EXHIBIT 10Q
LEASE CANCELLATION AGREEMENT
THIS LEASE CANCELLATION AGREEMENT (this "Agreement") is made
as of this 17th day of January, 1995, by and between REAL ESTATE
PROPERTIES LIMITED PARTNERSHIP, an Oregon limited partnership
("Lessor"), and FRED MEYER, INC., a Delaware ("Lessee").
RECITALS
This Agreement is entered into with reference to and upon
the basis of the following facts, understandings and agreements:
A. By a certain Lease Agreement dated October 22, 1986,
Lessor's predecessor demised to Lessee certain real property and
the improvements located thereon which real property is more
particularly described in Exhibit A, attached hereto and
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incorporated herein by reference (the "Property") Said Lease
Agreement was subsequently amended by Lease Modification
Agreement dated February 7, 1992. Said Lease Agreement, as
amended, is hereinafter referred to as the "Lease".
B. Lessor has entered into an agreement to sell the
Property to Walter W. McMonies, Jr. and Nancy E. Duhnkrack
(collectively "Buyer") which agreement is conditioned upon the
cancellation of the Lease and the investigation, and, if
necessary, remediation of certain environmental matters on the
Property.
C. Following negotiations, Lessor and Lessee have reached
agreement to terminate the Lease effective as of and concurrent
with the close of escrow transferring fee title to the Property
to the Buyer, provided that, and as a condition to termination,
Lessee performs certain environmental investigations and, if
necessary, remediation.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, receipt of which is hereby
acknowledged, Lessor and Lessee hereby agree as follows:
1. Effective Date. This Agreement and each and every
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provision hereof shall be effective as of the date first
hereinabove written (the "Effective Date").
2. Agreement to Cancel Lease.
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(a) Subject to and on the terms and conditions herein
set forth, Lessor and Lessee hereby agree to cancel the Lease,
which cancellation shall be effective as of the date of Closing
of the sale of the Property by Lessor to Buyer (the "Closing
Date").
(b) The cancellation of the Lease shall be
accomplished through an escrow (the "Escrow") which Lessor has
established or will establish with First American Title Insurance
Company (the "Escrow Holder") at 200 S. W. Market Street, Suite
1776, Portland, Oregon 97201-5786, Attention: Mitch Steeves.
(c) Cancellation of this Lease shall occur on the
Closing Date. In the event the Closing Date has not occurred
within ninety (90) days of the Effective Date, Lessee may
terminate this Agreement by delivering written notice thereof to
Lessor and the Lease shall remain in full force and effect,
without modification, and neither party shall have any further
liability hereunder.
3. Consideration. The consideration which Lessee shall
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provide to Lessor for the cancellation of the Lease shall be Two
Hundred Seventy-Five Thousand Dollars ($275,000.00), which Lessee
shall pay to Lessor through Escrow on the Closing Date.
4. Remediation Condition. Termination of the Lease is
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expressly conditioned upon Lessee performing or causing to be
performed the environmental remediation specified in clauses (a)
through (c) below at the Property (collectively, the
"Remediation") to the satisfaction of Lessor:
(a) Remediation of all environmental contamination
disclosed in the Service Agreement dated August 31, 1994 between
Hahn and Associates, Inc. and Lessee, a copy of which is attached
hereto as Exhibit B and incorporated herein by reference (the
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"Hahn Agreement");
(b) Completion of additional investigations as
detailed in the Hahn Agreement, and remediation of any
environmental contamination disclosed by such additional
investigations; and
(c) Abatement of all asbestos in the building located
on the Property.
Upon completion of the Remediation, Lessee shall
deliver to Lessor the reports of its environmental consultants
showing that the Remediation has been completed in accordance
with the laws of the State of Oregon and with generally accepted
environmental practice in the State of Oregon. Lessor shall
forward such information to Buyer within thirty (30) days
following receipt by Lessor of such reports, and Lessor shall,
after consulting with Buyer, either approve or disapprove the
environmental condition of the Property. In the event Lessor
disapproves the environmental condition of the Property, Lessor
shall give Lessee written notice thereof, which notice shall
specify in reasonable detail the reason for such disapproval.
Failure to give written notice of disapproval within thirty-five
(35) days or receipt of such reports shall be deemed approval.
In the event of disapproval, termination of the Lease is
conditioned upon Lessee taking such steps or performing such
additional remediation as is necessary to satisfy Lessor's
objections.
If at any time Lessee determines that completion of the
Remediation (or performance of any additional work requested by
Lessor based on review of the reports as provided above) to
Lessor's satisfaction would be too costly or difficult, Lessee
shall so notify Lessor, in which case this Agreement shall be
terminated, and the Lease shall continue in full force and effect
without modification; provided, however, that Lessor may preserve
this Agreement by notifying Lessee, within ten (10) days of
receipt of Lessee's termination notice, that Lessee waives the
condition specified in this Section 4, in which case the Lease
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shall be terminated in accordance with this Agreement despite the
nonsatisfaction of such condition.
5. Mutual General Releases; Reciprocal Indemnities.
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As of the Closing Date, Lessor and Lessee each hereby waive,
release and discharge each other from any further obligation or
liability whatsoever under the Lease, whether known or unknown,
suspected or unsuspected, or foreseeable or unforeseeable.
The mutual releases given hereunder are intended to and
shall be full and general releases of any and all claims, rights,
demands, actions, causes of action, indebtedness, obligations,
damages, and liabilities of every kind, nature and character
whatsoever, whether or not known, suspected or claimed, of which
either party hereto ever had, now has, or may hereafter have
against the other by reason of any act, omission, matter, cause,
or thing, including but not limited to any act, omission, cause,
matter or thing directly or indirectly arising out of or in
connection with the Lease excepting the environmental condition
of the Property. Each of the parties hereto expressly waives any
benefits due to it under the provisions of any law which
provides, in pertinent part that a general release does not
extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with
the debtor.
The parties understand that the facts in respect of which
the release made in this instrument is given may hereafter turn
out to be other than or different from the facts in that
connection now known or believed by the parties to be true; and
the parties hereby accept and assume the risk of all facts
turning out to be different and agree that this release shall be
and remain in all respects effective and not subject to
termination or recision by virtue of any such difference in
facts.
6. Successors and Assigns. This Agreement shall bind and
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inure to the benefit of each of the parties hereto and their
respective heirs, personal representatives, successors and
assigns.
7. Governing Law. This Agreement and the rights and
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obligations of the parties hereunder shall be construed and
governed in accordance with the laws of the State of Oregon.
8. Attorneys' Fees. In the event either party brings an
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action at law or in equity to interpret, enforce, or seek redress
for the breach of this Agreement, the prevailing party in such
action shall be entitled to recover from the other its attorneys'
fees and all costs and fees (including expert witness fees and
all cost of appeal) incurred in said action in addition to all
other appropriate relief.
9. Integration; Modification; Waivers. This Agreement
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constitutes the complete agreement and understanding by and
between the parties with respect to the subject matter hereof and
supersedes any and all prior representations, understandings and
agreements, whether written or oral. This Agreement may be
modified only by an instrument in writing signed by each of the
parties hereto. No provision of this Agreement may be waived,
except in a writing signed by the party to be charged with
waiver.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the respective dates set opposite their signatures
below, but this Agreement on behalf of such party shall be deemed
to have been dated as of the date first above written.
LESSOR:
REAL ESTATE PROPERTIES LIMITED
PARTNERSHIP,
an Oregon limited partnership
By FMGP Associates,
an Oregon limited partnership,
its General Partner
By FMGP Incorporated,
a Delaware corporation
its General Partner
Date: January 18, 1995 By RICHARD P. BUONO
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Richard P. Buono
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(typed or printed name)
Its Vice President
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LESSEE:
FRED MEYER, INC.
a Delaware corporation
Date: January 17, 1995 By SCOTT L. WIPPEL
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Scott L. Wippel
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(typed or printed name)
Its Senior Vice President -
Corporate Facilities
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Date: __________, 1995 By ______________________________________
_________________________________________
(typed or printed name)
Its _____________________________________
(Acknowledgments on next page)
(Acknowledgment for Lessor)
STATE OF ______________ )
) ss.
County of _____________ )
On __________, 1995, before me, ___________________________,
Notary Public, personally appeared ____________________________
_____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/
their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public in and for said
County and State
My Commission Expires: _________________
(Acknowledgment for Lessee)
STATE OF ______________ )
) ss.
County of _____________ )
On __________, 1995, before me, ___________________________,
Notary Public, personally appeared ____________________________
_____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/
their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public in and for said
County and State
My Commission Expires: _________________
EXHIBIT "A"
Legal Description
PARCEL I:
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Beginning at the Southeast corner of Lot 19, Block 277, COUCH'S
ADDITION TO THE CITY OF PORTLAND; thence North 100.11 feet; thence
West 100 feet; thence South 100.11 feet; thence East 100 feet to the
beginning, being part of Lot 16, Block 276 and parts of Lots 19 and
20, Block 277, COUCH'S ADDITION TO THE CITY OF PORTLAND, and part of
Block 28, KINGS SECOND ADDITION TO THE CITY OF PORTLAND, in the City
of Portland, County of Multnomah and State of Oregon.
PARCEL II:
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The following described real property in the City of Portland, County
of Multnomah and State of Oregon, bounded and described as follows,
to wit:
Part of Lot 16, Block 276, COUCH'S ADDITION TO THE CITY OF PORTLAND,
according to plat filed in the Office of the County Clerk of
Multnomah County, Oregon by Board of School Trustees on the 9th day
of September, 1905, recorded in Volume 326, page 75, and tract
adjoining the said parcel of real property being otherwise described
by metes and bounds as follows:
Commencing on the East line of NW 20th Avenue, formerly N. 19th
Street in the City of Portland at the Southwest corner of the tract
of parcel of real property heretofore conveyed by the Board of School
Trustees, a corporation, to Frances A. Gill, said point being 176.25
feet South of the South line of NW Everett Street; running thence
East along the South line of the Frances A. Gill tract, 100 feet;
thence South parallel with the East line of NW 20th Avenue, 50 feet;
thence West parallel with the South line of NW Everett Street 100
feet to the East line of NW 20th Avenue; thence North along the East
line of NW 20th Avenue, 50 feet to the place of beginning.
PARCEL III:
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Lot 17, Block 276, Subdivision of Blocks 276, 277 and 278, COUCH'S
ADDITION TO THE CITY OF PORTLAND, in the City of Portland, County of
Multnomah and State of Oregon.
EXHIBIT B
Copy of Agreement
Property No. 304-01/TW-2
Portland, Oregon