Tennessee-Memphis-4222 and 4240 Pilot Drive Lease Agreement - Graphic Development Co. LP and Lithograph Printing Co. of Memphis
AMENDED AND RESTATED
LEASE AGREEMENT - OFFICE,
COMMERCIAL PRINTING AND COMMERCIAL WAREHOUSE FACILITY
THIS AMENDED AND RESTATED LEASE AGREEMENT - OFFICE, COMMERCIAL PRINTING AND
COMMERCIAL WAREHOUSE FACILITY (hereinafter sometimes referred to as the "Lease"
and sometimes as the "Agreement") is made and entered into in duplicate as of
the 16th day of June, 1997, by and between Graphic Development Company, L.P., a
Tennessee limited partnership having its principal place of business at Memphis,
Tennessee 38118, as party of the first part (hereinafter referred to as
"Lessor") and Lithograph Printing Company of Memphis, a Tennessee corporation
maintaining its principal place of business at 4222 Pilot Drive, Memphis,
Tennessee 38118, as party of the second part (hereinafter referred to as
"Tenant").
WITNESSETH:
WHEREAS, pursuant to a certain Lease Agreement dated the 8th day of
January, 1985, as amended (i) by Memorandum of Agreement Regarding Rentals,
dated the 9th day of January, 1990, (ii) by Extension (With Modifications) of
Lease Agreement, dated the 1st day of August, 1994 and (iii) by Memorandum
Pertaining to Extension (With Modifications) of Lease Agreement, dated August 1,
1994 (collectively, said lease agreement and three modifications are referred to
as the "Prior Lease"), Tenant leased from Lessor an office, commercial printing
and warehouse building owned by Lessor; and
1
<PAGE>
WHEREAS, Tenant and Lessor desire to amend and restate the Prior Lease in
its entirety pursuant to this Agreement;
NOW, THEREFORE, in consideration for the mutual considerations hereinafter
set forth, the parties hereby agree that the Prior Lease shall be amended and
restated in its entirety as follows:
1. CONSIDERATION BY TENANT. The said Lessor, for and in consideration of
-----------------------
the rent hereinafter reserved and the covenants, agreements and stipulations
herein contained to be paid, executed and performed by the Tenant, does by these
presents let, lease and demise unto the said Tenant and his assigns, and Tenant
hereby rents, the following below-described real property located in Shelby
County, Tennessee.
2. DESCRIPTION. The premises ("Leased Premises") consists of those real
-----------
properties, including the office, commercial printing and warehouse building
constructed on and occupying said real properties, municipally known as 4222 and
4240 Pilot Drive, Memphis, Tennessee and as more particularly described on
Exhibit A attached hereto.
3. PURPOSE. It is understood and agreed that Tenant is leasing the Leased
-------
Premises in question as an office, commercial printing and warehouse
facility.
4. DURATION. TO HAVE AND TO HOLD the same in accordance with the
--------
following:
(a) The primary term of the Lease of the Leased Premises shall be for
a period of ten (10) years, commencing
2
<PAGE>
upon August 1, 1994 ("Commencement Date") and terminating on July 31, 2004.
(b) Upon the expiration of the primary term hereof, Tenant, provided
it is not in default of any provisions herein contained, shall have two (2)
successive options to renew the Lease under the same terms and conditions
each renewal to be for an additional period of five (5) years except that
the annual rental set forth in Article 6 shall be increased to a mutually
agreed amount to be negotiated by the parties at the time the option is
exercised; provided, however, that, in the event the parties cannot agree,
within a period of 60 days following receipt of Tenant's notice of renewal,
upon the increased rental to be charged during the renewal term, then, in
such event (and notwithstanding Tenant's delivery of notice of its intent
to renew), Tenant's option to renew shall terminate and this Lease shall
terminate upon the expiration of the primary term. Tenant's options to
renew must be exercised separately by Tenant's giving Lessor notice, in
writing, at least one hundred eighty (180) days prior to the expiration of
the primary term (or initial renewal term) that it intends to renew the
same. The second option granted to Tenant shall automatically expire in the
event the Tenant fails to renew the Lease pursuant to its initial option.
(c) The term "lease year" as used herein shall mean a period of
twelve (12) consecutive calendar months. The
3
<PAGE>
preceding to the contrary notwithstanding the first lease year shall begin
on the Commencement Date of the term hereof and shall end on July 31, 1995.
Each succeeding lease year shall commence on August 1st and terminate on
July 31st of the following year.
5. CONSIDERATION BY LESSOR. The Lessor does hereby covenant and agree
-----------------------
that it will keep and secure the Tenant in the peaceful use and possession of
the Leased Premises during the term of this Lease unless the said Tenant
defaults in the payment of rent, or in the fulfillment of any of the
obligations, requirements and conditions of this Lease.
6. RENTAL. The Tenant shall pay as rent for the Leased Premises, for the
------
period from the Commencement Date through the 31st day of July, 1997, an annual
rental of Two Hundred Seventy-Two Thousand Four Hundred Dollars ($272,400]
payable each Lease Year in advance in twelve monthly installments in the amount
of $22,700.00. The first installment shall be due and payable on the
Commencement Date of the term hereof and shall be for the period from the
Commencement Date through the last day of the next succeeding month, and each
succeeding installment shall be due and payable on the 1st day of each month
thereafter. All installments shall be deemed delinquent if not paid within ten
(10) days of the due date thereof. All delinquent payments shall bear interest
from the date the payment was due at the rate of ten percent (10%) per annum, or
the maximum effective fixed contract rate of interest which may be lawfully
charged at the
4
<PAGE>
time of such default, whichever is less.
Any acceptance of delinquent rent installments with interest shall not be
construed as a waiver of any condition set forth in Article 26 of this Lease nor
as a ratification of delinquent payments.
This Lease is what is commonly known as a "Net, Net, Net Lease", it being
understood that Tenant will, in accordance with the terms hereinafter set forth,
pay in addition to the Rent: (1) all taxes and assessments related to the Leased
Premises; (2) premiums for all insurance in an amount sufficient to insure the
Leased Premises for its replacement cost; (3) the cost of all repairs,
replacements and maintenance of the Leased Premises, and (4) any other cost and
expense connected with the Leased Premises. The intent of the parties is that
the rental payable by the Tenant shall, unless otherwise provided hereinbelow,
be net to the Lessor.
7. DELIVERY OF POSSESSION. Having been in possession of 4222 Pilot Drive
----------------------
since 1979 and having fully inspected 4240 Pilot Drive prior to its acquisition
by Lessor, Tenant acknowledges that it has examined the Leased Premises prior to
taking possession thereof and occupying the same, and Tenant agrees that said
Leased Premises have been received by it in good order and condition.
8. GOING BUSINESS. The Tenant shall at all times conduct, during normal
--------------
business hours, an active commercial printing business in the Leased Premises
and shall not keep the doors of
5
<PAGE>
the same closed for a period to exceed thirty (30) days.
9. LAWFUL USES. The Tenant agrees that neither the Leased Premises nor
-----------
any part thereof shall be used for any purpose in violation of the laws of the
United States, of the State of Tennessee, of the County of Shelby, or of any
other governmental body having jurisdiction, and agrees to hold the Lessor
harmless from any violation of said laws and ordinances.
10. WASTE AND NUISANCES. The Tenant agrees not to commit nor to permit to
-------------------
be committed any waste whatever and that it will allow no nuisance to exist on
said Leased Premises and will, when required by the proper authorities, abate
all nuisances at its own expense.
11. INSURANCE.
---------
(a) Cost of Insurance. Tenant shall pay the cost of all insurance
-----------------
required hereunder.
(b) Liability Insurance. Tenant shall, at Tenant's expense obtain
-------------------
and keep in force during the term of this Lease a policy of Combined Single
Limit, Bodily Injury and Property Damage insurance insuring Lessor and
Tenant against liability arising out of the ownership, use, occupancy or
maintenance of the Leased Premises. Such insurance shall be a combined
single limit policy in a primary amount of not less than [$500,000.00] per
occurrence with additional umbrella coverage of not less than [$5,000,000]
per occurrence.
(c) Property Insurance. The Tenant shall obtain and
------------------
6
<PAGE>
keep in force during the term of this Lease a policy or policies of
insurance covering loss or damage to the Leased Premises, including
fixtures and tenant improvements, in the amount of the full replacement
cost thereof, as the replacement cost may be agreed upon from time to time
by the parties) (i.e. coverage which the parties agree shall provide for
100% replacement cost to value with an agreed amount endorsement, as
determined initially, and annually thereafter, by an appraisal system
agreed upon by the parties), which replacement value is now estimated to be
$1,933,000 against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, flood, earthquake and
special extended perils ("all risk" as such term is used in the insurance
industry). Said insurance shall provide for payment of loss thereunder to
Lessor and Tenant as their interests may appear. The Tenant shall, in
addition, obtain and keep in force during the term of this Lease for
benefit of Lessor a loss of rents policy covering a period of six (6)
months, with loss payable to Lessor. If the Tenant shall fail to procure
and maintain said insurance, the Lessor may, but shall not be required to,
procure and maintain the same, but at the expense of the Tenant. If such
insurance coverage has a deductible clause, the deductible amount shall not
exceed [$5,000.00] per occurrence, and Tenant shall be liable for such
deductible amount. All such insurance shall
7
<PAGE>
be with such companies, in such form and content as are approved by Lessor,
which approval shall not be unreasonably withheld.
(d) Insurance Policies. Insurance required hereunder shall be in
------------------
companies holding a "General Policyholders Rating" of at least A plus and a
financial size category of at least Class XIII as set forth in the most
current issue of "Best's Insurance Guide". The Tenant shall deliver to
Lessor duplicate originals of policies of such insurance evidencing the
existence and amounts of such insurance with loss payable clauses as
required by this Article 11. No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30)
days' prior written notice to Lessor. Tenant shall, at least thirty (30)
days prior to the expiration of such policies, furnish Lessor with renewals
or "binders" thereof, or Lessor may order such insurance and charge the
cost thereof to Tenant, which amount shall be payable by Tenant upon
demand.
12. INVALIDATION OF INSURANCE. The Tenant agrees that it will suffer
-------------------------
nothing to remain on or about the Leased Premises which might invalidate the
liability and casualty coverage required to be maintained by Tenant under
Article 11.
13. DESTRUCTION BY FIRE. Should the buildings upon the Leased Premises be
-------------------
totally destroyed by fire or other cause or so damaged that Tenant cannot
reasonably conduct its business
8
<PAGE>
thereon and in the event the restoration or repair of same cannot be completed
within one hundred eighty (180) days from the date of the happening of any such
casualty and in the further event that Tenant is maintaining such insurance,
this Lease shall at Tenant's option terminate (which option must be exercised by
notice to Lessor within sixty (60) days of the occurrence) and the Tenant shall
be allowed an abatement of rent from the date of such damage or destruction, and
shall be relieved of the liability for the payment of any rent installments
falling due thereafter (except Tenant shall remain liable to the extent of any
obligations arising out of the provisions of the last sentence of Article 20);
however, if the damage is such that rebuilding or repairs can be completed
within one hundred eighty (180) days, or if more than one hundred eighty (180)
days and if Tenant has not exercised its option to terminate, the Lessor agrees,
to the extent of the insurance proceeds available therefor, to rebuild and to
make such repairs with reasonable promptness and dispatch, and to allow the
Tenant an abatement in the rent for such time as the building is untenantable
and a fair and proper partial or total abatement of rent for such time as the
building is partially untenantable, and as soon as the building (or portion
thereof) is restored and repairs completed, the Tenant agrees to take possession
of the same and to resume the payment of the rent upon the same terms and
conditions set forth herein for the unexpired term of this lease. All casualty
insurance proceeds relating to the building and improvements
9
<PAGE>
shall be made available to Lessor for either repair and restoration (if repair
and restoration is required hereunder) or compensation for loss of the building.
14. LESSOR HELD HARMLESS. In addition to, and not in limitation of any
--------------------
other provision of this Agreement, including Article 33(i), the Tenant covenants
and agrees to keep and to hold the Lessor harmless from any liability for loss
or damage to persons, property, or things, both real and asserted, accruing from
any cause or causes in connection with or about the Leased Premises (or Tenant's
use thereof), during the term of this Lease. Further, Tenant agrees to defend,
save, indemnify and hold the Lessor harmless against all liability, claims,
demands or judgments for damages arising from accidents to persons or property
occasioned by Tenant, its agents, employees or servants, and against all claims
or demands for damages arising from accidents in which Tenant, its agents,
employees or servants are in any way involved, damaged or injured. Tenant shall
defend any and all suits brought against the Lessor on account of any such
accidents or claims and will pay any judgment rendered in such suits and will
reimburse and indemnify the Lessor for all expenditures or expenses, including
court costs and counsel fees, made or incurred by the Lessor by reason of such
accidents, damages or injuries. Tenant's obligations pursuant to this Article
14 shall survive the termination of this Lease.
15. RIGHT OF ENTRY AND OBLIGATION TO MAKE REPAIRS. The Lessor reserves
---------------------------------------------
the right during the term of this Lease to enter
10
<PAGE>
the Leased Premises at reasonable hours to show the same to the other persons
who may be interested in renting or buying the property, and for the purpose of
inspecting the Leased Premises and, at cost of Tenant, to make such repairs,
additions or improvements as the Lessor may deem necessary for the protection
and preservation of the Leased Premises; but the Lessor is not bound to make any
repairs whatever, nor to be held liable for any damage in consequence of leaks,
nor for the stoppage of water, sewer, gas or drain pipes by reason of freezing
or any cause or obstructions, nor for any other defects about the Leased
Premises, the Tenant having examined the same and being satisfied therewith, and
should leaks, obstructions, freezings, stoppages, or other defects about the
Leased Premises occur during the term of this Lease, or while the Tenant is
occupying the Leased Premises, then the Tenant shall remedy the same promptly at
the Tenant's expense, unless the Lessor by written instrument undertakes to do
the same. The Tenant shall maintain the Leased Premises, in good order and
repair, inside and out, including but not limited to, repair and, if necessary,
replacement of all roofs, walls (interior and exterior), doors, windows,
ceilings, floor coverings, plumbing, electrical fixtures and other systems
within the Leased Premises.
In the event that the Tenant shall fail to make repairs as aforesaid, the
Lessor reserves the right to enter said Leased Premises at any time and make
such repairs at the expense of the Tenant, which expense shall be considered
additional rent. The
11
<PAGE>
Lessor further reserves the right (1) at any time to affix a "For Sale" notice
to any part of the Leased Premises, or (2) at any time within six months prior
to the expiration of this Lease to affix to any part of the Leased Premises a
"For Rent" notice and may keep the said notice so affixed without hindrance or
molestation by the Tenant.
16. REAL PROPERTY TAXES.
-------------------
(a) Payment of Taxes. Tenant shall pay the real property tax, as
----------------
defined in Article 16 (b), applicable to the Leased Premises during the
term of this Lease, prorated during the initial and final years of any term
of this Lease based upon the Tenant's period of occupancy. All such
payments shall be made at least ten (10) days prior to the delinquency date
of such payment. Tenant shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid. If Tenant shall fail to pay any
such taxes, Lessor shall have the right to pay the same, in which case
Tenant shall repay such amount to Lessor with Tenant's next rent
installment together with interest at the rate of ten percent (10%) per
annum, or the maximum effective fixed contract rate of interest which may
be lawfully charged at the time of such default, whichever is less.
(b) Definition of "Real Property Tax". As used herein, the term
---------------------------------
"real property tax" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license
fee, levy or tax (other
12
<PAGE>
than inheritance, personal income or estate taxes) imposed on the Leased
Premises by any authority having the direct or indirect power to tax,
including the City of Memphis, Shelby County, the State of Tennessee, or
the federal government, as against any legal or equitable interest of
Lessor in the Leased Premises, as against Lessor's right to rent or other
income therefrom, and as against Lessor's business of leasing the Leased
Premises. The term "real property tax" shall also include any tax, fee,
levy, assessment or charge (i) in substitution of, partially or totally,
any tax, fee, levy, assessment or charge hereinabove included within the
definition of "real property tax," or (ii) the nature of which was
hereinbefore included within the definition of "real property tax".
(c) Personal Property Taxes. Tenant shall pay, prior to delinquency,
-----------------------
all lawful taxes and governmental charges of any kind, including without
limiting the generality of the foregoing, any taxes, assessments and
charges of any kind whatsoever lawfully made by any governmental body
against and levied upon trade fixtures, furnishings, machinery, equipment
and all other personal property in connection with or with respect to the
Leased Premises. When possible, Tenant shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and
billed separately.
(d) Right to Contest Impositions. Tenant shall not be
----------------------------
13
<PAGE>
required to pay or discharge or cause to be paid or discharged any tax,
assessment, charge or levy so long as it shall, in good faith, be
concurrently contesting said tax, assessment, charge or levy and shall
have, during the period of such contest or appeal therefrom, secured the
amount being contested by either escrowing an amount satisfactory to Lessor
or posting with Lessor or appropriate court of record a bond in form and
amount satisfactory to Lessor.
17. ADVERTISING ON PREMISES. The Tenant agrees not to use the outside
-----------------------
walls, roofs, or any exterior portion of any building or other improvements that
are now on or that may hereafter be erected on Leased Premises, nor to allow the
same to be used by anyone else, for the purpose of displaying advertising
without the prior written consent of the Lessor, its legal representatives, or
assigns. The above statement to the contrary notwithstanding, the Tenant shall
have the right to erect such exterior advertising as is reasonably necessary to
identify the Leased Premises as Tenant's place of business.
18. CHANGES AND ALTERATIONS. The Tenant further agrees not to make any
-----------------------
changes, alterations, or additions about the Leased Premises without the prior
written consent of the Lessor, and to do nothing whatsoever that shall weaken,
or tend to weaken the buildings or structures now on or that may hereafter be
erected on the Leased Premises.
19. IMPROVEMENTS BY TENANT. All improvements, additions, and repairs made
----------------------
to the Leased Premises during the term of this
14
<PAGE>
Lease shall at the expiration of the same become the property of the Lessor, or
its assigns, without cost to it; it is agreed, however, that all trade fixtures
installed by the Tenant or its assigns for the business conducted by it shall
remain the property of the Tenant, and that such trade fixtures may be removed
during the term of this Lease or at its expiration, provided any damage caused
by such removal shall be repaired by the Tenant, or its assigns, at its own
expense and the Leased Premises left in good condition.
20. DELIVERY AT END OF LEASE. The Tenant agrees to deliver to the said
------------------------
Lessor, its assigns or legal representatives the Leased Premises at the
expiration of this lease in the same good order and condition as they were when
received and to make good all damages to Leased Premises, except for the usual
wear and proper use of the same, and also to remain liable for the rent until
the Leased Premises, with keys to the same, has been cleared of all persons and
property not belonging to the same, and returned to the Lessor, its legal
representative, or assigns, in like good order. No demand or notice for such
delivery shall be necessary. It is agreed, however, that the Tenant shall not
be liable to restore any damage to the Leased Premises caused by fire, wind
storms, or any other casualty beyond its control, except to the extent that any
such loss is not covered by the insurance Tenant is required to maintain
pursuant to Article 11 above.
21. PROOF OF PAYMENT. No setoff in the payment of the rent
----------------
15
<PAGE>
herein reserved shall be allowed unless signed by the Lessor, its legal
representative or assigns, and the proof of the payment of the rent shall be on
the Tenant in all controversies. All payments of rent due hereunder shall be
made by check payable to the order of the Graphic Development Company, L.P.
addressed and mailed to the Graphic Development Company, L.P., c/o Hilliard R.
Crews, Jr., 5321 E. Shelby Drive, Memphis, Tennessee 38118, unless the Lessor
shall, in writing, direct otherwise.
22. LIEN ON LEASEHOLD, ETC. A lien is hereby expressly reserved by the
----------------------
Lessor and granted by the Tenant upon the terms of this lease and upon all
interest of the Tenant in this leasehold, and upon all buildings, improvements,
water fixtures, gas fixtures and all other fixtures erected or put into place or
that may be erected or put into place upon the Leased Premises by or through the
Tenant or other occupant, for the payment of rent and also for the satisfaction
of any causes of action which may accrue to the Lessor by the provision of this
instrument. The above statement to the contrary notwithstanding, the Lessor's
lien upon trade improvements or trade fixtures erected or put upon the Leased
Premises by Tenant shall be subordinate to the lien of the [_________________],
or Tenant's then current lender and Lessor shall execute such documents as may
be reasonably required from time to time by ___________, or Tenant's then
current lender, as further evidence of such subordination.
23. COLLECTION COSTS. The Tenant agrees to pay all costs of collection,
----------------
including reasonable attorney fees, if all or any
16
<PAGE>
part of the rent reserved herein is collected after maturity with the aid of an
attorney; also to pay reasonable attorney fees in the event it becomes necessary
for the Lessor to employ an attorney to force the Tenant to comply with any of
the other obligations, conditions, or requirements imposed by this Lease.
24. INSOLVENCY OF TENANT. In the event of the insolvency of Tenant, or
--------------------
the filing of a proceeding by or against Tenant under the Federal Bankruptcy
Code, or in the event of a partial or general assignment for the benefit of a
creditor or creditors by Tenant, or in the event Tenant should be successfully
proceeded against in any general creditor's bill, or in the event Tenant makes
any offer in or out of court for the compromise of Tenant's debts, or any
substantial part thereof, by reduction in an amount or in preference, or
security, or by postponement of payment date or dates, or in the event any court
proceedings are instituted by, for, or against Tenant in contemplation of any
such offer, Lessor in addition to any rights available to it at law or equity
shall have the right and privilege to immediately terminate this Lease. Lessor
shall have the right to immediately re-enter into possession of the Leased
Premises for the purpose of leasing same.
If Lessor shall not be permitted to terminate this Lease as hereinabove
provided because of the provisions of Title 11 of the United States Code
relating to Bankruptcy, as amended ("Bankruptcy Code"), then Tenant as a debtor-
in-possession or any trustee for Tenant agrees promptly, within no more than
thirty
17
<PAGE>
(30) days upon request by Lessor to the Bankruptcy Court, to assume or reject
this Lease and Tenant on behalf of itself, and any trustee agrees not to seek or
request any extension of adjournment of any application to assume or reject this
Lease by Lessor with such Court. In such event, Tenant nor any trustee for
Tenant may only assume this Lease if (i) it cures or provides adequate assurance
that it (or its trustee) will promptly cure any default hereunder, (ii) it
compensates or provides adequate assurance that its trustee will promptly
compensate Lessor for any actual pecuniary loss to Lessor resulting from
Tenant's defaults, and (iii) it provides adequate assurance of performance
during the fully stated term hereof of all of the terms, covenants, and
provisions of this Lease to be performed by Tenant. In no event after the
assumption of this Lease shall any then-existing default remain uncured for a
period in excess of the earlier of ten (10) days or the time period set forth
herein. Adequate assurance of performance of this Lease, as set forth
hereinabove, shall include, without limitation, adequate assurance (i) of the
source of rent reserved hereunder and (ii) the assumption of this Lease will not
breach any provision hereunder including the obligations for timely payment of
all rents due hereunder. In the event of a filing of a petition under the
Bankruptcy Code, Lessor shall have no obligation to provide Tenant with any
services or utilities as herein required, unless Tenant shall have paid and be
current in all payments of taxes, insurance, maintenance obligations, utilities
or other charges
18
<PAGE>
due hereunder.
25. WAIVER OF BREACH. The waiver by either party of any breach of any
----------------
covenant or covenants of this Lease by the other shall be limited to the
particular instance, and shall not operate as, nor be deemed to be, a waiver of
any future breaches of the same covenant or covenants nor of any other covenant
or covenants.
26. DEFAULT OF RENT, ETC. These presents are on the expressed condition,
---------------------
that if the Tenant shall fail or neglect to pay when due any of the rent herein
reserved or fail or neglect to observe any of the covenants, agreements, or
requirements herein contained which are to be observed and performed by the
Tenant, then and in any and all of said events, or for violations of any one or
more of said covenants, requirements, or agreements on the part of the Tenant,
this Lease may, at the option of the Lessor, be declared null and void and
forfeited, and the Lessor may, without making demand and without notice except
as required below, lawfully enter into and upon the said Leased Premises, or any
part thereof in the name of the whole, and repossess and have the same as of its
former estate and expel the Tenant, or its assigns, and any and all persons who
may be in possession of the same. Lessor shall be entitled to receive from the
Tenant the difference in rental, if any, between the rental herein reserved for
the unexpired portion of the term and any lesser amount which Lessor, in the
exercise of reasonable diligence, is able to procure for the unexpired portion
of the term, together with all
19
<PAGE>
reasonable expenses incurred in the Lessor's reletting of the Leased Premises.
This right to be reserved by the Lessor, and granted by the Tenant, constitutes
an essential part of the consideration for the Lessor's agreement to lease the
Leased Premises to the said Tenant, and the same reserved right may be exercised
in any of the contingencies above set forth, that is to say, for the violation
and the non-observance of any of the undertakings to be kept, observed, or
performed by the Tenant, its successors, or assigns.
The above statements to the contrary notwithstanding, no event, during
the term of this Lease, the occurrence of which would constitute a default by
either party hereunder, shall be deemed a default until (i) the defaulting party
shall have been given notice by the non-defaulting party specifying the default
and stating that such notice is a "Notice of Default" and (ii) the defaulting
party shall have had ten (10) calendar days after receipt of such notice to cure
a monetary default hereunder and thirty (30) calendar days after receipt of such
notice to cure a non-monetary default hereunder and shall not have cured it.
27. RIGHT TO TERMINATE. It is further agreed that in the event the Lessor
------------------
terminates this Lease for any reason herein set forth that the said termination
shall not relieve the Tenant of any liability to the Lessor for failure to
fulfill, perform, or observe the obligations, agreements, and covenants imposed
on the Tenant by this Lease, and that the said Lessor shall at any time after
the termination of this Lease have the right of
20
<PAGE>
against the said Tenant, its successors, or assigns for any breach of this
Lease.
28. COVENANTS RUN TO HEIRS, ETC. It is agreed by the parties to this
----------------------------
Lease that all covenants, agreements, and undertakings contained in this Lease
shall extend to and be binding upon the respective successors and assigns of the
respective parties hereto the same as if they were in every case named and
expressed; also that the terms "Lessor" and "Tenant" shall be construed in the
singular or plural number according as they respectively represent one or more
than one persons, and in the event the Lessor or Tenant is a corporation,
limited liability company or partnership pronouns and other words referring to
the Lessor or Tenant herein shall be considered as changed to the proper
pronouns or words to indicate that the Lessor or Tenant is a corporation,
limited liability company or partnership.
29. ASSIGNMENT AND SUBLETTING. This Lease shall not be assigned,
-------------------------
mortgaged, pledged, encumbered or in any other manner transferred by Tenant,
voluntarily or involuntarily, by operation of law or otherwise, nor shall the
Leased Premises or any part thereof be sublet, licensed, granted to a
concessionaire or used or occupied by anyone other than Tenant without first
obtaining the written consent of Lessor.
A change in the control of Tenant, if its stock is not then publicly
held and traded, including, without limitation, a subsidiary of a publicly held
company, shall be deemed to be an
21
<PAGE>
assignment for all purposes of this Lease; provided, however that an assignment
to a wholly owned subsidiary of Tenant or to its parent corporation for the same
purpose as provided for in Article 3 of the Lease shall not require the consent
of Landlord.
If at any time during the term of this Lease, Tenant shall request
Lessor's consent to assign this Lease, or to sublet all or substantially all of
the Leased Premises, Tenant shall include with such requests the name and
business experience of the proposed transferee, assignee or sublessee, complete
and current financial statements of said transferee, assignee or sublessee, and
the rent and other terms of the proposed assignment, transfer or subletting.
In the event that Lessor consents to said subletting or assignment,
any amounts received by Tenant (other than the reasonable value paid to Tenant
in repayment for trade fixtures and inventory and other personal property of
Tenant) above the amounts payable by Tenant to Lessor hereunder shall be deemed,
"real estate profit" and shall be paid to Lessor.
If Lessor permits any such assignment, change or subletting, Tenant
agrees to pay Lessor's legal fees in connection therewith. IN ANY EVENT, LESSOR
SHALL HAVE THE RIGHT IN LESSOR'S SOLE DISCRETION TO WITHHOLD CONSENT TO AN
ASSIGNMENT OF THIS LEASE OR TO A SUBLETTING OF THE LEASED PREMISES.
If Tenant shall any time during the term of this Lease sublet all or
any part of the Leased Premises or assign this Lease, Tenant shall nevertheless
remain fully liable under all of
22
<PAGE>
the terms, covenants, and conditions of this Lease. If this Lease is assigned,
or if the Leased Premises or any part thereof are subleased or occupied by
anybody other than Tenant, Lessor may collect from the assignee, sublessee or
occupant any rent or other charges payable to Tenant under this Lease and apply
the amount collected to the rent and other charges herein reserved, but such
collection by Lessor shall not be deemed in acceptance of the assignee,
sublessee or occupant as a tenant nor a release of Tenant from the performance
of Tenant under this Lease.
Notwithstanding Lessor's consent to any assignment, subletting,
occupation or use by another person, any subsequent assignment, subletting,
occupation or use by another person shall require Lessor's prior written
consent.
30. RENEWAL. No renewal or extension of this Lease shall be binding upon
-------
either party unless it be in writing and signed by the Lessor and the Tenant,
and effected as set forth in this Agreement.
31. WATER, GAS AND ELECTRICAL RATES. Tenant shall pay for all utility
-------------------------------
services incident to its use of the Leased Premises, including, but not limited
to, all electrical, water and gas charges for electricity, water and gas used on
Leased Premises during the term of this Lease. If Tenant does not pay the same,
Lessor may pay the same and such payment shall be deemed to be additional rental
for the Leased Premises and shall be due and payable within ten (10) days
following receipt of notice from Lessor.
23
<PAGE>
32. MECHANIC'S LIENS. Without Lessor's prior written consent, Tenant
----------------
shall have no authority, express or implied, to create or place any lien or
encumbrance of any kind or nature whatsoever upon, or in any manner to bind, the
interest of Lessor in the Leased Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs, and each such claim shall affect and each such lien shall attach to, if
at all, only the Leasehold interest granted to Tenant by this instrument. It is
understood and agreed that if Tenant shall make repairs or improvements to the
demised Leased Premises, Tenant shall, in making such repairs or improvements,
act solely for its own benefit and not as an agent of Lessor, and that Lessor's
interest in the demised Leased Premises, shall not be subject to any mechanic's,
furnisher's or materialmen's liens. No contract for material will be entered
into by Tenant except with the express stipulation that any lien arising
therefrom shall not attach to Lessor's fee interest, but only to Tenant's
Leasehold interest, in the demised Leased Premises.
Tenant covenants and agrees that it will pay or cause to be paid all
sums due and payable by it on account of any labor performed or materials
furnished in connection with any work performed on the Leased Premises on which
any lien is or can be validly and legally asserted against its Leasehold
interest in the Leased Premises or the improvements thereon. Tenant will
24
<PAGE>
save and hold Lessor harmless from any and all loss, cost or expense, including
attorney's fees, based on or arising out of asserted claims or liens against the
Leasehold estate or against the rights, title and interest of the Lessor in the
Leased Premises or under the terms of this Lease. Tenant shall discharge by
payment or satisfactory bond pursuant to statutory procedures any lien arising
out of work performed or materials furnished on the demised Leased Premises by,
through or under Tenant within 30 days after the filing of same.
33. SPECIAL PROVISIONS.
------------------
(a) Limitation on Use. It is agreed and understood that the Leased
-----------------
Premises are leased to Tenant for the purpose of engaging in the commercial
printing business. Tenant agrees and binds itself to maintain and operate
the Leased Premises only for such purpose during the term of this Lease.
No other business shall be conducted upon the Leased Premises by Tenant
without the prior written consent of Lessor.
(b) Governing Law/Severability. This Lease shall be construed in
--------------------------
accordance with the laws of the State of Tennessee. If any part hereof is
contrary to, prohibited by or deemed invalid under applicable laws or
regulations of any governing jurisdiction, such provision shall be
inapplicable and deemed deleted but shall not invalidate the remaining
provisions hereof.
(c) Notices. All notices relating hereto shall be
-------
25
<PAGE>
delivered in person to Lessor or Tenant, or shall be delivered in person,
mailed, postage prepaid and certified or registered, to Lessor or Tenant at
their respective addresses as shown below or to any later address last
known to the sender:
LESSOR: TENANT:
Graphic Development Lithograph Printing Company
Company, L.P. of Memphis, Inc.
350 S. Yates 4222 Pilot Drive
Memphis, TN 38119 Memphis, TN 38118
ATTN: Walter P.
McMullen
(d) Condemnation. If the Leased Premises, or any material part
------------
thereof, shall be acquired or condemned by virtue or under threat of
eminent domain and in the further event Lessor, at its cost, is unable to
provide Tenant with a comparable substitute therefor prior to the taking of
the Leased Premises, or any material part thereof, then, in such event,
this Lease term shall terminate from the date of the title divesting from
the Lessor, or the substantial taking, whichever is sooner, and Tenant
shall have no claims against Lessor for the value of any unexpired term,
nor shall the Tenant be entitled to any part of the condemnation award or
private purchase price. For the purposes of this paragraph, a material
taking shall be defined as one which results in a material interference
with the operation of Tenant's business. The above statement to the
contrary notwithstanding, Tenant shall have the right to pursue its
26
<PAGE>
claims against such condemning authority for damages resulting to it as the
result of any required relocation following any such condemnation. In the
event this Lease continues following any immaterial condemnation, Lessor
shall at Lessor's expense restore and reconstruct the portion of the Leased
Premises not taken and the rent payable shall be adjusted to such an extent
as may be fair and reasonable under the circumstances.
(e) Tenant's Leasehold to be Subordinated. This Lease shall be
-------------------------------------
subordinated to any mortgage, deed of trust, or any other hypothecation or
security now or hereafter placed upon the Leased Premises by Lessor and to
any and all advances made on the security thereof and to any renewals,
modifications, consolidations, replacements and extensions thereof.
(f) Advances by Lessor. To the extent not otherwise provided for
------------------
herein, all sums advanced by the Lessor to effect performances required of
Tenant hereunder shall be due with the installment of rent next following
the advancement of any such sum by Lessor together with interest thereon
until paid at the rate of ten percent (10%) per annum or the maximum
effective contract rate of interest which may be lawfully charged at the
time of any such advancement, whichever is less.
(g) Holding Over. In the event of holding over by Tenant after the
------------
expiration or termination of this
27
<PAGE>
Lease, the hold over shall be as a tenant at will and all of the terms and
provisions of this Lease shall be applicable during that period, except
that Tenant shall pay Lessor as rental for the period of such hold over an
amount equal to one and one-half times the rent which would have been
payable by Tenant had the hold over been a part of the original term of
this Lease and except that Tenant shall not be deemed to possess any right
to continue its occupancy of the Leased Premises for any time. Tenant
agrees to vacate and deliver the Leased Premises to Lessor upon Tenant's
receipt of notice from Lessor to vacate. The rental payable during the hold
over period shall be payable to Lessor on demand. No holding over by
Tenant, whether with or without consent of Lessor, shall operate to extend
this Lease except as otherwise expressly provided.
(h) Waiver of Jury Trial. Tenant and Lessor waive any right to trial
--------------------
by jury or to have a jury participate in resolving any dispute, whether
sounding in contract, tort, or otherwise, between Lessor and Tenant arising
out of this Lease or any other instrument, document or agreement executed
or delivered in connection herewith or the transactions related hereto.
(i) Environmental Requirements. Except for Hazardous Material
--------------------------
contained in products used by Tenant in compliance
28
<PAGE>
with applicable law, Tenant shall not permit or cause any party to bring
any Hazardous Material upon the Leased Premises or transport, store, use,
generate, manufacture or release any Hazardous Material in or about the
Leased Premises without Lessor's prior written consent. Tenant, at its sole
cost and expense, shall operate its business in the Leased Premises in
strict compliance with all Environmental Requirements, and shall remediate
in a manner satisfactory to Lessor any Hazardous Material located on,
released on or from the Leased Premises whether by Tenant, its agents,
employees, contractors, subtenants or invitees or others and whether prior
to, or subsequent to, the date of this Lease, Tenant acknowledging that it
has been in possession of 4222 Pilot Drive since 1979 and that it came into
possession of 4240 Pilot Drive concurrent with Lessor's acquisition of
title and therefore, as to each, Tenant has had and will continue to have
complete responsibility for maintaining the Leased Premises in compliance
with all Environmental Requirements, other than, as to 4240 Pilot Drive, to
the extent indemnified by Ecolab, Inc. pursuant to letter agreement dated
August 1, 1994. Tenant shall complete and certify to disclosure statements
as requested by Lessor from time to time relating to Tenant's
transportation, storage, use, generation, manufacture, or release of
Hazardous Material on the Leased Premises. The term "Environmental
Requirements" means all applicable present and future
29
<PAGE>
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any governmental authority or agency regulating or
relating to health, safety, or environmental conditions on, under, or about
the Leased Premises or the environment, including without limitation, the
following: the Comprehensive Environmental Response, Compensation and
Liability Act; the Resource Conservation and Recovery Act; and all state
and local counterparts thereto, and any regulations or policies promulgated
or issued thereunder. The term "Hazardous Material" means and includes any
substance, material, waste, pollutant, or contaminant listed or defined as
hazardous or toxic, under any Environmental Requirements, asbestos and
petroleum, including crude oil or any fraction thereof, natural gas, or
synthetic gas usable for fuel (or mixtures of natural gas and such
synthetic gas). As defined in Environmental Requirements, Tenant is and
shall be deemed to be the "operator" of Tenant's "facility" and the "owner"
of all Hazardous Material heretofore or hereafter brought on the Leased
Premises whether by Tenant, its agents, employees, contractors or invitees,
or others and the wastes, by-products, or residues generated, resulting, or
produced therefrom.
Tenant shall indemnify, defend, and hold Lessor harmless from and
against any and all losses (including without limitation, diminution in
value of the Leased
30
<PAGE>
Premises and loss of rental income), claims, demands, actions, suits,
damages (including, without limitation, punitive damages), expenses
(including, without limitation, remediation, removal, repair, corrective
action, or cleanup expenses), and costs (including, without limitation,
actual attorneys' fees, consultant fees or expert fees and including,
without limitation, removal or management of any asbestos brought into the
Leased Premises or disturbed in breach of the requirements of this Article
33(i), regardless of whether such removal or management is required by law)
which are brought or recoverable against, or suffered or incurred by Lessor
as a result of any release of Hazardous Material for which Tenant is
obligated to remediate as provided above or any other breach of the
requirements under this Article 33(i) by Tenant, its agents, employees,
contractors, subtenants, assignees or invitees, regardless of whether
Tenant had knowledge of such noncompliance. The obligations of Tenant under
this Article 33(i) shall survive any termination of this Lease.
Lessor shall have access to, and a right to perform inspections
and tests of, the Leased Premises to determine Tenant's compliance with
Environmental Requirements, its obligations under this Article 33(i), or
the environmental condition of the Leased Premises. Access shall be
granted to Lessor upon Lessor's prior notice to Tenant and at such times so
as to minimize, so far as may be
31
<PAGE>
reasonable under the circumstances, any disturbance to Tenant's operations.
Such inspections and tests shall be conducted at Lessor's expense, unless
such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Lessor for
the cost of such inspection and tests. Lessor's receipt of or satisfaction
with any environmental assessment in no way waives any rights that Lessor
holds against Tenant.
34. ALL CONDITIONS CONTAINED HEREIN. This Lease contains all of the
-------------------------------
agreements and conditions made between the parties relating to the leasing of
the subject Leased Premises, and no representations or statements claimed to
have been made and not herein, or therein, contained shall vary or modify this
Lease in any way. THE PRECEDING TO THE CONTRARY NOTWITHSTANDING, the
obligations of the Tenant to the Lessor whether pursuant to the Prior Lease, or
any other lease agreement predating the Prior Lease, including obligations of
indemnity, shall not be discharged by this Agreement but shall remain in full
force and effect except to the extent specifically modified by the provisions of
this Agreement.
IN WITNESS WHEREOF, the Lessor and Tenant have caused this AMENDED AND
RESTATED LEASE AGREEMENT - OFFICE, COMMERCIAL PRINTING AND COMMERCIAL WAREHOUSE
FACILITY to be executed this 16th day of June, 1997.
LESSOR:
Graphic Development Company,
32
<PAGE>
L.P., A Tennessee limited
partnership
By: /s/ June H. Akers
-----------------
June H. Akers
Title: General Partner
By: /s/ Mary P. McMullen
--------------------
Mary P. McMullen
Title: General Partner
TENANT:
LITHOGRAPH PRINTING OF
MEMPHIS, A Tennessee Corporation
By: /s/ Walter P. McMullen
----------------------
Title: Chairman & CEO
STATE OF TENNESSEE
COUNTY OF SHELBY
BEFORE ME, the undersigned Notary Public in and for the State and County
aforesaid, personally appeared Mary P. McMullen, with who I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who upon
oath, acknowledged herself to be a general partner of Graphic Development
Company, L.P., the within named bargainor, a limited partnership, and that she
as such general partner, being duly authorized so to do, executed the foregoing
instrument for the purpose therein contained, by signing the name of the limited
partnership by herself as such general partner.
WITNESS my hand and notarial seal at office in Memphis, Tennessee, this 9th
day of June, 1997.
/s/ Mimi Cox
------------
Notary Public
My Commission Expires:
My Commission Expires Oct. 26, 1999
STATE OF TENNESSEE
COUNTY OF SHELBY
BEFORE ME, the undersigned Notary Public in and for the State and County
aforesaid, personally appeared June H. Akers, with who I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who upon
oath, acknowledged herself to be a general partner of Graphic Development
Company, L.P., the
33
<PAGE>
within named bargainor, a limited partnership, and that she as such general
partner, being duly authorized so to do, executed the foregoing instrument for
the purpose therein contained, by signing the name of the limited partnership by
herself as such general partner.
WITNESS my hand and notarial seal at office in Memphis, Tennessee, this
16th day of June, 1997.
/s/ Martha Jean Mitchell
------------------------
Notary Public
My Commission Expires:
3/25/98
STATE OF TENNESSEE
COUNTY OF SHELBY
Before me, the undesigned Notary Public of the State and County aforesaid,
personally appeared Walter P. McMullen, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the Chairman & CEO of Lithograph Printing Company of
Memphis, Inc., the within named bargainor, a corporation, and that he as such
Chairman & CEO, being authorized so to do, executed the foregoing instrument for
the purposes therein contained, by signing the name of the corporation by
himself as such Chairman & CEO.
WITNESS my hand and notarial seal at office in Memphis, Tennessee, this
16th day of June, 1997.
/s/ Martha Jean Mitchell
------------------------
Notary Public
My Commission Expires:
3/25/98
34
<PAGE>
EXHIBIT A
TO
LEASE AGREEMENT -
OFFICE AND COMMERCIAL WAREHOUSE FACILITY
(Description of Leased Property)
35