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Exhibit 10.27
BASIC LEASE INFORMATION
LEASE DATED AS OF SEPTEMBER 25, 1993
Lessor: TriNet Essential Facilities X, Inc.
Tenant: West Coast Liquidators, Inc.
Guarantor: MacFrugal's Bargains*Close-outs Inc.
Commencement Date: October 4, 1993 (Interim Term)
November 1, 1993 (Initial Term)
Lease Expiration Date: October 31, 2009 unless extended pursuant to
Paragraph 3(c) of the Lease.
Purchase Price: $23,462,625.00
Primary Term Fixed Rent: The annual Fixed Rent during the Preliminary and
Initial Term of the Lease shall be payable monthly in advance as
follows:
(a) From the delivery of the Lease through October 31, 1997: 10.35% of
Purchase Price per annum, 1/12 of which shall be payable on the first day
of each month, commencing November 1, 1993.
(b) On November 1 in each of 1997, 2001 and 2005, the dollar amount of Fixed
Rent specified in clause (a) shall be increased (but not decreased) by a
dollar amount equivalent to the product of the Fixed Rent payable during
the immediately preceding period and 85% of the percentage increase in the
All Urban Consumer Price Index ("CPI") over the preceding four-year
period, but in no event, however, shall any such increase in Fixed Rent
exceed 12% of the Fixed Rent payable in such prior period.
Renewal Term Rents: The annual Fixed Rent during any Renewal Term shall be
payable monthly in advance, determined on the first day of the first year of
each Renewal Term and on the first day of the sixth year of the Second Renewal
Term. The annual Fixed Rent shall be payable (i) in the First Renewal Term at
a rate equal to the annual Fixed Rent payable during the immediately prior 4
year period, increased (but not decreased) by a dollar amount equivalent to the
product of such prior period Fixed Rent and 85% of the percentage increase in
the CPI over the preceding four year period, but such increase shall not exceed
12% of the
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Fixed Rent payable in such prior period, (ii) in the first five
years of the Second Renewal Term at a rate equal to the annual Fixed Rent
payable during the immediately prior 2 year period, increased (but not
decreased) by a dollar amount equivalent to the product of such prior period
Fixed Rent and 85% of the percentage increase in the CPI over the preceding two
year period, but such increase shall not exceed 6% of the Fixed Rent payable in
such prior period and (iii) in the second five years of the Second Renewal Term
at a rate equal to the annual Fixed Rent payable during the immediately prior 5
year period, increased (but not decreased) by a dollar amount equivalent to the
product of such prior period Fixed Rent and 85% of the percentage increase in
the CPI over the preceding five year period, but such increase shall not exceed
15% of the Fixed Rent payable in such prior period.
Fixed Rent calculated as set forth above is subject to adjustment in the event
Landlord purchases the fee title to either the Improvements alone or the Land
and the Improvements together, as follows: annual Fixed Rent shall thereafter
be the sum of (i) annual Fixed Rent as calculated above, (ii) annual payments
of $500,000 under the PILOT Agreement, whether or not the PILOT Agreement is
then in effect and (iii) annual rent that would then be payable (as adjusted,
if applicable) under the Master Lease if the Master Lease had continued to be
in effect, increased by any amounts required to be paid under Clause D of
Section 9.1 or 9.2 of the Master Lease and not theretofore paid.
Landlord Address TriNet Essential Facilities X, Inc.
for Payment: c/o TriNet Corporate Realty Trust, Inc.
4 Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mark S. Whiting
Tenant Address: West Coast Liquidators, Inc.
2430 E. Del Amo Boulevard
Dominguez, California 90220
Attention: Real Property Administration
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LEASE AGREEMENT
Between
TRINET ESSENTIAL FACILITIES X, INC.
as Landlord
and
WEST COAST LIQUIDATORS, INC.
as Tenant
Dated as of September 25, 1993
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TABLE OF CONTENTS
Page
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1. DEMISE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. RENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. NET LEASE; NON-TERMINABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. QUIET ENJOYMENT: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. UTILITY BILLS; MASTER LEASE; PILOT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. REPAIRS AND MAINTENANCE; REPLACEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. IMPOSITIONS; PERMITTED CONTEST; LANDLORD CURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. DESTRUCTION OF OR DAMAGE TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12. GOVERNMENTAL ORDERS; COVENANTS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
13. PARTIAL TAKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
14. TERMINATION OF LEASE FOR SUBSTANTIAL TAKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
15. DEFAULT: Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
16. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
17. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
18. LANDLORD'S RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
20. STATUS OF LEASE; FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
21. MECHANICS' LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
22. END OF TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
23. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
24. MEMORANDUM OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
25. SUBLETTING/ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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26. HAZARDOUS MATERIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
27. LANDLORD'S RIGHT TO REQUIRE PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
28. LANDLORD'S ACQUISITION OF FEE TITLE TO THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
29. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXHIBITS
A. LEGAL DESCRIPTION - REAL ESTATE
B. DESCRIPTION OF PERSONAL PROPERTY AND FIXTURES
C. STATUS REPORT
D. PERMITTED ENCUMBRANCES
E. FORM OF SUBORDINATION AGREEMENT
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THIS LEASE, made and entered into as of September 25, 1993 (together with all
amendments and supplements hereto, this "Lease"), by and between TRINET
ESSENTIAL FACILITIES X, INC., a Maryland corporation with offices at Four
Embarcadero Center, # 3150 San Francisco, California 94111 (together, with any
successor or assigns, hereinafter called the "Landlord") and WEST COAST
LIQUIDATORS, INC., a California corporation, with offices at 2430 E. Del Amo
Boulevard, Dominguez, California 90220 (together with any permitted successor
or assigns, hereinafter called the "Tenant"). Capitalized terms used herein
not otherwise defined shall have the meanings specified in the following
recitals and definitions.
RECITALS
Tenant developed a high-tech warehouse facility at 3501 Jourdan Road in New
Orleans, Louisiana on land owned by the Industrial Development Board of the
City of New Orleans of Louisiana, Inc. (the "IDB") and caused the IDB to issue
$2,000,000 of its bonds secured by a first lien on the Land and by amounts
payable by Tenant under the Master Lease hereinafter mentioned. Record fee
simple title to the warehouse is vested in the IDB, leasehold ownership resided
in Tenant, which had paid for the construction of the warehouse and which held,
pursuant to the Master Lease, an option to acquire fee title to the warehouse
for the payment of certain amounts and certain encumbrances, as provided in the
Master Lease. Tenant and Landlord entered into a sale and lease back
transaction in which Tenant assigned to Landlord Tenant's interest under the
Master Lease and its leasehold interest in the Land, the warehouse and certain
equipment contained therein. This Lease constitutes a sublease of the
Premises.
Now, therefore, in consideration of the covenants and agreements herein
contained, the parties hereby mutually agree as follows:
As used in this Lease, the following terms have the meanings specified:
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural
forms of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other than
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord
or others.
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"Basic Lease Information" means the pages preceding this Lease which are
hereby incorporated by reference.
"Certificates" is defined in paragraph 11(d) of this Lease.
"Commencement Date" is defined in paragraph 3(b) of this Lease.
"CPI" is defined in the Basic Lease Information section of this Lease.
"Environmental Laws" is defined in paragraph 26(b) of this Lease.
"Essential Equipment" means those items described on Exhibit B hereto with an
asterisk next to its name.
"Event of Default" is defined in paragraph 15 of this Lease.
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing
the acquisition of Landlord's interest in the Premises.
"First Renewal Term" is defined in paragraph 3(c) of this Lease.
"Fixed Rent" is defined in paragraph 4 of this Lease.
"Guarantor" means MacFrugal's Bargains*Close-outs Inc., a Delaware
corporation, and its successors by merger, consolidation or purchase of
substantially all its assets.
"IDB" is defined in the Recitals section of this Lease.
"Imposition" means the various tax and other charges referred to in paragraph
9(a) and the present and future governmental laws and regulations more
specifically described in paragraph 12.
"Improvements" means all of the buildings, structures and improvements
(including, without limitation, parking areas and driveways) now or hereafter
located on the Land.
"Incidental Equipment" means those items described on Exhibit B hereto
without an asterisk next to its name.
"Initial Term" is defined in paragraph 3(a) of this Lease.
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"Land" means the land, but none of the Improvements thereon, described in
Exhibit A hereto.
"Landlord" is defined in the first paragraph of this Lease.
"Landlord Group" is defined in paragraph 11(g) of this Lease.
"Lease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in paragraph 3(a) of this Lease.
"Master Lease" means the Lease Agreement, dated as of August 1, 1988 among
Industrial Development Board of the City of New Orleans, Louisiana, Inc., as
landlord, the City of New Orleans and Tenant, as tenant; Landlord has succeeded
to the interest of the tenant thereunder.
"Mortgagee" shall mean any first mortgagee with respect to the Premises.
"Overdue Rate" means a rate equal to the prevailing prime rate as shown in
the Wall Street Journal or any equivalent publication, plus 300 basis points.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges and any
liens of mechanics, materialmen and laborers for work or services
performed or materials furnished in connection with the Premises, which
are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants or other matters in the title set forth in Schedule B to the
policy of owners title insurance (or commitments therefor) delivered to
and accepted by Landlord with respect to the Premises in connection with
the delivery of this Lease as shown on Exhibit D attached hereto;
(c) The Lease and the rights of Tenant under this Lease;
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"PILOT Agreement" means the Payment in Lieu of Tax Agreement, dated as of
August 1, 1988, among City of New Orleans, Louisiana, The Industrial
Development Board of the City of New Orleans, Louisiana, Inc., The Director of
Finance of the City of New Orleans, Louisiana, The Tax Assessor of the 3rd
Municipal District of the Parish of Orleans, Louisiana and West Coast
Liquidators, Inc.
"Preliminary Term" is defined in paragraph 3(a) of this Lease.
"Premises" is defined in paragraph 1 of this Lease.
"Purchase Agreement" means the Purchase and Sale Agreement, dated as of July
15, 1993, by and between, Tenant, as seller, and Landlord as purchaser.
"Purchase Price" is defined in the Basic Lease Information.
"Railroad Crossing Agreement" is defined in paragraph 7(b) of this Lease.
"Rent" means Fixed Rent and Additional Rent.
"Renewal Term" is defined in paragraph 3(c) of this Lease.
"Renewal Term Commencement Date" is defined in paragraph 3(c) of this Lease.
"Renewal Term Expiration Date" is defined in paragraph 3(c) of this Lease.
"Second Renewal Term" is defined in paragraph 3(c) of this Lease.
"Servitude of Passage" is defined in paragraph 7(b) of this Lease.
"Site Assessments" is defined in paragraph 26(d) of this Lease.
"Site Reviewers" is defined in paragraph 26(d) of this Lease.
"Switch Track Contract" is defined in paragraph 7(b) of this Lease.
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"Tenant's Trade Fixtures" means all personal property of Tenant in or on the
Premises which is not described on Exhibit B.
"Term" means the Preliminary Term and Initial Term, together with any Renewal
Terms.
1. DEMISE OF PREMISES: Landlord hereby demises and leases to Tenant and
Tenant hereby leases and rents from Landlord the Premises, IN ITS "AS IS"
CONDITION, SUBJECT TO THE EXISTING STATE OF TITLE (WITHOUT EXPRESS OR IMPLIED
WARRANTY OF LANDLORD WITH RESPECT TO THE CONDITION, QUALITY, REPAIR OR FITNESS
OF THE PREMISES FOR A PARTICULAR USE OR TITLE THERETO, ALL SUCH WARRANTIES
BEING HEREBY WAIVED AND RENOUNCED BY TENANT), consisting of Landlord's
leasehold interest in the Land, the Improvements and Landlord's leasehold or
ownership title to the fixtures and equipment described on Exhibit B hereto
(including, without limitation, racking, conveyor, sorting and computer
systems), together with any easements, rights, and appurtenances in connection
therewith or belonging to said Land, Improvements, fixtures and equipment, and
(except with respect to Incidental Equipment) all replacements thereof, all
being collectively hereinafter referred to as "the Premises". No easement for
light, air or view is included with or appurtenant to the Premises. Any
diminution or shutting off of light, air or view by any structure which may
hereafter be erected (whether or not constructed by Landlord) shall in no way
affect this Lease or impose any liability on Landlord. Except as herein
expressly set forth, Tenant shall not have any rights of Landlord in its
capacity as Tenant under the Master Lease.
2. USE: Tenant may use and occupy the Premises for any lawful nonresidential
purposes so long as such use does not reduce the fair market value of the
Premises, considered as unencumbered by this Lease. Tenant shall not use or
occupy the same, or knowingly permit them to be used or occupied, contrary to
any statute, rule, order, ordinance, requirement or regulation applicable
thereto, or in any manner which would violate any certificate of occupancy
affecting the same or which would make void or voidable any insurance then in
force with respect thereto or which would make it impossible to obtain fire or
other insurance thereon required to be furnished hereunder by Tenant, or which
would cause structural injury to the Premises or cause the value or usefulness
of the Premises, or any portion thereof, to substantially diminish, or which
would constitute a public or private nuisance or waste, and Tenant agrees that
it will promptly, upon discovery of any such use, take all necessary steps to
compel the discontinuance of such use. Tenant shall not use, suffer or permit
the Premises, or any portion thereof, to be
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used by Tenant, any third party or the public, as such, without
restriction or in such manner as might impair Landlord's title to the Premises,
or in such manner as might reasonably make possible a claim or claims of
adverse usage or adverse possession by the public, as such, or third Persons,
or of implied dedication of the Premises, or any portion thereof. Nothing
contained in this Lease and no action by Landlord shall be construed to mean
that Landlord has granted to Tenant any authority to do any act or make any
agreement that may create any such third party or public right, title,
interest, lien, charge or other encumbrance upon the estate of the Landlord in
the Premises. The preceding sentence does not limit Tenant's right to assign
or sublet its interest hereunder, as provided in paragraph 25.
3. TERM:
(a) The preliminary term of this Lease ("Preliminary Term") shall commence
on October 4, 1993 and end on October 31, 1993. The initial term of this Lease
(the "Initial Term") shall be for a period of sixteen (16) years, beginning on
the Commencement Date and ending on October 31, 2009 (the "Lease Expiration
Date").
(b) The term "Commencement Date" shall mean November 1, 1993.
(c) Tenant shall have the right, at its option, to renew the Initial Term
of this Lease, for two (2) renewal terms (each, a "Renewal Term"), the first of
which shall renew the Initial Term for two (2) years and the second of which
shall renew the Initial Term for an additional ten (10) years (individually,
the First and Second Renewal Terms). The First Renewal Term shall commence on
the day after the Lease Expiration Date and shall expire on the second (2nd)
anniversary of the Lease Expiration Date. The Second Renewal Term shall
commence on the day after the date of expiration of the First Renewal Term and
shall expire on the tenth (10th) anniversary of the expiration of the First
Renewal Term. (Each such Renewal Term commencement date shall be referred to
herein as the "Renewal Term Commencement Date" with respect to the related
Renewal Term and each such Renewal Term expiration date shall be referred to
herein as the "Renewal Term Expiration Date" with respect to the related
Renewal Term.) Each option to renew the Term of this Lease as described above
shall be exercised by written notice to Landlord at least 18 months but not
more than 24 months prior to the Lease Expiration Date or the Renewal Term
Expiration Date, as the case may be. Subject to the provisions of paragraph 4,
the terms and conditions of this Lease shall apply to any Renewal Term with the
same force and effect as if such Renewal Term had
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originally been included in the Initial Term of the Lease. The right of
Tenant to exercise any Renewal Term shall be conditioned upon Tenant not being
in default under this Lease on the date of such exercise and upon this Lease
being in full force and effect as of the Renewal Term Commencement Date. The
Preliminary Term, Initial Term, together with any Renewal Terms, shall
constitute the "Term" of this Lease.
(d) It is recognized that, if Tenant elects to renew the Term of this Lease
for one or more Renewal Terms, the term of the Master Lease must be extended
for a corresponding period. Accordingly, if Tenant shall have given timely
notice of renewal pursuant to paragraph 3(c), Landlord agrees not to give
notice of termination of the Master Lease relating to the period of such
renewal pursuant to Sections 5.5 or 5.6 thereof, except in connection with
Landlord's purchase of the Land and Improvements or the Improvements from the
IDB.
4. RENTAL: Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord
without notice, by wire transfer or other electronic means (or otherwise so
there are collected funds available to Landlord on the due date) to Landlord at
such address as shall be provided by Landlord to Tenant, or to such other
Persons or place as may be provided by written notice from the Person then
entitled to receive the Fixed Rent, in equal installments in advance on or
before the first day of each month commencing on the date and in the amount
specified in the Basic Lease Information (or, if the first day of the month is
not a business day in California, then on the next business day).
If Fixed Rent is not paid when due, interest shall accrue thereon at the
Overdue Rate until payment is made. Tenant hereby acknowledges that late
payment by Tenant to Landlord of Fixed Rent, Additional Rent and other sums due
under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges
and late charges which may be imposed on Landlord by the terms of any mortgage
or trust deed covering the Premises. Accordingly, if any installment of Fixed
Rent or any other sum due to Landlord from Tenant shall not have been received
by Landlord or Landlord's designee within ten (10) days after notice to Tenant
that such amount shall be due, then, without any requirement for further notice
to Tenant, Tenant shall pay to Landlord a late charge equal to two percent (2%)
of such overdue amount, together with interest on such overdue amount at the
Overdue Rate. The parties agree that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment
by Tenant.
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5. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net lease and the
Fixed Rent, Additional Rent and all other sums payable hereunder by Tenant,
including the purchase price for the Premises payable pursuant to paragraphs 14
or 27, shall be paid without notice (except as expressly provided herein),
demand, set-off, counterclaim, abatement, suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease, nor shall Tenant be entitled to any abatement or (except
as otherwise expressly provided in paragraph 13(b)) reduction of Rent
hereunder, nor shall the obligations of Tenant under this Lease be affected, by
reason of (i) any damage to or destruction of all or any part of the Premises
from whatever cause, (ii) subject to paragraph 14, the taking of the Premises
or any portion thereof by condemnation, requisition or otherwise, (iii) the
prohibition, limitation or restriction of Tenant's use of all or any part of
the Premises, or any interference with such use, (iv) any eviction by paramount
title, termination of the Master Lease or otherwise, (v) Tenant's acquisition
or ownership of all or any part of the Premises otherwise than as expressly
provided herein, (vi) any default on the part of Landlord under this Lease, or
under any other agreement to which Landlord and Tenant may be parties or under
the Master Lease, (vii) the failure of Landlord to deliver possession of the
Premises on the commencement of the term hereof or (viii) any other cause
whether similar or dissimilar to the foregoing, any present or future law to
the contrary notwithstanding. It is the intention of the parties hereto that
the obligations of Tenant hereunder shall be separate and independent covenants
and agreements, that the Fixed Rent, the Additional Rent and all other sums
payable by Tenant hereunder shall continue to be payable in all events and that
the obligations of Tenant hereunder shall continue unaffected unless the
requirement to pay or perform the same shall have been terminated pursuant to
any express provision of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any
such proceeding.
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(d) Tenant waives all rights which may now or hereafter be conferred by law
(i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or (except as provided
in paragraph 13(b)) reduction of the Fixed Rent, Additional Rent or any other
sums payable under this Lease, except as otherwise expressly provided herein.
6. QUIET ENJOYMENT:
Landlord covenants with Tenant, that upon the payment of the Fixed Rent
and Additional Rent and the performance in all material respects of all the
terms of this Lease, Tenant shall at all times during the Term, peaceably and
quietly enjoy the Premises without any disturbance from Landlord or from any
person claiming by, through, or under Landlord.
7. UTILITY BILLS; MASTER LEASE; PILOT AGREEMENT:
(a) Tenant shall pay as Additional Rent before they become delinquent any
water, sewer, gas, fuel, electricity, light, heat, power and all other utility
bills for the Premises and the business conducted thereon.
(b) Tenant will duly and punctually make all payments required to be made
by the tenant under the Master Lease, when and as the same shall become due and
payable. Tenant's obligation to make payments under the Master Lease includes,
without limitation, the obligation to make all payments of rent payable
thereunder, when and as the same shall become due and payable. Notwithstanding
the foregoing, Tenant shall not be required to make any payment of purchase
price in connection with Landlord's purchase of the Improvements, or the Land
and the Improvements, pursuant to the Master Lease, including amounts described
in clauses A, B or C of Sections 9.1 or 9.2 of the Master Lease (which shall be
the sole obligation of Landlord to pay); provided, however, that Tenant shall
be obligated to pay amounts described in clause D of Sections 9.1 and 9.2 of
the Master Lease. Except as set forth above in this paragraph 7(b), Tenant
will also observe and perform at its own cost and expense all the covenants,
terms and conditions imposed by the Master Lease upon the tenant under the
Master Lease, including without limitation, all obligations (i) of "West Coast"
under the Grant of Servitude of Passage and Right of Use, dated March 29, 1990
(the "Servitude of Passage") by and between Sewerage and Water Board of New
Orleans ("S&WB") and West Coast Liquidators, Inc. ("West Coast"), (ii) of
"Licensee" under the Railroad Crossing Agreement - Pic 'N' Save, dated May 10,
1989 (the "Railroad Crossing Agreement") by and between the Public Belt
Railroad
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Commission for the City of New Orleans ("Railroad") and West Coast
Liquidators, Inc. ("License") and (iii) of the "Company" under the Switch Track
Contract, dated September 27, 1990 (the "Switch Track Contract") by and between
the City of New Orleans, acting through the Public Belt Railroad Commission of
the City of New Orleans ("Railroad") and West Coast Liquidators, Inc. (the
"Company"), to the end that Landlord shall not have any responsibility for
compliance with the provisions of the Master Lease and shall be indemnified by
Tenant against all liability thereunder. If any event (other than the
expiration of any period provided in the Master Lease for the exercise
of a right to extend the term of the Master Lease) shall occur which, pursuant
to the terms of the Master Lease, with or without the passage of time, shall
enable the tenant under the Master Lease to terminate the same, the party
discovering such event shall notify the other party thereof within 5 business
days after obtaining knowledge of the occurrence thereof. Notwithstanding any
such right of termination, Tenant shall take no action to terminate the Master
Lease and shall take all such action, if any, as shall be necessary to maintain
the estate of Landlord in the Leased Premises subject to the Master Lease
during the term demised by the Master Lease. During the Term, Landlord shall
not amend the Master Lease in a way that would increase the obligation or
restrict the rights of Tenant hereunder, nor shall Landlord take any action to
terminate the Master Lease or consent to any termination of the Master Lease as
otherwise permitted in the Master Lease, except in connection with Landlord's
acquisition of fee title to the Land and Improvements.
(c) So long as the Premises are subject to the PILOT Agreement, Tenant shall
comply with the terms thereof and make all payments required thereby in a
timely manner. Tenant shall, upon written request, provide Landlord with
evidence of the payment of the prior year's obligations under the PILOT
Agreement.
8. REPAIRS AND MAINTENANCE; REPLACEMENT:
(a) Tenant shall, at its own sole cost and expense, keep the Premises in
good order and condition, at all times on and after commencement of the Term to
and including the date of the termination of the Term, by lapse of time or
otherwise. Tenant shall promptly and adequately repair the Premises and all
its component parts, and replace or repair all landscaping and all damaged or
broken fixtures, other than Tenant's Trade Fixtures and Incidental Equipment,
and appurtenances.
In addition, Tenant shall timely and properly maintain repair and replace all
of the Premises including, but not
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necessarily limited to, Essential Equipment, mechanical systems,
electrical systems, racking, conveyor system, computer system, plumbing and
sewage systems, foundations and floor slabs, glazing systems, structural steel,
masonry walls and wall enclosures, and water tightness of all curtain walls by
a qualified stationary engineer or otherwise, in accordance with the greater
standard of
(i) the customary maintenance by prudent operators in the industry;
(ii) that which is necessary so as not to void, diminish, or impair
any warranty for such component from time to time in effect; and
(iii) that which is necessary to preserve and protect the useful life
of such component.
Notwithstanding the foregoing, Tenant shall have no obligation to replace any
Tenant Trade Fixtures or Incidental Equipment and Tenant shall not be obligated
to replace any Essential Equipment with an identical item, but may substitute a
functionally equivalent item with like utility, so long as no degradation in
utilization of the building as a high tech warehouse occurs as a result of such
substitution. In addition, Tenant shall maintain and repair or replace, or
cause others to maintain and repair or replace, as the case may be, the roof,
and repair or replace any material defect in materials or workmanship relating
to the foundation, columns, and structural steel which comprise a part of the
Premises. If any of the items listed on Exhibit B (or their replacements)
shall become obsolete or, in Tenant's judgment, uneconomic to repair, Tenant
shall remove such item from the Premises and, except in the case of Tenant's
Trade Fixtures or Incidental Equipment, promptly replace it with an item of
comparable initial value and function. Tenant shall, upon Landlord's request,
no more frequently than once per year, unless reasonably required more
frequently by a third party in Landlord's normal business operations, such as
mortgagees or rating agencies, deliver to Landlord a written statement showing
all removals and replacements of Essential Equipment during the preceding
calendar year, including manufacturers, model numbers, and serial numbers;
Landlord shall have 30 days after delivery of such statement to object to any
item therein, and such statement shall thereafter be conclusive as to all items
not objected to. Landlord, not more frequently than annually during the Term
(except in the event of an emergency or extraordinary condition), may upon 10
days' prior notice cause independent private inspectors, qualified in the
specific discipline, to make inspections of any building and building systems
on the Premises
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or segments thereof to determine Tenant's compliance under this
paragraph 8.
Landlord may, but is not required to, after twenty (20) days' notice to
Tenant (except in the case of emergency, in which case Tenant shall be given
notice contemporaneously with entry), enter the Premises and make such repairs,
alterations, improvements, additions, replacements or maintenance as Landlord
deems reasonably necessary and which Tenant failed to do as required in this
Lease, in a diligent fashion, and Tenant shall pay Landlord as Additional Rent
forthwith upon being billed for same by Landlord the cost thereof plus
reasonable overhead, fees and other costs or expenses arising from Landlord's
involvement with such repairs, alterations, improvements, additions,
replacements and maintenance.
Landlord may, but shall not be required to, enter the Premises personally or
through independent contractors at all reasonable times upon twenty (20) days'
notice (except in the case of an emergency, in which case Tenant shall be given
notice contemporaneously with entry) to inspect the Premises.
(b) It is intended by Tenant and Landlord that Landlord shall have
no obligation, in any manner whatsoever, to repair or maintain the Premises (or
the equipment therein), whether structural or nonstructural, all of which
obligations are intended, as between Landlord and Tenant, to be those of
Tenant. Tenant expressly waives the benefit of any statute now or in the
future in effect which would otherwise afford Tenant the right to make repairs
at Landlord's expense or to terminate this Lease because of Landlord's failure
to keep the Premises in good order, condition and repair.
(c) Tenant shall maintain on the Premises, and turn over to Landlord
upon expiration or termination of this Lease, current operating manuals for the
equipment (other than Incidental Equipment) on the Premises (including, without
limitation, the computer system, sorting system, conveyor system and Lansing
loaders).
(d) Tenant covenants not to install any underground storage tank on
the Land without Landlord's prior written consent, which may be conditioned on
Tenant's agreement to remove the tank at the end of the Term.
(e) Tenant hereby agrees (i) to assume the obligations of "West
Coast" under that certain Grant of Servitude of Passage and Right of Use, dated
March 29, 1990 (the "Servitude of Passage"), by and between Sewerage and Water
Board of New Orleans
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and West Coast Liquidators, Inc. ("West Coast") and (ii) to be
responsible for all maintenance of any and all "Bridges" (as defined in the
Servitude of Passage).
9. IMPOSITIONS; PERMITTED CONTEST; LANDLORD CURE: (a) Subject to
paragraph 9(e), Tenant covenants and agrees to pay, during the Term, as
Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof, all real estate taxes, special assessments,
utility bills referred to in paragraph 7, street lighting, excise levies,
licenses, permits, inspection fees, other governmental charges
(including payments required under the PILOT Agreement pursuant to paragraph
7), and all other charges or burdens of whatsoever kind and nature (including
costs, fees, and expenses of complying with any restrictive covenants or
similar agreements to which the Premises are subject incurred in the use,
occupancy, operation, leasing or possession of the Premises (excluding any
income taxes on the Fixed Rent imposed on Landlord, it being the intent of the
parties hereto that any tax on the net income derived from the Fixed Rent
payable in respect to the Premises imposed by any governmental authority shall
be paid by Landlord), without particularizing by any known name or by whatever
name hereafter called, and whether any of the foregoing be general or special,
ordinary or extraordinary, foreseen or unforseen, which at any time during the
Term may be payable. Tenant shall pay all special (or similar) assessments or
installments thereof (including interest thereon) for public improvements or
benefits which, during the Term shall be laid, assessed, levied or imposed upon
or become a lien upon the Premises and which are payable during the Term, or
any portion thereof; provided, however, that if by law any special assessment
is payable or, at the option of the party obligated to make such payment, may
be paid in installments (whether or not interest shall accrue on the unpaid
balance of such special assessment), Tenant may pay the same, together with any
interest accrued on the unpaid balance of such special assessment in
installments as the same respectively become payable and before any fine,
penalty, interest or cost may be added thereto for the nonpayment of any such
installment and the interest thereon. Tenant shall pay all real estate taxes,
whether heretofore or hereafter levied or assessed upon the Premises, or any
portion thereof, which are due and payable during the Term. At the end of the
Term of the Lease, Tenant's obligation to pay such taxes shall be prorated in
the event the tax period and the Term are not coextensive.
(b) Except for any tax on the net income derived from the Fixed Rent, if at
any time during the Term, any method of taxation shall be such that there shall
be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent,
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or on the Premises, or any portion thereof, a capital levy, gross
receipts tax, occupational license tax or other tax on the rents received
therefrom, or a franchise tax, or an assessment, gross levy or charge measured
by or based in whole or in part upon such gross Rents, Tenant, to the extent
permitted by law, covenants to pay and discharge the same, it being the
intention of the parties hereto that the Fixed Rent to be paid hereunder shall
be paid to Landlord absolutely net without deduction or charge of any nature
whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or of any
nature, kind, or description, except as otherwise expressly provided in this
Lease.
(c) Tenant covenants to furnish Landlord, within thirty (30) days after
request by Landlord, official receipts of the appropriate taxing authority, if
any, or other appropriate proof reasonably satisfactory to Landlord,
evidencing the payment of the same. The certificate, advice or bill of the
appropriate official designated by law to make or issue the same or to receive
payment of any Imposition may be relied upon by Landlord as sufficient evidence
that such Imposition is due and unpaid at the time of making or issuance of
such certificate, advice or bill.
(d) Upon the occurrence of an Event of Default hereunder, Tenant shall pay
to Landlord, at Landlord's written demand until the expiration of 18 months
during which no Event of Default has occurred hereunder, the known or estimated
yearly payments under the PILOT Agreement or real estate taxes and assessments,
payable with respect to the Premises in monthly payments equal to one-twelfth
(1/12) of the known or estimated yearly payments under the PILOT Agreement or
real estate taxes and assessments, next payable with respect to the Premises.
From time to time, after a default hereunder and termination of the PILOT
Agreement, Landlord may re-estimate the amount of real estate taxes and
assessments, and in such event Landlord shall notify Tenant, in writing, of
such re-estimate and fix future monthly installments for the remaining period
prior to the next tax and assessment due date in an amount sufficient to pay
the re-estimated amount over the balance of such period after giving credit for
payments made by Tenant on the previous estimate.
If the total monthly payments made by Tenant pursuant to this paragraph shall
exceed the amount of payments necessary for said taxes and assessments, such
excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However,
if the total of such monthly payments so made under this paragraph shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to
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make up the deficiency. All payments made by Tenant pursuant to this
paragraph 9(d) shall be deposited in a federally insured institution reasonably
satisfactory to Landlord and Tenant, and all interest earned thereon shall
accrue to the benefit of Tenant. Payment by Tenant of estimated amounts
required under the PILOT Agreement or for real estate taxes and assessments
under this paragraph 9(d) shall be considered as performance of such obligation
under the provisions of paragraph 9(a) hereof.
(e) If Tenant desires to contest the validity, amount, propriety, or
accuracy of any Imposition, Tenant shall notify Landlord of same which notice
shall state the nature of the Imposition being contested and the general
grounds, with reasonable specificity, for such contest. Within fifteen (15)
days of Landlord's receipt of such notice Landlord will notify Tenant that (i)
Landlord will contest the Imposition in question, or (ii) that Landlord
consents to the contest by Tenant. If Landlord fails to so notify Tenant, it
shall be presumed that Landlord has elected (ii). If Landlord elects to
contest the Imposition, it may do so on the grounds described in Tenant's
notice, and all the reasonable costs, expenses, fees or other obligations
incurred by Landlord in conducting such challenge shall be deemed Additional
Rent hereunder. If Landlord, either actively or by default, elects (ii) above,
Tenant shall have the right, at its own expense, to contest the amount,
propriety, accuracy, or validity, in whole or in part, of any Imposition by
appropriate proceedings diligently conducted in good faith, but only after
payment of such Imposition, unless non-payment would not cause a lien to be
filed against the Premises or would not otherwise jeopardize title to the
Premises or Landlord's interest therein; in which event, notwithstanding the
provisions of Paragraph 9(a) hereof, Tenant may postpone or defer payment of
such Imposition. However, if Tenant's tangible net worth, determined in
accordance with generally accepted accounting principles, is less than
$100,000,000, Landlord may require Tenant to, and in such event Tenant shall,
deposit with Landlord cash or a certificate of deposit payable to Landlord
issued by a national bank or Federal savings and loan association in the amount
of the Impositions so contested and unpaid, together with all interest and
penalties which may accrue, in Landlord's reasonable judgment, in connection
therewith, and all charges that may or might be assessed against or become a
charge on the Premises, or any portion thereof, during the pendency of such
proceedings. If, during the continuance of such proceedings, Landlord shall,
from time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, upon demand of Landlord, make additional deposits
of such additional sums of money or such additional certificates of deposit as
Landlord may reasonably request. Upon failure of Tenant to make such
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additional deposits, the amount theretofore deposited may be applied by
Landlord to the payment, removal and discharge of such Imposition, and the
interest, fines and penalties in connection therewith, and any costs, fees
(including reasonable attorney's fees) and other liability (including
reasonable costs incurred by Landlord) accruing in any such proceedings.
Upon the termination of any such proceedings, Tenant shall pay the amount of
such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability incurred by Tenant in connection
therewith. Upon such payment, Landlord shall return all amounts or
certificates of deposit deposited with it in respect to the contest of such
Imposition, as aforesaid, along with any interest earned thereon as a result of
an investment thereof, at Tenant's request and expense, in a Federally insured
security or account. However, at the written direction of Tenant, Landlord
shall make such payment out of the funds on deposit with Landlord and the
balance, if any, shall be returned to Tenant. Tenant shall be entitled to the
refund of any Imposition, penalty, fine and interest thereon received by
Landlord which has been paid by Tenant or which has been paid by Landlord but
for which Landlord has been previously reimbursed in full by Tenant.
Landlord shall not be required to join in any proceedings referred to in this
paragraph 9 unless either (i) the provisions of any law, rule or regulations at
the time in effect shall require that such proceedings be brought by or in the
name of Landlord, in which event Landlord shall join in such proceedings or
permit the same to be brought in Landlord's name upon compliance with such
conditions as Landlord may reasonably require or (ii) Tenant provides Landlord
with reasonable security for the payment of all expenses (including reasonable
compensation for the time of Landlord's officers) to be incurred by Landlord in
connection with such proceedings. Landlord shall not ultimately be subject to
any liability for the payment of any fees, including attorney's fees, costs and
expenses in connection with such proceedings and Tenant agrees to bear the
entire obligation therefor. Tenant agrees to pay all such fees (including
reasonable attorney's fees), costs and expenses or, on demand, to make
reimbursement to Landlord for such payment. During the time when any such
certificate of deposit is on deposit with Landlord, and prior to the time when
the same is returned to Tenant or applied against the payment, removal or
discharge of Impositions, as above provided, Tenant shall be entitled to
receive any interest paid thereon.
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(f) If Tenant shall at any time fail to pay any Imposition in
accordance with the provisions of paragraph 9, or to take out, pay for,
maintain and deliver any of the insurance policies or certificates of insurance
provided for in paragraph 11, or shall fail to make any other payment or
perform any other act on its part to be made or performed hereunder, then
Landlord, after ten (10) days prior written notice to Tenant (or without notice
in situations where Landlord determines that delay is likely to cause harm to
Landlord's interest in the Premises), and without waiving or releasing Tenant
from any obligation of Tenant contained in this Lease, may, but shall be under
no obligation to do so,
(i) pay after said ten (10) days' written notice to Tenant, any
Imposition payable by Tenant pursuant to the provisions of this
paragraph 9;
(ii) take out, pay for and maintain any of the insurance policies
provided for in paragraph 11; or
(iii) make any other payment or perform any other act on Tenant's
part to be paid or performed hereunder, except that any time
permitted to Tenant to perform any act required to be
performed by Tenant hereunder shall be extended for such
period as may be necessary to effectuate such performance,
provided Tenant is continuously, diligently and in good faith
prosecuting such performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor and all such action
taken by Landlord shall be in a reasonably diligent fashion. All sums,
reasonable under the circumstances, actually so paid by Landlord and all costs
and expenses, including reasonable attorney's fees, incurred by Landlord in
connection with the performance of any such act, together with interest thereon
at the Overdue Rate, shall be paid by Tenant to Landlord on demand and
submission of reasonable evidence of such expenditures. Landlord shall not be
limited in the proof of any damages which Landlord may claim against Tenant
arising out of or by reason of Tenant's failure to provide and keep in force
insurance as aforesaid, to the amount of the insurance premium or premiums not
paid or incurred by Tenant, and
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which would have been payable upon such insurance, but Landlord shall
also be entitled to recover, as damages for such breach, the uninsured amount
of any loss (to the extent of any deficiency between the dollar limits of
insurance required by the provisions of this Lease and the dollar limits of the
insurance actually carried by Tenant), damages, costs and expenses of
suit,including reasonable attorney's fees, suffered or incurred by reason of
damage to or destruction of the Premises, or any portion thereof or other
damage or loss which Tenant is required to insure against hereunder, occurring
during any period when Tenant shall have failed or neglected to provide
insurance as aforesaid.
10. DESTRUCTION OF OR DAMAGE TO PREMISES:
Tenant covenants that in case of damage to or destruction of any or all of
the Improvements and Essential Equipment by fire or any other cause, insured or
uninsured, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the Improvements, and repair or replace the Essential
Equipment, so damaged or destroyed as nearly as practicable to the condition,
quality and class thereof immediately prior to such damage or destruction,
without regard to the adequacy of any insurance proceeds for such purpose;
provided, however, that Essential Equipment may be replaced by a functionally
equivalent item with like utility, rather than an identical item, so long as no
degradation in utilization of the building as a high tech warehouse occurs as a
result of such substitution. This Lease shall continue, with Fixed Rent and
Additional Rent unabated and Landlord shall not terminate the Master Lease
pursuant to paragraph 17.2 thereof. In performing its obligations under this
paragraph 10, Tenant shall be entitled to insurance proceeds under the terms
and conditions set forth in paragraph 11 hereof, notwithstanding the terms of
any mortgage given by Landlord to the contrary. Landlord shall have the right
to approve the plans and specifications for the work of repair, replacement or
rebuilding, such approval not to be unreasonably withheld or delayed. Tenant
shall diligently obtain all necessary permits for such work or repair and shall
maintain builder risk insurance in amounts reasonably satisfactory to Landlord
until completion of such work. Such restoration, repairs, replacement or
rebuilding shall be commenced promptly and prosecuted with diligence, subject
to unavoidable delays and force majeure.
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11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION:
(a) Tenant at its sole cost and expense shall obtain and continuously
maintain in full force and effect during the Term "All-Risk" policies of
property insurance including damage by fire and the perils commonly covered
under the special causes of loss, and also including the perils of flood and at
the sole discretion of Tenant also including the perils of earthquake, covering
real and personal property and loss of business income, including all of the
Improvements, alterations, additions and changes on or at the Premises, which
insurance shall be for the benefit of Landlord (as an additional insured and
loss payee) and Tenant, as their interests may appear, and also protecting the
insurable interests of any other entity the Landlord may designate from time to
time, including but not limited to mortgagee(s), additional insured(s), loss
payee(s), or others (hereinafter referred to as "Property Insurance").
Such Property Insurance shall:
(i) be written with companies licensed to do business in the
State where the Premises are located, having a current
A.M. Best rating of A- or better and a current A.M. Best
Financial Size Category of VII or better and (at the
discretion of Landlord) a current Standard & Poor's
Claim-Paying Ability Rating of A or better;
(ii) be maintained continuously throughout the Term hereof; and
(iii) for all perils other than windstorm and earthquake, provide
for a deductible or self-insured retention per occurrence
no greater than (i) $250,000, at any time when Lessee's
tangible net worth, determined in accordance with generally
accepted accounting principles, is less than $100,000,000, or
(ii) $250,000, increased annually on the anniversary of the
Commencement Date by the corresponding annual percentage
increase in the CPI, or if such index is not available, then
the most comparable index then made available by the U.S.
government, such increase not to exceed 3% per annum, so long
as Lessee's tangible net worth, determined in accordance with
generally accepted accounting principles, is at least
$100,000,000. For losses caused by windstorm, a deductible or
self-insured retention no greater than 2% of the value of the
property insured at the Premises, per
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policy valuation, shall apply. For losses caused by
earthquake, the deductible or self-insured retention shall be
at the sole discretion of the Tenant, in accordance with the
coverage requirements of paragraph 11(a) above. In any event,
any and all co-insurance penalties, deductibles, or
self-insured retention shall be the responsibility of, and
shall be paid by, Tenant.
At all times, the Property Insurance coverage shall be in an amount
equal to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements, alterations, additions and changes on or at the Premises. Full
Replacement Cost shall be interpreted to mean the cost of repairing or
replacing the improvements, alterations, additions and changes on or at the
Premises with property of like kind and quality, determined at the time of
loss, without deduction for depreciation or wear and tear, and it shall include
a reasonable sum for architectural, engineering, legal, interest charges,
permit fees, administrative and supervisory fees connected with the restoration
or replacement of such Improvements in the event of damage thereto or
destruction thereof. Any co-insurance penalty, deductible, or self-insured
retention applicable shall be the sole responsibility of, and shall be paid by,
Tenant.
(b) During the Term, Tenant, at its sole cost and expense, but for the
benefit of Landlord (as an additional insured), and also protecting the
insurable interests of any other entity the Landlord may designate from time to
time, including but not limited to Landlord's mortgagee(s), additional
insured(s), loss payee(s), or other entities Landlord may designate from time
to time, and as required by the Master Lease, shall obtain and continuously
maintain, in full force and effect, the following insurance coverage written
with companies licensed to do business in the State where the Premises are
located, having a current A.M. Best Rating of A- or better and a current A.M.
Best Financial Size Category of VII or better and (at the discretion of
Landlord), a Standard & Poor's Claim-Paying Ability Rating of A or better:
(i) Commercial general liability insurance or comprehensive general
liability insurance with broad form comprehensive liability
endorsement, applying to Premises and operations (including
coverage for property damage resulting from the explosion
collapse, and underground hazards), products and
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completed operations, contractual liability, broad form
property damage, and personal injury, all with a minimum
combined single limit of $3,000,000.00 each occurrence and
$3,000,000.00 general aggregate per location.
(ii) Automobile liability applying to any owned, hired and non-owned
automobiles, with a minimum combined single limit of
$1,000,000.00 each accident.
(iii) Following form umbrella liability with a minimum combined single
limit of $25,000,000.00 each occurrence and a minimum aggregate
limit per location of $25,000,000.00.
(iv) if required by Landlord, such other insurance which is deemed
to be prudent and commercially available at a logical cost,
against other insurable hazards or occurrences and in such
amounts which at the time are reasonable and commonly insured
against in the case of premises, operations, and/or buildings or
improvements similar in nature, construction, design, general
location, use, and/or occupancy, to those on the Premises.
Any co-insurance penalty, deductible, or self-insured retention applicable with
respect to general liability, automobile liability, or umbrella liability,
shall be the sole responsibility of, and shall be paid by, Tenant.
(c) Tenant shall maintain a policy or policies of statutory workers'
compensation insurance covering all employees in amounts required by applicable
state law and employers' liability with minimum limits of $100,000.00 each
accident, $100,000.00 disease-each employee, and $100,000.00 disease-policy
limit or the minimum underlying insurance requirements of Tenant's umbrella
liability policy, whichever is greater.
(d) The aforementioned commercial general liability insurance or
comprehensive general liability insurance, automobile liability insurance,
umbrella liability insurance, workers' compensation insurance and employers'
liability insurance shall not include deductibles or self-insured retention in
excess of 1/4 of 1% of Tenant's tangible net worth, determined in accordance
with generally accepted accounting
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principles. Any co-insurance penalty, deductible, or self-insured
retention applicable with respect to general liability, automobile liability,
umbrella liability, worker's compensation or employers' liability shall be the
sole responsibility of, and shall be paid by, Tenant.
(e) Each policy of insurance required under this paragraph 11 shall have
attached thereto:
(i) an endorsement that such policy shall not be cancelled or
materially changed without at least thirty (30) days prior
written notice to Landlord, except in the case of
non-payment of premium, in which case there shall be at
least ten (10) days prior written notice; and
(ii) A Lender's Loss Payable Endorsement Form 438BFU (with respect
to insurance described in paragraph 11(a)).
To the extent the foregoing endorsements are not obtainable in precisely the
form prescribed, Tenant shall obtain reasonably similar endorsements.
Certificates of Insurance (ACORD 25-S) and
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Evidence of Property Insurance (ACORD 27) (collectively, the "Certificates")
shall be delivered to Landlord accompanied by, or Tenant shall provide, as
appropriate, evidence satisfactory to Landlord that the premiums thereon have
been paid currently. Such Certificates and evidence of payment shall be
delivered to Landlord on or before the Commencement Date. Prior to the
expiration of such policies, Certificates of all renewal or replacement
policies, plus reasonable evidence of current premium payment, shall be
delivered to Landlord not less than thirty (30) days prior to the expiration of
the then current policy term. Insurance binders evidencing the binding of
policies of insurance or the renewals thereof for the coverage specified shall
be accepted in the event such Certificates are not available at the time in
question, for a temporary duration, pending policy issuance. Within thirty
(30) days of written request, Tenant shall cause Certificates to be delivered
to Landlord, or deliver a letter to Landlord from the underwriter(s) stating
the reasons for the delay, and stipulating when Certificates will be available.
In no event shall the insurance for the coverage specified be allowed to lapse.
On two business days' prior notice to Tenant, copies of Tenant's insurance
policies shall be made available for inspection by Landlord or its designee or
Mortgagee or Mortgagee's designee during normal business hours at Tenant's
address.
Nothing in this paragraph 11 shall prevent Tenant from taking out insurance
of the kind and in the amount provided for under the preceding paragraphs under
a blanket insurance policy or policies which may cover other properties owned,
operated, leased or occupied by Tenant as well as the Premises. Such policy
of blanket insurance shall specify the amount exclusively allocated to the
Premises, or in lieu thereof, Tenant shall furnish Landlord and the holder of
any mortgage with a written statement from the insurer's authorized
representative or broker specifying the values reported for the Premises at
inception for premium determination purposes. Further, such policies of
blanket insurance shall, as respects the Premises, contain the various
provisions required of such an insurance policy by the foregoing provisions of
this paragraph 11.
(f) In the event of loss or damage to the Premises which exceeds the
deductible or self-insured retention described in paragraph 11(a)(iii), or in
the event of any claim in connection with the injury to any person or the
damage of any property (other than the Premises) arising out of or occurring at
the Premises or arising out of operations at the Premises which exceeds the
deductible or self-insured retention described in paragraph 11(c), or in the
event of the death of any person arising out of or occurring at the Premises,
Tenant shall
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promptly notify Landlord thereof in writing, and shall prepare and present
timely claims to the appropriate insurers on behalf of Tenant, Landlord and any
assignee or mortgagee of Landlord.
(g) The proceeds of any property claim for damage to the Premises, net of
any collection expenses, shall (subject to the terms of the Master Lease) be
paid to Tenant for use in restoring the Premises, unless such proceeds exceed
$50,000, in which case such proceeds shall be deposited with either a bank or
trust company having an office in the State of Louisiana and designated by
Landlord and reasonably satisfactory to Tenant (herein called the "Proceeds
Trustee") in the name of the Proceeds Trustee as trustee for Landlord and
Tenant and (subject to the terms of the Master Lease) disbursed in the manner
hereinafter provided. In the event Landlord mortgages the Premises with a
first mortgage, the mortgagee thereunder (regardless of its location) may, at
its option, be appointed Proceeds Trustee for so long as such first mortgage
remains outstanding. Insurance proceeds shall be deposited in an interest
bearing account (if available) and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee upon receipt by
Landlord and Proceeds Trustee of the following:
(i) A certificate signed by a licensed architect or engineer selected by
Tenant, subject to the approval of Landlord (such approval not to be
unreasonably withheld or delayed) and also signed by Tenant, dated not
more than thirty (30) days prior to the application for such
disbursement, setting forth in substance the following:
a. that the sum then requested to be disbursed either has been
been paid by Tenant or is justly due to contractors,
subcontractors, materialmen, engineers, architects or other
Persons (whose names and addresses shall be stated) who have
rendered and furnished certain labor and materials for the work;
giving a brief description of such services rendered and
materials placed in use on the Premises and the principal
subdivisions or categories thereof and the amounts so paid or
due to each of said Persons in respect thereof, and stating the
progress of the work up to the date of said certificate;
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b. that the sum then requested to be disbursed, plus all sums
sums previously disbursed, does not exceed the cost of
the work as actually accomplished up to the date of such
certificate (less ten percent (10%) of such cost which shall be
retained by the Proceeds Trustee to be disbursed following
completion of the work to be done by the named contractor);
c. that, to the best of their knowledge, except for the amounts
the amounts, if any, stated in said certificate pursuant
to the foregoing clause (i) of this paragraph to be due for
services or materials, there is no outstanding indebtedness
known to the Person signing the certificate, after due
inquiry, which is then due and payable for work, labor,
services and materials in connection with the work, which, if
unpaid, might become the basis of a vendor's, mechanic's,
laborer's or materialman's statutory or similar lien upon
Tenant's leasehold estate or Tenant's or Landlord's interest in
the Premises or any part thereof; and
d. that the amount remaining in the possession of the Proceeds
Proceeds Trustee after disbursement of the sum then
requested at least equals the estimated unpaid costs to
complete the work (and if insufficient funds remain, Tenant
shall deposit additional funds with the Proceeds Trustee
sufficient to enable the architect or engineer to make the
foregoing certification).
(ii) A certificate signed by Tenant, dated not more than thirty (30) days
prior to the application for such disbursement, setting forth in substance
that, to the best knowledge of Tenant, after due inquiry:
a. all materials and all property described in the
certificate are free and clear of all liens and
encumbrances, except such as may secure indebtedness
due to Persons (whose names and addresses and the
several amounts due them shall be stated) specified in
said certificate, which liens and encumbrances will be
discharged upon payment of such indebtedness and
encumbrances to which this Lease is subject; and
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b. that no default hereunder has occurred which has
not been remedied.
(iii) Evidence reasonably satisfactory to the Proceeds Trustee and
Landlord showing that there has not been filed or recorded with respect to
Tenant's leasehold estate or Tenant's or Landlord's interest in the Premises or
any part thereof any vendor's, mechanic's, design professional's, laborer's or
materialman's statutory or similar lien which has not been discharged of
record, except such as will be discharged upon payment of the amount then
requested to be disbursed.
(iv) Conditional lien waivers from each Person entitled to a
mechanics' or materialmen's lien against the Premises by reason of such work.
(v) Upon compliance with the foregoing provisions, the Proceeds
Trustee shall, out of the deposited sums, disburse to the Persons named in the
certificate the respective amounts stated in said certificate to be due to them
and/or shall disburse to Tenant the amount stated in said certificate to have
been paid by Tenant.
(vi) At any time after the completion in full of the work, the whole
balance of the deposited sums not theretofore disbursed pursuant to the
foregoing provisions of this paragraph 11(g) shall be disbursed to or upon the
order of Tenant, upon receipt by the Proceeds Trustee of:
a. a certificate signed by Tenant, dated not more than thirty
(30) days prior to the application for such disbursement,
setting forth in substance the following:
(1) that the work has been completed in full;
(2) that all amounts which Tenant is or may be
entitled to have disbursed under the foregoing
provisions of this Paragraph 11(g) on account of
services rendered or materials furnished in
connection with the work and placed in use on the
Premises have been disbursed under said
provisions;
(3) that all amounts for whose payment Tenant is or
may become liable in respect of the work have
been paid in full except to the extent, if any,
of any retainage and which retainage
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shall be applied to the final payments of the
amounts due; and
(4) that no default has occurred hereunder which has
not been remedied;
b. if the work resulted in any change to the plans and
specifications of the Premises, a copy of the final
plans and specifications of the improvements on the
Premises, which plans and specifications shall be
delivered to Landlord;
c. subject to paragraph 21(a), an official search or a
certificate of a title company reasonably satisfactory
to the Proceeds Trustee showing that there has not
been filed with respect to Tenant's leasehold estate
or Tenant's or Landlord's interest in the Premises or
any part thereof, any vendor's, mechanic's, laborer's
or materialman's statutory or similar lien which has
not been discharged of record;
d. a certificate of completion signed by the supervising
architect or engineer referred to in Paragraph
11(g)(i) above; and
e. if legally required, a certificate of occupancy or
equivalent governmental approval.
No such damage or destruction shall release Tenant from any
obligation hereunder for Fixed Rent, Additional Rent or other sums payable
under this Lease.
Any insurance proceeds remaining after completion of the
reconstruction as specified in Paragraph 11(g)(vi) above shall be paid to
Tenant.
(h) To the fullest extent permitted by law, but subject to the last
sentence of this subparagraph (h), Tenant shall protect, defend, indemnify and
hold Landlord, its direct or indirect partners, and any and all respective
members, partners, executive officers, directors, stockholders, agents and
employees of the aforementioned, any mortgagee and their respective successors
and assigns and any other individual or entity to whom a duty is owed
(collectively, the Landlord Group) harmless from and against any and all
claims, losses, and judgments, liabilities, damages, causes of action, costs
and expenses (including, without limitation, reasonable attorney's fees and
reasonable investigative and discovery costs), arising from Tenant's use of
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the Premises (including all common areas) and the ways adjoining the Premises,
or from the conduct of Tenant's business or from any activity, work or things
done, permitted or suffered by Tenant in or about the Premises (including all
common areas) and the ways adjoining the Premises and including any and all
liability arising under the Servitude of Passage, the Switch Track Agreement or
the Railroad Crossing Agreement. Subject to the last sentence of this
subparagraph (h), Tenant shall further protect, defend, indemnify and hold
Landlord Group harmless from and against any and all claims, losses, judgments,
liabilities, damages, causes of action, costs and expenses (including, without
limitation, reasonable attorney's fees and reasonable investigative and
discovery costs), arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease, or
arising from any negligence (active, passive, or otherwise), willful
misconduct, acts, or omissions of Tenant, or any of Tenant's agents,
contractors or subcontractors, employees, servants, customers, invitees,
subtenants, any other individual or entity, and from and against all costs and
expenses (including, without limitation, reasonable attorney's fees and
reasonable investigative and discovery costs) actually incurred, in the defense
of any such claim or any action or proceeding brought thereon; and in case any
action or proceeding be brought against a member of Landlord Group by reason of
any such claim, Tenant upon notice from any member of Landlord Group shall
defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord Group or selected by the insurance carrier. Tenant, as a material
part of the consideration to Landlord, assumes all risk of damage to property
or injury to or death of persons, in, upon or about the Premises arising from
any cause and Tenant waives all claims in respect thereof against Landlord
except to the extent any such cause or claim is attributable to the willful act
or negligent act of Landlord. Nothing in this paragraph shall require Tenant
to protect, defend, indemnify or hold harmless a Person to the extent of such
Person's negligence or willful misconduct.
12. GOVERNMENTAL ORDERS; COVENANTS:
Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
including, without limitation, the Americans with Disabilities Act of 1990, as
the same may be amended from time to time, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal, State, municipal
and other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules
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and regulations of the Board of Fire Underwriters where the Premises are
situated, or any other body now or hereafter constituted exercising lawful or
valid authority over the Premises, or any portion thereof, or the sidewalks,
curbs, roadways, alleys or entrances adjacent or appurtenant thereto, or
exercising authority with respect to the use or manner of use of the Premises,
or such adjacent or appurtenant facilities, and whether the compliance, curing
or removal of any such violation and the costs and expenses necessitated
thereby shall have been foreseen or unforeseen, ordinary or extraordinary, and
whether or not the same shall be presently within the contemplation of Landlord
or Tenant or shall involve any change in governmental policy, or require
structural or extraordinary repairs, alterations or additions by Tenant and
irrespective of the amount of the costs thereof. Tenant, at its sole cost and
expense, shall comply with all agreements, contracts, easements, restrictions,
reservations or covenants, if any, running with the land, or hereafter created
by Tenant or consented to, in writing, by Tenant or requested, in writing, by
Tenant. Tenant shall also comply with, observe and perform all provisions and
requirements of all policies of insurance at any time in force with respect to
the Premises and required to be obtained and maintained under the terms of
paragraph 11 hereof and shall comply with all development permits issued by
governmental authorities issued in connection with development of the Premises.
13. PARTIAL TAKING:
(a) If less than substantially all of the Premises shall be
taken for public or quasi-public purposes, Tenant will promptly, at its sole
cost and expense, restore, repair, replace or rebuild the improvements so taken
in conformity with the requirements of paragraph 11 as nearly as practicable to
the condition, size, quality of workmanship and market value thereof
immediately prior to such taking, without regard to the adequacy of any
condemnation award for such purpose. In performing its obligations, Tenant
shall be entitled to all condemnation proceeds available to Landlord under the
terms of the Master Lease under the same terms and conditions for disbursement
set forth for casualty proceeds in paragraph 11 hereof, notwithstanding the
terms of any mortgage given by Landlord to the contrary (except that the
mortgagee under any such mortgage may be the custodian of the proceeds pending
their disbursement in accordance with the disbursement provisions of paragraph
11). Any condemnation proceeds in excess of the amounts as are made available
to Tenant for restoration or repair of the Premises, shall be the sole and
exclusive property of Landlord. Tenant shall have the right to participate in
condemnation proceedings with Landlord, and shall be entitled to receive any
award made by
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the condemning authority in respect of business loss or, if available, business
relocation and any other claim permitted by law which does not, in any such
case, diminish Landlord's recovery.
(b) If the Landlord is entitled to condemnation proceeds as
described in the next to last sentence of Paragraph 13(a), each installment of
Fixed Rent thereafter payable hereunder shall be reduced by a fraction thereof,
the numerator of which shall be the proceeds retained by Landlord and the
denominator of which shall be the Purchase Price specified in the Basic Lease
Information.
14. TERMINATION OF LEASE FOR SUBSTANTIAL TAKING:
If all or substantially all of the Premises are taken for
public or quasi-public purposes, and the Premises are therefore rendered
unsuitable for continued use and occupancy in Tenant's business, then Tenant
shall, not later than twenty (20) days after such occurrence, deliver to
Landlord (i) notice of its desire to terminate this Lease with respect to the
Premises on the next due date for the Fixed Rent payment, (the "Termination
Date") which occurs not less than 45 days after the delivery of such notice and
(ii) a certificate of the President or Vice President of Tenant describing the
event giving rise to such termination and stating that Tenant has determined
that such event has rendered the Premises unsuitable for continued use and
occupancy in Tenant's business, and (iii) a certificate signed by the Tenant to
the effect that termination of this Lease with respect to the Premises will not
be in violation of any operating or similar agreement then in effect. Such
notice to Landlord shall be accompanied by (1) an undertaking of Tenant to pay
any amounts payable under the terms of the Master Lease upon a termination
thereof (including the payment of the Bonds referred to therein), and (2) an
irrevocable offer by Tenant to purchase on the Termination Date any remaining
portion of the Premises at a price equal to the Purchase Price specified in the
Basic Lease Information. The costs associated with such conveyance, including
transfer taxes and recording fees, shall be paid by Tenant. Landlord may
reject such offer by notice given to Tenant not later than thirty (30) days
after receipt of Tenant's notice (which offer Landlord may not reject without
the first mortgagee's consent if there is a mortgage then on the Premises).
Unless Landlord shall have rejected such offer in accordance with this
paragraph (with the mortgagee's consent as aforesaid), Landlord shall be
conclusively presumed to have accepted such offer, and, on the Termination
Date, shall convey by special warranty deed to Tenant any remaining portion of
the Premises free of liens and encumbrances (except those existing on
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the Commencement Date or thereafter created with the written consent of
the Tenant) but excluding encumbrances created by Landlord securing the
repayment of borrowed money, along with the right to receive any condemnation
award to which Landlord is entitled under the Master Lease.
15. DEFAULT: Events of Default.
The following events, following the expiration of the
applicable cure periods, in this Paragraph are sometimes referred to as an
"Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for 5 days after receipt of notice,
provided that such notice and cure period shall apply only once
in any twelve month period and after one such notice in any
such period, an Event of Default shall exist upon failure to
pay Fixed Rent when due;
(b) If default shall be made in the payment of Additional Rent or
in the payment of any other sum required to be paid by Tenant
under this Lease and such default shall continue for 5 days
after receipt of notice thereof;
(c) If default shall be made in the observance or performance of
any of the other covenants in this Lease which Tenant is
required to observe and perform and such default shall continue
for thirty (30) days after written notice to Tenant, provided
however, that if such default cannot be cured simply by the
payment of money and cannot reasonably be cured in such 30 day
period, an Event of Default shall not exist as long as Tenant
promptly commences and thereafter diligently prosecutes the
cure of such default, provided that such cure period shall in
no event extend beyond 270 days after the notice of such
default;
(d) If any representation or warranty made by Tenant herein or by
Tenant or Guarantor in any certificate, demand or request
proves to be incorrect in any material respect when made;
(e) If the interest of Tenant in this Lease shall be attached,
levied on under execution or other legal process and same is
not vacated within sixty (60) days;
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(f) If a case shall be commenced under the United States Bankruptcy
Code by Tenant or Guarantor;
(g) If any involuntary petition in bankruptcy shall be filed
against Tenant or Guarantor under any Federal or State
bankruptcy or insolvency act and shall not have been dismissed
within sixty (60) days of the filing thereof;
(h) If a receiver or similar official shall be appointed for Tenant
or Guarantor or any substantial portion of the property of
Tenant or Guarantor by any court and any such receiver shall
not have been discharged within thirty (30) days from the date
of his appointment;
(i) If Tenant shall abandon the Premises; or
(j) If the consolidated tangible net worth of Guarantor determined
in accordance with generally accepted accounting principles
shall be less than $100,000,000 and Tenant does not comply with
paragraph 27;
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such
Event of Default continues, Landlord, at its option and with or without notice
or demand of any kind to Tenant or any other person, may have any one or more
of the remedies provided in this Lease, in addition to all other remedies and
rights provided at law or in equity.
16. REMEDIES: In the event of any Event of Default, Landlord may,
in addition to, and not in derogation of any remedies for any preceding breach,
with or without notice of demand (except as otherwise expressly provided
herein) and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such Event of Default:
(a) Immediately or at any time thereafter while such Event of
Default continues, mail a notice of termination addressed to Tenant and proceed
pursuant to and with due process of law, to repossess the Premises without
prejudice to any remedies which might otherwise be used for arrears of rent,
and upon such notice as aforesaid this Lease shall terminate, but Tenant shall
remain liable for its default hereunder as hereinafter provided. Tenant shall
have the right to cure any default until the expiration of the applicable cure
period, if any, following notice by Landlord, as specified above. Where
Landlord has given notice as provided for above, no further
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notice shall be required to effectuate a termination of the Lease,
which termination shall occur automatically.
(b) Terminate Tenant's right to possession of the Premises by
court order or any lawful means, in which case Tenant's right to possession
under this Lease shall terminate, and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event, Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including, but not limited to, the cost of recovering
possession of the Premises; reasonable expenses of reletting, including
necessary renovation and alteration of the Premises (which reletting shall be
restricted to operations similar to Tenant's operations, or to warehouse or
distribution center facilities); reasonable attorney's fees and any reasonable
real estate commissions actually paid; the worth at the time of award by the
court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the Term (not including any unexercised Renewal Terms) after the
time of such award exceeds the amount of such rental loss for the same period
that Tenant proves could be reasonably avoided; and that portion of any leasing
commissions paid by Landlord applicable to the unexpired Term of this Lease
(not including any unexercised Renewal Terms). The discount rate to be used in
determining present value shall be the discount rate then in effect at the
Federal Reserve Bank of San Francisco, plus 1%.
(c) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the Rent as it becomes due hereunder.
(d) Accelerate all rentals payable hereunder for the remainder
of the existing Term, and be entitled to the payment of the present value of
such sums, each discounted at the discount rate then in effect at the Federal
Reserve Bank of San Francisco, plus 1%, together with all rentals theretofore
accrued and unpaid and interest thereon at the Overdue Rate from the date due
until paid.
(e) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of Louisiana.
Unpaid installments of Rent and other unpaid monetary obligations of Tenant
under the terms of this Lease shall bear interest from the date due until paid
at the Overdue Rate.
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(f) Subject to the last sentence of this paragraph, at any time
after any such termination of this Lease or re-entry or repossession of the
Premises or any part thereof by reason of the occurrence of an Event of
Default, whether or not Landlord shall have collected any current damages
pursuant to paragraph 16(b), Landlord shall have the option to require payment
from Tenant, and Tenant will pay to Landlord on demand, as and for liquidated
and agreed final damages for Tenant's default and in lieu of all current
damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), whichever
amount Landlord shall select:
(i) an amount equal to the Fixed Rent reserved in this
Lease and/or covenanted to be paid for the remainder of the Term
(excluding unexercised Renewal Terms), discounted to present worth at
the discount rate then in effect at the Federal Reserve Bank of San
Francisco, plus 1%;
(ii) 110% of the Purchase Price specified in the Basic
Lease Information.
Landlord shall at the time of such payment under this paragraph 16(f) assign
and convey the Premises to Tenant free of liens and encumbrances (except those
existing on the Commencement Date or thereafter created with the express
written consent of Tenant, but excluding encumbrances created by Landlord
securing the repayment of borrowed money), without further consideration. The
costs of such transfer, including recording fees and transfer taxes shall be
paid by Tenant, except that, if Landlord receives more than 110% of such
Purchase Price, Landlord shall pay the portion of such costs, if any, which
result in Landlord receiving at least 110% of such Purchase Price. If the only
Event of Default hereunder is under paragraph 15(j), the damages under this
paragraph shall be the price applicable to a sale under paragraph 27; if there
is an Event of Default under paragraph 15(j) and under another provision of
this Lease, the damages under this paragraph shall be the greater of the amount
selected pursuant to this paragraph or the price applicable to a sale under
paragraph 27.
17. SUBORDINATION:
(a) Subordination, Non-Disturbance. Tenant agrees at any time
hereafter, and from time to time within twenty (20) days of written request of
Landlord's lender, to execute and deliver to Landlord an instrument in the form
attached hereto as Exhibit E, with such changes therein as may be requested by
Landlord and approved, in the exercise of reasonable judgment, by Tenant
subjecting and subordinating this Lease to the lien of any
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mortgage, deed of trust, security instrument, ground or underlying
lease or other document of like nature (hereinafter collectively referred to as
"Mortgage") which at any time may be placed upon the Premises, or any portion
thereof, by Landlord and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Event of Default, such subordination agreement or other instrument,
release or document (herein "Subordination Agreement") shall not interfere
with, hinder or reduce Tenant's right to quiet enjoyment under this Lease, nor
the right of Tenant to continue to occupy the Premises, and all portions
thereof, and to conduct its business thereon in accordance with the covenants,
conditions, provisions, terms and agreements of this Lease. The lien of any
such Mortgage shall not encumber Tenant's Trade Fixtures, and insurance
proceeds and condemnation awards shall be made available to Tenant in
accordance with the terms of this Lease (subject to the Master Lease). The
costs of preparing and recording such document shall be borne by Landlord, but
Tenant shall be responsible for its own counsel fees.
(b) Mortgagee Protection Clause. In the event of any act or
omission of Landlord constituting a default by Landlord, Tenant shall not
exercise any remedy until Tenant has given Landlord and any mortgagee of the
Premises written notice of such act or omission, and until a reasonable period
of time (not to exceed 5 business days) to allow Landlord or the mortgagee to
remedy such act or omission shall have elapsed following receipt of such
notice. However, if such act or omission cannot, with due diligence and in
good faith, be remedied within such period or cannot be cured simply by the
payment of money, the Landlord and the mortgagee shall be allowed such further
period of time as may be reasonably necessary provided that it commences
remedying the same with due diligence and in good faith and thereafter
diligently prosecutes such cure, provided such cure period shall not extend
beyond 270 days after the notice of such default. Nothing herein contained
shall be construed or interpreted as requiring any mortgagee receiving such
notice to remedy such act or omission.
(c) Attornment. If any mortgagee shall succeed to the rights of
Landlord under this Lease or to ownership of the Premises, whether through
possession or foreclosure or the delivery of a deed to the Premises in lieu of
foreclosure, then such mortgagee shall automatically be deemed to have
recognized this Lease and to assume the obligations of Landlord hereunder
(including, without limitation, the provisions of paragraph 6 hereof) accruing
on and after the date such mortgagee acquired
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title to the Premises, and Tenant shall attorn to and recognize such
mortgagee as Tenant's landlord under this Lease and shall promptly execute and
deliver any instrument that such mortgagee may reasonably request to evidence
such attornment (whether before or after making of the Mortgage). In the event
of any other transfer of Landlord's interest hereunder, such transferee shall
automatically be deemed to have recognized this Lease and to assume the
obligations of Landlord hereunder accruing on and after the date of such
transfer, Tenant shall attorn to and recognize such transferee as Tenant's
landlord under this Lease and shall promptly execute and deliver any instrument
that such transferee and Landlord may reasonably request to evidence such
attornment.
(d) Upon twenty days' advance written notice, Tenant agrees to
execute, acknowledge and deliver a document consenting to the assignment by
Landlord of this Lease and the Rent to a Mortgagee in a form then in use among
institutional lenders, with such changes therein as may be reasonably requested
by the Mortgagee, provided no such document alters the rights of Tenant
hereunder.
18. LANDLORD'S RIGHT OF ENTRY: Upon reasonable notice, from time
to time during normal business hours, such persons as Landlord or any assignee
of Landlord shall designate shall have the right to enter upon the Premises and
to inspect same, exhibit the Premises to prospective purchasers and mortgagees,
and examine Tenant's books and records pertaining to the Premises, insurance
policies, certificates of occupancy and other documents, records and permits in
Tenant's possession with respect to the Premises, all of which shall be
customary and adequate and reasonably satisfactory to Landlord, provided,
however, that such activities by Landlord shall be conducted in such a manner
as not to interfere with the conduct of business by Tenant at the Premises. If
no Event of Default exists hereunder, any such inspections shall be at the
expense of Landlord. If an Event of Default exists hereunder, such inspections
shall be at the reasonable expense of Tenant. During the final 18 months of the
Term, Landlord shall be entitled to place customary "For Rent" or "For Sale"
signs on the Premises. Such persons as Landlord or any assignee of Landlord
shall designate shall also have the right, upon three business days' notice, to
enter upon the Premises for the purpose of making repairs which Landlord is
authorized to make under the provisions of this Lease.
19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the
other pursuant to this Lease or
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pursuant to any applicable law or requirement of public authority,
shall be in writing (whether or not so stated elsewhere in this Lease) and
shall be deemed to have been properly given, rendered or made, when received by
overnight delivery or overnight courier delivery or facsimile transmission
with a confirmation copy sent by overnight delivery or by overnight courier
delivery addressed to the other parties as follows:
To Landlord:
TriNet Essential Facilities X, Inc.
c/o TriNet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Tenant:
West Coast Liquidators, Inc.
2430 E. Del Amo Boulevard
Dominguez, California 90220
Attention: Vice President of Real Estate and Construction
With a copy to the Attention of the General Counsel
Any party listed in this paragraph 19 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.
20. STATUS OF LEASE; FINANCIAL DATA:
(a) Upon written request of either party, the other party
agrees, within twenty (20) days, to deliver a written status report of this
Lease, in the form provided on attached Exhibit C, provided that neither party
shall be obligated to provide more than four (4) such status reports per year.
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(b) Tenant agrees to deliver to Landlord and to any lender or
purchaser designated by Landlord copies of the Guarantor's Form 10K, 10Q and
Annual Report, promptly upon their filing with the Securities and Exchange
Commission. If Guarantor ceases to be a reporting company under the Securities
Exchange Act of 1934, Tenant shall deliver to Landlord and to any lender or
purchaser designated by Landlord the following information: within 120 days
after the end of each fiscal year of Guarantor, an audited balance sheet of
Guarantor and its consolidated subsidiaries as at the end of such year, an
audited statement of profits and losses of Guarantor and its consolidated
subsidiaries for such year, and an audited statement of cash flows of Guarantor
and its consolidated subsidiaries for such year, setting forth in each case, in
comparative form, the corresponding figures for the preceding fiscal year in
reasonable detail and scope and certified by independent certified public
accountants of recognized national standing selected by Guarantor; and within
60 days after the end of each of the first three fiscal quarters of Guarantor a
balance sheet of Guarantor and its consolidated subsidiaries as at the end of
such quarter, statements of profits and losses of Guarantor and its
consolidated subsidiaries for such quarter and a statement of cash flows of
Guarantor and its consolidated subsidiaries for such quarter, setting forth in
each case, in comparative form, the corresponding figures for the similar
quarter of the preceding year, in reasonable detail and scope, and certified to
be true and complete by a financial officer of Guarantor having knowledge
thereof; the foregoing financial statements all being prepared in accordance
with generally accepted accounting principles, consistently applied.
(c) Upon ten (10) days' prior notice, Tenant will permit
Landlord and its professional representatives to visit Tenant's offices, at
Landlord's expense, and discuss Tenant's affairs and finances (insofar as they
relate to the Premises or this Lease) with appropriate officers, and will make
available such information as Landlord may reasonably request bearing on the
Tenant, Premises or this Lease, provided that Tenant shall not be required to
disclose information in violation of federal securities laws.
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21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or
permit any mechanic's lien or other lien to be filed or recorded against the
Premises, equipment or materials supplied or claimed to have been supplied to
the Premises at the request of Tenant, or anyone holding the Premises, or any
portion thereof, through or under Tenant. If any such mechanic's lien or other
lien shall at any time be filed or recorded against the Premises, or any
portion thereof, Tenant shall cause the same to be discharged of record within
thirty (30) days after the date of filing or recording of the same. However,
in the event Tenant desires to contest the validity of any lien it shall (i) on
or before thirty (30) days prior to the due date thereof (but in no
event later than 30 days after the filing or recording thereof), notify
Landlord, in writing, that Tenant intends to so contest same; (ii) on or before
the due date thereof, if Tenant's tangible net worth, determined in accordance
with generally accepted accounting principles, is less than $100,000,000, or if
such lien involves an amount in excess of 1/4 of 1% of Tenant's tangible net
worth so determined and any Mortgagee so requires, deposit with Landlord
security (in form and content reasonably satisfactory to Landlord or Mortgagee)
for the payment of the full amount of such lien and, from time to time, deposit
additional security or indemnity so that, at all times, adequate security or
indemnity will be available for the payment of the full amount of the lien
together with all interest, penalties, costs and charges accrued or accumulated
thereon.
If Tenant complies with the foregoing, and Tenant continues, in good
faith, to contest the validity of such lien by appropriate legal proceedings
which shall operate to prevent the collection thereof and the sale or
forfeiture of the Premises, or any part thereof, to satisfy the same, Tenant
shall be under no obligation to pay such lien until such time as the same has
been decreed, by court order, to be a valid lien on the Premises. Any surplus
deposit retained by Landlord, after the payment of the lien shall be repaid to
Tenant. Provided that nonpayment of such lien does not cause Landlord to be in
violation of any of its contractual undertakings, Landlord agrees not to pay
such lien during the period of Tenant's contest. However, if Landlord pays for
the discharge of a lien or any part thereof from funds of Landlord, any amount
paid by Landlord, together with all costs, fees and expenses in connection
therewith (including reasonable attorney's fees of Landlord), together with
interest thereon at the Overdue Rate, shall be repaid by Tenant to Landlord on
demand by Landlord. Tenant shall
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indemnify and defend Landlord against and save Landlord and the
Premises, and any portion thereof, harmless from and against all losses, costs,
damages, expenses, liabilities, suits, penalties, claims, demands and
obligations, including, without limitation, reasonable attorney's fees,
resulting from the assertion, filing, foreclosure or other legal proceedings
with respect to any such mechanic's lien or other lien or the attempt by Tenant
to discharge same as above provided.
(b) All materialmen, contractors, artisans, engineers, mechanics,
laborers and any other Person now or hereafter furnishing any labor, services,
materials, supplies or equipment to Tenant with respect to the Premises, or any
portion thereof, are hereby charged with notice that they must look
exclusively to Tenant to obtain payment for the same. Notice is hereby given
that Landlord shall not be liable for any labor, services, materials, supplies,
skill, machinery, fixtures or equipment furnished or to be furnished to Tenant
upon credit, and that no mechanic's lien or other lien for any such labor,
services, materials, supplies, machinery, fixtures or equipment shall attach to
or affect the estate or interest of Landlord in and to the Premises, or any
portion thereof.
(c) Tenant shall not create, permit or suffer, and, subject to the
provisions of paragraph 21(a) hereof, shall promptly discharge and satisfy of
record, any other lien, encumbrance, charge, security interest, or other right
or interest which, as a result of Tenant's action or inaction contrary to the
provisions hereof, shall be or become a lien, encumbrance, charge or security
interest upon the Premises, or any portion thereof, or the income therefrom,
other than Permitted Encumbrances.
22. END OF TERM: (a) Upon the expiration or earlier termination of
the Term of this Lease, Tenant shall surrender the Premises to Landlord in the
same condition and suitable for the same use in which the Premises was
originally received from Landlord except as repaired, rebuilt or altered as
required or permitted by this Lease, and subject to normal wear and tear
consistent with the maintenance required by paragraph 8 hereof and shall
surrender all keys to the Premises to Landlord at the place then fixed for
notices to Landlord and shall inform Landlord of all combinations on locks,
safes and vaults, if any. Except as otherwise provided herein, Tenant shall at
such time remove all of its property (including Tenant's Trade Fixtures)
therefrom and all alterations and improvements placed thereon by Tenant and not
consented to by Landlord, if so requested by Landlord. Tenant shall repair any
damage to the Premises caused
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by such removal, and any and all such property not so removed when
required shall, at Landlord's option, become the exclusive property of Landlord
or be disposed of by Landlord, at Tenant's cost and expense, without further
notice to or demand upon Tenant. Notwithstanding the foregoing, Tenant shall
have no obligation to surrender any of Tenant's Trade Fixtures or any
Incidental Equipment.
(b) If the Premises are not surrendered as above set forth,
Tenant shall indemnify, defend and hold Landlord harmless from and against loss
or liability resulting from the delay by Tenant in so surrendering Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this Lease. In addition to the
foregoing, and in addition to the Additional Rent, Tenant shall pay to Landlord
a sum equal to 150% of the Fixed Rent herein provided during each month or
portion thereof for which Tenant shall remain in possession of the Premises or
any part thereof after the termination of the Term or of Tenant's rights of
possession, whether by lapse of time or otherwise. The provisions of this
paragraph 22(b) shall not be deemed to limit or constitute a waiver of any
other rights or remedies of Landlord provided herein at law or at equity.
(c) All property of Tenant not removed on or before the last
day of the Term of this Lease shall be deemed abandoned. Tenant hereby appoints
Landlord its agent to remove all property of Tenant, including Tenant's Trade
Fixtures, from the Premises upon termination of this Lease and to cause its
transportation and storage for Tenant's benefit, all at the sole cost and risk
of Tenant and Landlord shall not be liable for damage, theft, misappropriation
or loss thereof and Landlord shall not be liable in any manner in respect
thereto. Tenant shall pay all costs and expenses of such removal,
transportation and storage. Tenant shall reimburse Landlord upon demand for
any expenses reasonably and actually incurred by Landlord with respect to
removal or storage of abandoned property and with respect to restoring said
Premises to good order, condition and repair.
(d) Except for surrender upon the expiration or earlier
termination of the Term hereof, no surrender to Landlord of this Lease or of
the Leased Property shall be valid or effective unless agreed to and accepted
in writing by Landlord.
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23. ALTERATIONS:
(a) At any time during the Term of this Lease, Tenant shall
have the right to make alterations in and to the Premises, provided such
alterations are in compliance with all applicable codes, laws, ordinances,
rules and regulations, and do not materially reduce the then unencumbered fair
market value of the Premises or cause the Premises to violate any terms of the
Master Lease, this Lease or compromise the structural integrity of the
Improvements.
(b) Prior to making any structural alteration the cost of which
is estimated to exceed $500,000 (increased from the Commencement Date by a
dollar amount equivalent to the product of the percentage increase in the CPI
and $500,000), Tenant shall submit to Landlord a plan showing the nature and
extent of such alterations and shall not proceed with such alterations without
Landlord's written consent, which shall not be unreasonably withheld or
delayed. If Landlord has not responded to such plan after 15 days, Tenant may
then send a second notice to Landlord prominently stating that the Landlord's
failure to object to the proposed plans within 5 business days after receipt of
such second notice shall be deemed Landlord's consent thereto.
24. MEMORANDUM OF LEASE: The parties agree to promptly execute a
Memorandum of Lease in recordable form and either of the parties shall have the
right, without notice to the other party, to record such Memorandum of Lease.
25. SUBLETTING/ASSIGNMENT: (a) Tenant shall have the right to
sublease all or any part of the Premises or assign its interest hereunder,
without Landlord's consent, provided that Tenant shall remain primarily liable
under this Lease without regard to any sublease or assignment, and provided
further that any profit realized upon subletting or assignment shall be the
property of Tenant. Tenant shall not mortgage its interest hereunder and any
purported mortgage thereof shall be void. Tenant may request that Landlord
enter into a non-disturbance, attornment and recognition agreement with any
such assignee or subtenant, and Landlord agrees to consider such request in
good faith, although Landlord may at its sole discretion agree or refuse to
agree to enter into such agreement with any assignee or subtenant.
(b) Tenant shall have a one-time right to assign its interest
under this Lease and be relieved of all liability accruing hereunder after such
assignment, provided (1) the
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assignee delivers a written assumption of all of Tenant's obligations
hereunder, and (ii) the assignee both (x) has a tangible net worth, determined
in accordance with generally accepted accounting principles, of at least
$100,000,000, and (y) has a Standard and Poor's Corporation BBB- and Moody's
Investors Services Baa rating (or better) on its debt.
26. HAZARDOUS MATERIAL:
(a) Tenant (i) shall comply, and cause the Premises to comply,
with all Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required
by Environmental Laws and the carrying out of any remediation program specified
by such authority), (ii) shall prohibit the use of the Premises for the
generation, manufacture, refinement, production, or processing of any
Hazardous Material (as hereinafter defined) or for the storage,
handling, transfer or transportation of any Hazardous Material (other
than in connection with the operation, business and maintenance of the Premises
and in commercially reasonable quantities as a consumer thereof and supplier of
consumer products and in compliance with Environmental Laws), (iii) shall not
permit to remain, install or permit the installation on the Premises of any
surface impoundments, underground storage tanks, or asbestos-containing
materials, except for such impoundments, tanks and asbestos containing material
as was on the Premises at the Commencement Date as disclosed to Landlord by an
environmental engineer's written report, provided such pre-existing items
continue to be in compliance with applicable laws and, to the extent required
by Paragraph 22, removed at the end of the Term, and (iv) shall cause any
alterations of the Premises to be done in a way so as to not expose in an
unsafe manner the persons working on or visiting the Premises to Hazardous
Materials and in connection with any such alterations shall remove any
Hazardous Materials present upon the Premises which are not in compliance with
Environmental Laws or which present a danger to persons working on or visiting
the Premises.
(b) "Environmental Laws" means the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Sections 6901, et seq. (RCRA),
the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. Section Section 9601 et seq. (CERCLA), the Toxic Substance
Control Act, as amended, 15 U.S.C. Sections 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. Sections 136
et
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seq., and all applicable federal, state and local environmental laws,
ordinances, rules and regulations, as any of the foregoing may have been or may
be from time to time amended, supplemented or supplanted, and any other
federal, state or local laws, ordinances, rules and regulations, now or
hereafter existing relating to regulations or control of Hazardous Material or
materials. The term "Hazardous Materials" as used in this Lease shall mean
substances defined as "hazardous substances", "hazardous materials", "hazardous
wastes" or "toxic substances" in any applicable federal, state or local
statute, rule, regulation or determination, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource,
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq.; and,
asbestos, pcb's, radioactive substances, methane, volatile hydrocarbons,
petroleum or petroleum-derived substances or wastes, radon, industrial solvents
or any other material as may be specified in applicable law or regulations.
(c) Except to the extent of liability resulting from or
arising out of the negligent or willful act of Landlord or its Mortgagee or
their agents or their successors and assigns on or about the Premises, Tenant
agrees to protect, defend, indemnify and hold harmless Landlord, its directors,
officers, employees and agents, and any successors to Landlord's interest in
the chain of title to the Premises, their direct or indirect partners,
directors, officers, employees, and agents, from and against any and all
liability, including all foreseeable and all unforeseeable damages including
but not limited to attorney's and consultant's fees, fines, penalties and civil
or criminal damages, directly or indirectly arising out of the use, generation,
storage, treatment, release, threatened release, presence or disposal of
Hazardous Materials from, on, at, to or under the Premises prior to or during
the Term of this Lease, and including, without limitation, the cost of any
required or necessary repair, response action, remediation, investigation,
cleanup or detoxification and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following
transfer of title to the Premises. This agreement to indemnify and hold
harmless shall be in addition to any other obligations or liabilities Tenant
may have to Landlord at common law under all statutes and ordinances or
otherwise, and shall survive following the date of expiration or earlier
termination of this Lease for five years, except where the event giving rise to
the liability for which indemnity is sought arises out of Tenant's acts, in
which case the agreement
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to indemnify shall survive the expiration or termination of this Lease
without limit of time. Tenant expressly agrees that the representations,
warranties and covenants made and the indemnities stated in this Lease are not
personal to Landlord, and the benefits under this Lease may be assigned to
subsequent parties in interest to the chain of title to the Premises, which
subsequent parties in interest may proceed directly against Tenant to recover
pursuant to this Lease. Tenant, at its expense, may institute appropriate
legal proceedings with respect to environmental matters of the type specified
in this paragraph 26(c) or lien for such environmental matters, not involving
Landlord or its Mortgagee as a defendant (unless Landlord or its mortgagee is
the alleged cause of the damage), conducted in good faith and with due
diligence, provided that such proceedings shall not in any way impair the
interests of Landlord or its mortgagee under this Lease or contravene the
provisions of any first mortgage. Counsel to Tenant in such proceedings shall
be reasonably approved by Landlord if Landlord is a defendant in the same
proceeding. Landlord shall have the right to appoint co-counsel, which
co-counsel will cooperate with Tenant's counsel in such proceedings. The fees
and expenses of such co-counsel shall be paid by Landlord, unless such
co-counsel are appointed because the interests of Landlord and Tenant in such
proceedings, in such counsel's opinion, are or have become adverse, or Tenant
or Tenant's counsel is not conducting such proceedings in good faith or with
due diligence.
(d) Tenant, promptly upon the written request of Landlord from
time to time, but not more than once in any calendar year unless an Event of
Default has occurred and is continuing, shall permit such persons as Landlord
or any assignee of Landlord may designate and (unless an Event of Default has
occurred and is continuing) approved by Tenant, which approval shall not be
unreasonably withheld or delayed ("Site Reviewers") to visit the Premises from
time to time and perform Environmental site investigations and assessments
("Site Assessments") on the Premises for the purpose of determining whether
there exists on the Premises any environmental condition which may result in
any liability, cost or expense to Landlord or any other owner or occupier of
the Premises relating to Hazardous Material. Such Site Assessments may include
both above and below the ground testing for environmental damage or the
presence of Hazardous Material on the Premises and such other tests on the
Premises as may be necessary to conduct the Site Assessments in the reasonable
opinion of the Site Reviewers. Tenant shall supply to the Site Reviewers such
historical and operational information regarding the Premises as may be
reasonably requested
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by the Site Reviewers to facilitate the Site Assessments (other than
information previously supplied in writing to Landlord by Tenant) and
shall make available for meetings with the Site Reviewers appropriate personnel
having knowledge of such matters. The cost of performing and reporting all
Site Assessments shall be paid by Landlord unless an Event of Default has
occurred and is continuing or unless the Site Reviewers discover an
environmental condition causing the Premises to be in noncompliance with
applicable Environmental Laws, in either of which events such cost will be paid
by Tenant within thirty (30) days after demand by Landlord with interest to
accrue at the Overdue Rate. Landlord, promptly after written request by Tenant
and payment by Tenant to the extent required as aforesaid, shall deliver to
Tenant copies of reports, summaries or other compilations of the results of
such Site Assessments. Tenant's sole remedy for Landlord's breach of the
preceding sentence shall be a mandatory injunction, and not a termination of
this Lease or a withholding or reduction of rent. If a Site Assessment
conducted under this paragraph 26(d) indicates that the Premises are in
violation of Environmental Laws or otherwise do not conform to the requirements
of this paragraph 26 at the time the Term is expiring or being terminated, the
term shall be automatically extended for the period of remediation of such
violation or nonconformity. All of the terms, covenants and conditions of this
Lease shall continue in full force and effect during the period of any such
extension, except that the annual Fixed Rent shall be the fair market rental
for the Premises assuming no such violation or nonconformity has occurred.
Such fair market rental shall be mutually agreed upon by the Landlord and
Tenant. In the event that the Landlord and Tenant are unable in good faith to
agree on such fair market rental, the annual Fixed Rent during the period of
any such extension shall be determined by an independent appraiser chosen
jointly by Landlord and Tenant without regard to any remaining Renewal Term.
Upon completion of such remediation, Landlord shall either purchase the fee
title to the Land in accordance with paragraph 28(b) and Tenant shall make the
payments contemplated thereby or, if Landlord does not exercise such right
within 60 days after completion of remediation, this Lease and the obligations
of Tenant hereunder (except those that accrued prior to such date) shall
terminate.
E. Tenant shall notify Landlord in writing, promptly upon
Tenant's learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be
liable to any Person as a result of the release or
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threatened release of any Hazardous Material into the environment from
the Premises;
(b) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Material into the
environment from the Premises;
(c) notice that the Premises is subject to an environmental
lien; and
(d) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could have a material adverse effect upon the
Premises.
27. LANDLORD'S RIGHT TO REQUIRE PURCHASE:
(a) If Guarantor's tangible net worth, determined in
accordance with generally accepted accounting principles, shall fall below
$100,000,000, Landlord shall have the right until a financial statement
delivered pursuant to paragraph 20(b) shows such tangible net worth to be in
excess of $100,000,000, to require Tenant to purchase the Premises on 90 days'
notice for a price equal to the greater of (x) the value (determined as
described in paragraph 27(b) below) of the Premises and, if applicable, Land
considered as encumbered by this Lease calculated on the basis of the value of
future rent and future residual value (as opposed to the basis of comparable
sales or replacement cost) and adjusted upward by any transfer tax, brokerage
commission, title insurance premium or other closing costs paid by Landlord in
connection with its acquisition of fee title to the Land or (y) the sum of the
Purchase Price specified in the Basic Lease Information plus any premium
payable to the holder of a mortgage on the Premises upon the prepayment of such
mortgage plus Landlord's reasonable out-of-pocket expenses incurred in
connection with such transfer. Landlord shall convey the Premises to Tenant by
special warranty deed, free of liens and encumbrances (except those existing on
the Commencement Date or thereafter created with the written consent of the
Tenant, but excluding encumbrances created by Landlord securing the repayment
of borrowed money). The Tenant shall be responsible for all costs including
transfer taxes and recording fees, in connection with the transfer of the
Premises.
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(b) The value described in paragraph 27(a) above shall be
determined by an appraisal, which shall be performed by an appraiser selected
by Landlord and paid by Tenant. Any appraiser selected by Landlord shall have
qualifications that include a minimum of five (5) years of experience in the
appraisal of industrial real estate in the City of New Orleans and shall use
the methodology described in paragraph 27(a) above to calculate "value". He
shall be disinterested, and shall be a member of a nationally recognized
appraisal association. Further, any such appraiser shall comply with the
Louisiana licensing law then in effect for appraisers authorized to perform
general appraisals within the State of Louisiana. If there are then any
existing United States laws governing appraisers, said appraiser shall be in
compliance with the then applicable Federal laws for appraisers performing
appraisals of industrial real estate. In the event that Tenant disputes an
appraised value determined by an appraiser (hereinafter the "First Appraiser"),
who performed an appraisal pursuant to this paragraph 27, it shall so notify
Lessee within five (5) days after receipt of such written determination by the
First Appraiser, and the disagreement shall be resolved as follows:
(i) Within five (5) days after the service of such
notice by Tenant to Landlord, Tenant shall designate a second
appraiser (the "Second Appraiser"), who shall appraise the
Premises in accordance with the requirements of this paragraph
27. This Second Appraiser shall render his opinion of the
appraised value no later than thirty (30) days after the
service of notice by Tenant stated above. In the event that
the higher of the two appraised values rendered herein is not
more than ten percent (10%) greater than the lower of the two
appraised values, then the mean between the two appraised
values shall be utilized to fix the appraised value.
(ii) In the event that the higher of the two appraised
values is more than ten percent (10%) higher than the lower of
the two appraised values, then the First Appraiser and the
Second Appraiser will meet within five (5) days after receipt
and acceptance of the Second Appraisal by Tenant, to attempt to
agree upon the appraised value. If the First Appraiser and
Second Appraiser do not agree upon the appraised value after
such meeting, then they shall appoint a third appraiser (the
"Third Appraiser").
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(iii) If the First and Second Appraiser shall be unable
to agree upon the appointment of the Third Appraiser within
five (5) days after the time specified in subsection "B" above,
then the Third Appraiser shall be selected by the Tenant and
Landlord themselves. If the Tenant and Landlord cannot agree
thereon, within a further period of five (5) days, then either,
on behalf of both, may apply to the person who is, at the time,
the most senior in service, active Judge of the United States
District Court for the Eastern District of Louisiana, for the
selection of the Third Appraiser. If that Judge cannot or will
not make the appointment, then the application will be made to
the next most senior Judge, and so on down the line of
seniority. The fees and costs of the Second Appraiser will be
borne by Tenant, and the fees and costs of the Third Appraiser,
will be divided equally between Tenant and Landlord.
The cost of application to the Judge of the United States
District Court shall be divided equally between Tenant
and Landlord. In the event of the failure, refusal or
inability of any appraiser to act, a new appraiser
shall be appointed in his stead, which appointment shall be
made in the same manner as provided herein; e.g., if the Second
Appraiser must be replaced, then Tenant will have the right to
designate his replacement. In the event that a Third Appraiser
is selected in the manner aforesaid, he shall perform an
appraisal of the Premises in accordance with the terms of this
paragraph 27 within thirty (30) days after his appointment. In
the event that the appraised value rendered by the Third
Appraiser is higher than the lower appraised value, but lower
than the higher appraised value, as rendered by the First
Appraiser and the Second Appraiser, then the appraised value
rendered by the Third Appraiser shall become the appraised
value. In the event that the appraised value rendered by the
Third Appraiser is lower than the lower appraised value or
higher than the higher appraised value, as rendered by the
First Appraiser and Second Appraiser, then an Appraisal Panel
shall be convened.
The "Appraisal Panel," consisting of the First, Second and Third
Appraisers, shall convene within (5) days after submission of a written
appraisal to Landlord and Tenant by the Third Appraiser (which Third Appraisal
does not resolve the appraised value question in accordance with this paragraph
27). The purpose of the formation of the Appraisal Panel will be to
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attempt to reach a decision by two members of the Appraisal Panel on
the appraised value. A decision joined in by any two of the appraisers of the
Appraisal Panel shall be the decision of the Appraisal Panel, and shall be
binding upon the parties hereto. If no two members of the Appraisal Panel can
concur in a decision of the appraised value within ten (10) days after the
submission of the appraisal by the Third Appraiser to the parties, then the
parties shall go to a neutral arbitrator for arbitration. If the Appraisal
Panel is able to concur upon a decision for the appraised value, then written
notice thereof shall be given to the parties hereto, which notice shall state
the appraised value of the Premises.
28. LANDLORD'S ACQUISITION OF FEE TITLE TO THE PREMISES
(a) If at any time Landlord wishes to continue the term of the
Master Lease beyond the Term of this Lease, then Landlord shall purchase
the fee title to the Land and the Improvements thereon in accordance with
the Master Lease.
(b) Whenever Landlord acquires title to the Land in accordance
with subparagraph (a) above or otherwise in accordance with the Master Lease,
it is agreed that Landlord shall pay the purchase price described in Section
9.1 A, B, and C of the Master Lease or Section 9.2 A, B and C of the Master
Lease. It is agreed the Tenant shall simultaneously pay the outstanding amount
of the "Bonds" (as defined in the Master Lease), pursuant to Section 9.1 D or
9.2 D of the Master Lease, as the case may be. Landlord will give 60 days'
notice to Tenant of its intended acquisition of fee title to the Land. If
Tenant fails to retire the Bonds, Landlord shall have the right to retire them
and Tenant shall thereupon owe the sum paid by Landlord to retire the Bonds as
Additional Rent hereunder. In the alternative, if Tenant fails to retire the
Bonds, Landlord shall have the right to rescind its proposed acquisition of the
Land, and any guarantees of the Bonds or the Master Lease by Tenant or any of
its affiliates shall continue.
29. MISCELLANEOUS PROVISIONS:
(a) This Lease and all of the covenants and provisions hereof
shall inure to the benefit of, and be binding upon, the parties hereto and the
heirs, personal representatives, successors and assigns of the parties.
(b) The titles and headings appearing in this Lease are for
reference only and shall not be considered a part of this
-50-
56
lease or in any way to modify, amend or affect the provisions thereof.
(c) This Lease contains the complete agreement of the parties
with reference to the leasing of the Premises.
(d) Any provision or provisions of this Lease which shall
prove to be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof, and the remaining provisions hereof
shall nevertheless remain in full force and effect.
(e) This Lease may be executed in one or more counterparts,
each of which shall be an original, and all of which shall constitute one and
same instrument.
(f) The term "Landlord" as used in this Lease shall mean only
the owner or owners at the time in question of the leasehold interest created
by the Master Lease (or, if the Master Lease no longer exists, the owner of the
fee interest in the Premises) and in the event of any transfer of such title or
interest, Landlord named in this Lease (and in case of any subsequent
transfers, then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed hereunder, provided that any funds in the hands of Landlord or the
then grantor at the time of such transfer, in which Tenant has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to
be performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns, only during their respective periods of ownership.
(g) This Lease shall be governed by and construed and enforced
in accordance with and subject to the laws of the State of Louisiana.
(h) Any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Premises and not
against any other assets, properties or funds of (1) Landlord or any director,
officer, shareholder, general partner, limited partner, or direct or indirect
partners, employee or agent of Landlord or its general partners (or any legal
representative, heir, estate, successor or assign of any thereof), (2) any
predecessor or successor partnership or corporation (or other entity) of
Landlord or its general partners, either directly or through Landlord or its
predecessor
-51-
57
or successor partnership or corporation (or other Person) of Landlord or
its general partners, and (3) any other person.
(i) Without the written approval of Landlord and Tenant, no
Person other than Landlord (including its direct and indirect partners),
Mortgagee, Tenant and their respective successors and assigns shall have any
rights under this Lease.
(j) There shall be no merger of the leasehold estate created
hereby by reason of the fact that the same Person may own directly or
indirectly, (1) the leasehold estate created hereby or any interest in this
Lease or such leasehold estate, (2) the leasehold interest created by the
Master Lease and/or (3) the fee estate in the Premises. Notwithstanding any
such combined ownership, this Lease shall continue in full force and effect
until terminated by an instrument executed by both Landlord and Tenant.
-52-
58
IN WITNESS WHEREOF, the parties have hereunto set their hands under
seal on the day and year first above written.
TRINET ESSENTIAL FACILITIES X, INC.
Landlord
By: MARK S. WHITING
-----------------------------
Name: Mark S. Whiting
Title: President
By: CHARLES S. SWANSON
-----------------------------
Name: Charles S. Swanson
Title: Senior Vice President
WEST COAST LIQUIDATORS, INC.
Tenant
By: LEONARD S. WILLIAMS
-----------------------------
Name: Leonard S. Williams
Title: President
By: PHILIP L. CARTER
-----------------------------
Name: Philip L. Carter
Title: Senior Vice President
and Chief Financial Officer
59
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
BE IT KNOWN that on this 24th day of September, 1993, before me, the
undersigned Notary Public, personally came and appeared Mark S. Whiting,
____________ ____________ to me personally known, and after being by me duly
sworn, did depose and say that he is the President of TriNet Essential
Facilities X, Inc. ____________ and that the seal affixed to the foregoing
Lease Agreement is the corporate seal of said corporation, that they signed and
sealed said document on behalf of the corporation by authority of its Board of
Directors, as the free act and deed of the corporation, for the uses and
purposes therein set forth.
XENIA M. TAN
-----------------------------------
Notary Public
My Commission Expires:
Feb. 28, 1994
[OFFICIAL SEAL]
60
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
BE IT KNOWN that on this 28th day of September, 1993, before me, the
undersigned Notary Public, personally came and appeared Philip L. Carter and
Leonard S. Williams, to me personally known, and after being by me duly sworn,
did depose and say that they are the Chief Financial Officer and the Chief
Executive Officer, respectively, of West Coast Liquidators, Inc. and that the
seal affixed to the foregoing Lease Agreement is the corporate seal of said
corporation, that they signed and sealed said document on behalf of the
corporation by authority of its Board of Directors, as the free act and deed of
the corporation, for the uses and purposes therein set forth.
KAY L. DUKEMAN
------------------------------
Notary Public
My Commission Expires:
6-11-97
- - ------------------------------
[OFFICIAL SEAL]
61
EXHIBIT A
LEGAL
DESCRIPTION
All that certain tract or parcel of land being located in the Third Municipal
District, City of New Orleans, Section 39 of Township 12 South, Range 12 East,
Southeastern District of Louisiana, as per plan of resubdivision prepared by
Fromherz Engineers, Inc., Dwg. No. WCL1, dated August 15, 1988, approved by the
City Planning Commission on October 4, 1988, subdivision Docket No. 68/88,
registered as Declaration of Title Change on November 1, 1988, COB 823-D, folio
243 identified as Lot PS 1, according to a survey by Fromherz Engineers, Inc.,
Drawing No. WCL1B, dated June 8, 1993, and is more particularly described as
follows:
Commencing at the intersection of the eastern right-of-way line of Jourdan Road
South (formerly the eastern boundary line of the Industrial Canal Reservation)
with the southern right-of-way line of Almonaster Avenue extension; thence
S16'10'30"E, along the eastern right-of-way of Jourdan Road South, for a
distance of 200.83' to a point, said point being the point of beginning.
Thence, from said point of beginning S86'07'08"E for a distance of 2194.11' to
a point of curve; thence along a curve to the right, having a radius of
322.17', for an arc distance of 401.15' to a point of tangency; thence
S14'46'35"E for a distance of 833.85 to a point located on the north line of
the Board of Commissioners Port of New Orleans property; thence along a
non-tangent curve to the left, having a radius of 5780.65', for an arc distance
of 109.83' to a point of tangency; thence S73'49'30"W along the north line of
the Board of Commissioners Port of New Orleans property, for a distance of
1562.67' to a point of curve; thence along a curve to the right having a radius
of 664.18' for an arc distance of 704.81' to a point located on the eastern
right-of-way of Jourdan Road South; thence N16'10'30"W for a distance of 61.49'
to a point; thence, continuing along the eastern right-of-way of Jourdan Road
South, N16'10'30"W for a distance of 1493.85' to a point, said point being the
point of beginning.
The above described tract or parcel of land comprises a portion of the ground
formerly designated as lot PS, including any and all servitudes, appurtenances
and advantages thereunto belonging, and is designated as lot PS1, containing
75.533 acres, all as is more fully shown on the drawing number WCL1B by
Fromherz Engineers, Inc., dated June 8, 1993.
62
Together with all improvements located thereon and all rights, ways,
privileges, and servitudes thereunto belonging or appertaining; and
Together with those "Incorporeal Rights" created as follows:
1. COB 856, folio 479, N.A. No. 874450 - Grant of Servitude of
Passage and Right of Use by the Sewerage and Water Board of New Orleans in
favor of West Coast Liquidators dated March 29, 1990 creating a cross-over of
Lot PS2.
2. COI No. 28404, N.A. No. 866084 - Switch Track Agreement between
the New Orleans Public Belt Railroad Commission and West Coast Liquidators,
Ltd. as created by Agreement dated September 27, 1990 and filed November 2,
1990.
3. COB 855, folio 243-245, COI No. 30531, N.A. No. 872064 -
Railroad Crossing Agreement between Public Belt Railroad Commission for the
City of New Orleans and West Coast Liquidators, Inc. dated May 10, 1989.
63
EXHIBIT B Page 1 of 2
WEST COAST LIQUIDATORS, INC. RUN DATE: 28-Sep.-93
N.O.D.C. NET BOOK VALUE REPORT TIME: 10:39 AM
FOR THE SEVEN MONTHS ENDING AUGUST 1993 PREP BY: TENEROWICZ
===============================================================================================================
PROP
SYS NO LOC CL UNIT ASSET DESCRIPTION VENDOR NAME NET BOOK VALUE
- - ----------------------------------------------------------------------------------------------------------------
1901 B 1015 Parking, paving curbs 1,585,674.60
1901 B 1025 Landscaping 91,411.06
1901 B 1030 Site utilities 737,215.68
1901 B 1040 Guard house 11,987.97
1901 B 1050 Fencing 29,384.42
1901 B 1200 Foundation and floors 3,594,833.53
1901 B 1201 Piles 473,756.08
1901 B 1210 Structural framing 4,172,747.76
1901 B 1220 Exterior walls 982,348.10
1901 B 1230 Roofing and waterproofing 1,185,956.69
1901 B 1240 Doors, windows, glazing 234,029.98
1901 B 1250 Interior partitions 237,960.53
1901 B 1260 Interior finishes 301,460.60
1901 B 1500 Fire protection services 860,731.48
1901 B 1700 HVAC 885,095.36
1901 B 1800 Electrical 648,910.56
1901 B 2000 Elevators 13,809.96
172 1901 B 9999 Alarm system 12,797.24
168 1901 B 9999 Contractors fee Broadmoor Corporatio 5,913.26
180 1901 B 9999 Valuation adjustment F.N.D. Electronics (159.30)
174 1901 B 9999 Alarm system Simplex Time Recorde 2,643.03
179 1901 B 9999 Sales use tax refund State of Louisiana (95,182.86)
170 1901 B 9999 Valuation Research 1,351.06
--------------
B TOTAL BUILDING (13200) 15,974,676.79
--------------
264 1901 BI 9999 F.N.D. Electronics 355.49
266 1901 BI 9999 F.N.D. Electronics 535.26
268 1901 BI 9999 F.N.D. Electronics 416.46
270 1901 BI 9999 F.N.D. Electronics 499.49
272 1901 BI 9999 F.N.D. Electronics 146.51
274 1901 BI 9999 Install frost proof hose KAM Mechanical Contr 3,711.79
276 1901 BI 9999 Install cable to guard sh F.N.D. Electronics 908.02
278 1901 BI 9999 Install sunshields, prog F.N.D. Electronics 1,239.22
280 1901 BI 9999 Install key locks and cable, reprog F.N.D. Electronics 292.28
3828 1901 BI 9999 Payless Equipment 179.39
3829 1901 BI 9999 Bartolo Supply 11,561.80
-------------
BI TOTAL BUILDING IMPROVEMENTS (13220) 19,845.71
-------------
64
EXHIBIT B Page 2 of 2
WEST COAST LIQUIDATORS, INC. RUN DATE: 28-Sep.-93
N.O.D.C. NET BOOK VALUE REPORT TIME: 10:39 AM
FOR THE SEVEN MONTHS ENDING AUGUST 1993 PREP BY: TENEROWICZ
===============================================================================================================
PROP
SYS NO LOC CL UNIT ASSET DESCRIPTION VENDOR NAME NET BOOK VALUE
- - ----------------------------------------------------------------------------------------------------------------
1901 DE 3000 Restroom accessories 5,585.99
1901 DE 3001 Restroom accessories 7,294.51
1901 DE 3003 Mirrors 2,470.31
1901 DE 3005 Signs and sign hook-ups 6,002.84
1901 DE 3015 Splash blocks 676.25
1901 DE 3035 Exit directional signs 9,418.95
1901 DE 3085 Exterior wall wash 19,757.39
1901 DE 4040 Carpeting 33,565.58
1901 DE 4045 Cabinets, counters, shelves 40,406.38
1901 DE 4050 Small item protections 1,152.35
1901 DE 4080 Public address system 95,505.58
--------------
DE TOTAL OFFICE EQUIPMENT (12800) 221,836.13
--------------
1901 WE 3020 Railroad siding and access 10,245.94
1901 WE 3030 Control gates 5,979.54
1901 WE 3060 Conveyor and accessories 1,338,732.72
1901 WE 3065 Rack and accessories 3,137,576.48
1901 WE 4000 Door lift connections 55,211.63
-------------
WE TOTAL WAREHOUSE EQUIPMENT (13110) 4,547,746.31
-------------
TOTAL N.O.D.C. 20,764,104.94
=============
65
EXHIBIT C
STATUS REPORT
The undersigned, __________________________, a ____________ corporation is the
___________________ under a Lease Agreement (the "Lease"), dated as of
September 25, 1993, between West Coast Liquidators, Inc., a California
corporation, (the "Tenant") and TriNet Essential Facilities X, Inc., a Maryland
corporation, as landlord (the "Landlord") of certain real property located on
Jourdan Road in New Orleans, Louisiana as described on attached Exhibit A (the
"Land Parcel"). Capitalized terms used but not defined herein shall have the
same meanings ascribed to them in the Lease. The undersigned hereby represents
and certifies as follows:
1. The Lease constitutes the entire agreement between the
parties with respect to the demise of the Premises and is in full force and
effect and has not been modified, supplemented, canceled or amended in any
respect.
2. The term of the Lease commenced on October 4, 1993 and ends
on September 30, 2009. The Lease provides Tenant the right to extend the term
of the Lease for two (2) renewal terms, the first of which extends the Initial
Term for two (2) years and the second of which extends the Initial Term for an
additional ten (10) years. The Tenant is currently obligated to pay Fixed Rent
in monthly installments in an amount equal to $____________ per month, which
Fixed Rent obligation is continuing and is not past due or delinquent in any
respect. No payment of Fixed Rent has been prepaid more than one month in
advance.
3. No event has occurred or is continuing which would
constitute a default by either the Tenant or Landlord under the Lease or would
constitute such a default but for the requirement that notice be given or that
a period of time elapse or both. No offset exists with respect to any Rent or
other sums payable or to become payable by the Tenant under the Lease.
66
IN WITNESS WHEREOF, this Certificate has been duly executed and
delivered by the authorized officers of the undersigned as of _______________
___, ______.
_________________________________
By: ____________________________
Name:
Title:
67
EXHIBIT D
PERMITTED ENCUMBRANCES
1. General and special taxes or assessments for 1994 and subsequent
years not yet due and payable, as modified by the Payment in Lieu of
Tax Agreement ("Pilot"), dated August 1, 1988, by and among the City
of New Orleans, State of Louisiana, The Industrial Development Board
of the City of New Orleans, Louisiana, Inc., the Director of Finance
of the City of New Orleans, Louisiana, the Tax Assessor of the Third
Municipal District of the Parish of Orleans, Louisiana, and West
Coast Liquidators, Inc.
2. Servitude in favor of the Sewerage & Water Board ("S&WB"), as shown
on the Survey, Exhibit No. 5, which was granted by the City to the
S&WB pursuant to Ordinance No. 8804 Mayor Council Series, approved
on October 15, 1982.
3. COB 813C, folio 621 - Servitude in favor of New Orleans Public
Service, Inc., ("NOPSI") for overhead electrical distribution
facilities and underground electrical distribution facilities.
4. COB 839, folio 499-503; COI No. 14998 - Servitude Agreement for
natural gas service between New Orleans Public Service, Inc. and the
Industrial Development Board of the City of New Orleans ("Owner"),
and West Coast Liquidators, Inc., a California corporation
("Lessee"), dated December 12, 1989, registered as N.A. No. 8229772.
5. COB 839, folio 504-508; COI No. 14972 - Servitude Agreement for
overhead electric service between New Orleans Public Service, Inc.
and the Industrial Development Board of the City of New Orleans
("Owner") and West Coast Liquidators, Inc., a California corporation
("Lessee") dated December 12, 1989, filed December 29, 1989 under
N.A. No. 829773.
6. COB 843, folio 488-490; COI No.16891 - Servitude Agreement for
underground electric service between New Orleans Public Service,
Inc. and the Industrial Development Board of the City of New
Orleans ("Owner") and West Coast Liquidators, Inc., a California
corporation ("Lessee") dated March 30, 1990, filed April 5, 1990
under N.A. No. 840685.
68
7. COI No. 19336 - Right of Way and Servitude between South Central
Bell and West Coast Liquidators, Inc., as Lessee for service poles,
guys, anchors, aerial cables and wires, etc., as per agreement dated
April 13, 1990, N.A. No. 842389, which has been corrected to show
the right of way and servitude in favor of South Central Bell by
Industrial Development Board of the City of New Orleans, Louisiana,
Inc., as of August 15, 1990, recorded as COI 29955, N.A. No. 871021,
which is exactly the same as the right of way previously granted by
West Coast Liquidators, Inc.
8. Encroachment of concrete roadway ramp owned by the Louisiana State
Department of Transportation onto the insured land parcel on the
Jourdan Road side as shown on a survey by Fromherz Engineers, Inc.,
dated June 8, 1993, Dwg. No. WCL1B.
9. Terms, conditions and obligations of the Master Lease.
10. Terms, conditions and obligations creating the following incorporeal
rights:
a. COB 856, folio 479, N.A. No. 874450 - Grant of Servitude of
Passage and Right of Use by the Sewerage and Water Board of New
Orleans in favor of West Coast Liquidators dated March 29, 1990
creating a cross-over of Lot PS2.
b. COI No. 28404, N.A. No. 866084 - Switch Track Agreement
between the New Orleans Public Belt Railroad Commission and West
Coast Liquidators, Ltd. as created by Agreement dated September 27,
1990 and filed November 2, 1990.
c. COB 855, folio 243-245, COI No. 30531, N.A. No. 872064 -
Railroad Crossing Agreement between Public Belt Railroad Commission
for the City of New Orleans and West Coast Liquidators, Inc. dated
May 10, 1989.
11. Permitted Encumbrances subordinate to this Lease:
a. Lease dated September 30, 1991, between West Coast
Liquidators, Inc., as landlord and The Spectrum Network, as tenant,
as amended by letter agreements dated October 18, 1991 and January
6, 1993.
b. Standard Industrial Lease - Multi-Tenant dated November 9,
1992, between West Coast Liquidators, Inc., as landlord and Tano
Corporation, as tenant, as amended by Amendment No. 1 to Standard
Industrial Lease - Multi-
69
Tenant, dated as of November 9, 1992 and as further amended by Amendment No. 2
to Standard Industrial Lease - Multi-Tenant, dated as of February 1, 1993.
70
EXHIBIT E
FORM OF SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
THIS AGREEMENT is made as of __________, ____, by and among TRINET
ESSENTIAL FACILITIES X, INC., (Lessor) whose address is _______________, WEST
COAST LIQUIDATORS, INC. (Lessee), whose address is _______________ and
_____________ (the Beneficiary), whose address is __________________________.
A. THE PROPERTY. The term "Property", as used herein, shall mean
the real property situated in the Parish of Orleans, State of Louisiana,
legally described in Exhibit A attached hereto and by this reference
made a part hereof, together with all buildings, structures,
improvements and fixtures now or hereafter located thereon, and
together with all easements and other rights appurtenant thereto.
B. THE LEASE. The property has been leased to Lessee pursuant to the
terms and provisions of a lease agreement dated as of ___________ ___,
1993, between Lessor and Lessee (the Lease), for a term of 16 years with
four ten-year optional renewal terms.
C. THE LOAN; SECURITY DOCUMENTS; MORTGAGE. Lessor proposes to borrow
certain sums from Beneficiary to be evidenced by a promissory note.
Lessor proposes to encumber the Property as security for payment of its
obligations to Beneficiary and, for such purpose, shall enter into
various instruments and documents (collectively the Security Documents),
including without limitation, a [Mortgage and Security Agreement]
(the Mortgage) from Lessor for the use and benefit of the Beneficiary
and [an Assignment of Lessor's Interest in Lease and Rents] (the
Assignment), which Mortgage and Assignment will be recorded in the
real property records of Orleans Parish, Louisiana.
D. PURPOSES. In connection with the above-mentioned transactions,
Lessor and Lessee have agreed to offer certain assurances and
representations to the Beneficiary, and all parties agree to provide
for (i) the subordination of the Lease to the Security Documents;
(ii) the continuation of the Lease notwithstanding any foreclosure of
the Mortgage, subject to certain conditions; and (iii) Lessee's
attornment to the Beneficiary or to such other parties as may acquire
71
-2-
title to the Property as the result of any foreclosure or any
conveyance of the Property in lieu of foreclosure.
NOW, THEREFORE, in consideration of the mutual terms and provisions
hereinafter contained and other good and valuable consideration received by any
party from any other, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Notices of Default to Beneficiary. Notwithstanding anything to
the contrary in the Lease, Lessee shall personally deliver or mail to
Beneficiary, at Beneficiary's address set forth above, a copy of any
written notice of any default under the Lease by Lessor which may be
given by Lessee, and if within the time provided in the Lease for the
cure thereof by Lessor, Beneficiary performs or causes to be performed
all such obligations with respect to which Lessor is in default which
can be cured by the payment of money, any right of Lessee to terminate
the Lease by reason of such default shall cease and be null and void.
2. Subordination of Lease to Security Documents. Lessee hereby
subordinates its leasehold estate in the Property and all of Lessee's
right under the Lease to the Security Documents and replacements
thereof, to the full extent of all obligations secured or to be secured
thereby including interest thereon, provided however, that the
provisions of the Lease relating to insurance proceeds and condemnation
proceeds shall control over any conflicting provisions of the Security
Documents.
3. Non-Disturbance of Lessee. Beneficiary agrees that, for so
long as Lessee shall not be in default under the terms of the Lease
after applicable notice and beyond any applicable cure period, neither
the Lease nor Lessee's rights pursuant thereto shall be disturbed or
affected by any exercise by Beneficiary of any rights or remedies
available to Beneficiary under the Security Documents. Beneficiary's
obligations under this Section 3 shall continue throughout the full
term of the Lease, including any extensions thereof with respect to
which Lessee has exercised its option. Beneficiary's obligations under
this Section 3 shall be null and void if Lessee shall, at any time,
default in the timely performance of the Lessee's obligations under the
Lease after receipt of any applicable notice and not cure such default
within the time, if any, allowed in the Lease, unless such default
occurred and was cured prior to the foreclosure of the Mortgage or
conveyance in lieu of foreclosure or a dation en paiment.
72
4. Beneficiary as Landlord after Foreclosure. In the event that Beneficiary
(or any other party) shall acquire fee title to the Property or shall succeed
to Lessor's interest in the Lease, whether through foreclosure of the Mortgage,
conveyance of the Property in lieu of foreclosure, dation en paiment, or
otherwise (including any exercise by Beneficiary of any rights or remedies
available to Beneficiary under the Security Documents), Beneficiary (or such
other party) shall thereupon, and without the necessity of attornment or other
act or agreement, be substituted as Lessee's landlord under the Lease, and
shall be entitled to the rights and benefits (including the benefit of
Guarantor's guaranty) and subject to the obligations thereof, provided that
neither Beneficiary nor any other party shall be:
(a) liable for any act or omission of any prior landlord under the Lease
(including Lessor); or
(b) subject to any offsets or defenses which Lessee might have against
any prior landlord (including Lessor); or
(c) bound by Lessee's payment of any rent or additional rent for more
than ninety (90) days beyond the then current rate period to any prior
landlord under the Lease (including Lessor); or
(d) bound by any material amendment, modification, extension, or
supplement of the Lease made without Beneficiary's prior written consent,
which shall not be unreasonably withheld, delayed or conditioned;
and Lessee hereby agrees to attorn to and recognize such Beneficiary (or other
party) as Lessee's landlord.
5. Payment of Rent Upon Default. Lessee is hereby advised that the Security
Documents give Beneficiary the right to collect rent and other sums payable
under the Lease directly from Lessee upon the occurrence of a default under the
Security Documents. Upon receipt by Lessee or Guarantor of notice from
Beneficiary of any such default, Lessor agrees Lessee or Guarantor will
thereafter pay all rent and other sums payable under the Lease directly to
Beneficiary (or as Beneficiary shall direct) as they become due and payable.
Lessor hereby waives any cause of action and releases any and all claims it may
have against Lessee arising out of Lessee's compliance with the preceding
sentence.
73
-4-
6. Binding Effect. The provisions of this Agreement shall be covenants
running with the Property, and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns.
7. No Waiver. No party hereto shall by any act of omission or commission be
deemed to waive any of its rights or remedies hereunder unless such waiver be
in writing and signed by such party, and then only to the extent specifically
set forth therein; a waiver on one event shall not be construed as continuing
or as a bar to or waiver of such right or remedy on a subsequent event.
8. Notices. All notices, demands, requests, approvals, or consents made
pursuant to, under or by virtue of this Agreement must be in writing and mailed
to the party to which the notice, demand, request, approval or consent is being
sent by certified or registered mail, return receipt requested, or by overnight
courier delivery, addressed as follows, or at such other address as such party
may designate by notice to the other parties:
To Guarantor:
MacFrugal's Bargains*Close-outs Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: Vice President--Real Estate and Construction
with a copy to:
MacFrugal's Bargains*Close-outs Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: General Counsel
To Lessee:
West Coast Liquidators, Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: Vice President--Real Estate and Construction
with a copy to:
West Coast Liquidators, Inc.
2430 East Del Amo Boulevard
74
-5-
Dominguez, California 90220
Attention: General Counsel
To Lessor:
TriNet Essential Facilities X, Inc.
c/o Trinet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
with a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Beneficiary:
_________________
_________________
_________________
Attention: _________________
Any notice, demand, request, approval, or consent given in accordance
with the provisions of this Paragraph 8 shall be effective on the date
of receipt or delivery or when proper delivery is refused by the
addressee.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana.
10. Miscellaneous. This Agreement may not be modified or amended
except by a written agreement duly executed by Lessee, Lessor and
Beneficiary with the consent in writing of Guarantor. This Agreement
shall be binding upon Lessee and Guarantor and shall inure to the
benefit of Beneficiary and its successors and assigns. In the event any
one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein. In the event of litigation concerning
this Agreement, the prevailing party shall be entitled to reimbursement
of reasonable attorneys' fees and expenses by the losing party or
parties.
75
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WITNESSES AS TO BOTH: LESSOR:
TRINET ESSENTIAL FACILITIES X, INC.
______________________________
Name:
By:_______________________________
______________________________ Name:
Name: Title:
By:_______________________________
Name:
Title:
WITNESSES: LESSEE:
WEST COAST LIQUIDATORS, INC.
______________________________
Name:
By:_______________________________
______________________________ Name:
Name: Title:
By:_______________________________
Name:
Title:
WITNESSES: BENEFICIARY:
______________________________ By:_______________________________
Name: Name:
Title:
______________________________
Name:
76
-7-
WITNESSES AS TO BOTH: CONSENTED TO:
MACFRUGAL'S BARGAINS*
______________________________ CLOSE-OUTS, INC.,
Name: Lease Guarantor
______________________________ By:____________________________
Name: Name:
Title:
By:____________________________
Name:
Title:
77
-8-
STATE OF _______________:
COUNTY OF ______________:
BE IT KNOWN that on this ______ day of __________, _____, before me,
the undersigned Notary Public, personally came and appeared ________________
[and _______________], to me personally known, and after being by me duly
sworn, did depose and say that he is [they are] the _________________ [and
________________, respectively], of TriNet and that the seal affixed to the
foregoing Subordination, Attornment and Non-Disturbance Agreement is the
corporate seal of said corporation [or that said corporation has no seal],
that he [they] signed and sealed said document on behalf of the corporation
by authority of its Board of Directors, as the free act and deed of
the corporation, for the purposes therein set forth.
___________________________
Notary Public
My Commission Expires:
___________________________
78
-9-
STATE OF ________________:
COUNTY OF _______________:
BE IT KNOWN that on this ______ day of _____, ____, before me, the
undersigned Notary Public, personally came and appeared ____________________
[and ____________________], to me personally known, and after being by me duly
sworn, did depose and say that he is [they are] the ____________________ [and
____________________, respectively], of [Beneficiary] and that the seal affixed
to the foregoing Subordination, Attornment and Non-Disturbance Agreement is the
corporate seal of said corporation [or that said corporation has no seal], that
he [they] signed and sealed said document on behalf of the corporation by
authority of its Board of Directors, as the free act and deed of the
corporation, for the purposes therein set forth.
______________________________
Notary Public
My Commission Expires:
______________________________
79
-10-
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES:
BE IT KNOWN that on this ______ day of ______, ______, before me, the
undersigned Notary Public, personally came and appeared Philip L. Carter and
Leonard S. Williams, to me personally known, and after being by me duly sworn,
did depose and say that they are the Chief Financial Officer and Chief
Executive Officer, respectively, of West Coast Liquidators, Inc., and that the
seal affixed to the foregoing Subordination, Attornment and Non-Disturbance
Agreement is the corporate seal of said corporation [or that said corporation
has no seal], that they signed and sealed said document on behalf of the
corporation by authority of its Board of Directors, as the free act and deed of
the corporation, for the uses and purposes therein set forth.
________________________________
Notary Public
My Commission Expires:
________________________________