EXHIBIT 10.15.1
AMENDED AND RESTATED
CREDIT FACILITIES AGREEMENT
AMENDED AND RESTATED CREDIT FACILITIES AGREEMENT dated as of October 14,
1994, between SUNBELT NURSERY GROUP, INC., a Delaware corporation (the
"Company"), PIER 1 IMPORTS, INC., a Delaware corporation, and PIER LEASE,
INC., a Delaware corporation (the "Lender").
The Lender and Pier 1 Imports, Inc., an indirect parent company of the
Lender, have provided certain revolving credit and lease facilities to the
Company, and the Company has requested the Lender to terminate all revolving
credit facilities and to further extend certain lease facilities to the
Company. The Lender is willing to terminate all revolving credit facilities
and to further extend such lease facilities to the Company by amending the
Credit Facilities Agreement, dated April 28, 1993, between the Company and
Pier 1 Imports, Inc. on the terms and conditions herein set forth.
Accordingly, the Company and the Lender agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Affiliate" shall mean a Person that directly, or indirectly through one
or more intermediaries, controls or is controlled by or is under common
control with another Person.
"Aggregate Pier Group Costs" shall mean the sum of all Pier Group Costs for
all properties of the Company included in the Lease Facility.
"Agreement" means this Amended and Restated Credit Facilities Agreement,
as the same may be amended, supplemented or modified from time to time.
"Applicable Law" shall mean the Laws of the United States of America
applicable to contracts made or performed in the State of Texas, including
without limitation 12 U.S.C. 86(a), as amended, and any other statute of the
United States of America now or at any time hereafter prescribing maximum
rates of interest on loans, advances and extensions of credit, and the Laws of
the State of Texas, including without limitation Articles 5069-1.04 and 5069-
1.07(a), Title 79, Revised Civil Statutes of Texas, 1925 (Art. 5069-1.04 and
Art. 5069-1.07(a), Vernon's Annotated Texas Statutes), as amended ("Article
1.04"), and any other statute of, or any provisions of the Constitution of,
the State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit.
"Auditors" shall mean independent certified public accountants selected by
the Company and acceptable to the Lender.
"Communications" has the meaning specified in Section 7.2.
"Company" has the meaning specified in the introduction to this Agreement.
"Default" means the occurrence of any event which with the giving of notice
or the passage of time or both would become an Event of Default.
"Environmental Law" means any Law that relates to the pollution or
protection of the environment or to Hazardous Materials, and includes all
terms and conditions of any permits issued to the Company or any of its
Subsidiaries or with respect to any of their respective owned or leased
properties under any such Law.
"Environmental Liabilities" means all liabilities, losses, fines,
penalties, charges, damages (including damages to Persons or the environment),
costs, or expenses, or any claim therefor asserted by any Person against, or
payable by the Company or any of its Subsidiaries, or any predecessor for
whose obligations and liabilities the Company or any of its Subsidiaries may
be liable as the result of any merger, de facto merger, stock purchase, or
other circumstance, that results in whole or in part from (a) the violation of
any Environmental Law, or (b) the presence, release, or threatened release of
any Hazardous Material on, at, or from any of the Company's or any of its
Subsidiaries' owned or leased properties. Without limiting the foregoing,
Environmental Liabilities include all costs and expenses (including, without
limitation, costs and expenses for legal, engineering, and other consultant
services, for investigations, testing, sampling, and monitoring, for boring,
excavation, and construction, for removal, modification, or replacement of
underground storage tanks or other equipment or facilities, for labor and
materials, and for proper storage, treatment, and disposal of Hazardous
Materials in compliance with Environmental Laws) of actions or activities to
(i) clean up or remove Hazardous Materials from the environment, (ii) prevent
or minimize the further movement, leaching, or migration of Hazardous
Materials in the environment, (iii) prevent, minimize, or mitigate the release
or threatened release of Hazardous Materials into the environment or injury or
damage from such release, (iv) remove, encapsulate, or otherwise abate or
control asbestos or asbestos-containing materials, or (v) comply with any
order, judgment, or other requirements of any Tribunal pursuant to any
Environmental Law.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
thereunder.
"Event of Default" means any of the events described in Section 6.1,
provided there has been satisfied any requirement in connection therewith for
the giving of notice, lapse of time or happening of any further condition,
event or act.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board, which are applicable as of the
date in question. The requisite that such principles be applied on a
consistent basis shall mean that the accounting principles observed in a
current period are comparable in all material respects to those applied in a
preceding period. Unless otherwise indicated herein, all accounting terms
shall be defined according to GAAP.
"Guaranteed Indebtedness" shall mean, with respect to any Person, without
duplication, all Indebtedness of another Person referred to in clause (i),
(ii) or (iii) of the definition of "Indebtedness," guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly in any manner by such Person.
"Hazardous Material" means any substance (a) the presence of which requires
removal, remediation, or investigation under any Environmental Law, (b) that
is defined or classified as a hazardous waste, hazardous material, pollutant,
contaminant, or toxic or hazardous substance under any Environmental Law,
including without limitation, any hazardous substance within the meaning of
Section 101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, 42 U.S.C. Sec. 9601(14), or (c) that contains or
consists of gasoline, diesel fuel, oil, fuel oil, or other petroleum
hydrocarbons.
"Highest Lawful Rate" shall mean at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lender is then
permitted to charge the Company on the Obligation. If the maximum rate of
interest which, under Applicable Law, the Lender is permitted to charge the
Company on the Obligation shall change after the date hereof, the Highest
Lawful Rate shall be automatically increased or decreased, as the case may be,
as of the effective time of such change without notice to the Company. For
purposes of determining the Highest Lawful Rate under Applicable Law, the
applicable rate ceiling shall be (i) the indicated rate ceiling described in
and computed in accordance with the provisions of Section (a)(a) of Article
1.04; or (ii) provided notice is given as required in Section (h)(1) of
Article 1.04, either the annualized ceiling or quarterly ceiling computed
pursuant to Section (d) of Article 1.04; provided, however, that at any time
such ceiling shall be less than 18% per annum or more than 24% per annum, the
provisions of Section (b)(1) and (2) of Article 1.04 shall control for
purposes of such determination, as applicable.
"Indebtedness" shall mean, with respect to any Person, (i) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) all obligations under leases which are required to
be recorded on the financial statements of such Person in accordance with GAAP
as capital leases in respect of which such Person is liable as lessee, and
(iii) any other indebtedness required to be recorded on the financial
statements of such Person in accordance with GAAP.
"Investment" shall mean any direct or indirect purchase or other
acquisition of, or a beneficial interest in, capital stock or other securities
of any other Person, or any direct or indirect loan, advance (other than
advances to employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital
contribution to or investment in any other Person, including without
limitation the incurrence or sufferance of Indebtedness or accounts receivable
of any other Person which are not current assets or do not arise from sales to
that other Person in the ordinary course of business.
"Laws" shall mean all statutes, laws, ordinances, rules, regulations,
orders, writs, injunctions or decrees of any Tribunal.
"Lease Facility" has the meaning specified in Section 2.1.
"Lender" has the meaning specified in the introduction to this Agreement.
"Litigation" shall mean any proceeding, claim, lawsuit, arbitration and/or
investigation conducted or threatened by or before any Tribunal, including
without limitation proceedings, claims, lawsuits and/or investigations under
or pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax or other Law, or under or pursuant to any
contract, agreement or other instrument; provided, however, that "Litigation"
shall not include any of the foregoing that is covered by adequate insurance.
"Material Adverse Change or Effect" shall mean any act, circumstance or
event that (i) causes a Default or Event of Default, or (ii) otherwise might
be material and adverse to the financial condition or business operations of
the Company and its Subsidiaries on a consolidated basis.
"Obligation" shall mean all present and future obligations, indebtedness,
and liabilities, and all renewals and extensions of all or any part thereof,
of the Company and/or any of its Subsidiaries to the Lender or any of its
Affiliates arising from, by virtue of or pursuant to this Agreement, any
Sublease or any Sublease Guarantee, and any and all renewals and extensions
thereof, or any part thereof, or future amendments thereto, all interest
accruing on all or any part thereof, and attorneys' fees incurred in the
enforcement or the collection of all or any part thereof, whether such
obligations, indebtedness, and liabilities are direct, indirect, fixed,
contingent, joint, several, or joint and several.
"Officers' Certificate" means a certificate signed in the name of the
Company by either its Chairman, its President, one of its Vice Presidents, its
Treasurer or its Assistant Treasurer, and either its Secretary or one of its
Assistant Secretaries.
"Person" shall mean and include an individual, partnership, joint venture,
corporation, trust, Tribunal, unincorporated organization or government, or
any department, agency or political subdivision thereof.
"Pier Group" means Pier Group, Inc., a Delaware corporation.
"Pier Group Costs" has the meaning specified as "Total Costs" in the
Sublease.
"Plan" shall mean any plan subject to Tile IV of ERISA and maintained for
employees of the Company or any of its Subsidiaries, or of any member of a
controlled group of corporations as defined in Section 1563 of the Internal
Revenue Code of 1986, as amended, of which the Company or any of its
Subsidiaries is a part.
"Property" shall mean all types of real, personal, tangible, intangible or
mixed property.
"Restricted Payment" shall mean (i) any declaration or payment of any
dividend (other than a stock dividend) on, or the making of any distribution,
loan, advance or Investment to or in any holder of, any shares of capital
stock of the Company or its Subsidiaries, or (ii) any purchase, redemption or
other acquisition or retirement for value of any shares of capital stock of
the Company or its Subsidiaries; but excluding cash payments to Timothy R.
Duoos made solely pursuant to the agreement entered into on October 14, 1994,
providing a fee to him for his guaranty of that certain Loan and Security
Agreement between the Company and American National Bank.
"Rights" shall mean rights, remedies, powers and privileges.
"Sublease" shall mean an amended and restated sublease agreement between
the Lender or a Subsidiary of the Lender and a Subsidiary of the Company, in
substantially the form attached hereto as Exhibit I, with respect to Company
property included in the Lease Facility.
"Sublease Guarantee" shall mean the Sublease Guarantee agreement of the
Company guaranteeing the obligations of the Sublessee under any Sublease.
"Subsidiary" shall mean any corporation at least a majority of whose
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are owned by any Person, or one or more Subsidiaries of that
Person, or a combination thereof.
"Tangible Net Worth" shall mean the total amount of stockholders' equity
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, minus:
(i) such portion of the assets which is attributable to interests held
by Persons other than the Company and its Subsidiaries (to the extent not
already deducted from stockholders' equity);
(ii) treasury stock (to the extent not already deducted from
stockholders' equity);
(iii) an amount equal to the excess, if any, of the amount reflected for
the securities of any Person which is not a Subsidiary of the Company over
the lesser of cost or market value (as determined in good faith by the
applicable board of directors and as evidenced by a resolution of such
board of directors) of such securities, except that in the case of any
securities as to which such Person is not required to file a Schedule 13D
under the Securities Exchange Act of 1934, the deduction shall not be made.
(iv) all good will, organization or developmental expenses and other
intangible items, including without limitation trademarks, patents, service
marks, trade names, copyrights, licenses and other similar agreements.
"Taxes" shall mean all taxes, assessments, fees or other charges at any
time imposed by any Laws or Tribunal.
"Tribunal" shall mean any municipal, state, commonwealth, federal, foreign,
territorial or other court, governmental body, subdivision, agency,
department, commission, board, bureau or instrumentality.
Section 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding."
Section 1.3 Accounting Terms. All accounting terms shall be construed
in accordance with GAAP.
ARTICLE II
SUBLEASE FACILITY
Section 2.1 Subleases. Lender is currently leasing from Pier Group,
and in reliance upon the representations and warranties set forth herein
Lender agrees to sublease to the Company and/or its Subsidiaries, the
properties listed on Exhibit II hereto, commencing on the dates listed
therewith, pursuant to the terms and conditions set forth in the Sublease for
each property (collectively, such leased properties constituting the "Lease
Facility"). Prior to the effective date of each Sublease, all Additional
Charges (as defined in each sublease between Pier Lease, Inc. and Wolfe
Nursery, Inc., effective as of April 28, 1993) shall be payable with respect
to a subleased property through the last day of the month preceding the
effective date of each Sublease. The Sublease properties may be sold by Pier
Group in accordance with the terms provided in each Sublease; provided, that
after giving effect to any such sale, the Aggregate Pier Group Costs for all
properties remaining in the Lease Facility shall not exceed the aggregate
appraised value (as provided to Pier Group prior to the date hereof) of such
remaining properties plus the aggregate cash deposit held by Pier Group from
the Company. If after giving effect to a sale of one or more Subleased
properties from Pier Group, the aggregate appraised value of properties
remaining in the Lease Facility exceeds the Aggregate Pier Group Costs for
such remaining properties, then Lender shall cause Pier Group to remit to the
Company a portion of the then current deposit, if any, held by Pier Group
equal to the amount of such excess, but in no event more than the total amount
of such deposit. Commencing October 21, 1995, the Lender shall cause Pier
Group to credit for the account of the Company interest on the amount of any
such deposit at a rate equal to the "Adjusted InterBank Rate" (as defined in
the Sublease) as such rate shall be determined from time to time.
Section 2.2 Fees. The Company agrees to pay to the Lender on or
before the first business day of each month, commencing November 1994, for a
period of 36 months a commitment fee equal to $8,884.08, and on the same day
of each month until the last day on which any properties are included in the
Lease Facility prior to June 30, 1995, a commitment fee equal to one-twelfth
of one percent (1/12th of 1%) of the total amount of the Pier Group Costs of
all such properties included within the Lease Facility for which the
commencement date listed on Exhibit II has not occurred.
ARTICLE III
CONDITIONS
Section 3.1 Conditions Precedent to Lease Facility. The obligation of
the Lender to enter into the Subleases is subject to the condition precedent
that it shall have received the following, each dated the date hereof (unless
otherwise indicated):
(a) Officers' Certificates certifying, inter alia, (i) true and correct
copies (attached thereto) of resolutions adopted by the Boards of Directors or
Executive Committee, as appropriate, of the Company and/or its Subsidiary
authorizing the Company and/or such Subsidiary to enter into the Subleases,
(ii) true and correct copies (attached thereto) of the Company's and/or such
Subsidiary's certificate of incorporation certified by the appropriate
governmental official of its respective state of incorporation, (iii) true and
correct copies (attached thereto) of bylaws of the Company and/or such
Subsidiary, (iv) certificates of existence, good standing and qualification
(attached thereto) issued by the appropriate governmental officials of such
jurisdictions as the conduct and nature of the Company's and/or such
Subsidiary's business requires it to be so qualified, (v) the incumbency and
specimen signatures of the Persons executing any documents on behalf of the
Company and/or such Subsidiary, (vi) the truth of the representations and
warranties made by the Company in this Agreement, and (vii) the absence of the
occurrence and continuance of any Default or Event of Default.
(b) The Company or any of its Subsidiaries shall execute and deliver a
Sublease and the Company shall execute and deliver the Sublease Guarantee (or
a confirmation of the continuous nature of its existing guarantee).
Section 3.2 Legal Details. All documents executed or submitted
pursuant hereto by the Company shall be satisfactory in form and substance to
the Lender and its counsel. The Lender and its counsel shall receive all
information, and such counterpart originals or certified or other copies of
such materials, as they may deem necessary or appropriate. All legal matters
incident to the transactions contemplated by this Agreement (including without
limitation matters arising from time to time as a result of changes occurring
with respect to any Laws) shall be satisfactory to counsel to the Lender.
ARTICLE IV
COVENANTS
From the date hereof, until payment in full of the Obligation and
termination of all Subleases:
Section 4.1 Affirmative Covenants.
(a) Compliance with Laws. The Company shall comply, and shall cause
each of its Subsidiaries to comply, in all material respects with all
applicable Laws, for which the failure to so comply could have a Material
Adverse Effect, and such compliance shall include, without limitation, paying
before the same become delinquent all Taxes imposed upon it or its Property,
except to the extent contested diligently and in good faith, and for which
adequate reserves are established.
(b) Environmental Laws. The Company shall, and shall cause each of its
Subsidiaries to, (a) comply in all material respects with Environmental Laws,
and (b) continue to maintain a management system designed to ensure
compliance, in all material respects, with Environmental Laws and minimize
financial and other risks to the Company and its Subsidiaries arising under
Environmental Laws or as the result of environmentally related injuries to
persons or property. If the Lender has reason to believe that the Company is
not in material compliance with Environmental Laws, the Company shall furnish,
and shall cause each of its Subsidiaries to furnish, to the Lender reasonable
evidence of compliance with the foregoing covenant within 45 days after any
request therefor from the Lender.
(c) Maintenance of Existence; Licenses and Franchises. Except as
permitted by Section 4.2(a), the Company shall maintain, and shall cause each
of its Subsidiaries to maintain, its existence, and the Company shall preserve
and maintain, and shall cause each of its Subsidiaries to preserve and
maintain, all material licenses, privileges, franchises, certificates,
authorizations and other permits and agreements necessary for the operation of
its business, provided, however, that the Company shall be permitted to
dissolve its Green Brothers Nursery, Inc. and Houston Patio and Garden
Centers, Inc. subsidiaries.
(d) Insurance. The Company shall maintain, and shall cause each of its
Subsidiaries to maintain, insurance policies with respect to its Property and
business in such amounts and against such casualties and contingencies as is
customary in its industry.
(e) (Intentionally omitted.)
(f) (Intentionally omitted.)
(g) Tangible Net Worth. The Company and its Subsidiaries shall maintain
a Tangible Net Worth of not less than $6,000,000.
(h) (Intentionally omitted.)
(i) (Intentionally omitted.)
(j) (Intentionally omitted.)
(k) Reporting Requirements. The Company and its Subsidiaries shall
maintain a standard system of accounting in accordance with GAAP. The Company
shall furnish to the Lender:
(i) Annual Report. As soon as available and in any event within 90 days
after the end of each fiscal year, its annual report to shareholders (or
equivalent report), accompanied by an opinion of Auditors stating that the
financial statements were prepared in accordance with GAAP and present
fairly the financial condition of the Company and its Subsidiaries;
(ii) Quarterly Reports. As soon as available and in any event within 45
days after the end of each fiscal quarter (other than the fourth fiscal
quarter), its quarterly report to shareholders (or equivalent report);
(iii) Securities Filings. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Company or any of its Subsidiaries sends to shareholders, and copies of all
regular, periodic and special reports, and all registration statements,
which the Company or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange;
(iv) Notice of Default. Immediately upon the happening of any condition
or event that constitutes a Default or Event of Default under this
Agreement, a written notice specifying the details of such Default or Event
of Default and the action proposed to be taken with respect thereto;
(v) Notice of Litigation. Immediately upon becoming aware of the
existence of any Litigation involving the Company, any of its Subsidiaries
or any of their Property that could have a Material Adverse Effect, a
written notice specifying the nature and status thereof and the action
being taken and proposed to be taken with respect thereto; and
(vi) Requested Information. With reasonable promptness, such other data
and information as from time to time reasonably may be requested by the
Lender.
(l) Officer's Certificate. Each set of financial statements delivered
to the Lender pursuant to Sections 4.1(k)(i) and (ii) hereof shall be
accompanied by an Officer's Certificate acceptable to the Lender, setting
forth calculations, in form and detail satisfactory to the Lender,
demonstrating compliance with Section 4.1(g).
(m) Inspection. The Company shall permit, and shall cause each of its
Subsidiaries to permit, any employees and other representatives of the Lender
to visit and inspect any Properties, to examine all books of account, records,
reports and other papers, to make copies and extracts therefrom, and to
discuss their affairs, finances and accounts with their officers, employees
and Auditors (and by this provision such Auditors are authorized to discuss
with the Lender the finances and affairs of the Company and each of its
Subsidiaries), at such times and as often as may be reasonably requested;
provided, however, that the Lender shall cause such employees and
representatives of the Lender to hold in strict confidence all information
acquired pursuant to the Lender's rights under this Section 4.1(m), except for
necessary disclosure in connection with disputes relating to the Subleases, or
disclosure compelled by judicial or administrative process or by other
requirements of Law.
Section 4.2 Negative Covenants.
(a) Mergers, Etc. The Company shall not merge with or into, or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to,
any Person, or permit or suffer any of its Subsidiaries to do so; provided,
however, that any Subsidiary may merge or consolidate with or into, or
transfer assets to or acquire assets from the Company or any other Subsidiary,
so long as, immediately after giving effect thereto, no circumstance or event
shall exist and be continuing that constitutes a Default or Event of Default,
the surviving corporation shall become party to the Sublease Guarantee upon
the request of the Lender, and in the case of any such merger or consolidation
to which Company is a party, the Company shall be the surviving corporation.
(b) (Intentionally omitted.)
(c) (Intentionally omitted.)
(d) Dividends and Other Distributions. The Company shall not make, and
shall not permit any of its Subsidiaries to make, any Restricted Payment,
except for dividends or other distributions paid (i) solely for the purpose of
making scheduled payments of principal and interest on promissory notes in
effect on the date hereof and disclosed to the Lender in writing, or (ii) by
any wholly owned Subsidiary of the Company.
(e) Change in Nature of Business. The Company shall not make, and shall
not permit any of its Subsidiaries to make, any material change in the nature
of any of their businesses as conducted on the date hereof.
(f) (Intentionally omitted.)
(g) (Intentionally omitted.)
(h) (Intentionally omitted.)
Section 4.3 Liens. The Lender will not create or permit any liens on
the properties constituting the Lease Facility, other than liens in favor of
Pier Group's lenders, liens permitted in accordance with the credit agreement
between Pier Group and its lenders, or liens created or permitted by the
Company or a Subsidiary of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents, warrants and covenants as follows:
Section 5.1 Organization and Qualification. The Company and each of
its Subsidiaries are duly organized, validly existing and in good standing as
corporations under the Laws of their states of organization, and the Company
is qualified to transact business and is in good standing as a foreign
corporation in the States of Texas and California and the Company's
subsidiaries are duly qualified or licensed and in good standing in each state
in which the nature of the business transacted or the Property owned in such
as to require qualification or licensing.
Section 5.2 Financial Statements. The financial statements of the
Company and its Subsidiaries furnished to the Lender dated as of January 31,
1994, are complete and correct in all material respects and were prepared in
accordance with GAAP. Such financial statements present fairly the financial
condition of the Company and its Subsidiaries as of the dates indicated and
for the periods involved, and show in all material respects all material
liabilities, direct and contingent, including, without limitation, any
Environmental Liability known by the Company or its Subsidiaries, the effect
of which would have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole. Since the date of the latest of such financial
statements, there has been no Material Adverse Change.
Section 5.3 Title to Properties. The Company and its Subsidiaries
have corporate power, authority and legal right to own and operate the
Properties which each now owns, and to carry on the lines of business in which
each is now engaged. The Company and each Subsidiary have good and marketable
title to all Property owned by it, free and clear of all liens, claims,
security interests and other encumbrances such as do not individually or
collectively have a Material Adverse Effect. There are no Environmental
Liabilities known to the Company or its Subsidiaries with respect to any of
the Company's or any of its Subsidiaries' properties that would have a
Material Adverse Effect.
Section 5.4 Conflicting Agreements and Other Matters. None of the
Company and its Subsidiaries is a party to any contract or agreement or
subject to any restriction which materially and adversely affects its
business, Property or financial condition. Neither the Company nor any of its
Subsidiaries is a party to or otherwise subject to any contract or agreement
which restricts or otherwise affects its right or ability to execute the
Subleases and Sublease Guarantees. Neither the execution or delivery of any
Sublease or Sublease Guarantee, nor compliance therewith, will conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any lien upon any Properties of the Company or its Subsidiaries under, or
require any consent, approval or other action by, notice to or filing with any
Tribunal pursuant to, the certificate of incorporation or bylaws of the
Company or its Subsidiaries, any award of any arbitrator, or any agreement,
instrument or Law to which the Company, its Subsidiaries or their Property is
subject.
Section 5.5 Authorization. The Boards of Directors of the Company
and/or its Subsidiaries duly authorized the execution, delivery and
performance of the Subleases and Sublease Guarantees. No consent of the
stockholders of the Company is required as a prerequisite to the validity and
enforceability of any document contemplated hereby. Each of the Company and
its Subsidiaries has corporate power and authority to execute, deliver and
perform under the Subleases and Sublease Guarantees to be executed and
delivered by it. The Subleases and Sublease Guarantees constitute the legal,
valid and binding respective obligations of the Company and its Subsidiaries,
enforceable in accordance with their terms (subject as to enforcement of
remedies to any applicable bankruptcy, reorganization, moratorium or other
Laws or principles of equity affecting the enforcement of creditors' rights
generally).
Section 5.6 Taxes. Each of the Company and its Subsidiaries has filed
all federal, state and other income Tax returns which are required to be
filed, and has paid all Taxes as shown on said returns, as well as all other
Taxes to the extent that they have become due (except as permitted by Section
4.1(a)). All Tax liabilities of the Company and its Subsidiaries are
adequately provided for on their books, including interest and penalties. No
income Tax liability of a material nature has been asserted by taxing
authorities for Taxes in excess of those already paid, and no taxing authority
has notified the Company or any of its Subsidiaries of any material deficiency
in any of their federal, state and other income Tax returns.
Section 5.7 (Intentionally omitted.)
Section 5.8 Possession of Franchises, Licenses, Etc. The Company and
its Subsidiaries possess all franchises, certificates, licenses, permits and
other authorizations from any Tribunal that are necessary in any material
respect for the ownership, maintenance and operation of their Property, and
are not in violation thereof in any material respect.
Section 5.9 Leases, Etc. The Company and its Subsidiaries enjoy
peaceful and undisturbed possession of all leases and other agreements
necessary in any material respect for the operation of their Property and
businesses in the aggregate. All such leases and other agreements are valid
and subsisting, and are in full force and effect.
Section 5.10 Disclosure. Neither this Agreement nor any other
document, certificate or statement furnished to the Lender by or on behalf of
the Company or any of its Subsidiaries in connection herewith omits to state
a material fact necessary in order to make the statements contained herein and
therein not misleading.
Section 5.11 ERISA. The Company and its Subsidiaries are in compliance
with all material provisions of ERISA that are applicable to them and their
Plans except where the failure to so comply would not have a Material Adverse
Effect.
Section 5.12 Certain Fees. No broker's, finder's or other fee or
commission was or will be payable with respect to the transactions
contemplated hereunder.
The Lender and Pier 1 represent and warrant as follows:
Section 5.13 Authorization. The Lender and Pier 1 each has the
corporate power and authority to enter into this Agreement and the Lender has
the corporate power to enter into each of the Subleases. The Lender has
entered into a lease with Pier Group with respect to each of the properties
that are subject to a Sublease, and the Lender will either maintain each such
lease during the term of each corresponding Sublease or will otherwise obtain
such rights in each property to enable the Lender or its assignee to perform
its obligations under such Sublease.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.1 Events of Default. Any one or more of the following
events shall be "Events of Default" hereunder (which shall include by
definition the expiration of any grace period with respect thereto), whether
the same shall occur and be continuing for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about or be effected
by operation of Law or otherwise):
(a) (Intentionally omitted.)
(b) Any representation or warranty made herein or in any writing
furnished in connection with or pursuant to this Agreement shall be false or
misleading that would constitute a Material Adverse Effect on the date as of
which made;
(c) There shall be a default in the performance or observance of any
other agreement, term or condition contained in any Sublease, Sublease
Guarantee or any other lease agreement between the Lender or an affiliate of
the Lender and a Subsidiary of the Company, which default shall continue for
more than 15 days after written notice to the Company.
(d) The Company or any of its Subsidiaries shall default (beyond any
grace period and whether or not waived) in the payment of any amount of any
other Indebtedness or Guaranteed Indebtedness in excess of $500,000, or in the
payment or performance of operating leases, in excess of $3,000,000 in the
aggregate, or shall default (beyond any grace period and whether or not
waived) in the performance of any agreement under which such Indebtedness or
Guaranteed Indebtedness or operating lease is created or evidenced, if as a
consequence of such default the holder (or a trustee on behalf of such holder)
of such Indebtedness or Guaranteed Indebtedness or operating lease does
accelerate such Indebtedness or Guaranteed Indebtedness or operating leases.
(e) Any of the following shall occur: (i) The Company or any of its
Subsidiaries shall make an assignment for the benefit of creditors or be
unable to pay its debts generally as they become due, (ii) the Company or any
of its Subsidiaries shall petition or apply to any Tribunal for the
appointment of a trustee, receiver or liquidator of it, or of any substantial
part of its assets, or shall commence any proceedings relating to the Company
or any of its Subsidiaries under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustments of debts, conservatorship, moratorium,
dissolution, liquidation or similar debtor relief Laws of any jurisdiction,
whether now or hereafter in effect; (iii) any such petition or application
shall be filed, or any such proceedings shall be commenced, against the
Company or any of its Subsidiaries and the same is not dismissed or otherwise
discharged within 30 days, or an order, judgment or decree shall be entered
appointing any such trustee, receiver or liquidator, or approving the petition
in any such proceedings; (iv) any final order, judgment or decree shall be
entered in any proceedings against the Company or any of its Subsidiaries
decreeing its dissolution; or (v) any final order, judgment or decree shall be
entered in any proceedings against the Company or any of its Subsidiaries
decreeing a split-up of the Company or any of its Subsidiaries, which requires
the divestiture of a substantial part of its assets;
(f) Final judgment(s) on the merits for the payment of $1,000,000 or
more in the aggregate shall be outstanding against the Company or any of its
Subsidiaries, and such judgment(s) shall remain unstayed, in effect and unpaid
for more than 30 days;
(g) Any "reportable event" as such term in defined in ERISA under any
Plan, or the appointment by an appropriate Tribunal of a trustee to administer
any Plan, or the termination of any Plan within the meaning of Title IV of
ERISA, and any of the foregoing results in a material liability to the Pension
Benefit Guaranty Corporation; or any material accumulated funding deficiency
within the meaning of ERISA exists under any Plan; or
(h) Any Sublease or Sublease Guarantee or material provision thereof
shall, for any reason, not be valid and binding on the Company or any
Subsidiary, as the case may be, or in full force and effect, or shall be
declared to be null and void; or the validity or enforceability of any
Sublease or Sublease Guarantee shall be contested by the Company or any
Subsidiary, as the case may be; or the Company or any Subsidiary shall deny
that it has any or further liability or obligation under its respective
Sublease or Sublease Guarantee.
Section 6.2 Remedies Upon Default. If any Event of Default specified
in Section 6.1(e) occurs, the aggregate unpaid principal balance of and
accrued interest on the Obligation shall thereupon become due and payable
concurrently therewith, without any action by the Lender and without
diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby expressly
waived. Except as set forth in the preceding sentence, should any Event of
Default occur and be continuing, the Lender may do any one or more of the
following:
(a) Acceleration. Declare (by written notice to the Company) the entire
unpaid balance of the Obligation, or any part thereof, immediately due and
payable, whereupon it shall be due and payable, without diligence,
presentment, demand, protest, notice of protest or other notice of any kind,
all of which are hereby expressly waived.
(b) Termination. Terminate the Lease Facility and any Sublease.
(c) (Intentionally omitted).
(d) Judgment. Reduce any claim to judgment.
(e) Rights. Exercise any and all Rights afforded by the Laws or
principles of equity of the State of Texas or any other jurisdiction, or by
any Sublease or Sublease Guarantee, or otherwise.
Section 6.3 Remedies in General. If any Event of Default shall occur
and be continuing, the Lender may immediately proceed to protect and enforce
all or any Rights with respect thereto contained in this Agreement or any
Sublease or Sublease Guarantee, or may enforce any other legal or equitable
Rights. All Rights conferred upon the Lender shall be cumulative and not
exclusive of any other Rights available. No delay or omission to exercise any
Right shall impair any such Right or shall be construed to be a waiver of any
Event of Default or an acquiescence therein. Any Right may be exercised from
time to time, independently or concurrently, and as often as shall be deemed
expedient. No waiver of any Event of Default shall extend to any subsequent
Event of Default. No single or partial exercise of any Right shall preclude
other or further exercise of any Right. The Company agrees that if an Event
of Default shall happen and be continuing, it will pay reasonable attorneys'
fees and court costs incurred in collecting the amounts due and in exercising
Rights hereunder.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Amendments, Etc. No amendment or waiver of any provisions
of this Agreement, nor consent to any departure by the Company herefrom or
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender in all cases, and then, in any case, such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 7.2 Notices, Etc. Notices, consents, requests, approvals,
demands and other communications (collectively, "Communications") provided for
herein shall; be in writing (including telecopy, telegraphic, telex or cable
Communications) and mailed, telecopied, telegraphed, telexed, cabled or
delivered to the following numbers or addresses, or such other number and
address as the Company or the Lender may give notice to the other of in
accordance with this section:
(a) If to the Company, to it at:
500 Terminal Road
Fort Worth, Texas 76106
Telecopy Number: (817) 626-6279
Attention: President
with a copy to:
Timothy M. Barnett
Winthrop & Weinstine
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402-4430
(b) If to the Lender, to it at:
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
Telecopy Number: (817) 334-0191
Attention: J. Rodney Lawrence
Corporate Counsel
All Communications shall, when mailed, telecopied, telegraphed, telexed,
cabled or delivered, be effective when delivered to the Company, sent by
telecopier to any party or the telecopier number as provided for herein and
receipt thereof is acknowledged by such party, delivered to the telegraph
company, telexed to any party or the telex number provided for herein,
confirmed by telex answerback, delivered to the cable company, or five days
after being mailed to the address provided for herein, respectively.
Section 7.3 No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, any Right hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, or any abandonment or discontinuance of any steps to enforce
such right, preclude any other or further exercise thereof or the exercise of
any other right. No notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or
other circumstances. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 7.4 Costs, Expenses and Taxes. The Company agrees to pay or
reimburse the Lender for paying (i) all costs and expenses of the Lender in
connection with (A) the administration of this Agreement and the other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Lender with
respect thereto and with respect to advising the Lender as to its rights and
responsibilities under this Agreement and the Subleases and (B) any
modification, supplement or waiver of any of the terms of this Agreement, and
(ii) all reasonable costs and expenses of the Lender (including reasonable
counsel's fees) in connection with the enforcement of this Agreement. The
obligations of the Company under this Section 7.4 shall survive any
termination of this Agreement and/or expiration of a Sublease.
Section 7.5 Indemnity. The Company agrees to indemnify and hold
harmless the Lender against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Lender or any of its employees, officers,
directors or other representatives in any way relating to or arising out of
any Environmental Liabilities, Sublease and Sublease Guarantee, any
transaction related hereto, or any act, omission or transaction of the
Company, its Subsidiaries and Affiliates, or any of their employees, officers,
directors or other representatives, to the extent that any of the same
results, directly or indirectly, from any claims made or actions, suits or
proceedings commenced by or on behalf of any Person other than the Lender.
The Company's indemnity obligation with respect to Environmental Liabilities
shall terminate seven years from the date hereof. The Company fully and
unconditionally releases the Lender and its Subsidiaries from all liabilities
and claims of whatever kind that the Company had, has or may have against the
Lender relating to or arising out of any Environmental Liabilities. The
obligation of the Company under this Section shall continue after payment of
the Obligation and termination of any or all Subleases, and shall not be
relieved by any claim or allegation of negligence by the Lender; provided,
however, that if such negligence shall be determined by a Tribunal in a final,
unappealable order, the Person whose negligence is so determined shall
reimburse the Company for all amounts paid under this Section in connection
with the proceeding determining the same.
Section 7.6 Right of Setoff. If any Event of Default shall have
occurred and be continuing, the Lender is hereby authorized at any time from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Lender to or for
the credit or the account of the Company against any of and all the
obligations of the Company now or hereafter existing under this Agreement and
the Subleases, irrespective of whether or not the Lender shall have made any
demand under this Agreement or the Subleases and although such obligations may
be unmatured. The Lender agrees promptly to notify the Company after any such
setoff and application made by the Lender, but the failure to give such notice
shall not affect the validity of such setoff and application. The rights of
the Lender under this Section 7.6 are in addition to the rights and remedies
(including, without limitation, other rights of setoff) which the Lender may
have.
Section 7.7 Governing Law. This Agreement, the Subleases, the
Sublease Guarantees, and all other documents executed in connection herewith,
shall be deemed to be contracts and agreements executed by the Company, its
Subsidiaries and the Lender under the Laws of the State of Texas and for all
purposes shall be construed in accordance with, and governed by, the Laws of
said State.
Section 7.8 Usury Not Intended. The Company and the Lender intend to
strictly comply with all applicable laws, including Applicable Laws.
Accordingly, the provision of this Section 7.8 shall govern and control over
every other provision of this Agreement, the Subleases and the Sublease
Guarantees, which conflicts or is inconsistent with this Section 7.8, even if
such provision declares that it controls (unless such provision expressly
identifies and refers to this Section 7.8). The term "interest" includes the
aggregate of all charges which constitute interest under Applicable Laws,
provided that, to the maximum extent permitted by Applicable Laws, (a) any
non-principal payment shall be characterized as an expense or fee or something
other than compensation for the use, forbearance or detention of money and not
as interest, and (b) all interest at any time contracted for, reserved,
charged or received shall be amortized, prorated, allocated and spread, in
equal parts during the full term of the Sublease. In no event shall the
Company or any other Person be obligated to pay, or the Lender have any right
or privilege to reserve, receive to retain, (a) any interest in excess of the
maximum amount of nonusurious interest permitted under Applicable Laws, or (b)
total interest in excess of the amount which the Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Subleases at the Highest Lawful Rate.
None of the terms and provisions contained in this Agreement, the Sublease or
the Sublease Guarantees which directly or indirectly relate to interest shall
ever by construed without reference to this Section 7.8 or construed to create
a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate. If the term of any
Sublease or Sublease Guarantee is shortened by reason of termination,
acceleration of maturity as a result of any Default or other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason the Lender at any time is owed or receives (and/or has received)
interest in excess of interest calculated at the Highest Lawful Rate, then and
in any such event all of any such excess interest shall be cancelled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to the
Lender, it shall be credited pro tanto against the then-outstanding principal
balance of the Company's obligations to the Lender, effective as of the date
or dates when the event occurs which causes it to be excess interest, until
such excess is exhausted or all of such principal has been fully paid and
satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
Section 7.9 Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing
by the Company and each Subsidiary in connection herewith shall survive the
execution and delivery of this Agreement and each Sublease, and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not.
Section 7.10 Binding Effect. This Agreement shall become effective
when it shall have been executed and delivered by the Company and the Lender,
and thereafter shall be binding upon and inure to the benefit of the Company
and the Lender and their respective successors and assigns.
Section 7.11 Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include
the successors and permitted assigns of such party; and all covenants,
promises and agreement by or on behalf of the Company, its Subsidiaries or the
Lender that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns. The Company may not
assign or transfer any of its rights or obligations hereunder without the
written consent of the Lender.
Section 7.12 Independence of Covenants. All covenants contained in
this Agreement shall be given independent effect so that if a particular
action or condition is not permitted by any such covenants, the fact that such
action or condition would be permitted by an exception to, or otherwise be
within the limitations of, another covenant shall not avoid the occurrence of
a Default or Event of Default if such action is taken or condition exists.
Section 7.13 Separability. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable
or void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or
parts of this Agreement so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom and the remainder will have the same
force and effectiveness as if such part or parts had never been included
herein.
Section 7.14 Entire Agreement. This Agreement (including Exhibits and
Schedules hereto) represent the final and entire agreement and understanding
between the Company and the Lender relating to the subject matter hereof and
thereof, supersede all prior proposals, agreements and understandings relating
to such subject matter and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements among the parties.
Section 7.15 Descriptive Headings. The section headings appearing in
this Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Agreement.
Section 7.16 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 7.17 Waiver of Jury Trial. Each of the parties hereto waives
any right it has or may hereafter have to trial by jury in any dispute arising
out of or relating to this Agreement or any of the Subleases, or any of the
transactions contemplated thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SUNBELT NURSERY GROUP, INC.
By: _____________________________
Mark L. Jones
Vice President
PIER 1 IMPORTS, INC.
By: _____________________________
Clark A. Johnson
Chairman of the Board and
Chief Executive Officer
PIER LEASE, INC.
By: _____________________________
Clark A. Johnson
Chairman of the Board and
Chief Executive Officer
EXHIBIT I
AMENDED AND RESTATED SUBLEASE
THIS AMENDED AND RESTATED SUBLEASE ("Sublease") is dated effective
as of the day of , 19 , and is between Pier Lease, Inc.,
a Delaware corporation (the "Sublessor"), having an address c/o 301 Commerce
Street, Suite 600, Fort Worth, Texas 76102, and WOLFE NURSERY, INC., a
Delaware corporation (the "Sublessee"), having an address at 500 Terminal
Road, Fort Worth, Texas 76106.
WHEREAS, Sublessor and Sublessee previously entered into that one
certain Sublease ("Original Sublease") dated effective as of the 28th day of
April, 1993, and Sublessor and Sublessee wish to amend and restate the terms
and provisions of the Original Sublease.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Sublessor and Sublessee
hereby amend and restate the Original Sublease to be as follows:
ARTICLE I
1. INCORPORATION OF STANDARD SUBLEASE PROVISIONS. The Standard
Sublease Provisions between Sublessor and Sublessee, dated as of even date
herewith (the "Standard Sublease Provisions"), are attached hereto as Exhibit
"A" and are hereby incorporated into this Sublease. Hereafter, this Sublease
and the Standard Sublease Provisions shall be read, taken and construed as one
and the same instrument. Capitalized terms not otherwise defined in this
Sublease shall have the respective meanings set forth in Article I of the
Standard Sublease Provisions. In the event of any conflict between the terms
and conditions of this Sublease and the terms and conditions of the Standard
Sublease Provisions, this Sublease shall control.
ARTICLE II
2. SUBLEASED PROPERTY. Upon and subject to the terms and
conditions of this Sublease, Sublessor subleases to Sublessee and Sublessee
rents from Sublessor all of Sublessor's right, title and interest in and to
the following property (collectively, the "Subleased Property"):
(a) the parcel of land (the "Land") located in
, County, , as more particularly described in Exhibit
"B" hereto,
(b) all buildings, structures, fixtures and other
improvements presently situated or hereafter constructed (except as provided
for in Section 13.3 of the Standard Sublease Provisions) upon the Land
(collectively, the "Subleased Improvements"),
(c) all easements, rights and appurtenances relating to the
Land and the Subleased Improvements, and
(d) all equipment, machinery, fixtures and other items of
property, including all components thereof, now or hereafter located in, on
and used in connection with, the Subleased Improvements or necessary to the
operation or maintenance thereof, which are now or hereafter owned by Owner,
including, without limitation, all furnaces, boilers, heaters, electrical
equipment, heating, plumbing, ventilating, refrigerating, waste disposal,
air-cooling and air-conditioning apparatus, sprinkler systems and fire and
theft protection equipment (other than Sublessee's Equipment, as described in
Section 9.2 of the Standard Sublease Provisions) and which are hereby deemed
by the parties hereto to constitute real estate under the laws of the state in
which the Subleased Property is located, together with all replacements,
modifications, alterations and additions thereto (collectively, the
"Fixtures"), SUBJECT, HOWEVER, to (i) all matters of record on the date hereof
affecting the Subleased Property, (ii) any state of facts as would be
disclosed by an accurate survey of the Subleased Property; and (iii) the terms
and conditions in Sublessor's lease agreement with Pier Group, Inc. ("Owner")
with respect to the Subleased Property (the "Primary Lease"), a copy of which
has been delivered to Sublessee.
ARTICLE III
3. TERM. Upon and subject to the terms and conditions of this
Sublease, Sublessor subleases to Sublessee, and Sublessee rents from Sublessor
all of Sublessor's right, title and interest in and to the Subleased Property
for (a) an interim term ("Interim Term") beginning on , 19
("Commencement Date") and ending on the earliest of (i) June 30, 1998 (the
"Termination Date"), (ii) the Environmental Put Date for such Subleased
Property or (iii) the Business Close Date (as defined below); and (b) if
Sublessee fails to acquire all of the Subleased Property by not later than
June 30, 1998, an extended term (the "Extended Term") commencing at the end of
the Interim Term and ending on June 30, 2000, unless this Sublease is sooner
terminated in accordance herewith. "Business Close Date" shall mean the
thirtieth (30th) consecutive day during which the Subleased Property shall
have been closed for business, provided, however, that a Business Close Date
shall be deemed not to have occurred in the event that the Subleased Property
shall have been closed for business solely as a result of substantial damage
to or destruction of the Subleased Property and Sublessee shall have, prior to
such 30th consecutive day, given written notice to Sublessor of Sublessee's
commitment to repair and reopen the Subleased Property and Sublessee shall
have reopened the Subleased Property for continuous business within one-
hundred eighty (180) days after the first day during which the Subleased
Property was closed for business.
ARTICLE IV
4. BASIC RENT. Sublessee shall pay to Sublessor or Sublessor's
Assignees, if any, in lawful money of the United States of America which shall
be legal tender for the payment of public and private debts at Sublessor's
address set forth above or at such other place or to such other persons, firms
or corporations as Sublessor or Sublessor's Assignees, if any, from time to
time may designate in writing, a net basic rental (the "Basic Rent") during
the Term, payable monthly, in advance on the first Business Day of each month
as follows (together with such additional amounts as Sublessor and Sublessee
may agree upon):
(a) During the Interim Term, the Basic Rent for each month will be
equal to the greater of (i) the amount of interest which would be charged on
the Total Cost for such month (less any portion of the Total Cost heretofore
returned to Sublessor by Sublessee pursuant to payment of Basic Rent or
otherwise) based on the sum of the "Adjusted InterBank Rate" (assuming an
Interest Period of 90 days) plus 2% per annum (with the terms "Adjusted
InterBank Rate" and "Interest Period" being defined in the Credit Agreement),
and (ii) 6.5% of Sublessee's "Gross Sales" (as defined in GAAP) for the
preceding month.
(b) During the Extended Term, the Basic Rent for each month will be
equal to the sum of (a) the greater of (i) the amount of interest which would
be charged on the Total Cost for such month (less any portion of the Total
Cost heretofore returned to Sublessor by Sublessee pursuant to payment of
Basic Rent or otherwise) based on the sum of the "Adjusted InterBank Rate"
(assuming an Interest Period of thirty days) plus 2% per annum and (ii) 6.5%
of Sublessee's "Gross Sales" (as defined in GAAP) for the preceding month,
plus (b) 2.5% of the Total Cost.
(c) On the last day of each of Sublessee's first and fourth fiscal
quarters of each year, Sublessor and Sublessee shall review the amount of
Basic Rent actually paid by Sublessee and the amount due hereunder, and an
appropriate adjustment shall be made to reconcile the difference, if any,
which shall be immediately payable. Sublessee agrees to wire federal or other
immediately available funds in payment of the Basic Rent to Sublessor, or as
Sublessor may direct, on the day each payment is due, or if such day is not a
Business Day then on the last Business Day prior to such date, so that
Sublessor shall receive immediately available funds in such location as
Sublessor may designate on each such date. The Basic Rent shall be paid
absolutely net to Sublessor without setoff, demand, notice, deduction, or
counterclaim, so that this Sublease shall yield to Sublessor the full amount
of the installments of Basic Rent throughout the Term, all as more fully set
forth in Article VIII of the Standard Sublease Provisions.
ARTICLE V
5.1 Insurance.
(a) Sublessee shall keep the Subleased Improvements insured
against (i) damage by fire and the other hazards covered by standard extended
coverage all risk insurance and (ii) damage by vandalism, malicious mischief,
and such other hazards against which Sublessor shall require insurance, and
each policy of insurance required pursuant to this Section 5.1 shall be
endorsed to name First Interstate Bank of Texas, N.A. ("Bank"), Owner and
Sublessor, as a mortgagee and/or loss payee thereunder, as their interest may
appear, with loss payable to Bank, Owner and Sublessor, as their interest may
appear, without contribution or assessment. All insurance policies and
endorsements required pursuant to this Section 5.1 shall be fully paid for,
nonassessable and contain such provisions (including, without limitation,
inflation guard and replacement cost endorsements) and expiration dates and
shall be in such form and amounts and issued by such insurance companies with
a rating of "A" or better as established by Best's Rating Guide, or an
equivalent rating with such other publication of a similar nature as shall be
in current use, or such other companies, as shall be approved by Sublessor.
The amount of coverage shall be the total replacement cost of the Subleased
Improvements (excluding costs for footings and foundations, architectural
costs, and engineering costs). Sublessor hereby approves the amounts of
insurance carried by Sublessee for the above-described risks as of the date
hereof and until such time, if any, as Sublessor shall reasonably determine
that greater or lesser amounts of coverage are required for the Subleased
Improvements, due regard being given to the site and type of the building, the
time of construction, the location, utilities and occupancy or any
replacements and substitutions therefor. At such time or from time to time as
Sublessor may give written notice to Sublessee requesting additional or less
insurance coverage for the Subleased Improvements, Sublessee shall promptly
obtain and deliver to Sublessor replacement insurance policies complying with
Sublessor's request and with the provision of this Section 5.1.
(b) In addition to the insurance policies above described,
Sublessee shall keep and maintain in effect insurance policies in respect of
rental loss, Workmen's Compensation (except in Texas and to the extent
Sublessee effectively elects not to be covered by the Texas Worker's
Compensations Act, Sublessee shall maintain an alternate plan covered by
ERISA), employers' liability coverage, comprehensive public liability
insurance, and such other insurance as Sublessor may require; all in such
form, with such coverage, in such amounts and issued by such insurance
companies with a rating of "A" or better as established by Best's Rating Guide
or equivalent rating of such other publications of similar nature as shall be
in current use, as shall be approved by Sublessor.
(c) Without limiting the foregoing, each policy of insurance
required hereunder shall provide that such policy may not be cancelled,
expire, or be terminated (whether due to nonpayment of premiums, surrender by
the insured, or other reason) except upon thirty (30) days' prior written
notice to Sublessor and that no act or thing done by Sublessee shall
invalidate the policy as against Sublessor, Bank or Owner. In addition,
Sublessor may require Sublessee to carry such other insurance on the Subleased
Improvements in such amounts as may from time to time be required by
institutional lenders, including, without limitation, Bank, or by Owner,
against insurable casualties (including, without limitation, risks of war and
nuclear explosion) which at the time are commonly insured against in the case
of premises similarly situated, due regard being given to the site and the
type of the building, the type of construction, the stage of construction,
location, utilities and occupancy or any replacements or substitutions
therefor.
(d) Sublessee shall additionally keep the Subleased
Improvements insured against loss by flood if the Subleased Property is
located in an area identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which the Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 are
applicable, as the same may have been or may hereafter be amended or modified
(and any successor acts thereto), in an amount at least equal to the total
replacement cost of the Subleased Improvements (excluding costs for footings
and foundations, architectural costs, and engineering costs) or the maximum
limit of coverage available with respect to the Subleased Improvements under
said Act, whichever is less, and with a company or companies reasonably
approved by Sublessor, Bank and Owner.
(e) From time to time upon the occurrence of any change in
the use, operation or value of the Subleased Property or any part thereof, or
in the event of the unavailability of insurance in the area in which the
Subleased Property is located, Sublessee shall promptly notify Sublessor of
such change and shall, within five (5) days after demand by Sublessor, take
out such additional amounts and/or such other kinds of insurance as Sublessor
may require. Otherwise, Sublessee shall not take out or permit any separate
or additional insurance which is contributing in the event of loss unless it
is endorsed in favor of Sublessor, Bank and Owner, as their interests may
appear, in accordance with the requirements hereof and otherwise satisfactory
to Sublessor, Bank and Owner, in all respects. Insurance required hereunder
may be carried by Sublessee pursuant to blanket policies, provided that all
other requirements herein set forth are satisfied and that the underlying
policy in respect of the Subleased Property is assigned and delivered as
herein required.
(f) In the event that Sublessee fails to keep the Subleased
Improvements insured in compliance with this Section 5.1, Sublessor may, but
shall not be obligated to, obtain insurance and pay the premiums therefor and
Sublessee shall, on demand, reimburse Sublessor for all sums, advances and
expenses incurred in connection therewith. Prior to the execution of a
Sublease, Sublessee shall deliver copies of all original policies to Sublessor
together with the endorsements thereto required hereunder.
(g) The proceeds of insurance paid on account of any damage
or destruction to the Subleased Property or any part thereof shall be applied
as hereinafter provided. Notwithstanding anything to the contrary contained
herein or in any provision of the applicable law, the proceeds of insurance
policies coming into the possession of Sublessor, Bank or Owner shall not be
deemed trust funds and Sublessor, Bank and Owner shall be entitled to dispose
of such proceeds as hereinafter provided.
5.2 Waiver of Subrogation. Sublessee and Sublessor hereby waive
and release each other and Owner of and from any and all rights of recovery,
claim, action, or cause of action against each other or Owner, their agents,
officers, and employees, for any loss or damage insured (whether by self
insurance, insurance or otherwise) by the terms of this Sublease or otherwise
insured that may occur to the Subleased Property, improvements to the building
or personal property including building contents within such building, by
reason of fire or the elements of nature regardless of cause or origin
including negligence of Sublessor, Sublessee or Owner and their agents,
officers, and employees; provided, however, that such waiver and release do
not adversely affect the insurance coverage required to be maintained herein.
Because this paragraph will preclude the assignment of any claim mentioned in
it by way of subrogation or otherwise to any insurance company or any other
person, each party to this Sublease agrees immediately to give to each
insurance company which has issued to it policies of insurance covering all
risk of direct physical loss, written notice of the terms of mutual waivers
contained in this paragraph, and to have the insurance policies properly
endorsed to prevent the invalidation of such insurance coverage by reason of
these waivers.
ARTICLE VI
6.1 Notice of Damage, Destruction or Taking; Condemnation Awards.
In case of any damage to or destruction of the Subleased Property or any part
thereof, or in case of any Taking, Sublessee shall forthwith give notice
thereof to Sublessor and Sublessor's Assignees, if any. If Sublessor shall be
advised by the condemning authority of a proposed Taking, Sublessor shall
forthwith give notice thereof to Sublessee, but its failure to do so shall not
affect the rights of the parties as set forth in this Article VI. In case of
any such Taking, damage or destruction, Sublessor shall be entitled to all
awards or insurance payments on account thereof (or amounts equal thereto if
Sublessee shall then be self-insuring hereunder), and Sublessee hereby
irrevocably assigns to Sublessor all rights of Sublessee to any such award or
payment and irrevocably authorizes and empowers Sublessor in the name of
Sublessee or otherwise, to file and prosecute what would otherwise be
Sublessee's claim for any portion of such award or payment, and to collect,
receipt for and retain the same, except as hereinafter provided. Any such
awards or insurance payments (or amounts equal thereto if Sublessee shall then
be self-insuring hereunder) shall be paid over to Sublessor's Assignees or if
no Sublessor's Assignees then exist, then to a commercial bank or trust
company or other institution selected by Sublessor (the "Escrow Holder"), to
be held in escrow and applied as hereinafter provided. All costs and expenses
of Sublessor, Sublessor's Assignees or the Escrow Holder shall be paid by
Sublessee. Unless an Event of Default shall have occurred, all sums so
received by Sublessor's Assignees or Sublessor or the Escrow Holder, as the
case may be, shall be applied in accordance with the provisions of Article
6.3, except that any such sums received with respect to a Taking for temporary
use shall be applied in accordance with the provisions of Article 6.2. If an
Event of Default shall have occurred at the time of receipt of any such award
or payment, the same shall be paid to and retained by Sublessor. Sublessee
will pay all costs and expenses, including attorneys' fees, incurred by
Sublessor or Sublessor's Assignees, if any, in connection with any such Taking
and the seeking and obtaining of any award or payment in respect thereof. For
the purposes of this Sublease, all amounts paid pursuant to any agreement with
any condemning authority in settlement of any condemnation or other eminent
domain proceeding affecting the Subleased Property shall be deemed to
constitute an award made in such proceeding whether or not the same shall have
actually been commenced. For the purposes of this Article, the terms "net
proceeds" and "net awards" shall mean, respectively, (i) any insurance
proceeds in respect of any damage to or destruction of the Subleased Property
or any part thereof, or (ii) any awards in connection with any Taking thereof,
in each case, less all costs and expenses, including attorneys' fees, incurred
in connection with the seeking and obtaining of any such proceeds or awards.
6.2 Taking for Temporary Use. In case of a Taking for temporary
use (a period not exceeding 365 consecutive days), there shall be no
termination, cancellation or modification of this Sublease, and Sublessee
shall continue to perform and comply with (except as such performance and such
compliance may be rendered impossible by reason of such Taking) all of its
obligations under this Sublease and shall in no event be relieved of its
obligation to pay punctually all Rent or any other charges payable hereunder.
Sublessor shall pay the net awards received by it (whether by way of damages,
rent or otherwise) by reason of such Taking to Sublessee, if no Event of
Default shall have occurred.
6.3 Other Taking, Damage or Destruction, Repair or Replacement.
(a) In case of any damage to or destruction of the Subleased
Property or any part thereof which is not Substantial, as hereinafter defined,
or in case of any Taking which is not Substantial other than for temporary
use, Sublessee will, at its expense, promptly commence and complete with due
diligence (subject to the occurrence of Unavoidable Delays) the replacement
and repair of the Subleased Property in order to restore it as nearly as
practicable to the value and condition thereof immediately prior to such
damage, destruction or Taking, whether or not the insurance proceeds or the
award for the Taking shall be sufficient for such purpose. If the cost of
restoring the Subleased Property is estimated by an independent architect
therefor and such cost is equal to or in excess of $100,000, Sublessee shall
expend its own funds to the extent of such excess before making application
for receipt of such proceeds or awards as hereinafter provided. If the cost
of restoration is estimated to be less than $100,000, then such proceeds or
awards shall be immediately paid over to Sublessee if no Event of Default
shall have occurred. If the cost of restoration is estimated to equal or
exceed $100,000, the net proceeds of insurance and the net awards for the
Taking received by Sublessor or Sublessor's Assignees, as the case may be,
shall, if no Event of Default shall have occurred, be paid to Sublessee (or as
Sublessee may direct), from time to time (but not more often than monthly) as
such Subleased Property is replaced or repaired, in amounts equal to the cost
of such replacement and repair, upon delivery to Sublessor of an Officer's
Certificate and a certificate of an engineer or architect satisfactory to
Sublessor certifying, in each case, the amount to be paid (which may represent
amounts theretofore paid by Sublessee in the effectuation of such repairs or
replacements and not reimbursed hereunder or amounts due and payable by
Sublessee therefor, or both). Upon completion of construction, Sublessee
shall deliver to Sublessor (i) a copy of a permanent, unconditional
certificate of occupancy for the Subleased Property and (ii) an Officer's
Certificate and a certificate of an engineer or architect who shall be either
a professional, licensed engineer employed by Lessor or shall be satisfactory
to Sublessor certifying to the completion of the repair or replacement of such
Subleased Property, the payment of the cost thereof in full, and the amount of
such cost, and upon receipt of such certificates by Sublessor, any balance of
such proceeds and awards or other payments received during the Term or any
renewal term, as appropriate, and not required to be held or applied in
accordance with the preceding sentence, shall (after deducting amounts
necessary to pay any taxes attributable to such Subleased Property) be paid
over to Sublessor or Sublessor's Assignees, except that if no Event of Default
has occurred and if the balance of an award for a Taking or other payments
shall be $100,000 or more, the entire balance shall be retained by Sublessor
and applied pursuant to the Primary Lease. In the event of a Taking of such
character as not to require any repair or replacement of the Subleased
Improvements, and upon delivery to Sublessor of an Officer's Certificate
certifying that such partial Taking has not materially affected the condition
or use of such Subleased Property, any net award or other payment for such
Taking received during the Term shall, if no Event of Default shall have
occurred, be paid over to Sublessee, except that if the amount of such award
or other payment shall be $100,000 or more, the same shall be retained by
Sublessor or Sublessor's Assignees and the Basic Rent will be adjusted as
required by the Primary Lease. If an Event of Default shall have occurred
prior to the time of Sublessor's receipt of any insurance proceeds or awards
or other payment for a Taking pursuant to this Article 6.3, the same shall be
retained by the Sublessor.
(b) Subject to the provisions of Section 3 hereof relating to
a Subleased Property being closed for business, in case of any destruction or
Taking of the Subleased Property to such an extent that Sublessee determines,
in Sublessee's sole discretion, within thirty (30) days after such destruction
or Taking, that the Subleased Property is no longer suitable for Sublessee's
intended use (such destruction or Taking being referred to hereinafter as
"Substantial") during the Term, and if no Event of Default shall have
occurred, Sublessee shall, within seventy-five (75) days from the date of such
destruction or Taking, give Sublessor (i) notice ("Notice") of its
determination and notice of termination of this Sublease with respect to such
Subleased Property accompanied by an offer to purchase the Subleased Property
from Owner (including the net amount of the award or insurance proceeds, as
the case may be) on the first Payment Date occurring not later than one
hundred ten (110) days after such Notice (the "Purchase Date") for a purchase
price equal to the "Total Cost" (as defined in the Primary Lease) of the
Subleased Property less any amount of such Total Costs theretofore returned to
Sublessor by Sublessee pursuant to payment of Basic Rent or otherwise, plus
other amounts to be paid under and in accordance with Article XXI of the
Primary Lease, (ii) an Officer's Certificate describing the event giving rise
to such termination and stating that the Board of Directors has determined
that there has been a substantial loss and stating the nature of the loss, and
(iii) a letter agreement that notwithstanding the termination of this Sublease
as to such Subleased Property or any other matter, Sublessee has discontinued
use of such Subleased Property in its business operations or will discontinue
such use on or before the Purchase Date and will not use the Subleased
Property for five (5) years thereafter for any purpose whatsoever. Sublessor
shall have the option of accepting or rejecting such offer; provided, however,
that Sublessor shall only accept such offer upon obtaining the written consent
of Owner and Sublessor's Assignees and such offer shall be deemed to have been
rejected unless written notice of acceptance is received by Sublessee within
forty-five (45) days prior to the Purchase Date. In the event Sublessor
accepts such offer, Sublessor shall (or cause Owner to), upon receipt from
Sublessee of the Purchase Price provided for above and any Rent due and
payable under this Sublease (including the installment of Basic Rent due on
the Purchase Date), (a) convey the Subleased Property to Sublessee on the
Purchase Date in accordance with the provisions of Article XXI of the Standard
Lease Provisions of the Primary Lease and (b) pay over or assign to Sublessee
the net award or net insurance proceeds, as the case may be, and this Sublease
shall thereupon terminate.
If Sublessor rejects Sublessee's offer to purchase the Subleased
property pursuant to the terms of this Sublease, this Sublease shall terminate
as to the Subleased Property on the Purchase Date, provided Sublessee shall
not then be in Default under this Sublease and provided further that Sublessor
shall retain all condemnation awards or proceeds of any insurance policies or
self-insurance payments, as the case may be, and any other payment to which it
may be entitled.
ARTICLE VII
7. COMPLETE AGREEMENT. Sublessor and Sublessee acknowledge and
agree that the terms and provisions of the Original Lease are hereby amended
and restated as set forth in this Sublease and that the terms and provisions
of this Sublease shall hereafter be the sole agreement between Sublessor and
Sublessee with respect to the Subleased Property.
ARTICLE VIII
8. LEASE GUARANTEE. Sunbelt Nursery Group, Inc., a Delaware
corporation ("Sunbelt"), has previously executed and delivered to Sublessor
its Sublease Guarantee ("Guarantee") dated April 28, 1993, by which Sunbelt
unconditionally guaranteed to Sublessor the payment and performance by
Sublessee under the Original Lease. By its execution below, Sunbelt agrees
that the Guarantee shall remain in full force and effect with respect to the
Original Sublease, as amended and restated by this Sublease, that this
Sublease is one of the "Lease Agreements" described in the Guarantee, and that
Sunbelt has no defenses, offset, or counterclaims against or with respect to
any of its obligations under its Guarantee.
IN WITNESS WHEREOF, the parties have caused the Sublease to be
executed as of the date first set forth above.
"SUBLESSEE"
WOLFE NURSERY, INC., a Delaware
corporation
By:
Mark L. Jones
Vice President
"SUBLESSOR"
PIER LEASE, INC., a Delaware corporation
By:
Clark A. Johnson, Chairman
ACCEPTED AND AGREED TO
AS SUBLEASE GUARANTOR:
SUNBELT NURSERY GROUP, INC.
By:
Mark L. Jones
Vice President
EXHIBIT "A"
STANDARD SUBLEASE PROVISIONS
PIER LEASE, INC.
Sublessor
AND
WOLFE NURSERY, INC.
Sublessee
STANDARD SUBLEASE PROVISIONS
THESE STANDARD SUBLEASE PROVISIONS ("Standard Sublease Provisions")
are dated effective as of the day of , 199 , and is between
PIER LEASE, INC., a Delaware corporation (the "Sublessor"), having an address
301 Commerce Street, Suite 600, Fort Worth, Texas 76102, and WOLFE NURSERY,
INC., a Delaware corporation (the "Sublessee"), having an address 500 Terminal
Road, Fort Worth, Texas 76106.
ARTICLE I
1. DEFINITIONS. Whenever used herein, the following capitalized
terms have the respective meanings set forth after them and include the plural
as well as the singular:
Additional Charges: As defined in Article VI.
Additional Facilities: One or more new buildings or one or
more additional structures annexed to any portion of the Subleased
Improvements which are constructed on the Land during the Term. No
replacement, restoration or rebuilding of the Subleased Improvements or any
portion thereof shall be deemed an Additional Facility.
Alterations: As defined in Section 13.1.
Basic Rent: As defined in a Sublease.
Building Plans: As defined in Section 3.1(a).
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which national banks in Fort Worth, Texas, are
authorized, or obligated, by law or executive order to be closed.
Commencement Date: As defined in a Sublease.
Construction Cost: The cost of construction and/or renovation
of the Subleased Improvements which cost shall include (a) costs of site
preparation and improvement, materials, labor, supervision, design,
engineering and architectural services, (b) the cost of the Fixtures, (c) all
financing charges incurred during the construction including any interest paid
or accrued on the Notes and all fees and expenses related to such financing
including, but not limited to, counsel fees, trustee fees, brokerage fees and
recording taxes, (d) Impositions, utility charges, insurance premiums and
other carrying charges in respect of the Subleased Property incurred by Lessee
during construction, (e) developer's costs, and (f) miscellaneous costs
approved by Sublessor; provided, however, that costs not directly incurred for
labor charges, materials, and Fixtures may not exceed twenty-five percent
(25%) of the total annual cost of construction and/or renovation.
Credit Agreement: That certain Restated Revolving Credit
Agreement dated December 30, 1992, between Owner and First Interstate Bank of
Texas, N.A., as agent, and the banks referred to therein (the "Banks"), as it
may be amended, or amended and restated, from time to time.
Credit Facilities Agreement: That certain Amended and Restated
Credit Facilities Agreement, dated October 14, 1994, between Sunbelt Nursery
Group, Inc. and Pier 1 Imports, Inc., as it may be amended, or amended and
restated, from time to time.
Default: Any condition or event which constitutes or would
constitute an Event of Default either with or without notice or lapse of time,
or both.
Development Agreement: As defined in Section 3.1(a).
Environmental Put Date: The date on which Owner is obligated
by the Banks (or any subsequent lender(s) to Owner with respect to the
Subleased Property) to pay all Outstanding Advances (as defined in the Credit
Agreement) with respect to the Subleased Property as a result of any violation
or alleged violation of any Environmental Laws (as defined in the Credit
Agreement) with respect to such Subleased Property.
Event of Default: As defined in Article XIX.
Fixtures: As defined in a Sublease.
GAAP: Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to circumstances as of the
date of determination.
Guarantor: Collectively, Sunbelt Nursery Group, Inc. and each
of its Subsidiaries.
Guarantee: The Sublease Guarantee, dated as of April 28, 1993,
by Guarantor guaranteeing the performance by Sublessee of its obligations
under the Sublease.
Impositions: All taxes (including, without limitation, all ad
valorem, sales (including those imposed on lease rentals), use, single
business, gross receipts, value added, intangible transaction privilege,
privilege or license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or
not commenced or completed prior to the date hereof and whether or not to be
completed within the Term), ground rents, water, sewer or other rents and
charges, excises, levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Subleased Property and/or the Basic Rent or Additional Charges (including all
interest and penalties thereon), which at any time prior to, during or in
respect of the Term may be assessed or imposed on or in respect of or be a
lien upon (a) Sublessor, including, without limitation, all franchise, single
business or other taxes imposed on Sublessor for the privilege of doing
business in the jurisdiction in which the Subleased Property is located, (b)
the Subleased Property, or any part thereof or any rent therefrom or any
estate, right, title or interest therein, or (c) any occupancy, operation, use
or possession of, or sales from, or activity conducted on, or in connection
with the Subleased Property or the leasing or use of the Subleased Property or
any part thereof. Nothing contained herein shall be construed to require
Sublessee to pay any tax, assessment, levy or charge imposed on Sublessor or
Sublessor's Assignees, if any, in the nature of a capital levy, estate,
inheritance, succession, transfer, net income or net revenue tax of Sublessor
or Sublessor's Assignees, if any, except that if at any time after the date
hereof the methods of taxation prevailing at the date hereof shall be altered
so that in lieu of or as an addition to or as a substitute for the whole or
any part of the taxes, assessments, rents, rates, charges, levies or
impositions now assessed, levied or imposed upon all or any part of the
Subleased Property, there shall be assessed, levied or imposed (a) a tax,
assessments, levy, imposition or charge based on the gross income or gross
rents received therefrom from Sublessee whether or not wholly or partially as
a capital levy or otherwise which is calculated without deduction of any
portion of such gross income or gross rents so received, or (b) a tax,
assessments, levy, imposition or charge measured by or based in whole or in
part upon all or any part of the Subleased Property and imposed upon Sublessor
or Sublessor's Assignees, if any, or (c) a license fee measured by the gross
rents received from Sublessee which is calculated without deduction of any
portion of such gross rents so received, or (d) any other tax, assessments,
levy, imposition, charge or license fee however described or imposed, then all
such taxes, assessments, levies, impositions, charges or license fees or the
part thereof so measured or based shall be deemed to be Impositions payable by
Sublessee hereunder; provided that any tax, assessment, levy, imposition or
charge imposed on income from the Subleased Property shall be calculated as if
Sublessor's Estate in such Subleased Property is the only asset of Sublessor.
Indebtedness: Indebtedness of any person shall mean and
include, without duplication, (a) any liability, contingent or otherwise, of
such person (i) for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such person or only to a portion thereof), or
(ii) evidenced by a note, debenture or similar instrument or representing the
balance deferred and unpaid of the purchase price of any property purchased;
(b) any liability of others of the kind described in the preceding clause (a),
which such person has guaranteed or which is otherwise its legal liability;
(c) any obligation secured by a Lien to which the property or assets of such
person are subject, whether or not the obligations secured thereby shall have
been assumed by or shall otherwise be such person's legal liability; and (d)
any and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, liability of the kind described in any of the
preceding clauses (a), (b) or (c).
Insurance Requirements: As defined in a Sublease.
Interim Term: As defined in a Sublease.
Land: As defined in a Sublease.
Legal Requirements: All federal, state, county, municipal and
other governmental statutes, laws, rules, orders, agreements, regulations,
ordinances, judgments, decrees and injunctions affecting either the Subleased
Property or the construction, use, occupancy or alteration thereof, whether
now or hereafter enacted and in force, including any which may (i) require
repairs, modifications or alterations in or to the Subleased Property or (ii)
in any way limit or condition the use and enjoyment thereof, and all permits,
licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Sublessee (including, without
limitation, any ground lease, or any deed of trust or mortgage with
Sublessor's Assignees, if any), at any time in force affecting the Subleased
Property.
Lien: Any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest).
Officer's Certificate: A certificate of Sublessee signed by
the president or any vice president or the treasurer, or other officer
authorized to so sign by the board of directors or bylaws of Sublessee.
Overdue Rate: The lower of (i) the Basic Rent plus three
percent (3%) per annum or (ii) the maximum rate permitted by law.
Owner: Pier Group, Inc.
Payment Date: Any due date for the payment of the installment
of Basic Rent.
Payments: As defined in Section 3.2(a).
Pier 1: Pier 1 Imports, Inc., a Delaware corporation.
Reimbursement Request: As defined in Section 14.1.
Rent: Collectively, the Basic Rent and Additional Charges.
Significant Subsidiary: A Subsidiary meeting any one of the
following conditions:
(a) the assets of the Subsidiary, or the investments in and
advances to the Subsidiary by Guarantor and Guarantor's other Subsidiaries,
exceed five percent (5%) of the assets of Guarantor and its Subsidiaries on a
consolidated basis;
(b) the sales and operating revenues of the Subsidiary exceed
five percent (5%) of the sales and operating revenues of Guarantor and
Guarantor's Subsidiaries on a consolidated basis; or
(c) the Subsidiary is the parent of one or more Subsidiaries
and, together with such Subsidiaries would, if considered in the aggregate,
constitute a Significant Subsidiary.
Sublease: The particular Sublease Agreement between Sublessor,
as lessor thereunder, and Sublessee, as lessee thereunder, into which these
Standard Sublease Provisions are incorporated by reference and attached
thereto as Exhibit "A".
Subleases: Collectively, all Subleases between Sublessor and
Sublessee.
Subleased Improvements; Subleased Property: Each as defined in
a Sublease.
Subleased Property: As defined in a Sublease.
Sublessee's Equipment: As defined in Section 8.2.
Sublessor's Lender: As defined in Section 14.3(a).
Sublessor's Assignees: Collectively, Sublessor's assignees
designated in any assignment of Sublessor's interest in a Sublease as
additional security for any Indebtedness of Sublessor and all purchasers at
any foreclosure sale of the Subleased Property and their assignees and the
successors and assigns of all such parties.
Sublessor's Estate: Sublessor's interest in a Subleased
Property which is a leasehold estate in the Land and Subleased Improvements.
Subsidiaries: Corporations, each of which Guarantor owns,
directly or indirectly, more than fifty percent (50%) of the voting stock
(individually, a "Subsidiary").
Taking: A taking or voluntary conveyance during the Term of
all or part of the Subleased Property, or any interest therein or right
accruing thereto or use thereof, as the result of, or in settlement of any
condemnation or other eminent domain proceeding affecting the Subleased
Property whether or not the same shall have actually been commenced.
Term: Collectively or individually, the Interim Term and the
Extension Term.
Third Party Offer: As defined in Article XXXVI.
Total Cost: An amount equal to the sum (but without
duplication of any item) of the following items paid, or to be paid by
Sublessor and not reimbursed by Sublessee, as of the applicable date
including, without limitation: (a) the cost of acquiring the Land or Owner's
leasehold estate therein, as applicable, which may include brokerage
commissions, if any, and attorneys' fees, (b) the Construction Cost of the
Subleased Improvements to the extent paid directly by Sublessor or Owner or
reimbursed to Sublessee pursuant to Article III hereof, (c) the cost of
surveys, title reports and title insurance policies, (d) filing fees and other
direct expenses (including reasonable attorneys' fees) incurred in connection
with the organization of Sublessor and Owner in the State of Texas, (e)
transfer taxes, documentary, stamp and similar taxes and all recording and
filing fees and taxes incurred in connection with the acquisition of the Land
or Sublessor's leasehold estate therein and the financing of Sublessor's
Estate, (f) the fees, expenses and disbursements of special counsel to
Sublessor's Assignees, if any, and counsel to Sublessor, Sublessee and
Guarantor, (g) Owner's cost of financing the Subleased Property and all other
costs of whatever kind shown on Owner's books and records attributable or
allocable to the Subleased Property, (h) the cost of any Alterations to the
Subleased Improvements, and (i) all costs or expenses of whatever kind or
character incurred by Owner in connection with the Subleased Property. Total
Cost, in any event, shall not be less than the total of all Outstanding
Advances (as defined in the Credit Agreement) relating to the Subleased
Property.
Unavoidable Delays: Delays due to strikes, lockouts, inability
to procure materials, power failure, acts of God, governmental restrictions,
enemy action, civil commotion, fire, unavoidable casualty or other causes
beyond the control of Sublessee, provided that lack of funds regardless of the
cause therefor shall not be deemed a cause beyond the control of Sublessee.
Year: A twelve (12) month period commencing on the
Commencement Date or on an anniversary date thereof, as the case may be.
ARTICLE II
2. INTENTIONALLY OMITTED.
ARTICLE III
3.1 INTENTIONALLY OMITTED.
3.2 INTENTIONALLY OMITTED.
3.3 Indemnity
(a) Indemnification. To the full extent permitted by
applicable law, Sublessee hereby agrees to indemnify and shall hold Pier 1,
Sublessor and Owner, and their respective successors and assigns, and any and
all officers, employees, agents, directors and shareholders of Pier 1,
Sublessor and Owner or of Pier 1's Sublessor's and Owner's successors and
assigns, harmless from and against, and shall defend against, any and all
liabilities, losses, claims, demands, costs, fees and expenses, and judgments
of any nature arising, or alleged to arise, from or in connection with or
giving rise to any bodily injury to, or the death of, any person or any other
loss (including, without limitation, loss of or damage to property) with
respect to: (a) the performance of, or failure of performance of,
construction of the Subleased Improvements and of the covenants contained
herein by Sublessee, its agents, employees, contractors, or subcontractors of
any tier; (b) any other acts or omissions of Sublessee or its agents,
employees, contractors, or subcontractors of any tier with respect to the Land
or the Subleased Property or any portion thereof; (c) performance of any labor
or services or the furnishing of any materials or other property in respect of
the Land or the Subleased Property or any portion thereof; (d) any non-payment
or delay of a payment which Sublessee is required to make under the Sublease;
or (e) any claim of any kind whatsoever at any time arising out of or in
connection with the Subleased Property, including, without limitation, any and
all hazardous waste claims and claims brought by the Environmental Protection
Agency, or other federal, state, or local environmental regulatory authority.
Sublessee expressly acknowledges and agrees that this indemnification protects
Pier 1, Owner, Sublessor and Sublessor's Assignees, if any, from the
consequences of the acts or omissions of Pier 1, Owner, Sublessor or
Sublessor's Assignees, including, without limitation, the negligent acts or
omissions of Owner, Pier 1, Sublessor or Sublessor's Assignees.
(b) Legal Defense. Sublessee shall resist and defend any
action, suit, or proceeding brought against any indemnified party described in
Section 3.3(a) by reason of any occurrence with respect to which Sublessee has
herein agreed to hold Sublessor and Owner harmless by use of counsel
designated by Sublessee, which designated counsel is subject to Owner's and
Sublessor's approval as applicable, such approval not to be unreasonably
withheld.
3.4 INTENTIONALLY OMITTED.
3.5 INTENTIONALLY OMITTED.
ARTICLE IV
4. INTENTIONALLY OMITTED.
ARTICLE V
5. INTENTIONALLY OMITTED.
ARTICLE VI
6. ADDITIONAL CHARGES. In addition to the Basic Rent, Sublessee
shall also pay and discharge as additional rent (collectively, the "Additional
Charges") all Impositions relating to the Subleased Property, and in the event
of any failure on the part of Sublessee to pay any of the foregoing, every
fine, penalty, interest and cost which may be added for non-payment or late
payment thereof and Sublessor shall have all legal, equitable and contractual
rights, powers and remedies provided either in the Sublease or by statute or
otherwise as in the case of non-payment of the Basic Rent. If any installment
of Basic Rent or Additional Charges shall not be paid when due, Sublessee
shall pay Sublessor on demand, as Additional Charges, a late charge (to the
extent permitted by law) computed at the Overdue Rate on the amount of such
installment, from the due date of such installment to the date of payment
thereof.
ARTICLE VII
7.1 Payment of Impositions. Subject to Article XVI hereof relating
to permitted contests, Sublessee will pay, or cause to be paid, all
Impositions before any fine, penalty, interest or cost may be added for
non-payment, such payments to be made directly to the taxing authorities where
feasible, and will promptly, upon request, furnish to Sublessor and
Sublessor's Assignees, if any, copies of official receipts or other
satisfactory proof evidencing such payments. If any Imposition may, at the
option of the taxpayer, lawfully be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Sublessee may
exercise the option to pay the same (and any accrued interest on the unpaid
balance of such Imposition) in installments and in such event, shall pay such
installments during the Term hereof as the same respectively become due and
before any fine, penalty, premium, further interest or cost may be added
thereto. Sublessee, at its expense, shall prepare, and to the extent it may
legally do so, and file all tax returns and reports in respect of any
Imposition as may be required by governmental authorities. If any refund
shall be due from any taxing authority in respect of any Imposition paid by
Sublessee, the same shall be retained by Sublessee.
7.2 Notice of Impositions. Sublessor shall, and shall cause Owner
to, give prompt notice to Sublessee of all Impositions payable by Sublessee
hereunder of which Sublessor or Owner, as applicable, at any time has
knowledge, but a failure to give any such notice shall in no way diminish
Sublessee's obligations hereunder.
7.3 Intentionally Omitted.
7.4 Utility Charges. Sublessee will pay or cause to be paid all
charges for electricity, power, gas, oil, water and other utilities used in
the Subleased Property, and for all services and supplies at any time rendered
to, or used on or about the Subleased Property.
7.5 Insurance Premiums. Sublessee will pay or cause to be paid all
premiums for the insurance coverage required to be maintained pursuant to the
Sublease.
7.6 Net Rent. Notwithstanding anything contained herein to the
contrary, it is intended that the Basic Rent provided for in this Sublease
shall be absolutely net to Sublessor throughout the term of this Sublease, and
Sublessee accordingly covenants and agrees to pay as they become due and
payable, and before they become delinquent, all Impositions, Additional
Charges, and other amounts of whatever kind or character which relate to or
arise in any way in connection with this Sublease, the Subleased Property or
the obligations of Sublessor with respect to the Subleased Property.
ARTICLE VIII
8. NO TERMINATION, ABATEMENT, ETC. Except as otherwise
specifically provided for, Sublessee shall remain bound by the Sublease in
accordance with its terms and shall neither take any action to modify,
surrender or terminate the same, nor seek nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent, nor
shall the respective obligations of Sublessor and Sublessee be otherwise
affected by reason of (a) any damage to, or destruction of, the Subleased
Property or any portion thereof from whatever cause or any Taking of the
Subleased Property or any portion thereof, (b) the lawful or unlawful
prohibition of, or restriction upon, Sublessee's use of the Subleased Property
or any portion thereof, the interference with such use by any person,
corporation, partnership or other entity, or by reason of any eviction by
paramount title, or any other defect in title, or Sublessee's acquisition of
ownership of Sublessor's Estate otherwise than pursuant to an express
provision contained in the Sublease, (c) any claim which Sublessee has or
might have against Sublessor or against any of Sublessor's Assignees, if any,
or by reason of any default or breach of any warranty by Sublessor hereunder
or any other agreement between Sublessor and Sublessee, or to which Sublessor
and Sublessee are parties, (d) any bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding up or other
proceedings affecting Sublessor or any assignee or transferee of Sublessor, or
any action with respect to the Sublease that may be taken by a trustee or
receiver of Sublessor or any assignee of Sublessor or by any court in any such
proceeding, (e) the discovery of any hazardous waste or toxic substance on the
Subleased Property, the effect of the application of any local, state, or
federal environmental laws, regulations, or ordinances to the Subleased
Property, or the imposition of liability under the "super fund" provisions of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, or (f) for any other cause whether similar or dissimilar to any of the
foregoing. Sublessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be available to Sublessee by
law or in equity to (i) modify, surrender or terminate the Sublease or quit or
surrender the Subleased Property or any portion thereof, or (ii) entitle
Sublessee to any abatement, reduction, suspension or deferment of the Rent or
other sums payable by Sublessee hereunder, except as otherwise specifically
provided in the Sublease. The obligations of Sublessor and Sublessee under
the Sublease shall be separate and independent covenants and agreements and
the net Basic Rent and Additional Charges and all other sums so payable by
Sublessee shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to an express provision of the
Sublease.
ARTICLE IX
9.1 Ownership of Sublessor's Estate. Sublessee acknowledges that
Sublessor's Estate is the property of Sublessor and that Sublessee has only
the right to the possession and use of the Subleased Property upon the terms
and conditions of the Sublease.
9.2 Sublessee's Equipment. Sublessee may, at its expense, install
or assemble or place on the Land or in the Subleased Improvements, and remove
and substitute, any items of machinery, equipment furnishings or trade
fixtures or other personal property owned by Sublessee and used or useful in
Sublessee's business, at present or hereafter situated on the Subleased
Property (collectively, "Sublessee's Equipment"), and Sublessee may remove the
same upon the expiration or prior termination of the Term; provided, however,
that Sublessee shall have no right to remove any item which constitutes a
Fixture. All Sublessee's Equipment shall be and remain the property of
Sublessee, provided that any of Sublessee's Equipment not removed by Sublessee
upon the expiration or earlier termination of the Sublease shall be considered
abandoned by Sublessee and may be appropriated, sold, destroyed or otherwise
disposed of by Sublessor without first giving notice thereof to Sublessee and
without obligation to account therefor. All costs and expenses incurred in
removing, storing and disposing of Sublessee's Equipment shall be paid by
Sublessee. Sublessee will repair, at its expense, all damage to the Subleased
Property caused by the installation or removal of Sublessee's Equipment,
whether effected by Sublessee or Sublessor. Sublessor shall not be
responsible for any loss or damage to Sublessee's Equipment.
ARTICLE X
10.1 Condition of the Subleased Property. Sublessee acknowledges
receipt and delivery of possession of the Subleased Property and that
Sublessee has examined title to, and the condition of, the Subleased Property
prior to the execution and delivery of the Sublease and has found the same to
be in good order and repair and satisfactory for all purposes under the
Sublease. Sublessee is renting the Subleased Property "as is" in its present
condition with all faults and defects. SUBLESSOR MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE SUBLEASED PROPERTY OR
ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR
ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, AS TO SUBLESSOR'S TITLE OR LEASEHOLD
INTEREST, AS APPLICABLE, THEREON OR OTHERWISE, OR AS TO ANY INCOME OR EXPENSES
TO BE DERIVED FROM OR PAID WITH RESPECT TO THE SUBLEASED PROPERTY, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY SUBLESSEE. SUBLESSEE
ACKNOWLEDGES THAT THE SUBLEASED PROPERTY HAS BEEN INSPECTED BY SUBLESSEE AND
IS SATISFACTORY TO IT.
10.2 Use of the Subleased Property. Sublessee may use the Subleased
Property for retail and wholesale sale of lawn and garden products, crafts,
Christmas merchandise and such other merchandise as is typically sold in a
majority of the stores of Sublessee in the state in which the Land is located
and any other retail use subject to Sublessor's approval, which approval will
not be unreasonably withheld or delayed and for no other purpose; provided
that Sublessee shall give Sublessor reasonable prior notice of its intent to
change the present use of the Subleased Property and a description of the
proposed use to which it will be put. Sublessee agrees to comply in a timely
manner with the terms of the Primary Lease or with the provisions of any deed
of trust, mortgage, or security agreement between Owner and Bank regarding the
use of the Subleased Property. Sublessee agrees that it will not permit any
unlawful occupation, business or trade to be conducted on the Subleased
Property or any use to be made of the Subleased Property contrary to any Legal
Requirements or Insurance Requirements applicable thereto. Sublessee shall
not use or occupy or permit the Subleased Property to be used or occupied, nor
do or permit anything to be done in or on the Subleased Property or any part
thereof, in a manner that may make it impossible to obtain fire or other
insurance thereon which Sublessee is, or may be, required to furnish
hereunder, or that will cause or be likely to cause structural injury to any
of the Subleased Improvements, or that will constitute a public or private
nuisance or waste. In the event that Sublessee conducts any activity at the
Subleased Property or uses the Subleased Property in any manner or any
condition exists upon the Subleased Property either before or during
Sublessee's occupancy of the Subleased Property, (i) which would cause such
Subleased Property to become a hazardous waste treatment storage or disposal
facility within the meaning of, or otherwise bring such Subleased Property
within the ambit of, the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sec. 6901 et seq., or any state law or local ordinance, (ii) so as to
cause a release or threatened release of hazardous waste from such Subleased
Property within the meaning of, or otherwise bring such Subleased Property
within the ambit of, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Sec. 9601-9657, or any state law or local
ordinance or (iii) so as to cause the discharge of pollutants or effluents
into any water source or system, or the discharge into the air of any
emissions, which would require a permit under the Federal Water Pollution
Control Act, 33 U.S.C. Sec. 1251 et seq., or the Clean Air Act, 42 U.S.C. Sec.
7401 et seq., or any state law or local ordinance, Sublessee agrees to (i)
promptly cure same at Sublessee's expense and (ii) protect, indemnify, save
harmless and defend Sublessor, its agents, officers, directors, shareholders,
employees and Sublessor's Assignees, if any, from and against all liability,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, attorneys' fees and expenses) imposed upon or
incurred by any of the above by reason of any of the foregoing. Sublessee
shall fully comply with all applicable environmental laws relating to the
Subleased Property, whether federal, state or local.
ARTICLE XI
11. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS, INSTRUMENTS,
ETC. Subject to Article XVI hereof relating to permitted contests, Sublessee,
at its expense, will promptly (a) comply with all Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair
and restoration of the Subleased Property, whether or not compliance therewith
shall require structural changes in any of the Subleased Improvements or
interfere with the use and enjoyment of the Subleased Property, and whether or
not such Legal Requirements or Insurance Requirements represent a change in
policy of the entity promulgating or enforcing any such Legal Requirement or
Insurance Requirement, and (b) procure, maintain and comply with all licenses
and other authorizations required for any use of the Subleased Property then
being made, and for the proper erection, installation, operation and
maintenance of the Subleased Improvements or any part of any thereof.
Notwithstanding the foregoing provisions of this Article XI, Sublessee shall
not be required to comply with an Insurance Requirement which consists of mere
recommendation if the failure to comply could not result in higher than
standard premium charges nor jeopardize the continuation of all required
insurance coverage on the Subleased Property.
ARTICLE XII
12.1 Maintenance and Repair.
(a) Sublessee, at its expense, will keep the Subleased
Property and the Equipment in a clean, neat and orderly condition and in good
order and repair and, with reasonable promptness, make all necessary and
appropriate repairs thereto, or replacements thereof or installations therein
of every kind and nature, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, foreseen or unforeseen or arising
by reason of a condition existing prior to the commencement of the applicable
Term (concealed or otherwise). All repairs, restorations and installations
shall, to the extent possible, be at least equivalent in quality to the
original work and shall be made in a good and workmanlike manner. Sublessee
will not take or omit to take any action the taking or omission of which might
materially impair the value or the usefulness of the Subleased Property or any
part thereof or commit any waste of the Subleased Property or any part
thereof.
(b) Sublessor shall not under any circumstances be required to
build any improvements on the Subleased Property, or to make any repairs,
replacements, alterations or renewals of any nature or description to the
Subleased Property, whether ordinary or extraordinary, structural or
non-structural, foreseen or unforeseen, or, to make any expenditure whatsoever
in connection with the maintenance and repair of the Subleased Property in any
way. Sublessee hereby waives the right to make repairs at the expense of
Sublessor pursuant to any law in effect at the time of the execution of the
Sublease or hereafter enacted.
(c) Nothing contained in the Sublease and no action or
inaction by Sublessor shall be construed as (i) constituting the consent or
request of Sublessor, expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the
Subleased Property or any part thereof, or (ii) giving Sublessee any right,
power or permission to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against Sublessor in respect thereof
or to make any agreement that may create, or in any way be the basis for, any
right, title, interest, lien, claim or other encumbrance upon the estate of
Sublessor in the Subleased Property.
(d) Unless Sublessor shall cause Owner to convey Owner's
interest in Sublessor's Estate to Sublessee pursuant to the provisions of the
Sublease, upon the expiration or prior termination of the applicable Term,
Sublessee will vacate and surrender the Subleased Property to Sublessor in the
condition in which the Subleased Property was originally received from
Sublessor, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of the Sublease and except for
ordinary wear and tear.
12.2 Encroachments, Restrictions, Etc. If any of the Subleased
Improvements or any use of or activity on the Subleased Property shall, at any
time, encroach upon any property, street or right-of-way adjacent to the
Subleased Property, or shall violate the agreements or conditions contained in
any restrictive covenant or other agreement affecting the Subleased Property,
or any party thereof, or shall impair the rights of others under any easement
or right-of-way to which the Subleased Property is subject, then promptly upon
the request of Sublessor or at the behest of any person affected by any such
encroachment, violation or impairment, Sublessee shall, at its expense,
subject to its right to contest the existence of any encroachment, violation
or impairment and in such case, in the event of an adverse final
determination, either (i) obtain valid and effective waivers or settlements of
all claims, liabilities and damages resulting from each such encroachment,
violation or impairment, whether the same shall affect Sublessor or Sublessee
or (ii) make such changes in the Subleased Improvements, the uses thereof or
the activities thereon and take such other actions as shall be necessary to
remove such encroachment and to end such violation or impairment, including,
if necessary, the alteration of any of the Subleased Improvements. Any such
alteration shall be made in conformity with the requirements of Section 13.1
hereof.
ARTICLE XIII
13.1 Alterations, Additions and Replacements. Sublessee, at its
expense, may at any time and from time to time after the Commencement Date
make alterations of, and additions to, any of the Subleased Improvements or
any part thereof and replacements for the same (collectively, "Alterations"),
provided that (a) the market value of the Subleased Property shall not be
reduced or its structural integrity or usefulness impaired, (b) the work shall
be done expeditiously and in a good and workmanlike manner, and, if approval
is required, in accordance with approved plans and specifications, (c) the
plans and specifications for any single Alteration with an estimated cost in
excess of $200,000 shall be approved in writing by Sublessor, such approval
not to be unreasonably withheld, (d) Sublessee shall comply with all Legal
Requirements and Insurance Requirements, if any, applicable to the work, (e)
except in the case of removal of a non-load bearing interior wall or similar
structure which has become unnecessary or undesirable by reason of Alterations
made in compliance herewith, no Subleased Improvements shall be demolished
unless Sublessee, unless such requirement is waived by Sublessor, shall have
first furnished Sublessor and Sublessor's Assignees, if any, with such surety
bonds or other security acceptable to Sublessor and Sublessor's Assignees, if
any, as shall assure that the cost of rebuilding of such Subleased
Improvements shall be met, (f) Sublessee shall promptly pay all costs and
expenses and discharge any and all liens arising in respect of the work, and
(g) Owner shall have consented to the making of the Alternations. Subject to
the provisions of Section 13.4, all Alterations shall immediately become and
remain the property of Sublessor, shall be deemed part of the Subleased
Property, and shall be subject to all of the terms and provisions of the
Sublease. In case the estimated cost of any Alteration exceeds $200,000, such
Alteration shall be made under the supervision of a qualified architect or
engineer who shall have been approved in writing by Sublessor, which approval
shall not be unreasonably withheld. Provided Sublessee is not then in Default
under the Sublease, upon the expiration or earlier termination of the Term,
Sublessee shall have no obligation to restore the Subleased Improvements to
their condition exiting prior to the making of Alterations permitted by this
Section 13.1. No alterations or Additional Facilities shall be made which
would tie in or connect any Subleased Improvements on the Subleased Property
with any other improvements on any property adjacent to the Subleased
Property, except roadways and utilities.
13.2 Salvage. All salvage resulting from materials which are
scrapped or removed in connection with the making of either Alterations
permitted by Section 13.1 or repairs required by Article XII hereof shall be
delivered to Sublessor and the Total Cost shall be reduced by such amount and
the Basic Rent be reduced accordingly.
13.3 Construction of Additional Facilities. Subject to the
requirements of Section 13.1, Sublessee, at its expense, may at any time
hereafter construct Additional Facilities. In case the estimated cost of such
Additional Facilities exceeds $200,000, the same must be constructed under the
supervision of a qualified architect or engineer, and prior to the
commencement of any work thereon, if the estimated cost thereof exceeds
$200,000, notice of the amount of such estimate shall be given to Sublessor in
writing.
ARTICLE XIV
14. INTENTIONALLY OMITTED.
ARTICLE XV
15.1 Liens. Subject to Article XVI hereof relating to permitted
contests, Sublessee will not directly or indirectly create or allow to remain
and will promptly discharge at its expense any lien, encumbrance, attachment,
title retention agreement or claim upon the Subleased Property or any
attachment, levy, claim or encumbrance in respect of the Basic Rent or
Additional Charges provided under the Sublease, not including, however, (a)
the Sublease, (b) the Primary Lease, (c) such other matters, if any, set forth
in Exhibit "B" to the Sublease as shall at the time be in effect and
applicable to the Subleased Property, (d) if not otherwise permitted by
Section 15.2 hereof, restrictions, liens and other encumbrances which are
consented to in writing by Sublessor or any easements which do not materially
and adversely affect (1) the marketability of title to Sublessor's Estate, (2)
the use of the Subleased Property for all purposes of the Sublease or (3) the
fair market value thereof, provided that Sublessee shall first have delivered
an Officer's Certificate to Sublessor certifying as to the matters set forth
in clauses (1), (2) and (3), (e) liens for those taxes of Sublessor which
Sublessee is not required to pay hereunder, (f) liens for Impositions or for
sums resulting from noncompliance with Legal Requirements so long as (1) the
same are not yet payable or are payable without the addition of any fine or
penalty or (2) such liens are in the process of being contested as permitted
by Article XVI hereof, and (h) liens of mechanics, laborers, materialmen,
suppliers or vendors for sums either disputed or not yet due, provided that
(1) the payment of such sums shall not be postponed under any related contract
for more than sixty (60) days after the completion of the action giving rise
to such lien and such reserve or other appropriate provisions as shall be
required by law or sound accounting principles shall have been made therefor
or (2) any such liens are being contested as permitted by Article XVI hereof.
15.2 Title Matters. Throughout the term of this Sublease, Sublessee
shall have the right to evaluate whether various easements and reciprocal
easement and access agreements (but not including any liens) (collectively,
"Title Matters") should be created on the Subleased Property (1) so that
Sublessee's use of the Subleased Property for its intended purposes may be
enhanced. Sublessee, upon evaluating such Title Matters, may request in
writing ("Request") that Sublessor or Sublessor's Assignees, if any, execute
certain instruments, enter into certain agreements, or take certain actions
(collectively, "Title Actions") to effectuate a Title Matter. Upon submission
of such Request, Sublessor or Sublessor's Assignees shall take the Title
Action unless objections ("Objections") to the Title Matter are raised by
Sublessor or Sublessor's Assignees, which Objections must be based on
reasonable cause, or by Owner or Bank. If Sublessor or Sublessor's Assignees
send notice of Objections to Sublessee, Sublessee shall modify the instruments
or agreements contemplated or otherwise cure such Objections, whereupon
Sublessor or Sublessor's Assignees shall take the Title Action as modified
after curing the Objections. It is intended that Sublessor or Sublessor's
Assignees rely on the good faith judgment of Sublessee in connection with the
Title Matters and Sublessor or Sublessor's Assignees shall not raise
Objections and shall take the Title Action unless Sublessor or Sublessor's
Assignees have reasonable cause to raise Objections or refuse to take the
Title Action or Owner or Bank object to such Title Action. All costs and
expenses incurred relating to the review and evaluation of the Title Matters,
the Request, the Title Action to be taken, and any Objections, including,
without limitation, attorneys' fees, will be included in the Total Cost for
the Subleased Property to which such matters relate.
ARTICLE XVI
16. PERMITTED CONTESTS. Sublessee, on Sublessor's behalf, but at
Sublessee's expense, may contest, by appropriate legal proceedings timely
initiated and conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any Legal
Requirement or Insurance Requirement or any lien, encumbrance, charge or claim
not permitted by Article XV hereof, provided that (a) in the case of an unpaid
Imposition, lien, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Sublessor and/or from the Subleased Property, (b) neither the Subleased
Property, nor Sublessor's Estate, nor any rent therefrom nor any part thereof
or interest therein would be in any immediate danger of being sold, forfeited,
attached or lost, (c) in the case of a Legal Requirement, Sublessor would not
be in any danger of civil or criminal liability for failure to comply
therewith pending the outcome of such proceedings, (d) in the case of a Legal
Requirement and/or an Imposition, lien, encumbrance or charge, Sublessee shall
give such reasonable security as may be demanded by Sublessor, Owner or Bank
to insure ultimate payment of the same and to prevent any sale or forfeiture
of the Subleased Property, Sublessor's Estate, the Basic Rent and any
Additional Charges by reason of such non-payment or noncompliance, provided,
however, the provisions of this Article XVI shall not be construed to permit
Sublessee to contest the payment of Basic Rent, Additional Charges or any
other sums payable by Sublessee to Sublessor under the Sublease or to contest
any payment under or term or provision of the Primary Lease, (e) in the case
of an Insurance Requirement, the coverage agreed to by Sublessor and Sublessee
pursuant to Article V of the Sublease shall be maintained, and (f) if such
contest be finally resolved against Sublessor or Sublessee, Sublessee shall,
as Additional Charges due hereunder, promptly pay the amount required to be
paid, together with all interest and penalties accrued thereon, or comply with
the applicable Legal Requirement or Insurance Requirement. Sublessor, at
Sublessee's expense, shall execute and deliver to Sublessee such
authorizations and other documents as may reasonably be required in any such
contest, and, if reasonably requested by Sublessee, Sublessor and Owner shall
join as a party therein. Sublessee shall indemnify and save Sublessor
harmless against any liability, cost or expense of any kind that may be
imposed upon or incurred by Sublessor in connection with any such contest and
any loss resulting therefrom, including, without limitation, reasonable
attorneys' fees.
ARTICLE XVII
17. INTENTIONALLY OMITTED.
ARTICLE XVIII
18. INTENTIONALLY OMITTED.
ARTICLE XIX
19. EVENTS OF DEFAULT.
19.1 If any one or more of the following events (individually, an
"Event of Default") shall occur:
(a) if Sublessee shall fail to make payment of any Basic Rent
or Additional Charges payable by Sublessee under the Sublease when the same
becomes due and payable, provided that with respect to the first two defaults
during a 12-month period, a failure to pay shall not constitute a default
until 10 days after due, or
(b) if Sublessee shall fail to observe or perform any other
term, covenant or condition of the Sublease and such failure shall continue
for a period of fifteen (15) days after notice thereof, unless such failure
cannot with due diligence be cured within a period of fifteen (15) days after
notice thereof, in which case such failure shall not be deemed to continue if
such failure is a non-monetary failure and Sublessee proceeds promptly and
with due diligence to cure the failure and diligently completes the curing
thereof within seventy-five (75) days after notice thereof, or
(c) if Sublessee, Guarantor or any Significant Subsidiary
shall make a general assignment for the benefit of its creditors, or shall
file a voluntary petition in bankruptcy, or shall file any petition or answer
seeking, consenting to, or acquiescing in reorganization, arrangement,
adjustment, composition, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file an answer
admitting or failing to deny the material allegations of a petition against it
for any such relief, or shall admit in writing its inability to pay its debts
as they mature, or there shall be entered against any of them an order for
relief, or
(d) if any proceeding against Sublessee, Guarantor or any
Significant Subsidiary seeking any of the relief mentioned in clause (c) of
this Section shall not have been stayed or dismissed within thirty (30) days
after the commencement thereof, or
(e) if a trustee, receiver, custodian or liquidator of
Sublessee, Guarantor or any Significant Subsidiary or of any substantial part
of its properties or assets, or of Sublessee's estate or interest in the
Subleased Property, shall be appointed with the consent or acquiescence of
Sublessee, or if any such appointment, if not so consented to or acquiesced
in, shall remain unvacated or unstayed for a period of thirty (30) days
whether or not consecutive, or
(f) if Sublessee, Guarantor or any Significant Subsidiary
shall be liquidated or dissolved, or shall begin proceedings toward such
liquidation or dissolution, or shall, in any manner, permit the divestiture of
substantially all its assets (other than in connection with a merger of
Sublessee or Guarantor into, or a sale of all or substantially all of
Sublessee's or Guarantor's (as the case may be) assets to, another
corporation, provided that the survivor of such merger or the purchaser of
such assets shall be acceptable to Sublessor, Owner and Bank, in their sole
and absolute discretion and shall assume all of Sublessee's or Guarantor's
obligations under the Sublease or the Guaranty (as the case may be), as
appropriate, by a written instrument, in form and substance satisfactory to
Sublessor, Owner and Bank, accompanied by an opinion of counsel, satisfactory
to Sublessor and counsel to Owner and Bank, stating that such instrument of
assumption is valid, binding and enforceable against the parties thereto in
accordance with its terms, and provided further, that the survivor of such
merger or the purchaser of such assets (as the case may be) shall have a
Consolidated Tangible Net Worth immediately after any such merger or purchase,
as appropriate, at least equal to the Consolidated Tangible Net Worth of
Sublessee or Guarantor immediately prior to such merger or purchase, as
appropriate), or
(g) if the estate or interest of Sublessee in the Subleased
Property or any part thereof shall be levied upon or attached in any
proceeding and the same shall not be vacated or discharged within forty-five
(45) days after commencement thereof (unless Sublessee shall be contesting
such lien or attachment in good faith in accordance with Article XVI hereof),
or
(h) if any of the representations or warranties made by or on
behalf of Sublessee or Guarantor, as appropriate, in the Sublease, the
Guaranty or in any other document, certificate or instrument delivered in
connection herewith proves to be untrue, incomplete or misleading in any
material respect unless specifically waived in writing by Sublessor, Owner and
Bank, or
(i) there shall be rendered against the Sublessee, Guarantor
or any Significant Subsidiary final judgment for the payment of money in
excess of one million dollars ($1,000,000) and the Sublessee, Guarantor or any
significant Subsidiary, as the case may be, shall have failed to satisfy such
judgment or to appeal therefrom (or from the order, decree or process pursuant
to which such judgment was granted, passed, entered or affirmed) and to obtain
a stay of execution thereof within the period prescribed by law for appeals,
and to have such judgment discharged within thirty (30) days after the
expiration of such period or the period of any such stay, whichever shall
later expire, or
(j) An "Event of Default" (as defined therein) occurs under
the Credit Facilities Agreement.
(k) an Event of Default under, and as defined in, any other
Sublease shall have occurred and not been waived by Sublessor, then, and in
any such event, and in addition to Sublessor's other rights and remedies under
this Sublease, Sublessor may terminate the Sublease by giving Sublessee not
less than ten (10) days' notice of such termination and upon the expiration of
the time fixed in such notice, the applicable Term shall terminate and all
rights of Sublessee under the Sublease shall cease. Sublessor shall have all
rights and remedies at law and in equity available to Sublessor as a result of
Sublessee's breach of the Sublease.
Sublessee will pay as Additional Charges all costs and expenses
incurred by or on behalf of Sublessor, Owner or Bank, including, without
limitation, attorneys' fees and expenses, as a result of any Event of Default
hereunder.
19.2 If an Event of Default shall have occurred, whether or not the
Sublease has been terminated pursuant to Section 19.1, Sublessee shall, if
required by Sublessor so to do, immediately surrender the Subleased Property
to Sublessor and quit the same, and if permitted by applicable law, Sublessor
may enter upon and repossess the Subleased Property by reasonable force,
summary proceedings, ejectment or otherwise, and may remove Sublessee and all
other persons and any and all personal property from the Subleased Property.
Sublessor shall be under no liability for or by reason of any such entry,
repossession or removal.
19.3 If an Event of Default shall have occurred, whether or not the
Sublease has been terminated pursuant to Section 19.1, Sublessor, with notice
to Sublessee, may, but shall be under no obligation to, relet the Subleased
Property or any part thereof for the account of Sublessee, in the name of
Sublessee or otherwise, for such term or terms (which may be greater or less
than the period which would otherwise have constituted the balance of the then
current Term) and on such conditions (which may include concessions or free
rent) and for such purposes as Sublessor may determine, and may collect,
receive and retain the rents resulting from such reletting. Nothing in this
Sublease shall be construed to impose upon Sublessor any duty to relet the
Subleased Property or otherwise to mitigate Sublessor's damages for any Event
of Default by Sublessee.
19.4 Neither (a) the termination of the Sublease pursuant to Section
19.1, (b) the repossession of the Subleased Property, (c) the failure of
Sublessor to relet the Subleased Property, (d) the reletting of all or any
portion thereof, nor (e) the failure of Sublessor to collect or receive any
rentals due upon any such reletting, shall relieve Sublessee of its liability
and obligations hereunder, all of which shall survive any such termination,
repossession or reletting. In the event of any such termination, Sublessee
shall forthwith pay to Sublessor all Rent due and payable to and including the
date of such termination. Thereafter, monthly on the days on which the Basic
Rent would have been payable under the Sublease if the same had not been
terminated and until the end of what would have been the Term in the absence
of such termination, Sublessee, at Sublessor's option, shall pay Sublessor as
and for liquidated and agreed current damages for Sublessee's default:
(i) an amount equal to the Basic Rent and Additional
Charges that would have been payable by Sublessee under the Sublease if the
Term had not been terminated, less
(ii) the net proceeds, if any, of any reletting of the
Subleased Property or any part thereof, after deducting all of Sublessor's
expenses in connection therewith, including, without limitation, repossession
costs, brokerage commissions, attorneys' fees and expenses and any repair or
alteration costs and expenses incurred in preparation for such reletting.
19.5 At any time after the termination of the Sublease pursuant to
Section 19.1, whether or not Sublessor shall have collected any current
damages pursuant to Section 19.4, Sublessor, at its option, shall be entitled
to recover from Sublessee and Sublessee will pay to Sublessor on demand as and
for liquidated and agreed final damages for Sublessee's default (it being
agreed that it would be impractical or extremely difficult to fix the actual
damages), and in lieu of all current damages provided in Section 19.4 beyond
the date to which the same shall have been paid,
(a) the sum of (i) any past due Rent together with a late
charge thereon (to the extent permitted by law) computed from the due date
thereof to the date of payment of such liquidated damages at the Overdue Rate
(or at the maximum rate permitted by law, whichever is the lesser), (ii) the
remaining payments of Basic Rent (which would otherwise have become due during
the remainder of the Term but for such termination) as of the later of the
date to which Basic Rent shall have been paid or the date to which Sublessee
shall have paid current damages pursuant to Section 19.5 discounted to the
date of payment at the rate of seven and one-half percent (7.5%) per annum
calculated on a quarterly basis, together with a late charge thereon computed
from the later of such dates to the date of payment of such liquidated damages
at (to the extent permitted by law) the Overdue Rate (or at the maximum rate
permitted by law, whichever is the lesser), and (iii) an amount equal to the
Additional Charges and other charges (as reasonably estimated by Sublessor)
which would be payable hereunder from such date for what would have been the
unexpired Term had the same not been terminated, discounted to the date of
payment at the rate of seven and one-half percent (7.5%) per annum, calculated
on a quarterly basis, less
(b) the then fair net rental value of the Subleased Property
for the period from the date of payment of such liquidated damages to the date
which would have been the then expiration date of the then current Term had
the Sublease not been terminated (after deducting all reasonable estimated
expenses to be incurred in connection with reletting the Subleased Property,
including, without limitation, repossession costs, brokerage commissions,
attorneys' fees and expenses and repair and alteration costs and expenses)
discounted to the date of payment at the rate of seven and one-half percent
(7.5%) per annum during the then unexpired current Term calculated on a
quarterly basis.
If any statute or rule of law shall validly prohibit or limit the amount of
such liquidated final damages to less than the amount above agreed upon,
Sublessor shall be entitled to the maximum amount allowable under applicable
statutes or rules of law.
19.6 If the Sublease is terminated pursuant to Section 19.1,
Sublessee waives, to the extent permitted by applicable law, (a) any right
which may require Sublessor to sell, lease or otherwise use its interest in
the Subleased Property or any part thereof in mitigation of Sublessor's
damages as set forth in this Article XIX, (b) any notice of re-entry or of the
institution of legal proceedings to that end, (c) any right of redemption,
re-entry or repossession, (d) any right to a trial by jury in the event of
summary proceedings to enforce the remedies set forth in this Article XIX, (e)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt, and (f) any other rights which might otherwise
limit or modify any of Sublessor's rights or remedies under this Article XIX.
19.7 In the event that Sublessor shall terminate the Sublease
pursuant to Section 19.1, subject to the rights provided in Section 19.8,
Sublessee and Guarantors, upon notice from Sublessor, shall comply with the
provisions of Section 36.
19.8 In the event that Sublessor elects to pursue any of the
remedies set forth in Section 19.2 through Section 19.7, then Sublessee shall
have the option, upon providing written notice within ten (10) days of such
election, to purchase Sublessor's Estate (and Sublessor will cause Owner to
convey Owner's interest therein to Sublessee) on a date which is within thirty
(30) days of the delivery of such notice for a purchase price equal to all
Rents to be paid hereunder through the Interim Term, plus the total amount due
under the Guarantee and such purchase shall otherwise be completed in
accordance with Article XXI hereof (including the payment by Sublessee of all
costs and expenses contemplated therein); provided, however, that Sublessee
shall pay, prior to exercising such option, all Rent and other sums due under
the Sublease to the date set for purchase of Sublessor's Estate.
ARTICLE XX
20. SUBLESSOR'S RIGHT TO CURE SUBLESSEE'S DEFAULT. If Sublessee
shall fail to make any payment or perform any act required to be made or
performed under the Sublease, Sublessor, or Owner or Bank, without waiving or
releasing any obligation or Default, may (but shall be under no obligation to)
at any time thereafter make such payment or perform such act for the account
and at the expense of Sublessee, and may enter upon the Subleased Property for
such purpose and take all such action thereon as, in the opinion of Sublessor
or Owner or Bank may be necessary or appropriate therefor. No such entry
shall be deemed an eviction of Sublessee. All sums so paid by Sublessor or
Owner or Bank and all costs and expenses (including, without limitation,
attorneys' fees and expenses) so incurred, together with a late charge thereon
(to the extent permitted by law) at the Overdue Rate (or at the maximum rate
permitted by law, whichever is less) from the date on which such sums or
expenses are paid or incurred by Sublessor or Owner or Bank shall be paid by
Sublessee to Sublessor or Owner or Bank on demand.
ARTICLE XXI
21. PROVISIONS RELATING TO PURCHASE BY SUBLESSEE. In the event
Sublessee or a third party purchases Sublessor's Estate from Sublessor
pursuant to any of the terms of the Sublease, Sublessor shall cause Owner,
upon receipt from Sublessee of the applicable purchase price, together with
full payment of any unpaid Rent due and payable on or before the date of the
purchase, execute and deliver to Sublessee, on the purchase date, an
appropriate assignment conveying title by general warranty with respect to
Owner's interest in Sublessor's Estate free and clear of any liens and
encumbrances other than those in existence and affecting Owner's interest in
Sublessor's Estate on the date hereof or created or permitted by Sublessee
(except for any liens to the Bank or other lenders to Owner). The conveyance
of the Subleased Improvements shall be "as is" with all faults and defects.
The purchase price shall be paid to Sublessor or as Sublessor may direct, in
immediately available U.S. cash funds without deduction or offset for any
cause whatsoever. All expenses of such conveyance including, without
limitation, documentary stamps and other conveyance taxes, the cost of title
examination and title insurance, the cost (including prepayment premium, if
any) of obtaining and recording a release of such Subleased Property from the
lien of any deed of trust or mortgage, broker's fee, if any, attorneys' fees
incurred by Sublessor in connection with such conveyance and release, transfer
taxes and recording fees, taxes and other charges shall be paid by Sublessee.
In addition, Sublessee shall assume all Impositions, without proration.
Unless otherwise specified in this Sublease, the purchase date shall be the
date specified by Sublessee pursuant to the notice provisions contained herein
and within the time frames specified; provided, however, the purchase date
shall in no event be later than ninety (90) days after the date the offer to
purchase is given (unless a shorter period of time is expressly prescribed
herein in which case the purchase date shall be no later than the date so
prescribed).
ARTICLE XXII
22. HOLDING OVER. If Sublessee shall for any reason remain in
possession of the Subleased Property after the expiration of the Term or
earlier termination of the Term hereof, such possession shall be as a
month-to-month tenant during which time Sublessee shall pay as rental one
hundred twenty percent (120%) of the Basic Rent due or to be due from July 1,
1998 to June 30, 2000.
ARTICLE XXIII
23. NO RECOURSE TO SUBLESSOR. No recourse shall be had against the
Sublessor, or its successors or assigns, or its employees, officers, directors
or shareholders for any claim based on any failure by the Sublessor in the
performance or observance of any of the agreements, covenants or provisions
contained in the Sublease or with respect to any certificate or instrument
given by any of the above in accordance with the terms hereof. In the event
of any such failure, recourse shall be had solely against Sublessor's Estate.
However, rights of enforcement against Sublessor's Estate are subject to and
subordinate to the rights of Sublessor's Assignees, if any, with respect
thereto and to any mortgage or deed of trust affecting the Subleased Property.
Nothing contained in the foregoing, however, shall restrict the right of
Sublessee to commence any proceedings against Sublessor for the breach of its
agreements or covenants contained in the Sublease; provided, however, that, in
the event that any judgment is obtained against Sublessor, the same shall not
be the basis of a right of offset, deferment or reduction of the Rent due
under the Sublease.
ARTICLE XXIV
24. RISK OF LOSS. The risk of loss or of decrease in the enjoyment
and beneficial use of the Subleased Property in consequence of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosures, attachments, levies or
executions (other than by Sublessor and those claiming from, through or under
Sublessor, except Sublessee) is assumed by Sublessee, and Sublessor shall in
no event be answerable or accountable therefor. None of the events mentioned
in this Section shall entitle Sublessee to any abatement of Basic Rent or
Additional Charges.
ARTICLE XXV
25. INDEMNIFICATION BY SUBLESSEE. Sublessee will protect,
indemnify, save harmless and defend Pier 1 and Sublessor, their respective
principals, agents, officers, directors, shareholders, employees, and Owner
and Bank, from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against Pier 1 or Sublessor or any of Owner or Bank, by reason of:
(a) the acquisition and ownership and leasing of, or the holding of any
security in, or the occupation, possession, conduct or management of the
Subleased Property or the Sublessor's Estate therein, as applicable, (b) any
accident, injury to or death of persons or loss of or damage to property
occurring on or about the Subleased Property or adjoining sidewalks, (c) any
use, misuse, non-use, condition, maintenance or repair of the Subleased
Property, (d) any Impositions, (e) any failure on the part of Sublessee to
perform or comply with any of the terms of the Sublease, (f) the extension of
the terms of any ground lease beyond the Term of the Sublease upon the request
of Sublessee, including, but not limited to, the rent and other sums payable
thereunder during such period, if applicable, (g) the non-performance of any
of the terms and provisions of any and all existing and future subleases of
the Subleased Property to be performed by the landlord thereunder and (h)
breach of any restrictive covenants or easements or zoning or other
governmental laws or regulations affecting the Subleased Property. Sublessee,
at its expense, shall contest, resist and defend any such claim, action or
proceeding asserted or instituted against Pier 1 or Sublessor, or any of
Sublessor's Assignees, if any, and may compromise or otherwise dispose of the
same as Sublessee sees fit. Sublessee expressly acknowledges and agrees that
this Article protects Pier 1, Sublessor and Owner and Bank from the
consequences of Pier 1's, Sublessor's or Owner's or Bank's acts or omissions
relating to this Sublease, the Subleased Property, operations of Sublessee on
other leased properties, and books and records relating thereto, including
without limitation the negligent acts or omissions of Pier 1, Sublessor or
Owner or Bank. Sublessee's liability under the provisions of this Article
arising during the Term hereof shall survive any termination of the Sublease.
ARTICLE XXVI
26. NO SUBLETTING OR ASSIGNMENT. Sublessee may not sublet all of
the Subleased Property or any part thereof, nor assign or transfer the Leased
Property or any part thereof, without the express prior written consent of
Sublessor and Owner, which consent may be withheld in the sole discretion of
Sublessor and/or Owner.
ARTICLE XXVII
27. OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS.
(a) At any time and from time to time upon request by
Sublessor or Owner or Bank, Sublessee will furnish to Sublessor or any party
designated by Sublessor an Officer's Certificate certifying any or all of the
following as requested, (i) that the Sublease is in full force and effect (or
that the Sublease is in full force and effect as modified and setting forth
the modifications) and the dates to which the Basic Rent and all Additional
Charges have been paid, (ii) either that Sublessee does not know of any
default in the performance of any provisions of the Sublease or specifying any
Default of which Sublessee may have knowledge and stating what action
Sublessee is taking or proposes to take with respect thereto, (iii) that, to
the knowledge of Sublessee, there are no proceedings pending or threatened
against Sublessee before or by any court or administrative agency which, if
adversely decided, would materially and adversely affect the financial
condition or operations of Sublessee, or, if any such proceedings are pending
or threatened to the knowledge of Sublessee, specifying and describing the
same, (iv) that Sublessee has no offsets, credits, or claims under or with
respect to the Sublease, and (v) such other information as Owner or Bank may
reasonably require from time to time. Any such certificate furnished pursuant
to this Section may be relied upon by Sublessor, Owner and Bank, and any
prospective purchaser of Sublessor's Estate. Sublessee will also furnish
Sublessor, upon request of Sublessor, an Officer's Certificate certifying the
amount of the Consolidated Tangible Net Worth of Sublessee, as shown on the
most current consolidated balance sheet of Sublessee and its consolidated
subsidiaries as sent to its stockholders.
(b) Sublessor and Owner and Bank shall have the right to visit
and discuss with Sublessee's and Guarantor's chief financial officers, upon
reasonable notice at a reasonable time, the financial affairs of Sublessee and
Guarantor, as appropriate. Sublessee will furnish the following statements to
Sublessor, Owner and Bank:
(i) within one hundred twenty (120) days after the end of
each of Guarantor's fiscal years, the annual audit report of Guarantor,
including a balance sheet, statement of changes in financial position and an
income and surplus statement for the fiscal year covered thereby, setting
forth in comparative form, the figures for the previous fiscal year, all on a
fully consolidated basis and in reasonable detail and duly certified by the
independent certified public accountants regularly employed by Guarantor,
(ii) within one hundred twenty (120) days after the end of
each of Guarantor's fiscal years, and together with the annual audit report
furnished in accordance with clause (i), an Officer's Certificate stating that
to the best of the signer's knowledge and belief after making due inquiry,
Sublessee is not in default in the performance or observance of any of the
terms of the Sublease or if Sublessee shall be in Default to its knowledge,
specifying all such Defaults, the nature thereof, and the steps being taken to
remedy the same,
(iii) with reasonable promptness, copies of all financial
statements and reports which Guarantor shall send to its stockholders, and
copies of each Form 10-K, Form 10-Q, Form 8-K, proxy statement and
registration statement (other than Form S-8 registration statements), or
copies of any successor forms or statements substituted therefor, which
Guarantor shall file with the Securities and Exchange Commission or any
governmental agency substituted therefor, and
(iv) with reasonable promptness, such other information,
consistent with the disclosure requirements of the federal securities laws,
respecting the financial condition and affairs of Guarantor, as Sublessor,
Owner or Bank may request from time to time.
ARTICLE XXVIII
28.1 Sublessor's Right to Inspect. Sublessee and Guarantor shall
permit Sublessor, Owner and Bank, and their respective authorized
representatives and any prospective purchasers, tenants and mortgagees to
inspect the Subleased Property during usual business hours.
28.2 Sublessee's Right to Inspect. Sublessor shall permit Sublessee
and its respective authorized representatives, purchasers, subtenants, and
mortgagees to inspect and audit Sublessor's books and records during usual
business hours. Sublessor shall use its best efforts to cause Owner to
provide Sublessee access to Owner's books and records substantiating any of
Owner's costs.
ARTICLE XXIX
29. NO WAIVER BY SUBLESSOR. No failure by Sublessor to insist upon
the strict performance of any term hereof or to exercise any right, power or
remedy consequent upon a breach thereof, and no acceptance of full or partial
payment of Rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of any such term unless waived in writing by
Sublessor, Owner and Bank. No waiver of any breach shall affect or alter the
Sublease, which shall continue in full force and effect with respect to any
other then existing or subsequent breach. No foreclosure, sale or other
proceeding under any deed of trust or mortgage shall effectuate a termination
of the lease or discharge or otherwise affect the obligations of Sublessee
hereunder.
ARTICLE XXX
30. REMEDIES CUMULATIVE. Each legal, equitable or contractual
right, power and remedy of Sublessor now or hereafter provided either in the
Sublease or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power and remedy, and the exercise
or beginning of the exercise by Sublessor of any one or more of such rights,
powers and remedies shall not preclude the simultaneous or subsequent exercise
by Sublessor of any or all of such other rights, powers and remedies.
ARTICLE XXXI
31. ACCEPTANCE OF SURRENDER. No surrender to Sublessor of the
Sublease or of the Subleased Property or any part thereof or of any interest
therein shall be valid or effective unless agreed to and accepted in writing
by Sublessor, Owner and Bank, and no act by Sublessor or any representative or
agent of Sublessor and Owner and Bank, other than such a written acceptance by
Sublessor and Owner and Bank shall constitute an acceptance of any such
surrender.
ARTICLE XXXII
32. NO MERGER OF TITLE. There shall be no merger of the Sublease
or of the leasehold estate created hereby by reason of the fact that the same
person, firm, corporation or other entity may acquire, own or hold, directly
or indirectly, (a) the Sublease or the leasehold estate created hereby or any
interest in the Sublease or such leasehold estate and (b) Sublessor's Estate
created by any ground lease related to the Subleased Property, if any, or (c)
the fee estate in the Sublease Property or any interest therein, if any.
ARTICLE XXXIII
33. OPTION TO PURCHASE.
(a) From the date hereof to June 30, 1997, Sublessee shall
have the option to purchase, for its own account or for that of its designee,
Sublessor's Estate from Sublessor (and Sublessor will cause Owner to convey
Owner's interest therein to Sublessee) on the day specified in the offer which
is not later than June 30, 1997, for a net purchase price equal to the fair
market value thereof as determined in accordance with the provisions of
Article XXXIV. Sublessee shall provide Sublessor (and Sublessor shall provide
Owner) with written notice of its decision to exercise this option not later
than sixty days prior to June 30, 1997. If Sublessee exercises its option,
Sublessor shall cause Owner to convey title by general warranty of Owner's
interest in Sublessor's Estate to Sublessee on the date set for the purchase
thereof in accordance with the provisions of Article XXI and upon receipt of
payment in cash of the purchase price therefor.
(b) From July 1, 1997, to June 30, 1998, Sublessee shall have
the option to purchase, for its own account or for that of its designee,
Sublessor's Estate from Sublessor (and Sublessor will cause Owner to convey
Owner's interest therein to Sublessee) on the day specified in the offer which
is not later than June 30, 1998, for a net purchase price equal to the fair
market value thereof as determined in accordance with the provisions of
Article XXXIV. Sublessee shall provide Sublessor (and Sublessor shall provide
Owner) with written notice of its decision to exercise this option not later
than sixty days prior to June 30, 1998. If Sublessee exercises its option,
Sublessor shall cause Owner to convey title by general warranty of Owner's
interest in Sublessor's Estate to Sublessee on the date set for the purchase
thereof in accordance with the provisions of Article XXI and upon receipt of
payment in cash of the purchase price therefor.
(c) From July 1, 1998, to June 30, 2000, Sublessee shall have
the option to purchase, for its own account or for that of its designee,
Sublessor's Estate from Sublessor (and Sublessor will cause Owner to convey
Owner's interest therein to Sublessee) on the day specified in the offer which
is not later than June 30, 2000, for a net purchase price equal to the fair
market value thereof as determined in accordance with the provisions of
Article XXXIV. Sublessee shall provide Sublessor (and Sublessor shall provide
Owner) with written notice of its decision to exercise this option not later
than sixty days prior to June 30, 2000. If Sublessee exercises its option,
Sublessor shall cause Owner to convey title by general warranty of Owner's
interest in Sublessor's Estate to Sublessee on the date set for the purchase
thereof in accordance with the provisions of Article XXI and upon receipt of
payment in cash of the purchase price therefor.
ARTICLE XXXIV
34. FAIR MARKET VALUE. For all purposes of this Sublease,
Sublessor and Sublessee agree that the fair market value of Sublessor's Estate
until June 30, 1997, shall be equal to 90% of Total Cost incurred by
Sublessor, and the fair market value of Sublessor's Estate from July 1, 1997,
to June 30, 2000, shall be equal to 100% of Total Cost incurred by Sublessor.
ARTICLE XXXV
35. SALE TO THIRD PARTY. If no Event of Default then exists,
Sublessor will cause Owner to sell Owner's interest in the Subleased Property
to a third party purchaser designated by Sublessee at any time at a price not
less than the fair market value of Sublessor's Estate therein.
ARTICLE XXXVI
36. OBLIGATIONS TO PURCHASE BY SUBLESSEE. In the event of either
(i) notification to Sublessee of the occurrence of circumstances that will
give rise to an Environmental Put Date or (ii) a Business Close Date, then in
either such case Sublessee shall immediately purchase, for its own account or
for that of its designee, Sublessor's Estate from Sublessor (and Sublessor
will cause Owner to convey Owner's interest therein to Sublessee), for a net
purchase price equal to the fair market value thereof as determined in
accordance with the provisions of Article XXXIV. Sublessor shall cause Owner
to convey title by general warranty of Owner's interest in Sublessor's Estate
to Sublessee on the date set for the purchase thereof in accordance with the
provisions of Article XXI and upon receipt of payment in cash of the purchase
price therefor.
ARTICLE XXXVII
37. CONVEYANCE BY SUBLESSOR. If Sublessor or any successor owner
of Sublessor's Estate shall convey all or any part of Sublessor's Estate other
than as security for a debt, Sublessor or such successor owner, as the case
may be, shall thereupon be released from all future liabilities and
obligations of the Sublessor under the Sublease and all such future
liabilities and obligations shall thereupon be binding upon the new owner,
subject to the provisions of Article XXIII hereof. No such transfer shall
release Sublessee of its obligations under Article XXV hereof.
ARTICLE XXXVIII
38. QUIET ENJOYMENT. So long as Sublessee shall pay all Rent as
the same becomes due and shall fully comply with all of the terms of the
Sublease and fully perform its obligation under the Sublease, Sublessee shall
peaceably and quietly have, hold and enjoy the Subleased Property for the Term
hereof, free of any claim or other action by Sublessor or anyone claiming by,
through or under Sublessor, but subject to the Primary Lease and to all liens
and encumbrances affecting the Subleased Property and the terms of the
Sublease. No failure by Sublessor to comply with the foregoing covenant, or
any other covenant, term, condition, or provision contained herein or in any
instrument executed in connection herewith, shall give Sublessee any right to
cancel or terminate the Sublease or abate, reduce or make a deduction from or
offset against the Basic Rent or Additional Charges or any other sum payable
under the Sublease, or to fail to perform any other obligations of Sublessee
under the Sublease.
ARTICLE XXXIX
39. NOTICES. All notices, demands, requests, consents, approvals
and other communications hereunder shall be in writing and delivered,
telecopied, telegraphed, telexed or mailed (by United States registered or
certified mail, return receipt requested and postage prepaid), addressed to
the respective parties, as follows:
(a) if to Sublessee:
Wolfe Nursery, Inc.
500 Terminal Road
Fort Worth, Texas 76106
Attention: President
Telecopy No.: (817) 626-6279
(b) if to Sublessor:
Pier Lease, Inc.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
Attention: General Counsel
Telecopy No.: (817) 878-7861
(c) if to Guarantor:
Sunbelt Nursery Group, Inc.
500 Terminal Road
Fort Worth, Texas 76106
Attention: President
Telecopy No.: (817) 626-6279
or to such other address as either party may hereafter designate, and shall be
effective upon receipt (i) if hand delivered, as evidenced by a receipt signed
by a person at such address, (ii) upon expiration of three (3) days after the
day of mailing, (iii) upon transmission to the specified telex number and
receipt of the appropriate answer back, or (iv) upon confirmation of a legible
telecopy transmission.
ARTICLE XL
40. COMPLIANCE WITH PRIMARY LEASE. This Sublease is subject and
subordinate to all of the terms and provisions of the Primary Lease and to the
rights of Owner under the Primary Lease. In the event the Primary Lease shall
terminate before the expiration of this Sublease, the Sublessee will, at
Owner's option, attorn to Owner and waive any right the Sublessee may have to
terminate this Sublease or to surrender possession hereunder as a result of
the termination of the Primary Lease, and in the event the Sublessee hereunder
receives a written notice from Owner or Owner's Assignees, if any, stating
that Sublessor is in default under the Primary Lease, Sublessee shall
thereafter be obligated to pay all rentals accruing under this Sublease
directly to the party giving such notice, or as such party may direct.
Sublessor agrees to obtain within thirty (30) days after the date hereof, a
nondisturbance agreement from Owner in a form reasonably satisfactory to
Sublessee.
ARTICLE XLI
41. MISCELLANEOUS.
41.1 Survival of Claims. Anything contained in the Sublease to the
contrary notwithstanding, all claims against, and liabilities of, the
Sublessee arising prior to any date of termination of the Sublease shall
survive such termination.
41.2 Severability. If any term or provision of the Sublease or any
application thereof shall be invalid or unenforceable, the remainder of the
Sublease and any other application of such term or provision shall not be
affected thereby.
41.3 Maximum Interest Rate. Any late charges provided for in any
provision of the Sublease shall bear interest at the Basic Rent plus five
percent (5%) per annum. If such late charges are based upon a rate in excess
of the maximum rate permitted by applicable law, the parties agree that such
charges shall be fixed at the maximum permissible rate. Sublessor and
Sublessee expressly stipulate and agree that their intent is at all times to
comply with the applicable law now or hereafter governing the interest payable
pursuant to this Section 41.3 of the Sublease. If the applicable law is ever
revised, repealed, or judicially interpreted so as to render usurious any
amount called for, contracted, charged, taken, reserved, or received under
this Sublease, then Sublessor and Sublessee expressly intend that all excess
amounts theretofore collected by Sublessor be credited to the Rent due under
this Sublease (or refunded to Sublessee if no Rent is then due or if this
Sublease has terminated or expired), and that the provisions of this Sublease
immediately be deemed reformed and the amounts thereafter collectible reduced,
without the necessity of executing a new document, so as to comply with the
then applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.
41.4 Modification. Neither the Sublease nor any provision hereof
may be changed, waived, discharged or terminated except by an instrument in
writing and recordable form signed by Sublessor, Sublessee and Owner.
Furthermore, no Rent or other amounts will be paid or accepted in advance, no
concessions under the provisions of this Sublease will be given, and no other
action of any kind or character whatsoever will be taken by Sublessor or
Sublessee that would be materially detrimental to Owner, without the prior
written consent of Owner.
41.5 Binding Upon Assigns. All the terms and provisions of the
Sublease shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. For all purposes under
the provisions of this Sublease, the word "Sublessor" shall include its
successors and assigns, except that Owner and Bank shall not be subject to any
obligations of this Sublease.
41.6 Effect of Headings and Table of Contents. The headings and
table of contents in the Sublease are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
41.7 Governing Law. With respect to the Subleased Property, the
Sublease shall be governed by and construed in accordance with the laws of the
State in which the Subleased Property is located. Sublessee agrees that the
obligations under the terms of this Sublease are performable in the State of
Texas and hereby waives the right to transfer or change the venue of any
action brought under this Sublease in Tarrant County, Texas, provided,
however, that venue of such action is legally proper in Tarrant County, Texas.
ARTICLE XLII
42. MEMORANDUM OF SUBLEASE. Sublessor and Sublessee shall,
promptly upon the request of either, enter into a short form memorandum of the
Sublease, in form suitable for recording under the laws of the State in which
the Subleased Property is located, in which reference to the Sublease shall be
made.
ARTICLE XLIII
43. TRUE SUBLEASE. Sublessor and Sublessee acknowledge and confirm
that the Sublease is intended as a true sublease between the parties and is
not intended as, and shall not be deemed to be, a mortgage or other security
device, a joint venture or partnership, or otherwise. In the event, however,
that the Sublease shall at any time be construed as a mortgage, deed of trust
or other security device by a court of competent jurisdiction, then Sublessor
and Sublessee agree as follows:
(a) The principal amount of the indebtedness due and payable
by Sublessee to Sublessor with respect to the Sublease shall be the Total Cost
paid by Sublessor and not reimbursed by Sublessee as of the applicable date,
and interest shall accrue and be charged on the unpaid balance of the
principal amount outstanding from time to time at the Applicable Rate,
provided that such rate shall never exceed the highest lawful applicable
contractual rate of interest. The principal amount, accrued interest thereon
as aforesaid, and all other amounts due and payable by Sublessee to Sublessor
under the terms of the Sublease shall be deemed to be the "indebtedness" (the
"Indebtedness") payable by Sublessee and secured by the provisions of the
Sublease. The Indebtedness shall be payable in installments at the times and
in the amounts set forth in the Sublease; provided, that upon the occurrence
of an Event of Default under the terms of the Sublease, then all of the
Indebtedness payable with respect to the Sublease shall, at the option of
Sublessor or Owner or Bank by written notice thereof given to Sublessee, be
immediately due and payable in full.
(b) Sublessor and Owner and Bank, as assignee of Sublessor,
shall have all rights and remedies with respect to the enforcement of liens
and security interests against the Subleased Property for the collection of
the Indebtedness, including without limitation, foreclosure thereof, as set
forth in the deed of trust or mortgage (as the case may be) executed and
delivered by the Sublessor and covering the Subleased Property (such deed of
trust or mortgage being called a "Mortgage"). Without limitation of the
foregoing, Sublessor and Owner and Bank shall have all rights, remedies and
recourses and shall be entitled to foreclose upon and sell the Subleased
Property and apply the proceeds thereof in accordance with the provisions of
Articles III and IV of the Mortgage encumbering the Subleased Property, which
articles are hereby incorporated fully by reference.
(c) All agreements between Sublessor, Owner and Bank, whether
now existing or hereafter arising whether written or oral, and whether set
forth in the Sublease or otherwise, are hereby limited so that in no
contingency, whether by reason of demand or acceleration or recharacterization
of the transactions set forth in the Sublease or otherwise, shall the interest
contracted for, charged, received, paid or agreed to be paid to Sublessor or
Owner or Bank exceed the maximum amount permissible by law. If, from any
circumstance whatsoever, interest would otherwise be payable to Sublessor or
Owner or Bank in excess of the maximum lawful amount, the interest payable
shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance Sublessor or Owner or Bank shall ever receive anything
of value deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excess of interest shall be applied to the
reduction of the principal of the indebtedness owed and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of
principal, such excess shall be refunded to Sublessee. All interest paid or
agreed to be paid to Sublessor or Owner or Bank shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal so that the interest on the
indebtedness for such full period shall not exceed the maximum amount
permitted by applicable law. This paragraph shall control all agreements
between Sublessor, Sublessee, Owner and Bank.
EXHIBIT "B"
LEGAL DESCRIPTION
EXHIBIT II
SUBLEASE
SUBLEASE PROPERTY DATE COST
Southlake 10/14/94 $ 880,000
Austin/Gardenland 11/12/94 2,900,000
Irving 11/12/94 800,000
Odessa 11/16/94 719,443
Dallas/Lewisville 12/30/94 1,915,711
San Antonio/I-10&Wurzbach12/30/94 2,179,931
Houston/Pasadena 12/30/94 1,664,968
College Station 12/30/94 1,465,684
Houston/Cypress 1/28/95 2,070,087
Hurst/Grapevine 1/28/95 1,785,001
Arlington/Lamar 5/24/95 1,692,513
Dallas/Greenville 7/08/95 1,743,319
Houston/Westheimer 10/20/95 2,941,929
$22,758,586
Aggregate deposit held by Pier Group: $74,569