1 Exhibit 10.3B FIRST AMENDMENT TO LEASE AGREEMENT BY AND BETWEEN HEWSON/DESOTO PHASE I, L.L.C. AND WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC. DATED: AS OF SEPTEMBER 1, 1999 PREPARED BY: BAKER, DONELSON, BEARMAN & CALDWELL 2 2000 FIRST TENNESSEE BUILDING 165 MADISON AVENUE MEMPHIS, TENNESSEE 38103 3 FIRST AMENDMENT TO LEASE AGREEMENT THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment"), entered into as of the 1st day of September, 1999, by and between HEWSON/DESOTO PHASE I, L.L.C., an Arizona limited liability company (the "Landlord"), and WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC., a California corporation (the "Tenant"); W I T N E S S E T H, that: The Original Lease (as hereinafter defined), as modified by this Amendment, constitutes a financing agreement for the purposes of Sections 57-10-409 and 27-7-22.3 of the Mississippi Code of 1972, as amended. By means of a Lease Agreement dated as of December 1, 1998 by and between Landlord and Williams-Sonoma, Inc., a California corporation ("Original Tenant"), recorded at Book 79, Page 520 of the Land Deed Records, Chancery Clerk's Office, DeSoto County, Mississippi (the "Original Lease"), Landlord leased to Original Tenant that entire certain parcel of land (the "Property"), containing 66.847 acres, more or less, and the easements and appurtenances thereto, located in the County of DeSoto, State of Mississippi, as described in EXHIBIT "A" attached hereto and made a part hereof, together with the building, and on-site and off-site improvements as described therein (the "Original Improvements") (the Property and the Original Improvements being herein sometimes called the "Original Project"). The Original Project was financed through the issuance of $30,300,000 Taxable Industrial Development Revenue Bonds, Series 1998 (Hewson/DeSoto Phase I, L.L.C. Project) (the "Series 1998 Bonds") by the Mississippi 4 Business Finance Corporation (the "Issuer"), pursuant to a Loan Agreement dated as of December 1, 1998 between the Issuer and Landlord (the "Original Loan Agreement"). The Bonds were issued pursuant to a Trust Indenture (the "Original Indenture") of even date therewith executed by and between the Issuer and Union Planters National Bank, N.A., as Trustee (the "Original Trustee"), and were secured by a deed of trust of even date therewith and executed by Landlord in favor of the Issuer (the "Original Deed of Trust"), which was assigned by the Issuer to the Original Trustee pursuant to the Indenture. Interests of various parties in the Original Project were subject to the Tenant Estoppel, Subordination, Non-Disturbance and Attornment Agreement (the "Original Non-Disturbance Agreement") of even date therewith by and among the Landlord, the Original Tenant, the Issuer and the Original Trustee. Subsequent to the issuance of the Series 1998 Bonds, the Original Tenant assigned its interests under the Original Lease to the Tenant, a wholly owned subsidiary of Original Tenant, by means of an Assignment of Lease dated as of July 1, 1999 (the "Assignment"). The Rental Commencement Date and Occupancy Commencement Date under the Original Lease occurred on July 6, 1999, the date upon which Tenant commenced actual productive use of the Original Project as a distribution center. Prior to such date, Tenant installed in the Original Project certain fixtures (the "Original Fixtures") and equipment (the "Original Equipment") not subject to the Original Lease. The parties now wish to amend the Original Lease to provide for an addition to the Original Improvements as described more fully herein. Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, for a term equal to the remainder of the Primary Term (as defined in the Original Lease), the Addition to be constructed on the Property, and on-site and 2 5 off-site improvements, all as described in the 1999 Plans (as defined in the First Supplement to Loan Agreement, as hereinafter defined) attached hereto as EXHIBIT "B" (the "Addition"). Tenant shall, during the course of and upon completion of the construction of the Addition, at the Tenant's sole cost and expense, install in the Addition certain fixtures (the "Addition Fixtures") and equipment (the "Addition Equipment"). The Addition will be financed with the proceeds of the $8,900,000 Taxable Industrial Development Revenue Bonds, Series 1999 (Hewson/DeSoto Phase I, LLC Project) issued by the Issuer pursuant to a First Supplemental Trust Indenture of even date herewith (the "First Supplemental Indenture") by and between the Issuer and First Tennessee Bank National Association as successor trustee (the "Trustee"). Such bonds (the "Series 1999 Bonds") will be Additional Bonds (as defined in the Original Indenture), the proceeds of which will be loaned to the Landlord by Issuer pursuant to the Original Loan Agreement, as modified by a First Supplement to Loan Agreement of even date herewith (the "First Supplement to Loan Agreement"). Landlord represents and warrants that all requirements set forth in the Original Indenture and the Original Loan Agreement for the issuance of Additional Bonds have been satisfied. The Series 1999 Bonds will be secured on a parity with the Series 1998 Bonds. Documents executed to secure the Series 1998 Bonds will be amended to reflect the issuance of the Series 1999 Bonds and to subject the collateral pledged thereunder to a parity lien for holders of Series 1999 Bonds. Based upon the foregoing, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant agree to the foregoing 3 6 recitals and agree to modify the Lease upon the following terms, provisions, conditions and limitations, and the parties respectively covenant and agree to such modifications as follows: 1. Definitions. Unless the context otherwise requires or unless otherwise amended or defined herein, definitions of capitalized terms used in the Original Lease shall be deemed to be amended by, and to have the meanings set forth in, the First Supplemental Indenture and First Supplement to Loan Agreement, and shall be incorporated herein. Capitalized terms used herein which are defined in the Original Lease, which are not amended by the First Supplemental Indenture or First Supplement to Loan Agreement, and which are not otherwise defined herein shall have the meaning set forth in the Original Lease. In addition, definitions set forth in the Recitals of this Amendment are incorporated herein. Furthermore, the following definitions of capitalized terms in the Original Lease shall be amended as follows: (a) "Basic Rent" shall mean the sum of Basic Rent (as defined in the Original Lease) plus Addition Basic Rent (as defined below in Section 2.1.A(c)). (a) "Company Payments" shall mean the sum of Company Payments (as defined in the Original Lease) plus Addition Company Payments (as defined below in Section 2.1.A(c)). (a) "Equipment" shall mean the Original Equipment and Addition Equipment taken as a whole. (a) "Fixtures" shall mean the Original Fixtures and Addition Fixtures taken as a whole. (a) "Global Basic Rent" shall mean the sum of Global Basic Rent (as defined in the Original Lease) plus Addition Global Basic Rent (as defined below in Section 2.1.A(a)). (a) "Improvements" shall mean the Original Improvements and the Addition taken as a whole. 5 7 (a) "Project" shall mean the Property, the Original Improvements, and the Addition. (a) "Rent" shall mean Basic Rent, Addition Basic Rent, Company Payments, Addition Company Payments, Additional Rent and Addition Additional Rent (as defined below in Section 2.2.A(a)). 2. Occupancy of the Addition. (a) There shall be added to the Original Lease immediately following Section 1.2 thereof the following Section 1.2.A: 1.2.A. Occupancy . (a) The parties hereto understand and agree that the Addition is anticipated to be complete and ready for occupancy as evidenced by a Certificate of Occupancy to be issued by the relevant jurisdiction on or about the 10th day of January, 2000 (the "Estimated Addition Completion Date"). Landlord shall exert its best efforts toward the end that the Improvements be completed on or before January 10, 2000. Landlord agrees to give Tenant written notice as to whether or not the Addition will be completed by the Estimated Addition Completion Date as soon as possible, but in any event not later than thirty (30) days prior to the Estimated Addition Completion Date. (b) Tenant's responsibility for payment of amounts set forth in Sections 2.1.A and 2.2.A hereof shall commence on that date (the "Addition Rental Commencement Date") which is the earliest of (i) ten (10) business days following receipt by the Tenant of a copy of those items required under Section 3.04 of the First Supplement to Loan Agreement, (ii) that date on which Tenant commences actual productive use (as distinct from installation of Addition Fixtures and Addition Equipment) of the Addition as part of the existing distribution facility, or (iii) April 30, 2000. Tenant's occupancy of the Addition shall commence on that date (the "Addition Occupancy Commencement Date") which is the earlier of (1) ten (10) business days following receipt by the Tenant of a copy of those items required under Section 3.04 of the First Supplement to Loan Agreement or (2) that date on which Tenant commences actual productive use (as distinct from installation of Addition Fixtures and Addition Equipment) of the Addition as part of the existing distribution facility. Notwithstanding anything to the contrary herein, Tenant shall have no obligation to pay Addition Company Payments until after the Addition Occupancy Commencement Date and until after all amounts (if any) due to Tenant under the Agreement and Indemnification of even date herewith (the "Indemnification Agreement") have been paid in full. 6 8 (c) Tenant's obligation to pay those amounts set forth in Sections 2.1.A and 2.2.A hereof (other than Addition Company Payments) shall arise on the Addition Rental Commencement Date regardless of any disputes which may occur between Landlord and Tenant concerning construction of the Addition, subject to the provisions of paragraph 7.7.A of this Amendment. (d) The Landlord shall construct or cause to be constructed the Addition substantially in accordance with the 1999 Plans and the 1999 Construction Budget (as defined in the First Supplement to Loan Agreement) attached hereto as Exhibit "C." The Landlord shall obtain all approvals requisite to the construction of the Addition, and shall construct the Addition in material compliance with all federal, State and local laws and regulations. On or before the Addition Occupancy Commencement Date, the Landlord will furnish to the Tenant copies of all required permits and authorizations except those permits and authorizations which Tenant must obtain, authorizing the occupancy and uses of the Addition for the purposes contemplated by the Tenant. The Landlord will take such action and institute such proceedings as shall be necessary to cause and require all contractors and material suppliers to complete their contracts, including the correction of any defective work, and the Landlord agrees that the Tenant may, from time to time, in its own name, or in the name of the Landlord, take such action as may be necessary or advisable, as determined by the Tenant, to assure that the construction of the Addition will proceed in an efficient and workmanlike manner. Any amounts recovered as damages, refunds, adjustments or otherwise in connection with the foregoing (a) shall be paid to the Tenant if the Tenant has corrected, at its own expense, the matter which gave rise to such default or breach, or (b) shall be paid to the Landlord if the Landlord has corrected, at its own expense, the matter which gave rise to such default or breach, or (c) shall be paid to the Landlord if the matter which gave rise to such default or breach has not yet been corrected and if such payment is prior to the Addition Occupancy Commencement Date (in which event Landlord shall thereafter promptly apply such amount to the correction of such matter, with the balance, if any, disposed of as set forth in Section 3.05 of the First Supplement to Loan Agreement), or (d) shall be paid to the Tenant if the matter which gave rise to such default or breach has not yet been corrected and if such payment is after the Addition Occupancy Commencement Date (in which event Tenant shall thereafter promptly apply such amount to the correction of such matter, with the balance, if any, disposed of as set forth in Section 3.2(b) of the Original Lease). 7 9 (b) There shall be added to the Original Lease immediately following Section 1.3 thereof the following Section 1.3.A: 1.3.A. Addition Fixtures; Addition Equipment . The parties hereto understand and agree that the Landlord has no responsibility whatsoever regarding the delivery and installation of the Addition Fixtures and Addition Equipment in the Addition, and that the Lease and the Tenant's covenants and agreements contained herein are in no way conditioned upon such delivery or installation. 3. Rental Terms for the Addition. (a) There shall be added to the Original Lease immediately following Section 2.1 thereof the following Section 2.1.A: 2.1.A Addition Rent. (a) From and after the Addition Rental Commencement Date, Tenant shall pay Addition Global Basic Rent, subject to adjustment as provided in Section 2.6.A hereof; "Addition Global Basic Rent" being defined (i) during the portion of the Primary Term remaining after such date as the sum of Addition Basic Rent (as defined below) and Addition Company Payments (as defined below) (provided, however, that Tenant shall have no obligation to pay Addition Company Payments until after the Addition Occupancy Commencement Date and until after all amounts due to Tenant under the Indemnification Agreement have been paid in full); and (ii) during the Option Periods, on the same terms as set forth in Section 2.7 of the Lease (provided, however, that during said Option Periods all Addition Global Basic Rent shall also constitute Addition Company Payments hereunder). (b) During the portion of the Primary Term remaining after the Addition Rental Commencement Date, the Addition Global Basic Rent shall be payable in the amounts set forth in Exhibit "D" attached hereto (the "Addition Rent Schedule") and made a part hereof, subject to adjustment of the Addition Basic Rent as provided in Section 2.6.A hereof. Any such Addition Basic Rent adjustment will be documented by an amended Exhibit "D," agreed to by the parties, at the time of such adjustment. During any Option Period, the Addition Global Basic Rent shall be determined as set forth in Section 2.7 of the Lease. 10 (c) From and after the Addition Rental Commencement Date through the end of the Primary Term, and so long as any Series 1999 Bonds remain Outstanding or the Indenture has not been released, Tenant shall timely pay to Trustee in accordance with the terms of the Loan Agreement at First Tennessee Bank National Association, 4385 Poplar Avenue, Memphis, Tennessee 38117, Attention: Corporate Trust Services, or such other person or at such other place as Trustee designates in writing to Tenant, without previous demand therefor and without deduction or offset, the amount of quarterly payments of interest accruing on Outstanding Series 1999 Bonds and semi-annual 1999 Mandatory Sinking Fund Payments (as defined in the First Supplemental Indenture) due on the Series 1999 Bonds (the "Addition Basic Rent"). Attached as part of Exhibit "D" is a schedule of payments of Addition Basic Rent over the term of the Series 1999 Bonds assuming no prepayments and assuming no change in the rate of interest borne by the Series 1999 Bonds as described in Section 2.6.A(b). All payments of Addition Basic Rent by Tenant to Trustee shall be credited against Tenant's obligation to pay Addition Global Basic Rent. Attached as part of Exhibit "D" is a schedule of Addition Company Payments for the portion of the Primary Term remaining after the Addition Rental Commencement Date, assuming no prepayment under Section 2.6.A(a). Provided that all amounts due to Tenant under the Indemnification Agreement have been paid in full, from and after the Addition Occupancy Commencement Date and during the portion of the Primary Term remaining after such date, Tenant shall pay such amounts (the "Addition Company Payments") to Landlord, ? Hewson Properties, Inc. at 4636 E. University Drive, Suite 265, Phoenix, Arizona 85034, or to such other person or place as Landlord designates in writing to Tenant, quarterly (on the same day as quarterly interest payments are due on the Series 1999 Bonds), without previous demand therefor, in an amount equal to one-quarter (_) of the difference between (i) the then applicable Addition Global Basic Rent (as adjusted in Section 2.6.A hereof during the remaining portion of the Primary Term) for the applicable lease year, and (ii) the Addition Basic Rent for the applicable lease year ("lease year" being the successive one (1) year periods). During any Option Period, all Addition Global Basic Rent shall be deemed to be Addition Company Payments for purposes of the Lease, and shall be paid to Landlord quarterly as set forth in this Section 2.1.A(c). (d) Notwithstanding any other provision hereof, in the event that the Addition Occupancy Commencement Date occurs on a date other than a quarterly interest payment date on the Series 1999 Bonds, the Addition Company Payments due hereunder shall be prorated for such portion of a quarterly interest period. 11 (b) There shall be added to the Original Lease immediately following Section 2.2 thereof the following Section 2.2.A: 2.2.A. Net-Net-Net Lease of Addition. (a) The Original Lease, as modified by this Amendment, constitutes what is commonly known as a "net-net-net lease," it being understood that the Trustee and the Landlord shall receive the Addition Basic Rent and Addition Company Payments, respectively, free and clear of any and all impositions, taxes, liens, charges or expenses of any nature whatsoever in connection with Landlord's ownership and leasing of the Project. (b) In addition to the Addition Global Basic Rent provided for in Section 2.1.A hereof, from and after the Addition Rental Commencement Date, the Tenant shall pay to Landlord or to third parties as provided elsewhere (particularly in Sections 2.3.A hereof and 2.4. of the Original Lease) as additional rent ("Addition Additional Rent") all impositions, taxes, payments or fees in lieu of taxes, insurance premiums, operating charges, costs and expenses relating to the Addition which arise or may be contemplated under any provisions of the Lease during the portion of the Primary Term remaining following the Addition Rental Commencement Date and any Option Periods. Upon the failure of Tenant to pay any of such costs, charges or expenses, Landlord shall have the same rights and remedies as otherwise provided in the Lease for the failure of Tenant to pay Addition Basic Rent. It is the intention of the parties hereto that Tenant shall in no event be entitled to any abatement of or reduction in Addition Global Basic Rent payable hereunder except as expressly provided herein. Any present or future law to the contrary shall not alter this agreement of the parties. Amounts payable by Tenant hereunder shall include, but not be limited to, the following: (i) Insurance premiums required to maintain the insurance policies attributable to the Addition described in Article IV of the Original Lease; (i) Expenses of occupying, operating, altering, maintaining and repairing the Addition throughout the term of the Lease; and (i) All taxes, assessments, fees in lieu of taxes and other governmental charges with respect to the Addition, as set forth in Section 6.2 of the Original Loan Agreement, except as provided in 12 Section 2.4 of the Original Lease and except as prorated pursuant to Section 2.3.A(a) of this Amendment, and all other expenses and charges (including any asserted by the Issuer or the Trustee, including but not limited to Trustee's regular and extraordinary fees, as to all of which Landlord shall be entitled to prompt reimbursement by Tenant) which during the term of this Lease shall be levied, assessed or imposed by any governmental authority upon or with respect to, or incurred in connection with the ownership, possession, occupation, operation, alteration, maintenance, repair or use of the Addition. If at any time during the term of the Lease under the laws of the State of Mississippi or any political subdivision thereof in which the Addition is situated, a tax or excise on rents or other tax, however described, is levied or assessed by said State or political subdivision against Landlord or the rentals set forth in Section 2.1.A hereof, Tenant covenants to pay and discharge such tax or excise on rents or other tax, but only to the extent of the amount thereof which is lawfully assessed or imposed upon Landlord and which was so assessed or imposed as a direct result of Landlord's interest in the Addition, or of this Amendment or of the rentals accruing hereunder, it being the intention of the parties hereto that all sums payable by Tenant hereunder (including, without limitation, Addition Basic Rent, Addition Company Payments, Addition Additional Rent and all other sums due hereunder) shall be paid to Landlord absolutely net without offset of any kind or deduction of any nature whatsoever except as expressly provided in this Amendment with respect to Addition Company Payments. Any payment or discharge by Tenant of any tax or excise on rents or other tax referred to in the preceding sentence shall not be deemed to be Addition Additional Rent. Nothing in this Amendment shall be construed to require Tenant to pay any franchise, estate, inheritance, succession, capital levy or transfer tax of Landlord, or any income, excess profits or revenue tax or any other tax or impost charged or levied against Landlord upon the rentals payable by Tenant under this Amendment, except to the extent hereinabove provided. In the case of any assessment for public improvement wherein the cost of the public improvement is permitted to be paid in installments, then and in such event only, such installments falling due during the term of this Amendment shall be paid by Tenant, and all such installments falling due subsequent to the term of this Amendment shall be paid by Landlord, notwithstanding the provisions of Section 2.3.A hereof. For the purpose of the foregoing sentence, an installment is due on the last day prior to the date upon which such an installment becomes delinquent. Upon the occurrence and continuation of an event of default hereunder (an "Event of Default"), the Landlord may require the Tenant to deposit with the Trustee (or Landlord if there is no Trustee) in an escrow account bearing interest 13 for the benefit of Tenant (i) an amount equal to (A) all taxes which are due and payable which Tenant is obligated to pay under this Section, including accrued ad valorem taxes, if any, or, in the alternative all amounts due as payments or fees in lieu of taxes, with respect to the Addition plus (B) any then delinquent insurance premiums allocable to the Addition with respect to the insurance required under Section 4.1 of the Original Lease, and (ii) thereafter, each month, an amount equal to one-twelfth (1/12th) of the annual charges for taxes to be paid under this Section 2.2.A and insurance premiums. Tenant covenants to cooperate fully with Landlord in taking any actions necessary to apply for and receive ad valorem tax relief for the Addition, including, but not limited to, meeting the requirements of Mississippi Code Section 27-31-101 and Section 27-31-104. Tenant expressly acknowledges that no right of offset with respect to payment of Addition Basic Rent to the Trustee or the payment of other amounts (except Addition Company Payments) hereunder shall arise in the event of the loss of ad valorem tax relief. Landlord agrees that, so long as Tenant is not in default hereunder, if any actions on the part of Landlord result in the occurrence of an event of default under the Loan Agreement or leads to a foreclosure on the Deed of Trust or any other event the result of which is the loss of ad valorem tax relief under the Loan Agreement, Landlord will indemnify Tenant to the extent Tenant is required under this Section 2.2.A to pay ad valorem taxes in excess of the payments in lieu of taxes which otherwise would have been paid by Tenant hereunder. (c) Tenant agrees, within six (6) months following the earlier of (i) the Addition Occupancy Commencement Date or (ii) the date of issuance of the Series 1999 Bonds, the Tenant will certify in writing to the Landlord as to the number of jobs created or, if prior to the Addition Occupancy Commencement Date, anticipated to be created, as a result of the Addition. (d) Tenant will reimburse Landlord with respect to certain environmental inspection matters as follows: (i) On an annual basis, Tenant will reimburse Landlord for the costs of a "walk-through" inspection of the Addition by a qualified environmental engineer reasonably acceptable to Tenant. (ii) If such inspection yields evidence of any potential environmental hazards related to Tenant's use and occupancy of the Addition, Tenant will reimburse Landlord for such additional environmental inspections and reports as are deemed reasonably necessary by such engineer. 14 (c) There shall be added to the Original Lease immediately following Section 2.3 thereof the following Section 2.3.A: 2.3.A Proration of Addition Taxes . (a) The taxes, fees in lieu of taxes, and other charges and expenses with respect to the Addition, described in Section 2.2.A(a) hereof, shall be prorated when appropriate between Landlord and Tenant in order that all of such taxes and other charges and expenses allocable to the Addition which relate to the period subsequent to the termination of the term of the Lease shall be borne by Landlord and in order that all of such taxes and other charges and expenses allocable to the Addition which relate to the term of the Lease shall be borne by Tenant. Such proration shall be computed in accordance with generally accepted accrual accounting principles and Landlord and Tenant shall each indemnify and hold the other harmless from any taxes and other charges and expenses relating to their respective periods of responsibility which may have become a charge upon the other. (b) Tenant shall not enter into any non-terminable contracts or agreements with respect to the Addition extending beyond the term of the Lease without the prior written consent of Landlord, which consent Landlord may not withhold unreasonably and arbitrarily. (d) There shall be added to the Original Lease immediately following Section 2.6 thereof the following Section 2.6.A: 15 2.6.A Addition Global Basic Rent Adjustment . (a) The parties hereto contemplate that the Costs of the Addition provided for hereunder will equal the aggregate sum of Eight Million Nine Hundred Thousand Dollars ($8,900,000.00) (such amount being herein also sometimes called the "Addition Target Cost"). If the Addition is completed for less than the Addition Target Cost (resulting in the transfer of such surplus amount of Series 1999 Bond proceeds from the 1999 Accounts (as defined in the First Supplemental Indenture) within the Acquisition Fund to the Bond Fund (each as defined in the Original Loan Agreement) under Section 5.01(b) of the First Supplemental Indenture, the application of such amount by the Trustee under Section 3.01(d) of the First Supplemental Indenture to the redemption of Series 1999 Bonds at par pro rata at the earliest possible date and the corresponding reduction in the amount of principal and interest payments due on the Series 1999 Bonds), the Addition Global Basic Rent during the portion of the Primary Term remaining after the Addition Occupancy Commencement Date shall be reduced as follows: (1) Addition Basic Rent during such period shall be reduced proportionately, and (2) quarterly Addition Company Payments shall be reduced by an amount equal to (x) the product of one-half percent (0.5%) times such surplus amount of Series 1999 Bond proceeds divided by (y) four (4). (b) The Series 1999 Bonds are subject to an interest rate increase on July 1, 2009, or if such day is not a business day, the next succeeding business day (the "1999 Rate Adjustment Date"), as provided in Section 2.02 of the First Supplemental Indenture, up to a maximum of thirteen percent (13%) per annum. Landlord and Tenant agree that, upon receiving notice from the Trustee that such an increase in rate has occurred, the Addition Basic Rent component of the Addition Global Basic Rent during the remaining portion of the Primary Term shall be increased accordingly. (c) Following the occurrence of any circumstances set forth in Section 6.9 of the Original Loan Agreement requiring or permitting the partial prepayment of Series 1999 Bonds, such amounts will be used to redeem Series 1999 Bonds as provided in Section 3.01(e) of the First Supplemental Indenture. If any such redemption occurs during the portion of the Primary Term remaining after the Addition Occupancy Commencement Date, the Addition Basic Rent component of the Addition Global Basic Rent during such period shall be reduced proportionately. 4. Right of Offset. There shall be added to the Original Lease immediately following Section 7.7 thereof the following Section 7.7.A: 16 7.7.A Right of Offset. So long as Tenant has not exercised any right to terminate the Lease as set forth in Section 10.24(a) of the Original Lease, any breach by Landlord of any term or provision hereof shall, in addition to those rights set forth in Section 10.24(a) of the Original Lease, give Tenant the right to offset sums due Tenant from Landlord as a result thereof against sums payable hereunder to Landlord as Addition Company Payments. In addition, Tenant shall have the right to offset Addition Company Payments owed to Landlord hereunder against sums owed Tenant from time to time pursuant to the Indemnification Agreement (as defined in Section 1.2.A of this Amendment). So long as any Series 1999 Bonds remain Outstanding, or the Indenture has not been released, then notwithstanding a breach by Landlord, Tenant shall remain liable for the payment of all Addition Basic Rent to the Trustee and payment of other amounts (except Addition Company Payments) hereunder until termination of the Lease by Tenant as provided in the Original Lease. 5. Reaffirmation of Provisions of Articles III, IV, V and VI of the Original Lease. Subject to the last sentence of this paragraph, the Landlord and the Tenant reaffirm, ratify and restate the provisions of Articles III, IV, V and VI of the Original Lease relating to insurance, financial covenants, damage, destruction and condemnation and other provisions included therein, and agree that such provisions shall be equally applicable to the Addition and Addition Basic Rent payable hereunder. References in said Articles to "Occupancy Commencement Date" shall, with respect to the Addition, be deemed to refer to the Addition Occupancy Commencement Date. References therein to "Completion Date" shall, if the applicable damage, destruction or condemnation relates only to the Addition and occurs after the Completion Date, be deemed to refer to the 1999 Completion Date. References in Section 6.4 of the Original Lease to "Tenant" shall be deemed to refer to the Original Tenant. 6. Notices. Section 10.2 of the Original Lease is amended by deleting subsection (iii) and inserting in lieu thereof the following: 17 "(iii) To Trustee, at First Tennessee Bank National Association, 4385 Poplar Avenue, Memphis, Tennessee 38117, Attention: Corporate Trust Services." 7. Benefits of the Act. There shall be added to the Original Lease immediately following Section 10.10 thereof the following Section 10.10.A: 10.10.A Benefits of the Act. Landlord and Tenant acknowledge that the Series 1999 Bonds are being issued pursuant to the provisions of Section 57-10-401 et seq. of the Mississippi Code of 1972, as amended (the "Act"), so that Tenant may obtain certain benefits provided by the Act as set forth in Section 4.05 of the First Supplement to Loan Agreement. Tenant hereby acknowledges and accepts the obligations set forth in Section 4.05 of the First Supplement to Loan Agreement on its behalf, and said Section is hereby incorporated herein by reference. In order to comply with the requirements of Section 57-10-409 of the Act, Tenant hereby covenants and agrees as follows: (a) The Original Lease as amended by this Amendment may be assigned by Tenant (other than to an affiliate thereof) only upon the prior written consent of the Issuer following the adoption of a resolution by the Issuer to such effect. (b) Upon a default by Tenant in the payment of Addition Basic Rent hereunder, the Trustee, on behalf of the Issuer, may exercise the rights and remedies available under the Indenture and the Loan Agreement, including, but not limited to, acceleration of the Bonds, foreclosure of the Deed of Trust and termination of the Lease. 8. Miscellaneous. (a) All references in the Original Lease to sections in Article I or II shall be deemed to refer to the corresponding sections added by this Amendment as well. By way of example and not limitation, the reference in the second line of Section 2.4(a) of the 18 Original Lease to "Section 2.2(a) above" shall be deemed to refer to "Section 2.2(a) of the Original Lease and Section 2.2.A(a) of the Amendment." (b) The Original Lease shall be deemed amended in all other respects necessary to subject the Addition to its terms, and to make the Addition part of the Project. (c) Landlord and Tenant reaffirm all terms and provisions of the Original Lease not expressly amended hereby, and make all representations and warranties set forth therein as of the date hereof. Except as set forth in this Amendment, the Original Lease shall be unchanged and remains in full force and effect. (d) This Amendment may be executed in any number of counterparts, each of which shall be an original and the counterparts shall constitute but one and the same instrument. (e) This Amendment is to be governed and construed in accordance with the internal laws of the State of Mississippi, without regard to principles of conflicts of laws. 19 9. Joinder of Original Tenant. Williams-Sonoma, Inc., as Original Tenant under the Original Lease, joins herein to acknowledge and agree that, notwithstanding the Assignment, it remains jointly and severally liable for the performance of the obligations created by the Original Lease, and is jointly and severally liable for the performance of the obligations created by this Amendment. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Lease Agreement as of the day and year first above written. HEWSON/DESOTO PHASE I, L.L.C., an Arizona limited liability company BY: HEWSON PROPERTIES, INC., a California corporation By: /s/s Gary J. Hewson ---------------------------------- Gary J. Hewson, Chief Executive Officer LANDLORD WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC., a California corporation By: /s/ Jerry Owens ------------------------------------- Title: VP Operation ---------------------------------- TENANT WILLIAMS-SONOMA, INC., a California corporation By: ------------------------------------- Title: ---------------------------------- ORIGINAL TENANT 20 STATE OF TENNESSEE COUNTY OF SHELBY Personally appeared before me, TONYA S. COCHRAN, the undersigned authority in and for the said county and state, on this the 7th day of September, 1999, within my jurisdiction, the within-named GARY J. HEWSON, who acknowledged himself to be Chief Executive Officer of HEWSON PROPERTIES, INC., a California corporation, which corporation is the manager of HEWSON/DESOTO PHASE I, L.L.C., an Arizona limited liability company (the "Maker"), and that for and on behalf of said corporation and as its act and deed as manager of the Maker and for and on behalf of the Maker and as its act and deed, he executed and delivered the foregoing instrument after having been duly authorized so to do. ------------------------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF TENNESSEE COUNTY OF SHELBY Personally appeared before me, TONYA S. COCHRAN, the undersigned authority in and for the said county and state, on this the 7th day of September, 1999, within my jurisdiction, the within-named JERRY E. OWENS, who acknowledged that he is Vice-President and Assistant Secretary of WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC. and that for and on behalf of the said corporation, and as its act and deed, he executed and delivered the above and foregoing instrument, after first having been duly authorized by said corporation to do so. ------------------------------------------ Notary Public My Commission Expires: - ---------------------- 21 STATE OF TENNESSEE COUNTY OF SHELBY Personally appeared before me, TONYA S. COCHRAN, the undersigned authority in and for the said county and state, on this the 7th day of September, 1999, within my jurisdiction, the within-named DUANE WEEKS, who acknowledged that he is Senior Vice-President of WILLIAMS-SONOMA, INC., a California corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed and delivered the above and foregoing instrument, after first having been duly authorized by said corporation to do so. ------------------------------------------ Notary Public My Commission Expires: - ---------------------- 22 EXHIBIT "A" Real Property Description TRACT I: LOCATED IN DESOTO COUNTY, MISSISSIPPI: BEING A SURVEY OF PART OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER, PART OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER, PART OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER AND PART OF THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER, SECTION 25, TOWNSHIP 1 SOUTH, RANGE 6 WEST, DESOTO COUNTY MISSISSIPPI AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEAST CORNER OF SAID SECTION 25; THENCE S89 degrees32'11"W ALONG THE NORTH LINE OF SAID SECTION 25 A DISTANCE OF 80.00 FEET TO A POINT; THENCE S00 degrees31'04"E ALONG A LINE THAT IS 80.00 FEET WEST OF AND PARALLEL TO THE EAST LINE OF SAID SECTION 25 A DISTANCE OF 491.49 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING S00 degrees31'04"E ALONG A LINE THAT IS 80.00 FEET WEST OF AND PARALLEL TO THE EAST LINE OF SAID SECTION 25 A DISTANCE OF 1485.00 FEET TO A POINT; THENCE S89 degrees13'30"W A DISTANCE OF 1957.52 FEET TO A POINT; THENCE N00 degrees46'30"W A DISTANCE OF 1484.99 FEET TO A POINT; THENCE N89 degrees13'30"E A DISTANCE OF 1964.19 FEET TO THE POINT OF BEGINNING AND CONTAINING 2,911,841 SQUARE FEET OR 66.847 ACRES. TRACT II: THE RIGHTS BENEFITTING THE FOREGOING TRACT I CREATED BY (A) THAT CERTAIN RECIPROCAL STORM WATER DRAINAGE AGREEMENT BY AND BETWEEN HEWSON/DESOTO SOUTH, LLC AND HEWSON/DESOTO PHASE I, LLC DATED AS OF THE 1ST DAY OF DECEMBER, 1998, (B) THAT CERTAIN RECIPROCAL STORM WATER DETENTION AND DRAINAGE AGREEMENT BY AND BETWEEN HEWSON/DESOTO PHASE I, LLC AND WILLIAMS-SONOMA, INC. DATED AS OF THE 1ST DAY OF DECEMBER, 1998, (C) THAT CERTAIN RECIPROCAL CONNECTOR EASEMENT AGREEMENT BY AND BETWEEN HEWSON/DESOTO PHASE I, L.L.C. AND WILLIAMS-SONOMA, INC. DATED AS OF DECEMBER 1, 1998 AND (D) THAT CERTAIN PARKING EASEMENT AGREEMENT BY AND BETWEEN HEWSON/DESOTO PHASE I, L.L.C. AND WILLIAMS-SONOMA, INC. DATED AS OF DECEMBER 1, 1998, EACH RECORDED IN THE OFFICE OF THE CHANCERY CLERK, DESOTO COUNTY, MISSISSIPPI ON DECEMBER 11, 1998. 23 EXHIBIT "B" Plans for Addition Building and Improvements See Attached 2 24 RETAIL DISTRIBUTION CAMPUS, BUILDING ADDITION, WILLIAMS-SONOMA, OLIVE BRANCH, MS Parcel Two 260,640 S.F. Building Expansion Plans by H&M Design Services, P.C. Final Sheet # Prepared by: Sheet Title Date Revision Date - --------------------------------------------------------------------------------------------------------- Cover H-M Drawing Index 8/20/99 - --------------------------------------------------------------------------------------------------------- CE - 1.0 RSM Grading & Drainage Plan 8/17/99 - --------------------------------------------------------------------------------------------------------- A - 1.0 H-M Site Concrete Paving Plan 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 1.1 H-M Building Additional Floor Plan 7/22/99 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 1.2 H-M Enlarged Area Floor Plans 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 2.1 H-M Room Finish & Door Schedules/Details 7/22/99 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 3.1 H-M Building Addition Elevations 7/22/99 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 3.2 H-M Tilt-Up Wall Panel Elevations 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 3.3 H-M Tilt-Up Wall Panel Elevations 7/22/99 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 3.4 H-M Tilt-Up Wall Panel Elevations 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 4.1 H-M Wall Sections 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 4.2 H-M Wall Sections 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 5.1 H-M Architectural Details 7/22/99 8/20/99 - --------------------------------------------------------------------------------------------------------- A - 7.1 H-M Building Addition Roof Plan 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 7.2 H-M Flashing Detail 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 8.1 H-M Roof Opening Plan (Section "A") 7/22/99 - --------------------------------------------------------------------------------------------------------- A - 8.2 H-M Roof Opening Plan (Section "B") 7/22/99 - --------------------------------------------------------------------------------------------------------- C - 1.1 H-M Building Addition Foundation Plan 7/22/99 - --------------------------------------------------------------------------------------------------------- C - 2.1 H-M Foundation Sections and Details 7/22/99 - --------------------------------------------------------------------------------------------------------- C - 2.2 H-M Misc. Plans & Details 8/20/99 - --------------------------------------------------------------------------------------------------------- S - 1.1 H-M Building Addition Roof Framing Plan 7/22/99 - --------------------------------------------------------------------------------------------------------- S - 2.1 H-M Framing Sections & Details 7/22/99 - --------------------------------------------------------------------------------------------------------- M - 1.1 H-M Site Utilities Plan 8/20/99 - --------------------------------------------------------------------------------------------------------- M - 3.1 H-M Building Additional Plumbing Plans 8/20/99 - --------------------------------------------------------------------------------------------------------- M - 3.2 H-M Enlarged Area Plumbing Plans 8/20/99 - --------------------------------------------------------------------------------------------------------- M - 4.1 H-M Building Addtion HVAC Plan 8/20/99 - --------------------------------------------------------------------------------------------------------- M - 4.2 H-M HVAC Details, Schedules & Notes 8/20/99 - --------------------------------------------------------------------------------------------------------- M - 5.1 H-M Fire Protection Sprinkler Requirement Plan 8/18/99 - --------------------------------------------------------------------------------------------------------- E - 1.1 H-M Electrical Site Plan 8/12/99 - --------------------------------------------------------------------------------------------------------- E - 2.1 H-M Lighting Plan (Section "A") 8/2/99 - --------------------------------------------------------------------------------------------------------- E - 2.2 H-M Lighting Plan (Section "B") 8/3/99 - --------------------------------------------------------------------------------------------------------- E - 2.3 H-M Luminaire Schedule & Mounting Detail 8/11/99 - --------------------------------------------------------------------------------------------------------- E - 3.1 H-M Power Plan (Section "A") 8/12/99 - --------------------------------------------------------------------------------------------------------- E - 3.2 H-M Power Plan (Section "B") 8/12/99 - --------------------------------------------------------------------------------------------------------- E - 4.1 H-M One Line Diagram 8/12/99 - --------------------------------------------------------------------------------------------------------- E - 4.2 H-M Fan Control Panel Schedule 8/13/99 - --------------------------------------------------------------------------------------------------------- E - 4.3 H-M Panelboard Schedules 8/16/99 - --------------------------------------------------------------------------------------------------------- E - 5.1 H-M Systems Plan (Section "A") 8/20/99 - --------------------------------------------------------------------------------------------------------- E - 5.2 H-M Systems Plan (Section "B") 8/20/99 - --------------------------------------------------------------------------------------------------------- 25 EXHIBIT "C" 1999 Construction Budget See Attached C-1 26 EXHIBIT "C" TO FIRST AMENDMENT TO LEASE AGREEMENT PHASE TWO COST PROJECTION - WILLIAMS-SONOMA PROJECT 09/02/99 ASSUMPTIONS: - -- ------- ------- ------- ------- ----- --------- --------- ---------- - ADDITION TO EXISTING OLIVE BRANCH DISTRIBUTION BUILDING - 6 MONTH DEVELOPMENT TIMEFRAME - 9.25% RATE FOR CAPITALIZED INTEREST FUND BOND ISSUANCE WILL BE: $8,898,599 - -- ------- ------- ------- ------- ----- --------- --------- ---------- SUMMARY SQUARE FOOTAGE 260,640 S.F. - -- ------- ------- ------- ------- ----- --------- --------- ---------- % OF HARD COSTS: PER S.F. TOTAL TOTAL -------- ------ ---------- SHELL BUILDING & SITEWORK - 27.24 87.1% 7,100,798 GROSS RECEIPTS TAX SAVINGS (est.) (0.38) -1.2% (100,703) GRADING & STORM DRAINAGE 0.35 1.1% 82,262 PAYMENT & PERFORMANCE BOND 0.18 0.6% 45,957 TENANT IMPROVEMENTS - 0.00 0.0% 0 LAND - INCLUDED IN PRIOR ISSUANCE 0.00 0.0% 0 SOFT COSTS: ARCHITECTURAL & ENGINEERING - 0.96 2.8% 247,963 PERMITS & UTILITY FEES - 0.06 0.2% 22,000 EARNED INTEREST (5.0%) (0.28) -0.8% (68,482) EQUITY FINANCING INTEREST (8.0%) 0.00 0.0% 970 PROPERTY TAX - 0.01 0.0% 2,000 INSURANCE - 0.08 0.2% 21,000 LEGAL & ACCOUNTING - 0.26 0.8% 67,000 DEVELOPER'S OVERHEAD (3%)* 1.00 2.9% 260,000 TITLE RECORD - 0.05 0.1% 13,000 APPRAISALS/CONSULTANTS/TOXICS- 0.21 0.6% 54,200 TRAVEL 0.15 0.4% 40,000 CONTINGENCY (5% OF HARD COSTS) 1.57 4.0% 368,916 --------- -------- ---------- TOTAL DEPOSIT TO PROJ. CONSTR. FUND 31.29 91.6% 8,154,871 TOTAL UNDERWRITER'S DISCOUNT 0.43 1.3% 111,250 UNDERWRITER'S & BOND COUNSEL 0.21 0.8% 55,000 BOND ISSUANCE FEES 0.18 0.5% 43,000 DEPOSIT TO CAPITALIZED INTEREST FUND 2.05 6.0% 534,478 --------- --------- ---------- TOTAL USES 34.14 100.0% 8,398,599 - -- ------- ------- ------- ------- ----- --------- --------- ---------- * Developer's Overhead will be 3% of the final amount of the Series 1999 Bond after redemption of excess proceeds. C-2 27 EXHIBIT "C" COST PROJECTION SUPPORT SCHEDULE BREAKDOWN ARCH. & ENGINEER Proposal Amount 7,193,060 Owens Contract 199,953 Less: Site Grading (92,262) Will-Hayes 3,000 --------- Reaves & Sweeney Civil 15,000 Net Total Building Cost 7,100,798 Topo, ALTA, etc. 20,000 Landscape Design 0 Other 10,000 ------- Total 247,953 CONSULTANTS SITEWORK Construction consultant 6,000 Appraisal 7,200 Site Grading 92,262 Soils 3,000 Phase One 0 Consulting Fees 5,000 Sprinkler consultants 3,000 Construction testing 30,000 ------- Total 54,200 LEGAL Tax Attorney 3,000 Reviewing Bond Attorney 25,000 BOND ISSUANCE FEES Lease Counsel 20,000 Construction Contracts 6,000 Financial Advisor 7,000 Arch & Eng Contract 3,000 Validation 500 Accounting & Tax Prep 10,000 Trustee & Counsel Fees 9,000 W-S Lease & Bond Counsel 0 POS/Official Statement 5,500 --------- Issuer's Fee 15,000 Total 67,000 Miscellaneous Fees 6,000 ------- Underwriter's Counsel 21,000 Total 43,000 Bond Counsel 34,000 C-3 28 WILLIAMS-SONOMA CASH FLOW PROJECTIONS CONSTRUCTION AND LEASEUP INTEREST CARRY - MONTH -------------------------------------------------------------------------------------- 1 2 3 4 5 6 7 8 ------ ------- --------- --------- --------- --------- --------- --------- SOURCES OF FUNDS: Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-2000 Feb-2000 TOTALS - ----------------- ------ ------- --------- --------- --------- --------- --------- --------- --------- MEMBER LOAN TO LLC 29,100 57,294 (115,391) 0 CUMULATIVE LLC FUNDING 29,100 116,384 0 0 0 0 0 0 0 ------ ------- --------- --------- --------- --------- --------- --------- --------- BOND FINANCING 0 0 6,598,589 0 0 0 0 0 CUMULATIVE BOND FUNDING 0 0 6,598,589 0 0 0 0 0 6,598,589 ------ ------- --------- --------- --------- --------- --------- --------- --------- TOTAL SOURCES OF FUNDS 29,100 57,294 6,732,205 0 0 0 0 0 6,598,589 ------ ------- --------- --------- --------- --------- --------- --------- --------- USES OF FUNDS: SHELL BUILDING & SITEWORK - 2,130,238 1,426,150 1,420,180 1,420,188 710,080 7,000,798 GROSS RECEIPTS TAX SAVINGS (est.) (100,703) ( 100,703) GRADING & STORM DRAINAGE 92,282 92,282 PAYMENT & PERFORMANCE BOND 45,957 45,957 TENANT IMPROVEMENTS - 0 LAND - INCLUDED IN PRIOR ISSUANCE 0 SOFT COSTS: ARCHITECTURAL & ENGINEERING - 123,977 123,977 247,853 PERMITS & UTILITY FEES - 22,000 22,000 EARNED INTEREST (50%) (26,655) (19,650) (13,090) (5,752) (3,099) (68,482) EQUITY FINANCING INTEREST (8.0%) 194 776 970 PROPERTY TAX - 2,000 2,000 INSURANCE - 21,000 21,000 LEGAL & ACCOUNTING - 13,400 13,400 13,400 13,400 13,400 67,000 DEVELOPER'S OVERHEAD (3%) 250,000 250,000 TITLE RECORD - 13,000 13,000 APPRAISAL/CONSULTANTS/TOXICS - 9,033 9,033 9,033 9,033 9,033 9,033 54,200 TRAVEL - 6,667 6,667 6,667 6,667 6,667 6,667 40,000 CONTINGENCY (5% OF HARD COSTS) 0 0 113,423 71,008 71,008 30,469 358,916 ------ ------- --------- --------- --------- --------- --------- --------- --------- TOTAL MONTHLY DRAWS FROM PROJ CON. FUND 29,100 37,294 2,365,103 1,524,358 1,631,154 1,761,118 836,747 0 8,154,871 TOTAL UNDERWRITER'S DISCOUNT 111,250 111,250 PURCHASER'S & BOND COUNSEL 55,000 55,000 BOND ISSUANCE FEES 43,000 43,000 DEPOSIT TO CAPITALIZED INTEREST FUND 534,478 534,478 ------ ------- --------- --------- --------- --------- --------- --------- --------- TOTAL USES 29,100 37,294 3,128,830 1,624,358 1,631,154 1,761,116 636,747 0 8,898,699 CUMULATIVE BALANCE 29,100 116,394 2,501,487 4,125,854 5,757,008 7,310,124 8,154,871 8,154,871 PER S.F. UNIT COST 0.11 0.45 9.00 16.83 22.09 28.84 31.29 31.29 BOND INTEREST (9.75%) 50,302 68,593 68,593 68,593 68,593 68,593 393,269 FINANCING INTEREST ON LOAN (8.0%) 194 776 970 C-4 29 EXHIBIT "D" Addition Rent Schedule See Attached 30 EXHIBIT "D" GLOBAL LEASE BASIC COMPANY BASIC QRTS DATE INTEREST SINK FUND RENT PAYMENT RENT - --------------------------------------------------------------------------------------------------------- 0 01/01/00 $274,417 $0 $274,417 $11,125 $285,542 1 04/01/00 $205,813 $0 $205,813 $11,125 $216,938 2 07/01/00 $205,813 $65,000 $270,813 $11,125 $281,938 3 10/01/00 $204,309 $0 $204,309 $11,125 $215,434 4 01/01/01 $204,309 $70,000 $274,309 $11,125 $285,434 5 04/01/01 $202,691 $0 $202,691 $11,125 $213,816 6 07/01/01 $202,691 $70,000 $272,691 $11,125 $283,816 7 10/01/01 $201,072 $0 $201,072 $11,125 $212,197 8 01/01/02 $201,072 $75,000 $276,072 $11,125 $287,197 9 04/01/02 $199,338 $0 $199,338 $11,125 $210,463 10 07/01/02 $199,338 $75,000 $274,338 $11,125 $285,463 11 10/01/02 $197,603 $0 $197,603 $11,125 $208,728 12 01/01/03 $197,603 $85,000 $282,603 $11,125 $293,728 13 04/01/03 $195,638 $0 $195,638 $11,125 $206,763 14 07/01/03 $195,638 $85,000 $280,638 $11,125 $291,763 15 10/01/03 $193,672 $0 $193,672 $11,125 $204,797 16 01/01/04 $193,672 $90,000 $283,672 $11,125 $294,797 17 04/01/04 $191,591 $0 $191,591 $11,125 $202,716 18 07/01/04 $191,591 $95,000 $286,591 $11,125 $297,716 19 10/01/04 $189,394 $0 $189,394 $11,125 $200,519 20 01/01/05 $189,394 $100,000 $289,394 $11,125 $300,519 21 04/01/05 $187,081 $0 $187,081 $11,125 $198,206 22 07/01/05 $187,081 $105,000 $292,081 $11,125 $303,206 23 10/01/05 $184,653 $0 $184,653 $11,125 $195,778 24 01/01/06 $184,653 $105,000 $289,653 $11,125 $300,778 25 04/01/06 $182,225 $0 $182,225 $11,125 $193,350 26 07/01/06 $182,225 $110,000 $292,225 $11,125 $303,350 27 10/01/06 $179,681 $0 $179,681 $11,125 $190,806 28 01/01/07 $179,681 $120,000 $299,681 $11,125 $310,806 29 04/01/07 $176,906 $0 $176,906 $11,125 $188,031 30 07/01/07 $176,906 $125,000 $301,906 $11,125 $313,031 31 10/01/07 $174,016 $0 $174,016 $11,125 $185,141 32 01/01/08 $174,016 $130,000 $304,016 $11,125 $315,141 33 04/01/08 $171,009 $0 $171,009 $11,125 $182,134 34 07/01/08 $171,009 $135,000 $306,009 $11,125 $317,134 35 10/01/08 $167,888 $0 $167,888 $11,125 $179,013 36 01/01/09 $167,888 $140,000 $307,888 $11,125 $319,013 31 EXHIBIT "D" GLOBAL LEASE BASIC COMPANY BASIC QRTS DATE INTEREST SINK FUND RENT PAYMENT RENT - --------------------------------------------------------------------------------------------------------- 37 04/01/09 $164,650 $0 $164,650 $11,125 $175,775 38 07/01/09 $164,650 $145,000 $309,650 $11,125 $320,775 39 10/01/09 $161,297 $0 $161,297 $11,125 $172,422 40 01/01/10 $161,297 $155,000 $316,297 $11,125 $327,422 41 04/01/10 $157,713 $0 $157,713 $11,125 $168,838 42 07/01/10 $157,713 $160,000 $317,713 $11,125 $328,838 43 10/01/10 $154,013 $0 $154,013 $11,125 $165,138 44 01/01/11 $154,013 $170,000 $324,013 $11,125 $335,138 45 04/01/11 $150,081 $0 $150,081 $11,125 $161,206 46 07/01/11 $150,081 $180,000 $330,081 $11,125 $341,206 47 10/01/11 $145,919 $0 $145,919 $11,125 $157,044 48 01/01/12 $145,919 $180,000 $325,919 $11,125 $337,044 49 04/01/12 $141,756 $0 $141,756 $11,125 $152,881 50 07/01/12 $141,756 $190,000 $331,756 $11,125 $342,881 51 10/01/12 $137,363 $0 $137,363 $11,125 $148,488 52 01/01/13 $137,363 $205,000 $342,363 $11,125 $353,488 53 04/01/13 $132,622 $0 $132,622 $11,125 $143,747 54 07/01/13 $132,622 $210,000 $342,622 $11,125 $353,747 55 10/01/13 $127,766 $0 $127,766 $11,125 $138,891 56 01/01/14 $127,766 $220,000 $347,766 $11,125 $358,891 57 04/01/14 $122,678 $0 $122,678 $11,125 $133,803 58 07/01/14 $122,678 $230,000 $352,678 $11,125 $363,803 59 10/01/14 $117,359 $0 $117,359 $11,125 $128,484 60 01/01/15 $117,359 $240,000 $357,359 $11,125 $368,484 61 04/01/15 $111,809 $0 $111,809 $11,125 $122,934 62 07/01/15 $111,809 $250,000 $361,809 $11,125 $372,934 63 10/01/15 $106,028 $0 $106,028 $11,125 $117,153 64 01/01/16 $106,028 $270,000 $376,028 $11,125 $387,153 65 04/01/16 $99,784 $0 $99,784 $11,125 $110,909 66 07/01/16 $99,784 $280,000 $379,784 $11,125 $390,909 67 10/01/16 $93,309 $0 $93,309 $11,125 $104,434 68 01/01/17 $93,309 $285,000 $378,309 $11,125 $389,434 69 04/01/17 $86,719 $0 $86,719 $11,125 $97,844 70 07/01/17 $86,719 $305,000 $391,719 $11,125 $402,844 71 10/01/17 $79,666 $0 $79,666 $11,125 $90,791 72 01/01/18 $79,666 $315,000 $394,666 $11,125 $405,791 73 04/01/18 $72,381 $0 $72,381 $11,125 $83,506 32 EXHIBIT "D" GLOBAL LEASE BASIC COMPANY BASIC QRTS DATE INTEREST SINK FUND RENT PAYMENT RENT - --------------------------------------------------------------------------------------------------------- 74 07/01/18 $72,381 $335,000 $407,381 $11,125 $418,506 75 10/01/18 $64,634 $0 $64,634 $11,125 $75,759 76 01/01/19 $64,634 $345,000 $409,634 $11,125 $420,759 77 04/01/19 $56,656 $0 $56,656 $11,125 $67,781 78 07/01/19 $56,656 $365,000 $421,656 $11,125 $432,781 79 10/01/19 $48,216 $0 $48,216 $11,125 $59,341 80 01/01/20 $48,216 $380,000 $428,216 $11,125 $439,341 81 04/01/20 $39,428 $0 $39,428 $11,125 $50,553 82 07/01/20 $39,428 $400,000 $439,428 $11,125 $450,553 83 10/01/20 $30,178 $0 $30,178 $11,125 $41,303 84 01/01/21 $30,178 $415,000 $445,178 $11,125 $456,303 85 04/01/21 $20,581 $0 $20,581 $11,125 $31,706 86 07/01/21 $20,581 $435,000 $455,581 $11,125 $466,706 87 10/01/21 $10,522 $0 $10,522 $11,125 $21,647 88 01/01/22 $10,522 $455,000 $465,522 $0 $465,522 $12,349,829 $8,900,000 $21,249,829 $979,000 $22,228,829