EXHIBIT 10.38
LEASE AGREEMENT
BETWEEN
AAAA WORLD IMPORT-EXPORT, INC.
a Florida corporation, as "LANDLORD"
AND
FMI INTERNATIONAL CORP.
a New Jersey corporation, as "TENANT"
FOR
THE LEASE OF CERTAIN
REAL PROPERTY
IN
Miami-Dade County, Florida
ATTORNEYS FOR LANDLORD:
ATTORNEYS FOR TENANT:
Charles D. Brecker, Esq.
William L. Bricker, Jr., Esq.
KATZ, BARRON, SQUITERO,
CURTIS, MALLET-PREVOST, COLT &
& FAUST,
P.A.
MOSLE LLP
First Fort Lauderdale Place - Suite 280
101 Park Avenue
100 N.E. Third Avenue
New York, NY 10178
Fort Lauderdale, FL 33301
Tele: (212) 696-6000
Tele: (954) 522-3636
Fax: (212)697-1559
Fax: (954) 522-5119
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TABLE OF CONTENTS
PAGE
----
ARTICLE I: DEMISED
PREMISES......................................... 1
ARTICLE II:
TERM.....................................................
1
2.01 Lease
Term............................................... 1
2.02
Commencement Date........................................
2
ARTICLE III:
RENT.....................................................
2
3.01 Fixed
Minimum Rent....................................... 2
3.02 Rent Past
Due............................................ 2
3.03 Landlord
Services........................................ 3
3.04
Intentionally Omitted....................................
3
3.05 Sales and
Use Tax........................................ 3
3.06
Payment..................................................
3
3.07 Additional
Rent.......................................... 3
3.08 Utility
Reimbursement.................................... 3
3.09 Operating
Expenses....................................... 4
3.10 Services
Paid Directly by Tenant......................... 6
ARTICLE IV: MAINTENANCE,
REPAIRS AND ALTERATIONS..................... 7
4.01 Landlord
Maintenance and Improvements.................... 7
4.02 Tenant
Maintenance....................................... 7
4.03
Alterations..............................................
7
4.04 Removal of
Tenant's Fixtures............................. 8
4.05
Liens....................................................
8
4.06 Notice by
Tenant......................................... 8
ARTICLE V: INSURANCE
AND INDEMNITY.................................. 9
5.01 Tenant's
Insurance....................................... 9
5.02 Increase in
Fire Insurance Premium....................... 9
5.03
Indemnification of Landlord..............................
10
5.04 Waiver of
Subrogation.................................... 10
ARTICLE VI:
USE......................................................
10
ARTICLE VII: LANDLORD AND TENANT
SERVICES............................. 11
7.01 Landlord
Services........................................ 11
7.02 Tenant
Services.......................................... 11
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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7.03
Interruption of Services.................................
11
ARTICLE VIII:
ADDITIONAL COVENANTS.....................................
11
8.01 Repairs by
Landlord...................................... 11
8.02 Quiet
Enjoyment.......................................... 12
8.03 Landlord's
Liability..................................... 12
8.04
Parking..................................................
12
8.05 Tenant
Access............................................ 13
8.06 Landlord's
Access........................................ 13
8.07
Signs....................................................
13
8.08 Landlord's
Representations and Warranties................ 13
ARTICLE IX: TENANT'S
ADDITIONAL COVENANTS............................ 14
9.01 Affirmative
Covenants.................................... 14
9.02 Negative
Covenants....................................... 16
ARTICLE X:
DESTRUCTION AND CONDEMNATION.............................
17
10.01 Fire or Other
Casualty................................... 17
10.02 Eminent
Domain........................................... 18
ARTICLE XI: DEFAULTS AND
REMEDIES.................................... 19
11.01
Defaults.................................................
19
11.02
Bankruptcy...............................................
19
11.03 Remedies of
Landlord..................................... 20
11.04 Holdover by
Tenant....................................... 20
11.05 Landlord's Right
to Cure Defaults........................ 21
11.06 Effect of
Waivers of Default............................. 21
11.07 Estoppel
Certificate..................................... 21
11.08 Effect of
Unavoidable Delays............................. 21
11.09 No
Waiver................................................ 21
ARTICLE XII: ASSIGNMENT AND
SUBLETTING................................ 22
12.01 Consent
Required......................................... 22
12.02 Significant
Change of Ownership.......................... 22
ARTICLE XIII:
SECURITY DEPOSIT.........................................
23
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE XIV: MISCELLANEOUS
PROVISIONS................................. 23
14.01 Notice
................................................. 23
14.02
Brokerage................................................
24
14.03 Applicable Law
and Construction.......................... 24
14.04 Binding Effect
of Lease.................................. 24
14.05
Subordination............................................
24
14.06 No Oral
Change........................................... 24
14.07 No
Representations by Landlord........................... 24
14.08 Liability of
Landlord.................................... 24
14.09 Waiver of Jury
Trial..................................... 25
14.10 Radon
Gas................................................ 25
14.11
Time.....................................................
25
14.12
Survival.................................................
25
14.13 Accord and
Satisfaction.................................. 25
14.14
Litigation...............................................
25
14.15 Choice of Law
and Venue.................................. 26
EXHIBITS
"A"
Demised Premises, Parking Area, Building and the Land
"B"
Agreement of Term of Lease
"C"
Tenant's Sign Plans
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<PAGE>
LEASE AGREEMENT
THIS LEASE
made on the _______ day of November, 2001, by AAAA WORLD
IMPORT-EXPORT, INC., a Florida corporation (hereinafter called
"LANDLORD"),
whose address is 11400 N.W. 32nd Avenue, Miami, Florida 33167, and
FMI
INTERNATIONAL CORP., a New Jersey corporation, whose address is 800
Federal
Boulevard, Carteret, New Jersey 07008 (hereinafter called
"TENANT").
WITNESSETH:
ARTICLE I
DEMISED PREMISES
Landlord
hereby leases to Tenant and Tenant hereby hires from Landlord,
a
certain portion of space comprised of approximately 158,000 square
feet of
rentable warehouse space, which warehouse space is inclusive of
approximately
2,500 square feet of office space on the first and second floor
thereof
(hereinafter referred to as the "DEMISED PREMISES"), which
warehouse space is
located within a certain building (the "BUILDING"), which Building
is located at
11400 N.W. 32nd Avenue, Miami, Florida 33167, as more particularly
described on
EXHIBIT "A" attached hereto. Landlord's grant of the Demised
Premises to Tenant
shall be subject to and with the benefits of the terms, covenants,
conditions
and provisions of this Lease, together with the appurtenances
specifically
granted in this Lease, but reserving and excepting to Landlord the
right to
install, maintain, use, repair and replace pipes, ducts, conduits,
and wires
through the Demised Premises and serving the other parts of the
Building of
which the Demised Premises are a part. The land on which the
Building is
located, along with the Building and the related improvements,
including parking
facilities, are more specifically set forth in EXHIBIT "A" attached
hereto
(hereinafter collectively called the "LAND").
ARTICLE II
TERM
2.01 LEASE
TERM. The Demised Premises are leased for a term of five (5)
years (the "TERM"), which shall commence on the latter of (a)
January 15, 2002,
or (b) fifteen (15) days from the vacation of the adjoining
premises which will
permit Landlord to completely vacate the Demised Premises, which
date shall be
no later than February 15, 2002 (the "COMMENCEMENT DATE"). The Term
shall end at
12 o'clock noon on the last day of the sixtieth (60th) month
following the
Commencement Date, or, if same is not a business day, the next
succeeding
business day (the "TERMINATION DATE"), unless the Term shall sooner
terminate
pursuant to any of the terms, covenants or conditions of this
Lease, or pursuant
to law. On the Commencement Date, Landlord shall tender to Tenant,
and Tenant
shall accept from Landlord the Demised Premises in its AS-IS
condition.
Notwithstanding the foregoing, Tenant shall have possession of
approximately 30,000 square feet of warehouse space of the Demised
Premises (the
"Temporary Space") with four (4) dock-height doors on or before
November 5,
2001. Tenant shall have free use of the Temporary Space until the
Commencement
Date. Tenant shall erect a temporary fence, no less than sixteen
(16) feet in
height, around the Temporary Space and may install temporary motion
detectors
above the fenced area to monitor the area above the temporary
fence. The hours
of operation for the Temporary Space shall be Monday through Friday
from 8:00
a.m. to 5:00 p.m.
Landlord
grants to Tenant the right of first offer (the "Expansion
Right")
to lease the remainder of the Building (to wit: approximately
105,000 square
feet of warehouse space and, at Landlord's option, the office
space
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<PAGE>
located directly above such warehouse space) (the "Expansion
Space"), in the
event that Landlord elects to lease said Expansion Space during the
Term. If
Tenant exercises its Expansion Right, Tenant will lease said
Expansion Space
from Landlord on the terms and conditions negotiated between the
parties hereto
at the time Tenant exercises such Expansion Right.
2.02
COMMENCEMENT DATE. When the Commencement Date and Termination Date
of
the Term have been determined, Landlord and Tenant shall execute,
acknowledge,
and deliver a written statement in the form attached hereto as
EXHIBIT "B" to
one another and their respective designees specifying the
Commencement and
Termination Dates of the Term. Such statement shall also state that
as of the
date of the execution of such statement Tenant is in possession of
the Demised
Premises and is paying the "Fixed Minimum Rent" (as defined in
Paragraph 3.01
hereof) and all other charges hereunder, and that Tenant has no
claims,
defenses, set-offs or counterclaims against Landlord (or, if so,
specifying the
nature and amount thereof).
ARTICLE III
RENT
3.01 FIXED
MINIMUM RENT. Tenant hereby covenants and agrees to pay to
Landlord, together with any and all sales and use taxes levied upon
the Tenant's
use and occupancy of the Demised Premises during the Term of this
Lease, which
shall be paid in equal monthly installments, without set-off or
deduction, in
advance as of the latter of (a) February 15, 2002, or (b) thirty
(30) days
following the Commencement Date (the "Rent Commencement Date"), and
on the first
day of each and every calendar month thereafter for the entire
Term, certain
rent (the "FIXED MINIMUM RENT"), as follows:
GROSS RATE PER
TOTAL MONTHLY FIXED ESTIMATED 6.5% ESTIMATED TOTAL
SQUARE FOOT MINIMUM
RENT
SALES & USE TAX MONTHLY PAYMENT
------------------------------------------------------------------------
$4.50
$59,250.00
$3,851.25
$63,101.25
Tenant
shall pay to Landlord, PRIOR TO THE COMMENCEMENT DATE, in the
form
of a company check, local cashier's check or official bank check,
the first
(1st) month's installment of Fixed Minimum Rent, plus sales tax
thereupon, along
with an additional $177,750.00 in the form of an unconditional and
irrevocable
letter of credit or a standby letter of credit (either, "Letter of
Credit") to
be issued by a federal or state chartered lending institution and
subject to
Landlord's approval (the latter being referred to as the "SECURITY
DEPOSIT").
The Letter of Credit, or any renewals or substitutions thereof,
shall be valid
and enforceable through the Termination Date. Provided that Tenant
has paid to
Landlord each payment of Fixed Minimum Rent and Additional Rent (as
hereinafter
defined) on or before the fifth (5th) day of any calendar month or
within five
(5) days following the date in which such payment became due, as
applicable,
within the first (1st) twelve months of the Term, then Tenant may
reduce the
amount of the Letter of Credit by $59,250.00 to $118,500.00 (the
"Replacement
Letter of Credit"). The Security Deposit shall be held by Landlord
in accordance
with Article XIII hereof. If the Commencement Date occurs on a day
other than
the first calendar day of a month, Tenant shall pay to Landlord,
PRIOR TO THE
COMMENCEMENT DATE, a pro rata portion of the Fixed Monthly Rent for
said initial
partial month. The Fixed Minimum Rent and the Additional Rent for
any partial
month or other partial period during the Term shall be pro rated
based on the
actual number of days contained in such period.
3.02 RENT
PAST DUE. In the event any installment of Fixed Minimum Rent is
not paid on or before the tenth (10th) business day of any calendar
month, or
any Additional Rent is not received by Landlord within ten (10)
business days
following the date in which such payment became due, then a late
charge of two
and one-half percent
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(2 - 1/2%) of the delinquent sum may be charged by Landlord. If any
installment
of Fixed Minimum Rent or Additional Rent shall remain overdue for
more than
fifteen (15) days following the date in which such payment became
due, an
additional late charge in an amount equal to one and one-half
percent (1-1/2%)
per month (eighteen percent (18%) per annum), or any greater amount
which may
lawfully be charged under Florida law, of the delinquent amount may
be charged
by Landlord, such charge to be computed for the entire period for
which the
amount is overdue and which shall be in addition to and not in lieu
of the two
and one-half percent (2 - 1/2%) late charge or any other remedy
available to
Landlord. All late charges imposed under this Section 3.02 shall be
deemed
Additional Rent, and Tenant shall be responsible for the payment of
any taxes
assessed thereon. Any failure by Landlord to impose a late fee as
provided under
this Section 3.02 shall not be deemed as a waiver by Landlord of
any subsequent
rights Landlord may have to impose such charges for a period not to
exceed
ninety (90) days from the original due date..
3.03
LANDLORD SERVICES. Landlord shall not be responsible for the
provision of any services, maintenance, repair or otherwise, to the
Demised
Premises, or parking area serving same, except as otherwise
specifically
provided hereunder. Landlord shall be responsible for Common Area
servicing,
management (including replacements) and maintenance, and Landlord's
costs
therefor shall be included as a Direct Expense under Section
3.09(a)(ii). In all
instances Tenant is responsible for the supplying of, and payment
for, all
janitorial, security and refuse removal services rendered to the
Demised
Premises, it being understood that Landlord shall have no
obligation to supply
the foregoing services (or any other service not specifically
required of
Landlord under this Lease) to the Demised Premises. The security
guard station
presently situated near Landlord's entrance to the Building is
solely for
Landlord's purposes, and shall not provide any security services to
the Demised
Premises. At its option, Landlord may elect to relocate such
security guard
station to an alternate location. Landlord is in no way obligated
to provide
security, or maintain such security guard station, for the benefit
of Tenant or
of any employee, invitee, or agent of Tenant. Notwithstanding the
foregoing, in
the event that Tenant's permitted use of the Demised Premises
requires the
services of a security guard, then Landlord and Tenant shall
negotiate the
charge for such services or contract with a third party to provide
such
services.
3.04
Intentionally Omitted.
3.05 SALES
AND USE TAX. Tenant hereby covenants and agrees to pay monthly
to Landlord, as Additional Rent, any sales, use or other tax,
excluding State
and/or Federal Income Tax for the Land, now or hereafter imposed
upon all Fixed
Minimum Rent and Additional Rent, whether by the United States of
America, the
State of Florida, or any political subdivisions thereof,
notwithstanding the
fact that such statute, ordinance, or enactment imposing the same
endeavor to
impose the tax on Landlord. Tenant further covenants and agrees to
pay, as due,
all "Business Taxes," consisting of all taxes attributable to the
personal
property, trade fixtures, business, income, occupancy, operations
or sales of
Tenant, or any other occupant of the Demised Premises, inclusive of
Tenant's use
of the Building or the Land.
3.06
PAYMENT. Fixed Minimum Rent and all Additional Rent shall be
payable
in lawful money of the United States to Landlord, as stated on the
top portion
of Page 1 of this Lease, or to such other persons or at such other
places as
Landlord may designate in writing from time to time; always without
any set-off
or deduction and without any prior demand therefor.
3.07
ADDITIONAL RENT. "ADDITIONAL RENT" means all sums of money
required
to be paid by Tenant under this Lease, except Fixed Minimum Rent,
whether or not
the same are designated "Additional Rent," or are payable to
Landlord, or
otherwise, including, but not limited to the Utility Reimbursement
as defined in
Section 3.08 and operating expenses in accordance with Section
3.09. Tenant
shall be responsible for, and shall pay to Landlord with the
payment of all
Additional Rent payments, all taxes, including sales taxes,
assessed thereon.
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3.08
UTILITY REIMBURSEMENT. The Demised Premises is not separately
metered
for utility service, including electric, water and sewer service.
Landlord and
Tenant agree that the following allocation of Building utility
expenses
represents the most equitable manner of apportioning utility
expenses
attributable to the Demised Premises. Tenant shall be responsible
for, and shall
reimburse Landlord on a monthly basis, within ten (10) business
days of Tenant's
receipt of the corresponding bills from Landlord, (a) forty percent
(40%) of the
monthly electric bill or bills attributable to the Building's total
electric
usage, and (b) Tenant's Proportionate Share (as defined herein) of
the monthly
water and sewer bill or bills attributable to the Building's total
water and
sewerage usage. The foregoing shall be collectively known as the
"UTILITY
REIMBURSEMENT" With respect to the Utility Reimbursement for the
last two (2)
months of the Term, Tenant shall pay to Landlord, by the 10th day
of each of the
last two (2) months of the Term, the average of the Utility
Reimbursements for
the three (3) months immediately preceding the penultimate month of
the Term
(the "AVERAGE UTILITY PAYMENT"). Upon Landlord's receipt of the
utility bills
relative to the last two (2) months of the Term, Landlord shall
calculate the
actual amount of the Utility Reimbursement attributable to those
months. In the
event the Average Utility Payment exceeds the actual Utility
Reimbursement
attributable to the last two (2) months of the Term, Landlord shall
reimburse
Tenant such difference within thirty (30) days of Landlord's
receipt of the
bills for each of the last two (2) months of the Term. In the event
the Average
Utility Payment is less than the Utility Reimbursement due and
owing for the
last two (2) months of the Term, Tenant shall pay Landlord the
difference within
ten (10) days after receipt of written notice from Landlord with
respect to such
amount due. In the event that the electric or water usage during
any month of
the Term is more than eight percent (8%) greater than the average
electric or
water usage for the immediately preceding six (6) month period,
Landlord shall
have the right to increase the electric and/or water portion of the
Utility
Reimbursement, commensurate with Tenant's electricity usage in the
Demised
Premises, which increase shall be retroactive for no more than two
(2) months
upon Landlord providing Tenant with notice of such Utility
Reimbursement
increase. Tenant shall be responsible for, and shall pay to
Landlord with the
payment of all Utility Reimbursement payments, all taxes, including
sales taxes,
if applicable, assessed thereon.
3.09
OPERATING EXPENSES.
(a) For
the purpose of this Section 3.09, the following terms are
defined
as follows:
(i) LEASE YEAR: Each
calendar year falling partly or wholly within the
Term.
(ii) DIRECT EXPENSES: All direct costs of operation,
maintenance,
repair, replacement and management of the Common Areas, the Land
and the
Building, as determined in accordance with generally accepted
accounting
principles, including the following costs by way of illustration,
but not
limitation: insurance charges of or relating to all insurance
policies and
endorsements deemed by Landlord to be reasonably necessary or
desirable and
relating in any manner to the protection, preservation, or
operation of the
Building and the Land or any part thereof, including public
liability, flood and
windstorm damage, and including any deductible amount applicable to
any claim
made by Landlord under such insurance; the cost of common area
janitorial
services; window cleaning costs; landscaping costs; labor costs;
all costs and
expenses of managing the Building; material and equipment costs
including the
cost of maintenance, repair and service agreements and rental and
leasing costs;
purchase costs of equipment other than Capital Items (as defined
herein);
current rental and leasing costs of items which would be
amortizable capital
items if purchased; tool costs; licenses, permits and inspection
fees; wages and
salaries; accounting and legal fees (to the extent incurred with
respect to the
Common Areas, the Building, the Land, or any part thereof); any
sales, use or
service taxes incurred in connection therewith. Direct Expenses
shall not
include: depreciation or amortization of the Building or equipment
in the
Building, except as provided herein; interest on, amortization of
and all other
costs and expenses related to any mortgage; the costs of all
repairs,
improvements and replacements, as well as the purchase or leasing
of any
machinery, equipment, vehicles, supplies, or the like that, under
generally
accepted accounting principles consistently applied, are required
to be
capitalized on the books and records of Landlord ("Capital Items"),
except,
however, with respect to any Capital Items of the nature described
in
sub-subparagraphs
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(A), (B) and (C) of this subparagraph; loan principal payments;
costs of
alterations of tenants' premises, except the Demised Premises;
leasing
commissions and related expenses; interest expenses on long-term
borrowings;
advertising costs; or management salaries for executive personnel
other than
personnel located at the Building. In addition, Landlord shall be
entitled to
amortize and include as an additional rental adjustment: (A) an
allocable
portion of the cost of capital improvement items which are
reasonably calculated
to reduce operating expenses; (B) fire sprinklers and suppression
systems and
other life safety systems; and (C) other capital expenses which are
required
under any future governmental laws, regulations or ordinances which
are not
applicable to the Building at the present time. The costs of the
Capital Items
described in sub-subparagraphs (A), (B) and (C) shall be amortized
over the
useful life of such improvements in accordance with such reasonable
life and
amortization schedules as shall be determined by Landlord in
accordance with
generally accepted accounting principles, consistently applied, the
Internal
Revenue Code of 1984 (the "Code"), as amended, and the regulations
promulgated
under such Code, with interest on the unamortized amount at one
percent (1%)
in excess of the prime lending rate announced from time to time as
such by
CitiBank, N.A. from its New York office.
(iii) TAXES: Real estate taxes and any other taxes, charges and
assessments which are levied with respect to the Building or the
Land, or with
respect to any improvements, fixtures and equipment or other
property of
Landlord, real or personal, located in the Building and used in
connection with
the operation of the Building and said Land, any payments to any
ground lessor
in reimbursement of tax payments made by such lessor; and all fees,
expenses and
costs incurred by Landlord in investigating, protesting, contesting
or in any
way seeking to reduce or avoid increase in any assessments, levies
or the tax
rate pertaining to any Taxes to be paid by Landlord in any Lease
Year. Taxes
shall not include penalties or interest for late payment by
Landlord, or any
corporate franchise, or estate, inheritance or net income tax, or
tax imposed
upon any transfer by Landlord of its interest in this Lease, the
Land or the
Building. Landlord shall use its best efforts to pay the Ad Valorem
taxes in
November.
(iv) BASE YEAR shall be calendar year 2002.
(v) TENANT'S
PROPORTIONATE SHARE shall be 60.08%, which is calculated
as follows:
Square footage of Demised Premises (to wit: 158,000)
------------------------------------------------------
Total square footage of the Building (to wit: 263,000)
(b) As of
January 1, 2003, and every month of the Term thereafter, Tenant
shall be responsible for, and shall pay to Landlord, one-twelfth
(1/12) of the
combined annual Tenant's Proportionate Share of the increase in
Direct Expenses
and Taxes for the Land in excess of the Direct Expenses and Taxes
associated
with managing and maintaining the Land in the Base Year. The
increase in Direct
Expenses and Taxes shall be known as the "DIRECT EXPENSE INCREASE".
Upon ten
(10) business days notification from Landlord ("DIRECT EXPENSE
INCREASE
NOTICE"), Tenant shall pay to Landlord, as Additional Rent,
one-twelfth (1/12)
of the combined annual Tenant's Proportionate Share of the Direct
Expense
Increase ("TENANT'S DIRECT EXPENSE SHARE"), together with all sales
taxes due
thereon. The failure by Landlord to deliver the Direct Expense
Increase Notice
to Tenant shall not be deemed as a waiver by Landlord of its rights
to collect
such sums. Upon Tenant's written request, Landlord shall provide to
Tenant
copies of any tax bills with respect to Landlord's determination of
any Direct
Expense Increase.
(c) The
determination of Direct Expenses shall be made by Landlord and
shall be binding upon Landlord and Tenant. Tenant may review the
books and
records supporting such determination in the office of Landlord, or
Landlord's
agent, during normal business hours, upon giving Landlord five (5)
days advance
written notice within sixty (60) days after receipt of such
determination, but
in no event more often than once in any one year period. If Tenant
shall dispute
any specific item or items of the Direct Expense Increase Notice or
in the
material which was the basis for any Direct Expense Increase, the
parties shall
exercise reasonable good faith efforts to settle such dispute
within ninety (90)
days following Tenant's notice. Landlord shall reimburse Tenant all
or any part
(as the case may be) of such disputed amount determined to be due
and owing to
Tenant. In the event that
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during all or any portion of any Lease Year, the Building is not
fully rented
and occupied Landlord may make any appropriate adjustment in
occupancy-related
Direct Expenses for such year for the purpose of avoiding
distortion of the
amount of such Direct Expenses to be attributed to Tenant by reason
of variation
in total occupancy of the Building, by employing sound accounting
and management
principles to determine Direct Expenses that would have been paid
or incurred by
Landlord had the Building been fully rented and occupied, and the
amount so
determined shall be deemed to have been Direct Expenses for such
Lease Year.
Prior to
the actual determination thereof for a Lease Year, Landlord may
from time to time estimate Tenant's liability for Direct Expenses
and/or Taxes
for the Lease Year or portion thereof. Landlord will give Tenant
written
notification of the amount of such estimate and Tenant agrees that
it will pay,
by increase of its Fixed Minimum Rent due in such Lease Year,
Additional Rent
in the amount of such estimate. Any such increased rate of Fixed
Minimum Rent
pursuant to this Section 3.09(d) shall remain in effect until
further written
notification to Tenant pursuant hereto.
When the
above mentioned actual determination of Tenant's liability for
Direct Expenses and/or Taxes is made for any Lease Year and when
Tenant is so
notified in writing, then:
If the
total Additional Rent Tenant actually paid pursuant to this
Section
on account of estimated Direct Expenses and/or Taxes for the Lease
Year is less
than Tenant's liability for actual Direct Expenses and/or Taxes,
then Tenant
shall pay such deficiency to Landlord as Additional Rent in one
lump sum within
thirty (30) days of receipt of Landlord's bill therefor; and
If the
total Additional Rent Tenant actually paid pursuant to this
Section
on account of estimated Direct Expenses and/or Taxes for the Lease
Year is more
than Tenant's liability for actual Direct Expenses and/or Taxes,
then Landlord
shall credit the difference against the then next due payments of
Additional
Rent to be made by Tenant under this Article III. Tenant shall not
be entitled
to a credit by reason of actual Direct Expenses and/or Taxes in any
Lease Year
being less than Direct Expenses and/or Taxes in the Base Year
(Direct Expenses
and/or Taxes).
If the
Commencement Date is other than January 1 or if the Termination
Date is other than December 31, Tenant's liability for Direct
Expenses and Taxes
for the Lease Year in which said Date occurs shall be prorated
based upon a
three hundred sixty-five (365) day year.
3.10
SERVICES PAID DIRECTLY BY TENANT. Tenant shall pay separately
for
janitorial services to the Demised Premises, and shall contract for
such
services directly with an independent janitorial cleaning
service.
Alternatively, Tenant may utilize an employee of Tenant to perform
such
services. Tenant shall pay separately for refuse removal services,
and shall
contract for such services directly with an independent refuse
collection
service. Tenant shall be responsible for (i) compliance with all
laws regarding
refuse recycling, (ii) ensuring that Tenant's refuse is collected
from the
Demised Premises on a regular basis, consistent with other
warehouse buildings
in the vicinity of the Building, and (iii) keeping the Demised
Premises, the
Building and the Land, including the parking areas, free from the
accumulation
of any refuse, garbage, trash and the like generated by Tenant, its
agents and
invitees. Landlord shall not be responsible for furnishing the
Demised Premises
with any security services, electronic, human or otherwise. Tenant
shall, at
Tenant's expense, within thirty (30) days of the date hereof,
install an
electronic security system in the Demised Premises. Prior to
installation,
Tenant shall furnish to Landlord, for Landlord's approval, not to
be
unreasonably withheld, delayed or conditioned, the plans and
specifications of
the proposes security system, together with the name of the
licensed and
properly insured contractor. The security system shall be installed
and
maintained in compliance with all applicable governmental codes and
standards,
and Tenant shall maintain all necessary permits for same.
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ARTICLE IV
MAINTENANCE, REPAIRS AND ALTERATIONS
4.01
LANDLORD MAINTENANCE AND IMPROVEMENTS. Landlord covenants to keep
the
following in good order, repair and condition: (i) the structure of
the
Building, including all of the exterior walls, structural columns,
beams,
joists, foundation, footings and stem walls, and roofs (keeping
same in water
tight condition); (ii) the mechanical, electrical, water and sewer
systems, and
other base building systems (except such as may be installed by, or
be the
property of, Tenant, and except for the ventilating and
air-conditioning
equipment, if any installed for the Demised Premises); and (iii)
the entrances,
sidewalks, corridors and other facilities from time to time
comprising the
"Common Areas" (as hereinafter defined). To the extent that
Landlord is
otherwise obligated under this Lease, Landlord shall keep and
maintain the
Common Areas in compliance with Americans with Disabilities Act of
1990 (42
U.S.C. Sec. 12101 et. seq.) (the "ADA") and all other applicable
legal
requirements. "Common Areas" means those areas, facilities,
utilities,
improvements, equipment and installations, in or adjacent to the
Building which
serve or are employed for the mutual convenience, use or benefit of
more than
one (1) tenant or occupant of the Building, including their
respective agents,
employees, customers, clients and invitees, in common with others
entitled to
the use or benefit of same, and which are not, from time to time,
designated or
intended by Landlord to be leased. Landlord hereby retains the sole
and
exclusive right to place signs anywhere upon the Land, including
upon any
portion of the Building and upon any fence situated within the
Land, but
excluding the Demised Premises and Tenant's fenced-in parking area
(as discussed
in Sections 8.04 and 8.05). Prior to the Commencement Date,
Landlord, at its
sole cost and expense, shall paint the interior of the two-story
office space of
the Demised Premises using standard building materials and will
provide Tenant
with an allowance in the amount of $2,000.00 for the carpeting of
the Demised
Premises. Expenditures beyond the aforementioned shall be Tenant's
sole cost and
expense.
4.02
TENANT MAINTENANCE. Tenant shall, at its sole cost, maintain
the
Demised Premises, and all systems serving the Demised Premises
(including
electrical and plumbing systems) and Tenant's parking area in the
same condition
as existed on the Commencement Date, subject to reasonable wear and
tear,
exclusive of base building mechanical, plumbing and electrical
systems, with the
exception only of those repairs which are the obligation of
Landlord set forth
in the foregoing Paragraph 4.01, and subject further, to the
provisions of
Article X of this Lease. All repair and maintenance performed by
Tenant in the
Demised Premises which constitute structural changes and/or the
cost of which
exceeds $25,000.00 shall be performed by contractors or workmen
designated or
approved by Landlord, such approval not to be unreasonably
withheld, delayed, or
conditioned, and Tenant shall notify Landlord in writing no less
than three (3)
days prior to undertaking any repairs or maintenance in, to or
about the Demised
Premises. Tenant shall maintain all parking areas available to such
Tenant, as
depicted on EXHIBIT "A," in addition to the interior of the Demised
Premises,
including, without limitation, walls, ceilings, shutters, utility
meters,
ventilation and air-conditioning systems and pipes and conduits,
which are
installed by Tenant or which exclusively serve the Demised
Premises, whether
inside or outside the Demised Premises, together with all
electrical, plumbing
and other mechanical installations therein, in the same condition
as existed on
the Commencement Date, subject to reasonable wear and tear. Tenant
shall cause
the repair thereof, as is from time to time needed, with Landlord's
prior
written approval, pursuant to requirements of any governmental
authority
exerting jurisdiction over the Building.
4.03
ALTERATIONS. Tenant accepts the Demised Premises in its AS-IS
condition as being in good repair and condition. Tenant shall
maintain the
Demised Premises and every part thereof in the same condition as
existed on the
Commencement Date, subject to reasonable wear and tear, in
accordance with all
applicable governmental regulations, as described in Section 9.01
below. Tenant
shall not make or suffer to be made any alterations, additions, or
improvements
of any nature costing in excess of $15,000.000 to or of the Demised
Premises, or
any part thereof, including the exterior thereof, without prior
written approval
of Landlord, which approval Landlord
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<PAGE>
shall not unreasonably withhold, delay or condition. Landlord may
withhold its
approval for any reason if the proposed alternations materially
affect
Landlord's use and occupancy of the Building, or the structural
integrity of the
Building, including the roof, foundation or ceilings. In the event
the Landlord
consents to the proposed alterations, additions, or improvements,
the same shall
be at Tenant's sole cost and expense, and Tenant shall indemnify
and hold
Landlord harmless on account of the cost thereof. Any such
alterations shall be
made at such times and in such manner as not to unreasonably
interfere with the
occupation, use, and enjoyment of the remainder of the Land by the
other
occupants thereof. If required by Landlord, such alterations shall
be removed by
Tenant upon the termination or sooner expiration of the Term and
Tenant shall
repair damage to the Demised Premises caused by such removal, all
at Tenant's
cost and expense. Tenant shall be permitted additional lighting
within the
Demised Premises, at Tenant's sole cost and expense, and subject to
Landlord's
prior written approval of Tenant's lighting plan, which approval
shall not be
unreasonably withheld, delayed or conditioned. Any lighting
fixtures installed
within the Demised Premises shall be deemed a fixture, shall become
Landlord's
property, without compensation to Tenant, and shall not be removed
by Tenant
upon the expiration or earlier termination of this Lease, unless so
directed in
writing by Landlord.
4.04
REMOVAL OF TENANT'S FIXTURES. All leasehold improvements,
including
lighting fixtures as referenced in Section 4.03, and except for
Tenant's
"Fixtures," shall immediately upon their placement in the Demised
Premises
become Landlord's property without compensation to Tenant.
"Fixtures" shall mean
all equipment and furnishings installed by Tenant and affixed to
the Demised
Premises which are removable from the Demised Premises without
damage thereto.
"Fixtures" shall not include: (a) ventilating or air-conditioning
systems,
facilities and equipment in or serving the Demised Premises; (b)
floor coverings
affixed to the floor of the Demised Premises; (c) internal
stairways and doors;
and (d) any fixtures, facilities, equipment or installations
installed by or at
the expense of Landlord, all of which are leasehold
improvements.
Except as provided herein or otherwise agreed by Landlord in
writing, no leasehold improvements shall be removed from the
Demised Premises by
Tenant either during or at the expiration or sooner termination of
the Term,
except that: (i) Tenant may, during the Term, in the usual course
of its
business, remove Tenant's Fixtures, provided the Tenant is not in
default under
this Lease; and (ii) Tenant shall, at the expiration or earlier
termination of
the Term, at its sole cost, remove such of the leasehold
improvements and
Tenant's Fixtures in the Demised Premises as Landlord shall require
to be
removed, and restore the Demised Premises to Landlord's then
current Building
standard to the extent required by Landlord. Notwithstanding
anything to the
contrary herein, Landlord agrees to execute a waiver, subordination
and consent
letter in favor of Tenant's "equipment" lenders, whereby such
lenders shall be
permitted to enter the Demised Premises to repossess such equipment
in the event
of a default by Tenant under its equipment loans.
4.05
LIENS. Tenant shall promptly pay for all materials supplied and
work
done by or at the request of Tenant in respect of the Demised
Premises so as to
ensure that no lien is recorded against any portion of the Land or
Building or
against Landlord's or Tenant's interest therein. If a lien is so
recorded,
Tenant shall discharge same within thirty (30) business days of the
date in
which such lien is recorded by payment or bonding. If any such lien
against the
Land, Building, Landlord's or Tenant's interest therein is
recorded, and not
discharged by Tenant as above required, within thirty (30) business
days
following recording, Landlord shall have the right to remove such
lien by
bonding or payment, and the cost thereof, including all costs
incurred by
Landlord in connection with the removal thereof, shall be paid
immediately by
Tenant to Landlord upon Tenant's receipt of demand from Landlord.
Tenant has no
right or authority to create any mechanics' or materialmen's lien
on the Land,
Building, or Landlord's interest therein, and Tenant, in compliance
with Section
713.10, Florida Statutes, shall provide written notice (and provide
written
acknowledgment thereof to Landlord) to all suppliers of labor or
materials, as
well as all contractors and subcontractors, as applicable prior to
ordering such
labor or materials or executing any agreement for construction of
leasehold
improvements.
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<PAGE>
4.06
NOTICE BY TENANT. Tenant shall notify Landlord of any accident,
defect, damage or deficiency in any part of the Demised Premises,
the Building
or the Land, which comes to the attention of Tenant, its agents or
employees,
notwithstanding that Landlord may have no obligation in respect
thereof.
ARTICLE V
INSURANCE AND INDEMNITY
5.01
TENANT'S INSURANCE. Tenant shall, throughout the Term (and any
other
period when Tenant is in possession of the Demised Premises),
maintain at its
sole cost the following insurance:
A. All risks property insurance, naming Tenant and Landlord as
insured parties, containing a waiver of subrogation rights which
Tenant's
insurers may have against Landlord and against those for whom
Landlord is
responsible under law, including, without limitation, its
directors, officers,
agents and employees, and, at the request of Landlord, (except with
respect to
Tenant's chattels) incorporating a mortgagee endorsement (without
contribution)
in form reasonably acceptable to Landlord and its mortgagee. Such
insurance
shall insure property of every kind owned by Tenant, or for which
Tenant is
legally liable, or installed by or on behalf of Tenant, located on
or in the
Building, including, without limitation, leasehold improvements, in
an amount
not less than the full replacement cost thereof (new), with such
cost to be
adjusted no less than annually.
B. Broad form comprehensive general and public liability
insurance,
including a contractual liability endorsement and personal injury
liability
coverage. Such policy shall contain inclusive limits of not less
than
$5,000,000.00 per occurrence, provide for cross liability, and
include Landlord
as a named insured. The policy shall also contain a personal injury
endorsement
covering claims arising out of false arrest, false imprisonment,
defamation of
character, liable and slander, wrongful eviction and invasion of
privacy,
without exclusion of coverage for claims of personal injury brought
by
employees, agents or contractors of an insured. Tenant also may
satisfy the
obligations of this paragraph through and under its umbrella policy
coverage.
C. Worker's compensation and employer's liability insurance in
compliance with applicable legal requirements.
D. Any other form of insurance which Tenant or Landlord, acting
reasonably, shall require from time to time, in form, in amounts
and for risks
against which a prudent tenant would insure.
All
policies referred to above shall: (i) be taken out with
insurers
licensed to do business in Florida and reasonably acceptable to
Landlord; (ii)
issued by insurers with general policy holder's rating of not less
than "A" or
better and financial size of XII or better as rated in the most
current (from
time to time) Best's Rating Guide; (iii) be in a form reasonably
satisfactory to
Landlord and Landlord's mortgagee; (iv) be non-contributing with,
and shall
apply only as primary and not as excess to any other insurance
available to
Landlord or its mortgagee; and (v) contain an undertaking by the
insurers to
notify Landlord by certified mail not less than thirty (30) days
prior to any
material change, cancellation or termination.
During the
term hereof, Landlord shall maintain for the benefit of
Landlord and Tenant the following: (a) property insurance for the
Building and
the Demised Premises and any personal property therein owned by
Landlord,
against loss or damage from such causes of loss as are covered by
"all risk"
property insurance on a replacement cost basis in an amount not
less than the
full replacement cost of the Building and Landlord's personal
property without
deduction for physical depreciation thereof, which property
insurance shall
include a demolition and increased cost of construction endorsement
and rental
abatement insurance for a period of not more than one (1) year; and
(b) during
any period of restoration by Landlord, builder's risks insurance
against loss or
damage from such causes of loss as are covered by "builder's risks"
property
insurance.
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<PAGE>
5.02
INCREASE IN FIRE INSURANCE PREMIUM. Tenant agrees that it will
not
keep, use, sell, or offer for sale in or upon the Demised Premises
any article
which may be prohibited by the standard form of fire and extended
risk insurance
policy. Tenant agrees to pay any increase in premiums for fire and
extended
coverage insurance that may be charged during the Term on the
amount of such
insurance which may be carried by Landlord on said Demised
Premises, or the
Building, resulting from Tenant's use of the Demised Premises,
whether or not
Landlord has consented to the same. Tenant agrees to promptly make,
at Tenant's
cost, any repairs, alterations, changes and/or improvements to
equipment in the
Demised Premises required by Landlord's insurer(s) so as to avoid
the
cancellation of, or the increase in, premiums on said insurance. If
Tenant's use
of the Demised Premises causes Landlord's insurance premium costs
for the
Building to be increased, Tenant agrees to pay and is obligated for
any costs of
such increase, which shall be Additional Rent and added to the next
occurring
monthly installment of Fixed Minimum Rent, plus any applicable
sales and use
taxes.
5.03
INDEMNIFICATION.
A. Tenant shall indemnify, defend and save Landlord harmless
from
and against any and all claims, actions, damages, liability and
expense in
connection with loss of life, personal injury and/or damage to
property arising
from or out of any occurrence in, upon or at the Demised Premises,
or the
occupancy or use by Tenant of the Demised Premises or any part
thereof, or
occasioned wholly or in part by any act or omission of Tenant, as
well as all of
Tenant's agents, contractors, employees, servants, guests,
licensees,
sub-lessees, concessionaires or assignees. In case Landlord
