Wisconsin-Milwaukee-4129 and 4189 North Port Washington Road Lease - Koss Corp. and Home Depot USA Inc.
RESTATED LEASE
THIS RESTATED LEASE (this "RESTATED LEASE") is made by and between KOSS
CORPORATION, a Delaware corporation ("TENANT") and HOME DEPOT U.S.A., INC., a
Delaware corporation ("LANDLORD") as of the 20th day of January, 1999.
RECITALS
A. By Building Lease dated December 31, 1985, Hi-Tran, Inc. as landlord
and Tenant entered into a written lease (the "BUILDING LEASE") for certain
premises commonly known as 4129 and 4189 North Port Washington Road and legally
described on Exhibit A attached thereto as Parcels 1 and 2. The Building Lease
was subsequently amended by: (i) that certain Amendment to Lease dated February
28, 1986 between Junior House, Inc. (as successor to Hi-Tran, Inc. by merger)
and Tenant (the "FIRST AMENDMENT"); (ii) that certain Addendum to Lease dated
December ___, 1987 (the foregoing date intentionally left blank to reflect the
exact reference to the date in said document) between John C. Koss ("KOSS") (as
successor by assignment to Junior House, Inc.) and Tenant (the "SECOND
AMENDMENT"); and (iii) that certain Third Lease Amendment dated as of June 25,
1993 between Koss and Tenant (the "THIRD AMENDMENT" which, together with the
Building Lease, the First Amendment and the Second Amendment is sometimes
collectively referred to herein as the "LEASE").
B. In conjunction with the sale of a portion of the original premises
demised under the Lease from Koss to Landlord, Koss, Landlord and Tenant have
concurrently herewith entered into a Partial Assignment, Termination and
Modification of Lease (the "ASSIGNMENT"). For purposes of this Restated Lease,
all terms used herein with initial capital letters which are defined in the
Assignment shall have the same meaning herein as are ascribed to such terms in
the Assignment unless otherwise defined herein or the context dictates
otherwise. The purpose of the Assignment was, among other things, to: (i)
terminate the Lease as to all portions of the HD Parcel except for the Koss Sign
Premises; and (ii) memorialize the partial assignment of Koss' rights and
obligations as landlord under the Lease with respect to the Koss Sign Premises
to Landlord.
C. In connection with the foregoing sale transaction, Koss and Landlord
have also concurrently herewith executed a Reciprocal Easement Agreement ("REA")
which, among other things, contained various rights and obligations concerning
the Koss Signs. Tenant executed a consent to the REA whereby, among other
things, Tenant consented to and agreed to be bound by all applicable terms,
conditions and provisions of the REA, subject to the limitations contained in
such consent.
D. Pursuant to the terms of the Assignment, Landlord and Tenant agreed
to execute this Restated Lease with respect to the HD Lease, and now desire to
enter into this Restated Lease for purposes of better describing the parties
respective rights and obligations with respect to the Koss Sign Premises. For
purposes of this Restated Lease, the term "this Restated Lease" shall in all
instances refer to the HD Lease, as amended, supplemented and clarified by the
terms of this Restated Lease.
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NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows:
1. LEASE. Landlord and Tenant mutually ratify and confirm Tenant's
continued leasehold rights in and to the Koss Sign Premises (consisting of the
Koss Signs and the Koss Sign Pads located on the HD Parcel legally described on
EXHIBIT A attached hereto and as approximately shown on the Site Plan attached
hereto as EXHIBIT B upon and subject to the terms of this Restated Lease. For
purposes of this Restated Lease, (i) all references in the Lease to the terms
"this Lease" or "the Lease" or "hereof" or "herein" or words of similar import
referring to the Lease shall refer to this Restated Lease, (ii) all references
in the Lease to the terms "Premises," or "Leased Premises," or "demised
premises" or any words of similar import shall refer to the Koss Sign Premises;
and (iii) all references in the Lease to the term "Landlord" shall refer to Home
Depot U.S.A., Inc. or its grantees, successors or assigns, as the case may be.
2. TERM, PURPOSE AND POSSESSION.
(a) The term of this Restated Lease is hereby extended so as to expire
upon the earlier to occur of (i) the cessation of Tenant's use of the Koss
Parcel for electronics manufacturing and related business, or (ii) December 31,
2098, unless sooner terminated as provided in the Restated Lease. Upon the
expiration or earlier termination of this Restated Lease, Tenant agrees, upon
not less than fifteen (15) days' prior written notice, to sign an instrument in
recordable form to be provided by Landlord releasing all of Tenant's right,
title and interest in and to the HD Parcel as Landlord or its title insurer may
reasonably require to insure over Tenant's leasehold rights pursuant hereto.
(b) Subject to the terms of this Restated Lease, the Koss Sign Premises
may be used by Tenant for purposes of the maintenance, operation, repair and
replacement (including the periodic changing of the billboard advertising
signage) of the Koss Signs and for no other purpose. Landlord and Tenant
acknowledge and agree that any physical changes to the structure of the Koss
Signs shall be subject to the prior written consent of Landlord as more
particularly set forth in Section 8 of the Building Lease; provided, however,
Landlord hereby agrees that such consent shall not be unreasonably withheld or
delayed. In no event may the Koss Signs be used (i) to identify any of
Landlord's competitors, (ii) to advertise any product or service for or on
behalf of any owner or operator of a home improvement center or hardware store
(other than Landlord) or for any other item described in Section 3.01(f) of the
REA (unless first approved by Landlord), or (iii) to communicate any negative or
derogatory material concerning Landlord, its home improvement centers or any
products or services sold by Landlord. In connection with Tenant's use of the
Koss Sign Premises, Tenant agrees that it will not do, suffer or permit, or
agree to do anything that would in any way interfere with or delay or increase
the cost of the development or operation of the HD Parcel or Landlord's business
operated thereon.
(c) Tenant acknowledges that as of the date hereof, Tenant is in
possession of the entire Koss Sign Premises, and: (i) Tenant hereby accepts the
Koss Sign Premises in their "AS-IS CONDITION AND AS-BUILT CONFIGURATION" subject
to all easements, covenants, conditions or other matters of record; and (ii)
Landlord shall not be required to install, or
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contribute toward the cost of any alterations, additions or improvements to the
Koss Sign Premises for Tenant's occupancy during the term of this Restated
Lease, except for Landlord's obligations pursuant to Sections 2.03(e) and (f) of
the REA.
3. RENT. Landlord acknowledges that annual rent in the amount of Ten
Dollars (10.00) per year for the entire term of this Restated Lease has been
prepaid, the receipt and sufficiency of which are acknowledged by Landlord and
that except as referenced in Section 4 hereof, no other consideration is due
Landlord from Tenant throughout the term under this Restated Lease with respect
to the use of the Koss Sign Premises without in any way otherwise limiting,
modifying or affecting Tenant's obligations and liabilities under this Restated
Lease.
4. MAINTENANCE AND TAXES.
(a) Tenant shall, at its sole cost and expense (i) repair and maintain
(including necessary replacements) the Koss Signs (including, without
limitation, the physical sign structures as well as all signfaces thereon) in
good condition and repair so as to keep same in a safe, sightly and functional
condition at all times in accordance with and subject to the applicable terms of
Section 2.03 of the REA including, without limitation, all applicable
ordinances, statutes, regulations and all other local, state, and federal laws
applicable to the Koss Signs, and (ii) be responsible for all utility
consumption charges in connection with the illumination of the Koss Signs, which
utility line or lines are now or shall be connected to a meter or submeter which
shall be billed directly to the Koss Parcel. It is the intention of the parties
hereto that (1) Tenant shall perform and satisfy all of the obligations of the
Owner of the Koss Parcel (as defined in the REA) with respect to the Koss Signs,
and (2) Landlord shall maintain the Koss Sign Pads in accordance with and
subject to the terms of Article II of the REA.
(b) Landlord shall be responsible for payment of all real estate taxes
attributable to the HD Parcel (including the Koss Sign Premises) without
reimbursement from Tenant, and Tenant shall not have the right to contest any
real estate taxes with respect thereto notwithstanding anything to the contrary
in the Lease.
5. ACCESS. In connection with the exercise of any rights available to
Tenant with respect to the Koss Sign Premises or the performance of any
obligations required of Tenant with respect to the Koss Sign Premises under this
Restated Lease or under the REA, Tenant shall have the right to enter upon the
HD Parcel as reasonably necessary to perform such obligations or exercise such
rights. Any entry onto the HD Parcel shall be made subject to all of the terms
of this Restated Lease and the REA including, without limitation, Tenant's
covenant to perform any work expeditiously, in a good workmanlike manner and so
as to not interfere with the business operation conducted on the HD Parcel and
to timely pay for all such work so as to prevent any lien claims from arising on
the HD Parcel. All insurance and indemnification provisions contained in the
Building Lease shall apply as fully with respect to Tenant's use of the Koss
Sign Premises pursuant to this Restated Lease as if they were set forth herein
in their entirety.
6. DESTRUCTION. If either or both of the Koss Signs are partially or
wholly damaged or destroyed by fire or other casualty or occurrence, Tenant
shall have the option, to be exercised in writing to Landlord within sixty (60)
days following the date of any such fire or other
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casualty, to (i) repair, replace or restore the Koss Signs (or the applicable
damaged sign, as the case may be), in which case this Restated Lease shall
continue in full force and effect for the remainder of the unexpired term
hereof, or (ii) terminate this Restated Lease by written notice to Landlord,
whereupon subject to Tenant's removal of the Koss Signs if so required by
Landlord, the parties shall have no further rights or obligations hereunder,
except for any obligations or liabilities which have previously accrued under
this Restated Lease which shall survive the termination hereof. If Tenant fails
to furnish a written election within said 60-day period, Tenant shall be deemed
to have elected to repair, replace or restore the Koss Signs (or the applicable
damaged sign, as the case may be). Upon the expiration or earlier termination of
this Restated Lease as to one or both of the Koss Signs, upon written request by
Landlord, Tenant shall, at its expense, remove the applicable sign(s) from the
Koss Sign Premises (and the HD Parcel) leaving the Koss Sign Premises (and
adjacent areas on the HD Parcel) in a safe and sightly condition, at grade with
adjacent areas on the HD Parcel and free of all sign materials and improvements,
holes, piles of dirt or other materials or debris caused by such removal,
repairing any damage to any portion of the HD Parcel caused thereby. If Tenant
elects or is deemed to have elected to repair, replace or restore the Koss Signs
pursuant to this Section 6, Tenant shall commence such repair, replacement or
restoration within ninety (90) days following the date of damage or destruction
(subject to reasonable extension due to force majeure) and shall diligently
prosecute such repair, replacement or restoration work, as the case may be, to
completion within one hundred eighty (180) days following the date of damage or
destruction (subject to reasonable extension due to force majeure), failing
which, in either case of failure to commence or complete in accordance herewith,
this Restate Leased shall terminate with respect to the applicable sign(s) so
damaged or destroyed. If, following any substantial damage or destruction, such
repair, restoration or rebuilding is prohibited by applicable law, then this
Restated Lease shall terminate as provided herein with respect to the applicable
sign(s). Any restoration or replacement of the Koss Signs shall be built solely
on the Koss Sign Pads in accordance with and subject to all applicable terms of
this Restated Lease and shall be substantially similar in size and height to the
sign which was damaged or destroyed. Except as provided in the following
sentence, Tenant hereby waives any right of recovery and releases all claims
against Landlord with respect to any damage or destruction to the Koss Signs
from any cause whatsoever to the extent of the proceeds payable under any
policies of insurance maintained by Tenant pursuant to the Restated Lease or
which would have been payable had the required insurance coverage been
maintained, whether or not such damage or loss shall have been caused by any
acts or omissions of Landlord or its directors, officers, employees, agents,
tenants or occupants. Notwithstanding the terms of the preceding sentence, if
the Koss Signs or either of them are materially damaged or destroyed as a result
of an intentional act of Landlord, and if the restoration or reconstruction of
the affected sign(s) is then prohibited by law, then the foregoing waiver and
release shall not apply with respect to any claim or right of recovery for
direct (and not consequential, special or indirect) damages that Tenant may have
against Landlord in connection with such damage or destruction.
7. RECIPROCAL EASEMENT AGREEMENT. The REA and this Restated Lease shall
be construed together with the intent of giving full force and effect to each
and every term and provision of each agreement.
8. NOTICES. Notices required or desired to be given under this Restated
Lease shall be in writing and delivered by nationally recognized overnight
courier with evidence of receipt to
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the parties at the addresses below or such other addresses as one or more
parties may from time to time designate by like notice. Delivery shall be deemed
effective on the date of delivery as shown by the delivery ticket of the courier
evidencing receipt thereof. The initial addresses of the parties are as follows:
(a) If to Tenant Koss Corporation
Attention: Michael Koss
4129 North Port Washington Road
Milwaukee, Wisconsin 53212
with copy to: Richard W. Silverthorn
Whyte Hirschboeck Dudek, S.C.
. 111 E. Wisconsin Avenue, Suite 2100
Milwaukee, Wisconsin 53202
If to Landlord: Home Depot U.S.A., Inc.
1400 West Dundee Road
Arlington Heights, Illinois 60004
Attention: Michael LaFerle
Midwest Real Estate Manager
with copies to: Home Depot U.S.A., Inc.
2455 Paces Ferry Road
Building C, 20th Floor
Atlanta, Georgia 30339
Attention: Senior Corporate Counsel - Real Estate
and
Altman, Kritzer & Levick, Ltd.
1101 Perimeter Road
Suite 700
Schaumburg, Illinois 60173
Attention: Gregg M. Dorman, Esq.
9. TENANT AGREEMENTS. Anything in the Lease to the contrary
notwithstanding, Tenant acknowledges and agrees that:
(a) Landlord has no obligations or liabilities with respect to
the Koss Sign Premises except as expressly provided in this Restated
Lease or the REA;
(b) Landlord has no obligations or liabilities of any kind or
nature whatsoever with respect to or arising out of (i) the Lease prior
to the effective date of the Assignment and this Restated Lease
(including, without limitation, any obligations, debts or liabilities
of Koss as landlord under the Lease, if any), or (ii) the Koss Parcel
or the condition thereof, or (iii) any other agreements (verbal or
written) between Koss and Tenant with
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respect to the Koss Sign Premises, the HD Parcel or any other matter or
thing, and Tenant does hereby release Landlord from any such
obligations or liabilities and waives all claims against Landlord in
connection therewith;
(c) Landlord is not making and has not made any
representations or warranties of any kind or nature concerning the Koss
Sign Premises including, without limitation, the condition thereof or
whether the Koss Signs are or will be in compliance with or permitted
by applicable laws;
(d) the covenant of quiet enjoyment set forth in the Lease
with respect to the Koss Sign Premises shall only apply with respect to
matters caused by Landlord, its agents, employees or contractors, or
anyone claiming by or through Landlord;
(e) the indemnity set forth in Section 9(D) of the Building
Lease shall also include Tenant's indemnification of Landlord with
respect to any liabilities, claims, losses, damages, demands, fines,
penalties, interest, liens, costs or expenses (including, without
limitation, reasonable attorneys' fees and litigation expenses) arising
out of the failure of the Koss Signs to comply with all applicable laws
or with respect to the continued maintenance of the Koss Signs
following notice from any applicable governmental authority that such
signs are prohibited under applicable law; and
(f) In addition to any other applicable rights or remedies
available to Landlord at law or in equity, Landlord shall have all
rights and remedies available under Section 14 of the Building Lease in
the event of Tenant's default under this Restated Lease.
10. AUTHORITY. Each of the parties hereto represents, warrants and
covenants unto the other that this Restated Lease has been duly authorized,
executed and delivered, is a valid and binding obligation of such party and is
enforceable against such party in accordance with its terms.
11. AMENDMENT; CONFLICT. Except as terminated, partially assigned,
amended and restated in the Modification and this Restated Lease, all terms,
covenants, conditions, agreements and provisions set forth in the Lease are
ratified, confirmed and approved. In the event of any conflict between the Lease
and the terms of the Modification and this Restated Lease, the terms of the
Modification and this Restated Lease shall in all instances govern and control.
12. MEMORANDUM AND RELEASE. Landlord and Tenant agree that a Memorandum
of this Restated Lease in the form attached hereto as EXHIBIT C shall be
executed and acknowledged by the parties hereto concurrently with the execution
of this Restated Lease and recorded at Tenant's expense. Upon the expiration or
earlier termination of this Restated Lease, Tenant agrees, upon not less than
fifteen (15) days' prior written notice from Landlord, to sign a release with
respect to the Memorandum of Restated Lease in recordable form as Landlord or
its title insurer may reasonably require to further confirm and evidence such
expiration or termination.
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13. MISCELLANEOUS.
(a) If any provision of this Restated Lease, or portion thereof, or its
application to any person or circumstances is held invalid, inoperative or
unenforceable, the remainder of this Restated Lease shall be unaffected and
enforced to the fullest extent permitted by law.
(b) This Restated Lease shall be construed and enforced in accordance
with the laws of the State of Wisconsin.
(c) This Restated Lease shall be binding upon and inure to the benefit
to the named parties and each successor and assign thereof; provided, however,
nothing herein shall in way be deemed to limit, modify or adversely affect the
terms of Section 12 of the Building Lease.
(d) This Restated Lease may only be amended, modified or terminated by
a written instrument executed by Landlord and Tenant or the respective
successors or assigns.
(e) This Restated Lease may be executed in several counterparts, each
of which shall be deemed an original and which, when taken together, shall
constitute one and the same document.
TEXT OF RESTATED LEASE ENDS HERE; SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, this Restated Lease has been executed by the
parties as of the date first above written.
TENANT: KOSS CORPORATION
By: /s/ Michael J. Koss
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Michael Koss, Chief Executive Officer
LANDLORD: HOME DEPOT U.S.A., INC.
By: /s/ Kathryn E. Lee
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Print Name: Kathryn E. Lee
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Title: Senior Corporate Counsel
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