STATE OF SOUTH CAROLINA )
) SUBLEASE AGREEMENT
COUNTY OF SPARTANBURG )
This Sublease Agreement is made as of the ____ day of February, 1997 by
and between Johnson Development Associates, Inc., a South Carolina Corporation
herein referred to as "Sublessor" and ESA Management, Inc. hereinafter referred
to as "Sublessee".
Bell Hill, LLC is the successor in interest to Bell Hill Associates,
hereinafter referred to as "Landlord". On January 30, 1990, Landlord did lease a
portion of the third floor of the Bell Office Building III at 961 East Main
Street, Spartanburg, SC to WJB Video Limited Partnership as evidenced by copy of
said lease which is attached hereto with four amendments and made a part hereof
and referenced hereafter as "Lease Agreement".
Subsequently, WJB Video Limited Partnership through its affiliated
company, Blockbuster Video, Inc. did reduce its presence in Bell Hill and is
desirous of subleasing all of the space that it occupied on the third floor in
accordance with the above referenced Lease Agreement. That space is hereafter
defined as "Premises".
A Sublease Agreement (the "WJB Sublease Agreement") was entered into
between WJB Video Limited Partnership and Johnson Development Associates, Inc.
on August 30, 1996 wherein Johnson Development obligated itself to sublease all
of the third floor not presently occupied by it. Such a sub-Sublease is
anticipated under the provision of Section 5A of the WJB Sublease Agreement.
NOW THEREFORE, Johnson Development Associates, Inc. as Sublessor and ESA
Management, Inc. do hereby agree as follows:
1. The Sublessor hereby subleases to Sublessee the Premises
described in attached Exhibit "A" upon the conditions and terms set forth
hereafter.
2. The term of this sublease shall commence October 21, 1996 and
shall continue in full force and effect until December 31, 1997. Sublessee shall
have the option of extending this sublease for an additional twelve (12) month
period each year, throughout the term of the WJB Sublease Agreement, on the same
terms and conditions provided for herein, by sending written notice to Sublessor
no later than October 1st of each succeeding year. By way of example, if
Sublessee wishes to extend the term of this sublease to December 31, 1998, it
must provide written notice to Sublessor no later than October 1, 1998.
3. (a) Sublessee shall pay to Sublessor a base monthly rent
calculated by multiplying $9.55 per rentable square foot of the Premises. Said
amount is set forth in attached Schedule A. In addition to the base monthly
rent, Sublessee shall pay, as additional rent, its prorata share of any and all
common area charges as defined under the Lease Agreement. Such amount shall be
paid monthly.
(b) It is understood that this sublease is a triple net
sublease and that Sublessee's prorata share of any and all cost that would be
payable by Johnson Development Associates, Inc. as Sublessor and/or WJB Video
Limited Partnership for the Premises shall be borne by Sublessee as of the
commencement date.
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(c) All rent, both base and the prorata contribution to CAM, shall be
due and payable on or before the first day of each month in advance to Sublessor
at the address stated below. Rent for any period less one month shall be
apportioned based on the number of days in that month.
(d) In the event of late payment, Sublessor shall be entitled to a late
charge of two percent (2%) of the amount of the monthly rent if not received by
Sublessor on or before the fifth day of each month.
4. Sublessee shall use the Premises solely for general office use and
for no other purpose.
5. Sublessee shall not, by operation of law or otherwise, transfer,
sign, sublet, enter into license agreement, mortgage or hypothecate this
sublease or Sublessee's interest in the Premises without first procuring the
prior written consent of Bell Hill, LLC, WJB Video Limited Partnership and
Johnson Development Associates, Inc. which consent shall not be unreasonably
withheld or delayed. The attempted transfer, assignment, etc. without such
permission shall be void and shall confer no rights upon any third person. In
the event of a permitted sublease or assignment, the Sublessee shall not be
relieved from any covenant or obligation for the balance of the sublease term.
Acceptance of rent by Sublessor from any third party or entity shall not be
deemed a waiver by Sublessor of any provision hereof. Sublessee agrees to
reimburse Sublessor for any reasonable fees incurred in conjunction with the
processing and documentation of any such transfer, assignment, subletting,
licensing, changing ownership, mortgage or hypothecation of this sublease.
Sublessee shall have the absolute right to sublet, assign or otherwise transfer
its interest in this sublease to any parent or operating subsidiary of
Sublessee, or subsidiary of the parent of Sublessee, or to a corporation with
which Sublessee may merge or consolidate, or to any entity controlled by George
Dean Johnson, Jr., without the approval of Sublessor, WJB Video Limited
Partnership or Bell Hill, LLC. This sublease shall contain no provision
restricting or referring in any manner to a change in control or change in
shareholders, directors, management or organization of Sublessee, or to the
issuance, sale, purchase or disposition of the shares of Sublessee.
6. Sublessee agrees to take the Premises in "as is" condition.
Sublessee has inspected and is fully familiar with the condition of the
Premises and Sublessee's taking of possession shall constitute acknowledgment
that the Premises are in good condition and without need of repair. Sublessor
makes no representations or warranties with regard to any equipment or fixtures.
7. Except as otherwise specifically provided for herein, Sublessee
agrees to be bound by the terms of Paragraph 9, 10, 11, 12, 13, 14, 15, 16 of
the Lease Agreement. Further, it makes the covenants and representations stated
in Paragraph 17, 20, 24 of the Lease Agreement.
8. The default provisions of Paragraph 18 and 19 shall be in full force
and effect.
9. All notices provided for under this Sublease Agreement, under the
Johnson Development Sublease Agreement, and the original Lease Agreement shall
be in writing and sent by Express Courier Service or by Registered or Certified
Mail, Return Receipt Requested to Johnson Development Associates, Inc., P.O. Box
3524, 961 East Main Street, Spartanburg, SC 29304, Attn: A. Foster Chapman, and
to WJB Video, LP, c/o Viacom Realty Corporation, 1515 Broadway, New York, NY
10036-5794, Attn: Mr. David H. Williamson, with a copy to Viacom, Inc., 1515
Broadway, New York, NY 10036-5794, Attn: General Council, as to Sublessee,
Extended Stay America, Inc., 450 East Las Olas Blvd., Suite 1100, Ft.
Lauderdale, FL 33301 Attn: Development Counsel.
10. All of the terms and conditions of the referenced and attached
documents are fully incorporated herein except as may be expounded upon herein
and the parties shall be bound to such previous documents.
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11. In the case any one or more of the provisions contained in this
Sublease shall for any reason be held invalid, illegal, or unenforceable, such
unenforceability shall not effect any other provision of this Sublease, the
Sublease shall be construed as if such provision had not been contained herein.
12. Sublessee represents and warrants that this Sublease has been
duly authorized and the party signing on behalf of Sublessee is so authorized to
execute this Sublease.
13. Sublease may not be modified or amended except by written
agreement signed by the parties hereto.
14. This agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one in
the same instrument.
In witness whereof, the parties have hereunto set their hands and seals
on the date and year first stated above.
SUBLESSOR
Johnson Development Associates, Inc.
By: /s/ A. Foster Chapman
---------------------------------
A. Foster Chapman, President
SUBLESSEE
ESA Management, Inc.
By: /s/ Shawn R. Ruben
---------------------------------
Its: Shawn R. Ruben
---------------------------------
Vice President - Development
This Sublease Agreement is hereby consented to by:
BELL HILL, LLC
By: /s/ George Dean Johnson, Jr.
-----------------------------------
George Dean Johnson, Jr., President
WJB VIDEO LIMITED PARTNERSHIP
By: Blockbuster Video, Inc., General Partner
By: (not required)
-----------------------------------
David H. Williamson, Vice President - Real Estate
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SCHEDULE "A"
RENTAL AMOUNT
Rental Calculations
- -------------------
Base Square Common Adjusted *Rent/ *Total Annual
Rent Foot Area Factor Rentable Area Sq. Ft. Rental Amount
- ----------------------------------------------------------------------------------------------------------------
American Storage 2,590 1.1642 3,015 9.55 = 28,795
Extended Stay 5,362 1.1642 6,243 9.55 = 59,620
Johnson Development 5,400.5 1.1642 6,287 9.55 = 60,040
-------- ------ --------
13,352.5 15,545 $148,455
* Does not include CAM charges
------------------------------
Best Estimate with CAM Contribution
- -----------------------------------
Adjusted CAM
Rentable Area Est. Per Sq. Ft. CAM
---------------- -------------------- -----------
American Storage 3,015 x 4.87 = 14,683
Extended Stay 6,243 x 4.87 = 30,403
Johnson Development 6,287 x 4.87 = 30,618
------
75,704
Rental Obligation
- -----------------
Base CAM
Rental Contribution Total Monthly
------------ ----------------------------------------------------------------
American Storage 28,795 + 14,683 43,478 3,623
Extended Stay 59,620 + 30,403 90,023 7,502
Johnson Development 60,040 + 30,618 90,658 7,555
-----
Monthly Total: 18,680
------
Rental Obligation After Application of Blockbuster Credit of $2,833.33/Month
- ----------------------------------------------------------------------------
Adjusted
% Credit Monthly Obligation
----------------------- ----------- --------------
American Storage 3,623 19.40 - 549 + 3,623 = 3,074
Extended Stay 7,502 40.16 - 1,138 + 7,502 = 6,364
Johnson Development 7,555 40.44 - 1,146 + 7,555 = 6,409
------ ------ -------
18,680 100.00 $15,847