EXHIBIT 10(a)
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") made
this _____ day of August , 2004, by and among LESCO SERVICES, INC., an Ohio
corporation, having an address of 15885 Sprague Road, Strongsville, OH 44136
("Assignor"), LESCO, INC., an Ohio corporation, having an address of 15885
Sprague Road, Strongsville, OH 44136 ("Lesco") and THE GLIDDEN COMPANY, d/b/a
ICI PAINTS, a Delaware corporation, having an address of 925 Euclid Avenue,
Cleveland, Ohio 44115 ("Assignee");
W I T N E S S E T H:
WHEREAS, LESCO and Lescar Company, Ltd., an Ohio limited liability
company ("Landlord") entered into that certain Lease for Land and Buildings
dated June 13, 2000, as amended (the "Lease"), affecting certain real property
and improvements consisting of a two-story office building of approximately
eighty-eight thousand eight hundred sixteen (88,816) square feet and the
adjacent one-story building of approximately five thousand five hundred
sixty-seven (5,567) square feet located at 15885 Sprague Road, Strongsville,
Ohio 44136, which real property is more particularly described on EXHIBIT "A"
attached hereto and incorporated herein by reference and constituting the entire
"Demised Premises" as described in the Lease; and
WHEREAS, on or about December 31, 2000, Lesco assigned the Lease to
Assignor, a wholly-owned subsidiary of Lesco, with the Landlord's prior written
consent, conditioned on the agreement that Lesco, in addition to Assignor,
remain primarily liable to Landlord for all monetary and non-monetary conditions
and obligations under the Lease in accordance with the terms thereof,
notwithstanding said assignment; and
WHEREAS, pursuant to Article XVII of the Lease, Assignor, with the
prior written consent of Landlord, has the right to assign its interest in the
Lease; and
WHEREAS, Assignor desires to assign the Lease to Assignee and
Assignee desires to accept the assignment of the Lease from Assignor and to
assume all of the "Tenant's" duties and obligations and Assignee agrees to
faithfully perform and be bound by the terms, conditions and covenants
thereunder; and
WHEREAS, following execution by Assignor, Lesco and Assignee, this
Assignment shall be effective on the date a mutually-acceptable "Landlord's
Consent" to this Assignment is executed by Landlord ("Effective Date"); and
WHEREAS, any capitalized terms used in this Assignment and not
defined shall have the same meaning as set forth in the Lease unless otherwise
expressly set forth herein to the contrary; and
WHEREAS, in the event that there is "conflict" in the terms of this
Assignment and the Lease, it is expressly understood and agreed that the terms
in the Lease shall govern except where those terms are specifically modified by
this Assignment and identified, in each case, as a "LEASE AMENDMENT" in bold
type.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. ASSIGNMENT. (a) Assignor hereby gives, grants, bargains, sells,
conveys, transfers and sets over unto Assignee, and its permitted successors and
assigns, as of the date which is one hundred (100) days after the Effective Date
or November 14, 2004, whichever is earlier (the "Delivery Date"), all of
Assignor's right, title and interest in and to the Lease as of the Delivery Date
upon the terms and conditions contained herein. Assignor shall deliver the
Demised Premises on the Delivery Date in the
following condition: (i) the Demised Premises shall be in broom clean condition
with all of Assignor's fixtures, furniture, equipment and signage removed,
except for those fixtures, furniture and equipment being purchased by Assignee
pursuant to Section 18 of this Assignment; (ii) except for (i) above, the
Demised Premises shall be delivered in their present "as-is" condition, subject
to normal wear and tear through the Delivery Date.
(b) Except as set forth in paragraph 31, herein, if Assignor does
not deliver the Demised Premises and the FF&E (if Assignee elects to purchase
under Section 18 below)) on or before the Delivery Date (through no fault of
Assignee), then Assignor and Lesco shall indemnify, hold harmless and reimburse
Assignee for any and all tangible and substantiated costs directly related to
said delay (including, without limitation, any holdover rent or business
interruption expenses actually incurred, and any increase in relocation expenses
actually incurred). For the purposes of this paragraph, delivery shall be deemed
to have occurred only upon satisfaction and/or waiver of the following: (i)
Assignor has delivered a fully executed original of this Assignment and a
consent executed by Landlord to Assignee (which is not subject to waiver by
Assignor, Lesco or Assignee); and (ii) Assignee's confirmation and approval that
the Demised Premises are in the physical condition as required under this
Assignment, which approval shall not be unreasonably withheld, conditioned or
delayed (subject to minor punchlist items to be completed by Assignor within 30
days after the Delivery Date). Assignee shall have the right to inspect the
Demised Premises prior to the Delivery Date for purposes of the foregoing
approval.
(c) Assignor and Lesco shall make available to Assignee all records,
reports, surveys, plans, specifications, site plans, engineering studies, and
other information and documentation related to the Demised Premises that is in
the possession or control of Assignor and Lesco and shall deliver all such items
to Assignee on or before the Delivery Date.
(d) Assignor and Lesco hereby agree to forever warrant and defend
this Assignment against all claims and causes of action brought by all persons
lawfully alleging or attempting to allege any right, title or interest by,
through or under Assignor or Lesco.
2. ASSUMPTION. Effective as of the Delivery Date, Assignee hereby
accepts the foregoing assignment and, in consideration thereof, Assignee hereby
covenants and agrees that, on and after the Delivery Date, Assignee will assume,
observe, perform, fulfill and be bound by all terms, covenants, conditions and
obligations of the Lease which accrue on and after the Delivery Date and are to
be observed, performed and fulfilled by the Tenant (as that term is used in the
Lease) on and after the Delivery Date in the same manner and to the same extent
as if Assignee were the Tenant named therein. Notwithstanding the foregoing to
the contrary, (a) Assignor and Lesco shall promptly reimburse Assignee on a
monthly basis for amounts paid by Assignee to Landlord for the Base Rent and
Taxes due and owing from the Delivery Date through April 30, 2005; (b) Assignee
agrees that it will perform no construction in the Premises prior to the
Delivery Date without the written consent of Landlord, Assignor and Lesco; and
(c) as between Assignor and Assignee, Assignor and Lesco shall bear full
responsibility for the environmental condition of the Demised Premises existing
prior to or as of the Delivery Date and any resulting violations of applicable
environmental laws, except to the extent caused by Assignee, its agents,
employees and contractors during the due diligence period.
3. COVENANTS, REPRESENTATIONS AND WARRANTIES.
(a) Assignor: As a material inducement for Assignee to enter into
this Assignment, Assignor and Lesco, jointly and severally, covenant,
represent and warrant to Assignee that as of the Effective Date and the
Delivery Date:
(i) the Lease (including amendments and any prior assignments)
attached hereto as EXHIBIT "B" and made a part hereof is a true and
complete copy and there have been no further
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amendments or modifications thereto, except for the Second Amendment and
Extension Agreement executed concurrently herewith;
(ii) the Lease represents the entire agreement between the
Landlord and Assignor or Lesco as to the leasing of the Demised Premises
and the Lease is in full force and effect and has not been assigned,
modified, supplemented, or amended, in whole or in part, in any way,
except as hereinbefore described;
(iii) (A) to the actual knowledge of Assignor and Lesco, there
are no underground storage tanks (in use or abandoned) on or about the
Demised Premises; (B) with the exception of two (2) underground
10,000-gallon gasoline storage tanks and a 500-gallon used oil tank which
were removed from the Demised Premises prior to Assignor and Lesco's
occupancy(1), neither Assignor nor Lesco, nor, to the actual knowledge of
Assignor or Lesco, any other owner or occupant of the Demised Premises,
has: (1) caused or permitted, and Assignor and Lesco have received no
notice and have no actual knowledge of, the generation, manufacture,
refinement, transportation, treatment, storage, deposit, release, salvage,
installation, removal, disposal, transfer, production, burning or
processing of any Hazardous Material or Dangerous Materials (as those
terms are defined by the Lease) on, under or about the Demised Premises
(except for office products and cleaning supplies that are normally used
in an office) or migration to any adjacent properties; (2) caused or
permitted, and Assignor and Lesco have received no notice and have no
actual knowledge of, the release or existence of any Hazardous Material or
Dangerous Materials on, under or affecting the Demised Premises or
migration to any adjacent properties; or (3) caused or permitted, and
Assignor and Lesco have received no notice and have no actual knowledge
of, any substances or conditions on, under or affecting the Demised
Premises or migration to any adjacent properties which may constitute a
violation of or support any claim or cause of action, whether by any
governmental agency or any other person, under any applicable federal,
state, or local law, rule, ordinance or regulation or under any common
law.
(iv) there exists no default on the part of Landlord or
Landlord's agent(s) or Assignor (or Lesco) under the Lease, nor, to
Assignor's and Lesco's actual knowledge, has any event occurred that, with
the passage of time or the giving of notice or both, would constitute a
default by Landlord, Assignor (or Lesco) under the Lease; Landlord and
Assignor and Lesco are in full compliance with their obligations under the
Lease; and prior to the Delivery Date and within three (3) business days
of Assignor's or Lesco's discovery or notice of an event of default
pursuant to the Lease, Assignor shall notify Assignee in writing of such
event of default.
(v) Assignor and Lesco are each an Ohio corporation, validly
existing and in good standing in the State of Ohio; Assignor and Lesco
have full power and authority to enter into this Assignment and perform
all of its duties and obligations under this Assignment and such execution
and performance have been duly authorized by all necessary corporate
action and approval and such action and approval has not been rescinded or
modified; and the undersigned signing on behalf of Assignor and Lesco is
duly authorized and empowered to execute this Assignment. At the request
of the title company, Assignor and Lesco shall provide Assignee with a
copy of such authorization, certified by an officer of each corporation;
(vi) Assignor, Lesco and Assignee agree that there are
currently four hundred twenty-three (423) parking spaces located on the
Demised Premises;
(vii) Notwithstanding any provision of the Lease to the
contrary, to Assignor's and Lesco's actual knowledge, other than local
city ordinances and Landlord's prior written
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(1) A "no further action" letter has been issued under BUSTR regulations, dated
March 15, 1994.
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approval, there are no restrictions prohibiting Assignee from converting
Assignor's existing building signage (including the Sprague Road sign) to
Assignee's signage, at Assignee's sole cost and expense, as set forth on
EXHIBIT "C", attached hereto and made a part hereof;
(viii) until the Delivery Date, Assignor and Lesco shall: (A)
perform all of its obligations pursuant to the Lease other than as shall
be the obligation of Assignee pursuant to this Assignment, (B) maintain
the Demised Premises in good-working condition; make all repairs and
replacements as required pursuant to the Lease; and maintain all insurance
coverages required pursuant to the Lease, (C) not cause any liens,
encumbrances or other defects in title to attach to the leasehold estate
(except real estate taxes) without the prior written consent of Assignee,
which consent shall not be unreasonably withheld, conditioned or delayed;
provided, however that all such liens, encumbrances or other title defects
shall be removed or cured prior to the Delivery Date; and (D) pay all
utilities, taxes, insurances and other obligations with respect to the
Demised Premises accrued as of the Delivery Date, subject to the parties'
agreement that Taxes due and payable in the first half of 2005 and
thereafter shall be paid by Assignee, but Assignor shall reimburse
Assignee for Taxes assessed from the Delivery Date through April 30, 2005,
prorated on a per diem basis.
(ix) to the best of Assignor and Lesco's knowledge, no
commissions are owed with respect to the original execution of the Lease,
and any commission that Landlord owed to CB Richard Ellis was paid;
(x) this Assignment, upon execution by Assignor and Lesco,
constitutes the valid and legally binding obligations of Assignor and
Lesco, enforceable against Assignor and Lesco in accordance with their
respective terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or other similar laws,
and general equitable principles;
(xi) other than the consent of Landlord and Landlord's lender,
no consent, approval, order or authorization of, or registration,
declaration or filing with any governmental authority or any other person
is required in connection with the execution and delivery by the Assignor
and Lesco of this Assignment and the documents and instruments to be
executed and delivered by it pursuant hereto or the consummation by it of
the transactions contemplated hereby, except as otherwise expressly
provided herein;
(xii) Assignor's leasehold interest is free of all liens and
encumbrances, including without limitation, construction or mechanic's
liens, and Assignor has not commenced any construction or taken any other
action that may result in such a lien;
(xiii) there are no actions, suits or proceedings pending, or
to the actual knowledge of Assignor or Lesco threatened, before any
judicial body or any governmental authority or any order, writ,
injunction, decree or demand of any court of any governmental authority
relating to the Lease or the Demised Premises or any part thereof, and to
Assignor's and Lesco's actual knowledge, the Demised Premises is in
compliance with all laws, rules, regulations and orders applicable
thereto;
(xiv) neither Assignor nor Lesco has filed a voluntary
petition in bankruptcy and no third party has commenced an involuntary
petition in bankruptcy against Assignor or Lesco, and no trustee, receiver
or similar officer has been appointed for Assignor, Lesco or the Demised
Premises. Assignor and Lesco are each able to pay its liabilities as they
become due and the value of each of its assets exceed its liabilities;
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(xv) to the extent permitted by the hereindefined Guarantees
and Permits, Assignor and Lesco shall and do hereby assign to the Assignee
all of its rights, title and interest in and to all warranties and
guarantees (the "Guarantees") given in connection with the construction,
maintenance or repair of the Demised Premises or the FF&E (if purchased)
to the extent any such Guarantees remain in existence on the Delivery Date
and are transferable to Assignee, and all certificates of occupancy,
permits, licenses, approvals and authorizations (the "Permits") issued by
any federal, state, county or municipal government or quasi-governmental
authority relating to the Demised Premises, to the extent any such Permits
herein are in existence on the Delivery Date and are transferable to
Assignee;
(xvi) subject to the obligations set forth in the Lease and
the obligations to the Landlord thereunder, all service agreements
pertaining to the Demised Premises shall have been terminated by Assignor
and/or Lesco on or before the Delivery Date without any obligation or
liability to Assignee;
(xvii) except as disclosed in Chicago Title Insurance
Company's commitment no. 24210077 dated April 26, 2004 ("Commitment"),
neither Assignor nor Lesco has received any notice of, and to their actual
knowledge, there are no (i) proposed special assessments, condemnation, or
changes in the roads adjacent to the Demised Premises other than proposed
curb cuts to the adjacent property in the cul-de-sac ; (ii) pending public
improvements which will result in any charge being levied or assessed
against, or a lien being created upon, the Demised Premises; or (iii)
pending or threatened eminent domain or condemnation proceedings against
or involving the Demised Premises or any adjacent parcel;
(xviii) except for the assignment described in the Recitals
above, neither Assignor nor Lesco has previously assigned its interest in
the Lease nor sublet the Demised Premises to any other party and there are
no existing agreements or options to so assign or sublet; there are no
other leases, licenses, occupancy rights or other interests in the Demised
Premises, other than those approved in writing by Assignee; and on the
Delivery Date, Assignee shall have exclusive possession of the Demised
Premises, subject to Assignee's faithful performance of all obligations
under the Lease and to Landlord's rights of entry pursuant to the Lease
and Assignor and Lesco's rights of entry pursuant to the terms of this
Assignment; and
(xix) the execution and delivery of this Assignment and
performance by Assignor and Lesco will not conflict with or result in a
violation of, or breach of, or constitute a default under, any law or
administrative regulation or any of the terms, conditions or provisions of
any judgment, decree, loan agreement, bond, note, resolution, indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party and which affects the Assignee or Lesco or the transactions
contemplated by this Assignment.
Except as otherwise expressly provided herein, the covenants,
representations and warranties of Assignor are also conditions of
Assignee's obligations hereunder and are true as of the Effective Date and
shall be true on the Delivery Date as if those representations and
warranties were made on and as of such time. Assignor shall fully disclose
to Assignee and Landlord, promptly after its occurrence, any change in
facts or circumstances of which Assignor becomes aware prior to the
Delivery Date that may affect the representations and warranties set forth
above. The covenants, representations and warranties made by Assignor and
Lesco hereunder shall survive the Delivery Date.
(b) Assignee: As a material inducement for Lesco and Assignor to
enter into this Assignment, Assignee covenants, represents and warrants to
Lesco and Assignor that as of the Effective Date and the Delivery Date:
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(i) the undersigned signing on behalf of Assignee is duly
authorized and empowered to execute this Assignment;
(ii) Assignee is a Delaware corporation duly organized,
validly existing and in full force and effect under the laws of the State
of Delaware and is and shall remain duly-registered to conduct business in
the State of Ohio. Assignee has full power and authority to enter into
this Assignment and perform all of its duties and obligations under this
Assignment and such execution and performance have been duly authorized by
all necessary corporate approval. At the request of Assignor or Lesco,
Assignee shall provide a copy of such authorization, certified by an
officer of the corporation;
(iii) in the event that Assignee is successful in obtaining an
amendment to the Lease to extend the Term of the Lease beyond January 14,
2016 (the "Extension Term"), neither Lesco nor Assignor shall have rights
or obligations with respect to such Extension Term;
(iv) any negotiations conducted by Assignee with Landlord
regarding the terms of the Lease and/or the Extension Term of the Lease
shall not culminate in any agreement whereby Lesco's and/or Assignor's
obligations, duties or rights under the Lease might be materially
adversely affected, unless Lesco and Assignor consent in writing to the
terms of such agreement. Assignee shall give Lesco prior written notice of
all proposed Lease amendments, and all amendments that might have a
material effect on Lesco or Assignor shall be subject to the approval of
Lesco and Assignor; provided, however, that such approval shall not be
unreasonably withheld, conditioned or delayed;
(v) this Assignment, upon execution by Assignee, constitutes
the valid and legally binding obligations of Assignee, enforceable against
Assignee in accordance with their respective terms, subject to the effect
of applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or other similar laws, and general equitable principles;
(vi) the execution and delivery of this Assignment and
performance by Assignee will not conflict with or result in a violation
of, or breach of, or constitute a default under, any law or administrative
regulation or any of the terms, conditions or provisions of any judgment,
decree, loan agreement, bond, note, resolution, indenture, mortgage, deed
of trust or other agreement or instrument to which it is a party and which
affects the Assignee or the transactions contemplated by this Assignment;
(vii) other than the consent of Landlord and Landlord's
lender, no consent, approval, order or authorization of, or registration,
declaration or filing with any governmental authority or any other person
is required in connection with the execution and delivery by the Assignee
of this Assignment and the documents and instruments to be executed and
delivered by it pursuant hereto or the consummation by it of the
transactions contemplated hereby, except as otherwise expressly provided
herein; and
(viii) Assignee has not filed a voluntary petition in
bankruptcy and no third party has commenced an involuntary petition in
bankruptcy against Assignee, and no trustee, receiver or similar officer
has been appointed for Assignee. Assignee is able to pay its liabilities
as they become due and the value of its assets exceeds its liabilities;
(ix) Assignee shall have arranged at its own expense for all
services required under the Lease, effective as of the Delivery Date.
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Except as otherwise expressly provided herein, the covenants,
representations and warranties of Assignee are also conditions of Lesco's
and Assignor's obligations hereunder and are true as of the Effective Date
and shall be true on the Delivery Date as if those representations and
warranties were made on and as of such time. Assignee shall fully disclose
to Lesco, Assignor and Landlord, promptly after its occurrence, any change
in facts or circumstances of which Assignee becomes aware prior to the
Delivery Date that may affect the representations and warranties set forth
above. The covenants, representations and warranties made by Assignee
hereunder shall survive the Delivery Date.
4. INDEMNIFICATION. (a) Assignee hereby indemnifies and agrees to
defend and hold harmless Lesco and Assignor, including their respective
shareholders, directors, officers, successors and assigns from and against
any and all liability, loss, damage, cost and expense, including without
limitation reasonable attorneys' fees, arising from or in connection with:
(i) any failure or alleged failure of Assignee or its
successor-in-interest to have complied with or to have performed, the
obligations of the Tenant under the Lease, as amended, but only to the
extent such obligations accrue from and after the Delivery Date; (ii) the
environmental condition of the Demised Premises caused or suffered to be
created by Assignee, its agents, employees or contractors from and after
the Delivery Date, and any violations of applicable environmental laws
arising therefrom, but specifically excluding any violations or conditions
existing prior to or as of the Delivery Date; (iii) any monetary and
non-monetary obligations owed to Landlord pursuant to the Lease accruing
from and after the Delivery Date, including, without limitation, Base
Rent, Operating Costs, utilities, Additional Rent, and/or Taxes; (iv) any
breach by Assignee of the covenants, warranties and representations made
under this Assignment; and (v) any liabilities, claims or costs related to
Assignee's occupancy of the Demised Premises from and after the Delivery
Date. The foregoing indemnifications shall survive the Delivery Date.
(b) Assignor and Lesco, jointly and severally, hereby indemnify and
agree to defend and hold harmless Assignee, its shareholders, directors,
officers, successors and assigns from and against any and all liability,
loss, damage, cost and expense, including without limitation reasonable
attorneys' fees, arising from or in connection with (i) any failure or
alleged failure of Assignor or Lesco to have complied with or to have
performed, the obligations of the Tenant under the Lease, but only to the
extent such obligations accrue prior to the Delivery Date; (ii) the
environmental condition of the Demised Premises existing prior to or as of
the Delivery Date and caused by Assignor or Lesco or for which Assignor or
Lesco is liable under the Lease or under applicable environmental laws,
and any violations of applicable environmental laws arising therefrom;
(iii) any monetary and non-monetary obligations owed to Landlord pursuant
to the Lease accruing or required to be performed prior to the Delivery
Date; (iv) any liabilities, claims or costs related to Assignor's or
Lesco's occupancy of the Demised Premises prior to the Delivery Date; (v)
any unapproved or non-conforming construction or improvements made to the
Demised Premises by Assignor or Lesco; (vi) any obligation pursuant to the
Lease, as amended, to remove any approved and conforming structures and/or
improvements made to the Demised Premises by Assignee, Assignor or Lesco
and return the Demised Premises to its original condition; (vii) any and
all brokers' commissions with respect to the Lease and Assignment other
than the commission for the Extension Term and any broker engaged by
Assignee other than Staubach; (viii) any breach by Assignor of the
covenants, warranties and representations made under this Assignment; (ix)
any commission contemplated to be owed pursuant to any separate agreement
with CB Richard Ellis; and (x) Assignor's activities at the Demised
Premises pursuant to Section 12 of this Assignment. The foregoing
indemnifications shall survive the Delivery Date.
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(c) Notwithstanding the foregoing provisions of this Article of this
Agreement, the parties recognize and agree that the primary rights and
sole obligations of Landlord are set forth in the Lease, irrespective of
the agreements by and between the Assignor and Assignee, unless the
Landlord has expressly consented to a specific modification of such rights
and obligations and, further, that Landlord has no obligations under this
Section 4.
(d) A party claiming indemnification under this Assignment (an
"Indemnified Party") shall with reasonable promptness: (1) notify the
party from whom indemnification is sought (the "Indemnifying Party") of
any third-party claim or claims asserted against the Indemnified Party
("Third Party Claim") for which indemnification is sought, and (2)
transmit to the Indemnifying Party a copy of all papers served with
respect to such claim (if any) and a written notice ("Claim Notice")
containing a description in reasonable detail of the nature of the Third
Party Claim, an estimate of the amount of damages attributable to the
Third Party Claim to the extent feasible (which estimate shall not be
conclusive of the final amount of such claim) and the basis of the
Indemnified Party's request for indemnification under this Agreement.
Within fifteen (15) days after receipt of any Claim Notice (the
"Election Period"), the Indemnifying Party shall notify the Indemnified
Party (i) whether the Indemnifying Party disputes its potential liability
(in whole or in party) to the Indemnified Party with respect to such Third
Party Claim, and (ii) whether the Indemnifying Party desires to defend the
Indemnified Party against such Third Party Claim.
If the Indemnifying Party notifies the Indemnified Party within the
Election Period that the Indemnifying Party elects to assume the defense
of the Third Party Claim, then the Indemnifying Party shall have the right
to defend such Third Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted diligently by the Indemnifying Party to a
final conclusion or settled at the discretion of the Indemnifying Party in
accordance with this paragraph (d). If requested by the Indemnifying
Party, the Indemnified Party agrees to cooperate with the Indemnifying
Party and its counsel in contesting any Third Party Claim that the
Indemnifying Party elects to contest. Except as otherwise provided herein,
the Indemnified Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to this Section (d) and shall bears its own costs and expenses
with respect to such participation.
If the Indemnifying Party fails to notify the Indemnified Party
within the Election Period that the Indemnifying Party elects to defend
the Indemnified Party pursuant to this Section (d), or if the Indemnifying
Party elects to defend the Indemnified Party but fails to prosecute or
settle the Third Party Claim as herein provided, then the Indemnified
Party shall have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings,
which proceedings shall be promptly, vigorously and reasonably prosecuted
by the Indemnified Party to a final conclusion or settled; provided,
however, that notwithstanding the foregoing, if the Indemnified Party
undertakes the defense of such Third Party Claim, it shall not be deemed
to waive any right to indemnification hereunder nor the right to recover
any costs or expenses incurred in the defense or settlement of such Third
Party Claim. The Indemnifying Party may participate in, but not control,
any defense or settlement controlled by the Indemnified Party pursuant to
this Section (d), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
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The Indemnifying Party shall not settle or compromise any Third
Party Claim unless: (i) the terms of such compromise or settlement require
no more than the payment of money (i.e., such compromise or settlement
does not require the Indemnified Party to admit any wrongdoing or take or
refrain from taking any action), (ii) the full amount of such monetary
compromise or settlement will be paid by the Indemnifying Party, and (iii)
the Indemnified Party receives as part of such settlement a legal, binding
and enforceable unconditional satisfaction and/or release, in form and
substance reasonably satisfactory to it, providing that such Third Party
Claim and any claimed liability of the Indemnified Party with respect
thereto is being satisfied by reasons of such compromise or settlement and
that the Indemnified Party is being released from all obligations or
liabilities it may have with respect thereto. The Indemnified Party shall
not settle or admit liability to any Third Party Claim without the prior
written consent of the Indemnifying Party unless: (x) the Indemnifying
Party has disputed its potential liability to the Indemnified Party,
causing the Indemnified Party to undertake its own defense; the
Indemnified Party reasonably prosecutes and/or settles such Third Party
Claim, and the dispute over indemnification is resolved in favor of the
Indemnified Party or (y) the Indemnifying Party has failed to respond to
the Indemnified Party's Claim Notice within the Election Period.
In the event any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim,
the Indemnified Party shall, with reasonable promptness, transmit to the
Indemnifying Party a written notice (the "Indemnity Notice") describing in
reasonable detail the nature of the claim, an estimate of the amount of
damages attributable to such claim to the extent feasible (which estimate
shall not be conclusive of the final amount of such claim) and the basis
of the Indemnified Party's request for indemnification under this
Agreement.
5. BROKERS. The parties each represent to the other that Weber Wood
Medinger and Staubach (collectively, the "Broker") were the only real estate
brokers involved in presenting or arranging for the consummation of this
Assignment. Assignor and Lesco shall be responsible for all brokerage
commissions with respect to the existing Lease Term due to Broker and Assignor
and Lesco shall indemnify and hold Landlord harmless from any costs, expenses or
liabilities in relation therewith. Assignor and Lesco shall not be obligated to
pay any commission with respect to the Extension Term. Assignor/Lesco and
Assignee represent and warrant each to the other that each has not dealt with
any real estate agent or broker in connection with this transaction other than
Broker and agree to indemnify and save each other harmless from and against all
loss, cost and expense incurred by reason of the breach of such representation
and warranty. The foregoing indemnifications shall survive the Delivery Date.
6. MEMORANDUM OF ASSIGNMENT. This Assignment shall not be recorded
by either party; provided, however, that after this Assignment has been executed
by Landlord, the parties shall execute a Memorandum of Assignment of Lease which
Memorandum shall be in recordable form as required in Cuyahoga County, Ohio and
which Memorandum shall set forth such terms as Landlord, Assignee and Assignor
mutually agree.
7. NOTICES. Notices hereunder shall be given by United States mail,
postage prepaid, certified with return receipt requested, by hand delivery, by
facsimile, or by a nationally recognized overnight courier (with evidence of
receipt) and shall be effective upon receipt or refusal of receipt, and shall be
addressed to the parties as follows:
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(a) If intended for Assignor or Lesco, to:
Prior to the Delivery Date:
Lesco, Inc.
15885 Sprague Road
Strongsville, Ohio 44136
Attn: Real Estate
with a copy to:
Lesco, Inc.
15885 Sprague Road
Strongsville, Ohio 44136
Attn: Legal Department
After the Delivery Date:
Lesco, Inc.
1301 East Ninth Street
Suite 1300
Cleveland, OH 44114
Attn: Real Estate
with a copy to:
Lesco, Inc.
1301 East Ninth Street
Suite 1300
Cleveland, OH 44114
Attn: Legal Department
(b) If intended for Assignee, to:
Prior to and for 60 days following the Delivery Date:
The Glidden Company d/b/a ICI Paints
925 Euclid Avenue
Cleveland, Ohio 44115
Attn: Real Estate Department
More than 60 days after the Delivery Date:
The Glidden Company d/b/a ICI Paints
15885 Sprague Road
Strongsville, Ohio 44136
Attn: Real Estate Department
with a copy to:
Ulmer & Berne, LLP
1300 E.9th Street
Penton Media Bldg., Ste. 900
Cleveland, Ohio 44115
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Attn: Brian O'Neill, Esq.
And a copy to Landlord:
Lescar Company, Ltd.
c/o Carnegie Management and Development Corporation
27500 Detroit Road, Suite 300
Westlake, Ohio 44145
Attn: President
Address for service of notice may be changed by written notice to
the other party delivered in accordance with this Section.
8. SUCCESSORS AND ASSIGNS. The terms and conditions of this
Assignment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
9. COUNTERPARTS. This Assignment may be executed in counterparts,
each of which shall be deemed an original, and all of which shall constitute one
document.
10. GOVERNING LAW. The terms of this Assignment shall be governed by
the laws of the State of Ohio and only courts located in Cuyahoga County shall
have jurisdiction to hear disputes arising hereunder, the parties hereto having
consented to the exercise of personal jurisdiction by said courts.
11. WAIVER. Assignee, Assignor and/or Lesco may, by a written
instrument, extend the time for, or waive the performance of, any of the
obligations of the others or waive compliance by the others with any of the
covenants or conditions contained in this Assignment, provided such instrument
does not cause a direct or indirect default under the Lease or Landlord's
Consent which is attached hereto or to the Second Amendment to Lease and
Extension Agreement.
12. RIGHT TO ACCESS. Subject to Landlord's rights under the Lease,
to the extent Assignor and/or Lesco remains liable under the Lease, Lesco and/or
Assignor, by any duly authorized agent, employee, contractor or representative
and upon reasonable notice to Assignee and Landlord, shall have access to the
Demised Premises and each and every part thereof at any and all reasonable times
during business hours to inspect the same for any purpose, including, but not
limited to, the determination of the condition of the Demised Premises or any
part thereof, and the repair and maintenance thereof, if necessary, the progress
of any approved work undertaken by Assignee, and generally Assignee's
performance of and compliance with the terms and provisions of this Assignment
and the Lease; provided, however, that in the event of an emergency Lesco and
Assignor shall not be required to give notice. If during such inspection Lesco
and/or Assignor determines that maintenance or repair work (which is then
required to be performed by Assignee under this Assignment or the Lease) needs
to be undertaken, and such maintenance and/or repair work is not commenced
within the applicable time period specified in the Lease following receipt of
Lesco's and Assignor's written notice such work may be undertaken by Lesco
and/or Assignor in the manner specified in the Lease, and any costs incurred as
a result of such work shall be the responsibility of Assignee and shall be
reimbursed by Assignee to Lesco/Assignor within thirty (30) days of Assignee's
receipt of an invoice from Lesco/Assignor. During any access, Lesco and Assignor
shall use their best efforts not to interfere with Assignee's business
operations at the Demised Premises. Lesco and Assignor's rights of access under
this paragraph shall be subject to Assignee's reasonable rules and regulations
(provided that Assignee must notify Assignor and Lesco of such rules and
regulations) and Assignee's right to have a representative of Assignee present
during all inspections and activities.
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13. ANNUAL EVIDENCE OF ASSIGNEE'S NET WORTH. As a material
inducement for Landlord to consent to this Assignment, Assignor and Lesco,
jointly and severally, covenant, represent and warrant to Landlord that Assignor
and Lesco shall be and remain fully responsible to Landlord for all obligations
under the Lease (but not to the extent that rent and other charges may have been
added, increased or otherwise affected by the Second Amendment to Lease and
Extension Agreement) until such date as Landlord's lender confirms that, in its
reasonable business judgment, Assignee has appropriately demonstrated that, for
a period of twenty-four consecutive months, it has and is maintaining a net
worth equal to or greater than ninety million dollars ($90,000,000) using
generally accepted accounting principles ("Net Worth Threshold"). Immediately
upon receipt of written confirmation from Landlord's lender, Landlord shall
notify Assignee, Assignor and Lesco in writing of the date on which Landlord's
lender confirmed that Assignee met the Net Worth Threshold and Assignee shall,
as of the date of lender's determination and by that fact, become solely and
remain fully responsible to Landlord for all obligations under the Lease and
under the Lease Amendment and Extension Agreement, including the payment of rent
and all other charges under the Lease and the Lease Amendment and Extension
Agreement and shall remain so responsible until the expiration of the Lease as
extended per the Assignment and the Lease Amendment and Extension Agreement. For
so long as Assignor and/or Lesco remains liable under the Lease, Assignee shall
provide to Assignor and Lesco, annually and by March 31 of each year, an
affidavit from an authorized representative who shall attest to Assignee's net
worth as of December 31 of the previous year. (Net worth shall be calculated
using generally accepted accounting principles.) At the request of Assignor or
Lesco, Assignee shall make available for inspection by Assignor, Lesco, Landlord
and/or Landlord's lender unaudited financial statements in support of Assignee's
net worth calculation and at the request of Landlord or Landlord's lender, will
provide additional information or documentation in support of such calculation,
a copy of which additional information or documentation also shall be provided
by Assignee to Assignor and Lesco. The unaudited financial statements shall take
the form as shown in EXHIBIT H. The information disclosed by Assignee under this
paragraph shall be kept confidential by Assignor, Lesco and Landlord to the
extent it is not publicly known. Landlord agrees to cooperate with Assignor and
Lesco to obtain the expeditious review by Landlord's lender of such information
as Assignor and Lesco believe will demonstrate that Assignee has met the Net
Worth Threshold.
14. CONDITIONS TO PARTIES' OBLIGATIONS.
(a) In addition to the conditions described in Section 3 above, the
obligations of Assignee under this Assignment are contingent upon the
satisfaction and/or waiver of the following conditions, which conditions
are deemed satisfied and the contingencies are released and discharged by
Assignee upon the written acceptance of this Assignment by Assignee on the
Delivery Date:
(i) Assignee, at its sole cost and expense, shall obtain an
ALTA Lessee's Policy of Title Insurance in an amount reasonably
determined by Assignee and insuring the leasehold interest in the
Demised Premises, subject only to exceptions of record as set forth
in the Commitment; provided, however, that all standard exceptions
shall be deleted to the extent possible and the title policy shall
include the following endorsements: contiguity, access, survey (if
available) and comprehensive. In the event of any other title or
survey exception, Assignee shall notify Assignor and the Title
Company in writing of Assignee's objection thereto. In the event
that such a title or survey objection is not corrected by Assignor
within thirty (30) days after the date of receipt by Assignor of
notice from Assignee, or if Assignor, at Assignor's option, is
unwilling to so correct, then Assignee may, at Assignee's option, to
be exercised by written notice to Assignor and Lesco within ten (10)
days after the expiration of such thirty (30) day period, either:
(X) accept such title as Assignor is able to furnish; (Y) grant
Assignor additional time in which to cure any defect; or (Z)
terminate this Assignment. Upon such termination no
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party hereto shall thereafter be under any further obligation to the
other party hereto. Assignor and Lesco agree to execute such forms
and affidavits as are customary in order to allow the Title Company
to delete the standard exceptions from the title policy.
(ii) Assignor shall have provided to Assignee an estoppel
certificate from Landlord in the form attached hereto as EXHIBIT I,
which estoppel certificate shall be updated as of the Delivery Date
and must show no exceptions that Assignee is unwilling to accept.
(iii) Assignee, at its sole cost and expense, shall have
negotiated with Landlord an amendment to the Lease in the form
attached hereto as EXHIBIT J, which amendment ("Second Amendment to
Lease and Extension Agreement") shall be signed simultaneously with
the execution of this Assignment and which amendment shall be
effective on the Delivery Date only upon the execution by Landlord
and the assignment of the Lease from Assignor to Assignee.
(iv) Assignee, at its sole cost and expense, shall have
obtained, prior to the initiation thereof, Landlord's prior written
consent in Landlord's sole discretion to Assignee's proposed
alterations and improvements set forth on EXHIBIT "D" attached
hereto and made a part hereof.
(v) Assignee shall have obtained, at no cost or obligation to
Landlord, a fully executed Subordination, Non-Disturbance and
Attornment Agreement from Landlord's lender, which agreement shall
be in a form reasonably acceptable to Assignee
(vi) There shall be no material adverse change in the Demised
Premises or the physical condition thereof or the Lease between May
14, 2004, and the Delivery Date; and there shall have been no
material taking or notice of intent of a material taking or sale in
lieu of a taking with respect to the Demised Premises or any part
thereof.
(vii) Assignor and Lesco shall have performed, observed, and
complied with all of the covenants, agreements and conditions
required by this Assignment to be performed, observed and
complied with by Assignor and Lesco prior to the Delivery Date
as and when required.
(viii) All of the representations and warranties made by
Assignor and Lesco and set forth in this Assignment shall be
true and correct as of the Effective Date and as of the
Delivery Date.
(ix) Landlord shall have consented to this Assignment within
two (2) business days after receipt of an executed copy
of same;
(x) Landlord's lender shall have consented to the December 31,
2000 assignment from Lesco to Assignor (if required) and shall have
consented to this Assignment within two (2) business days after
receipt of an executed copy of same.
(xi) Assignee shall have received approvals from the city of
Strongsville and other governmental agencies for Assignee's
application for tax abatement and other economic incentives, which
application shall be submitted by Assignee following the Effective
Date of this Assignment.
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(b) The obligations of Assignor and Lesco under this Assignment are
contingent upon the satisfaction and/or waiver of the following
conditions:
(i) Landlord shall have consented to this Assignment within
two (2) business days after receipt of an executed copy of same;
(ii) Landlord's lender shall have consented to the December
31, 2000 assignment from Lesco to Assignor (if required) and shall
have consented to this Assignment within two (2) business days after
receipt of an executed copy of same;
(iii) Assignee shall have performed, observed, and complied
with all of the covenants, agreements and conditions required by
this Assignment to be performed, observed and complied with by
Assignee prior to or as of the Delivery Date as and when required;
(iv) All of the representations and warranties made by
Assignee and set forth in this Assignment shall be true and correct
as of the Effective Date and as of the Delivery Date; and
(v) Assignee shall waive any due diligence period remaining as
of the Effective Date of this Assignment.
(c) If any of the conditions set forth in this Assignment are not
timely satisfied or waived prior to the Delivery Date by the party to whom
the condition applies, then such party, at its sole option, shall have the
right, exercisable by notice to the other: (1) to waive such condition;
(2) to terminate this Assignment, in which event this Assignment shall
have no further force or effect; or (3) to extend the Delivery Date on a
day-to-day basis for a period not longer than ninety (90) days to permit
the other party to satisfy such conditions.
(d) Notwithstanding any other provision of this Assignment, if
Assignee defaults under the Lease (subject to applicable grace and cure
periods) prior to the date Assignor and Lesco are relieved from their
obligations to guarantee Assignee's compliance with the Lease, then, in
such event Assignor and Lesco hereby agree to promptly cure said default.
If any one of the following occurs, Assignor and/or Lesco (without
prejudice to any other rights or remedies at law or in equity) shall have
the right to require Landlord to commence eviction proceedings against
Assignee, without terminating this Assignment Agreement, upon five (5)
days prior written notice to Assignee and Landlord, which five (5) days
shall be in addition to any applicable grace and cure period:
(i) Assignee defaults three (3) or more times within a
rolling 12-month period on any monetary obligation under
the Lease (subject to applicable grace and cure
periods). Notwithstanding the foregoing, if Landlord
requires Lesco and/or Assignor to expend $100,000 or
more to cure a non-monetary default by Assignee (subject
to applicable grace and cure periods) and Assignee fails
to indemnify Assignor or Lesco in violation of the
Assignment Agreement, such refusal (subject to
applicable grace and cure periods) shall count as a
default for the above-mentioned purpose;
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(ii) Assignee fails to maintain the Letter of Credit and
Assignee defaults one (1) time on any monetary
obligation under the Lease (subject to applicable grace
and cure periods) and such failure to maintain the
Letter of Credit continues beyond the applicable grace
period for that default under this Assignment.
In connection with this Section, Assignor and Lesco shall indemnify
and hold Landlord harmless for all reasonable costs incurred to evict
Assignee (including reasonable attorney fees, all rents and other charges
and costs to repair and restore the Premises, if damaged) and for any
claims brought by Assignee against Landlord arising out of the eviction
proceedings and shall reaffirm their obligations under the Lease. In the
event that Lesco and/or Assignor request Landlord's assistance in finding
a replacement tenant for the Premises, Lesco and Assignor also shall
indemnify and hold Landlord harmless for the costs to secure a replacement
tenant, including costs to restore the Premises and broker fees.
Assignor/Lesco's failure to pursue its right of eviction upon Assignee's
third default shall not constitute a waiver of its right to pursue
eviction later based on those defaults; provided, however, that
Lesco/Assignor shall notify the Landlord to pursue eviction proceedings,
if at all, within ninety (90) days from the last default on which
Lesco/Assignor relies for its right to pursue eviction.
For so long as Lesco and/or Assignor are guaranteeing Assignee's
performance of the Lease, in the event that Lesco and/or Assignor requires
Landlord to evict Assignee pursuant to Section 14(d) of the Assignment
Agreement, Lesco and/or Assignor shall reoccupy the Demised Premises
within six (6) months of Assignee's eviction or shall find a subtenant or
assignee acceptable to Landlord (in its discretion in accord with the
terms of the Lease) who will occupy the Demised Premises within six (6)
months of Assignee's eviction.
Notwithstanding the foregoing, nothing in this Section shall be
deemed to constitute a waiver by Assignee of its rights to assert any
defenses which may be available under this Lease or this Assignment in
connection with any eviction proceedings. Lesco/Assignor agree not to make
demand upon Landlord to commence eviction proceedings without first having
given Assignee five (5) days prior written notice.
15. FORCE MAJEURE. If either party shall be prevented or
delayed from punctually performing any obligations or satisfying any conditions
under this Lease by reason of any act of God, unusual governmental restriction,
regulation or control, enemy or hostile governmental action, civil commotion,
strikes, lockouts, insurrection, sabotage, or caused by the other party, then
the time to perform such obligation or satisfy such condition shall be extended
on a day-to-day basis for the period of the delay caused by such event. This
section shall not apply to the inability to pay any sum of money due hereunder
or the failure to perform any other obligation due to the lack of money or
inability to raise capital or borrow for any purpose. Nor shall this section
apply to any act of casualty that causes damage or destruction to the Demised
Premises between the Execution Date and the Delivery Date. No delay under Force
Majeure shall be effective unless the party experiencing the delay shall have
notified the other party of the delay within three (3) business days of the
event giving rise to such delay.
16. CONFIDENTIALITY. Except to the extent disclosure is
required by any legal authority, Assignor, Lesco and Assignee agree to hold the
terms of this Assignment and any confidential or proprietary business
information exchanged or discovered pursuant to or in anticipation of this
transaction in confidence and not to disclose such information to any third
party. Assignor, Lesco and Assignee shall make an effort to select a mutually
agreeable date after which their respective employees may be notified of the
execution of this Assignment; provided, however, that notification shall not be
unreasonably delayed if the parties are unable to agree on a date. Except to the
extent required by law, no party shall issue a press release or make any public
statement about this Assignment without obtaining
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the prior consent of the other parties. In the event that public disclosure is
required by law, then the parties shall take reasonable efforts to obtain from
each other prior approval of the contents of the disclosure.
17. TIME IS OF THE ESSENCE. Time is of the essence in this
Assignment.
18. ASSIGNEE'S RIGHT TO PURCHASE FF&E. If so exercised during
the due diligence period, Assignee shall have the right to purchase certain
furniture, fixtures and equipment set forth on EXHIBIT "E" attached hereto and
made a part hereof (collectively, the "FF&E"). The purchase price for the FF&E
shall be One Hundred Seventy-Five Thousand Dollars ($175,000) and shall be
payable in full to Assignor on or before the Delivery Date and Assignor and
Lesco shall provide a bill of sale to Assignee documenting such sale, free and
clear of all liens, substantially in the form set forth on EXHIBIT "F" attached
hereto and made a part hereof. Assignee shall accept the FF&E in its "as-is"
condition, provided that the FF&E is maintained in substantially the same
condition as it existed on May 14, 2004, reasonable wear and tear excepted.
19. ESCROW AGREEMENT. Simultaneously with the execution of
this Assignment, Assignor and Assignee shall enter into an Escrow Agreement in
the form attached hereto as EXHIBIT "G" (the "Escrow Agreement"), whereby
Assignor and Lesco shall deposit the amount of Three Million Five Hundred
Thousand Dollars ($3,500,000) (the "Escrowed Sum"), which Escrowed Sum shall be
disbursed in accordance with the terms of the Escrow Agreement.
20. LETTER OF CREDIT.
(a) Effective as of January 1, 2005, Assignee shall provide to
Assignor/Lesco a letter of credit, in a form reasonably acceptable to
Assignor/Lesco and from Assignee's senior lender (or any other financial
institution reasonably acceptable to Assignor), securing Four Million Four
Hundred Thousand Dollars ($4,400,000), which letter of credit shall be
maintained by Assignee at Assignee's sole cost and expense until the earlier of:
(i) January 14, 2016; or (ii) the date on which Lesco and Assignor are
completely released from their guarantee as described in Section 13, above.
Notwithstanding the foregoing, the face amount of the letter of credit shall be
reduced when and if (and only to the extent that) the impact of a complete
default of Assignee under the Lease and this Assignment would be less than
$4,400,000. Commencing on January 1, 2007, Assignor/Lesco shall pay Assignee
annually in advance an amount equal to 2.273% of the face amount of the letter
of credit to defray Assignee's cost of the letter of credit. Notwithstanding the
foregoing, however, on January 1, 2007, Assignor/Lesco shall, in addition to
paying its contribution toward the cost of the letter of credit for 2007, prepay
its contribution for 2008. Lesco/Assignor's next contribution payment shall be
due on January 1, 2008 (for 2009), and such annual payments shall continue
accordingly to ensure that the letter of credit remains in place for as long as
required by this Section 20. If at any time Assignor/Lesco does not promptly pay
its required contribution(s) toward the cost of the letter of credit, Assignee
shall post the required letter of credit at its own expense. In such event,
Lesco/Assignor's obligation to make contributions for the letter of credit
through January 14, 2016 shall be accelerated and become immediately due and
payable, and Assignee shall be entitled to recover this entire sum from Assignor
and Lesco, jointly and severally, plus interest on any overdue contributions at
the rate of 10% per annum and an additional amount of $50,000 in liquidated
damages.
(b) Upon a default of Assignee under this Assignment or the
Lease (subject to applicable grace and cure periods), Assignor and/or Lesco
(without prejudice to their rights under Section 14(d) of this Assignment or any
other rights and remedies at law) shall be entitled to draw upon the Letter of
Credit to cure Assignee's default. Provided that the Letter of Credit shall be
first used to cure any outstanding Lease default by Assignee, Assignor and Lesco
also shall be entitled to draw upon the Letter of Credit for any reasonable
expenses or costs which Assignor and/or Lesco incur in order to mitigate
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its/their liability as guarantors (e.g., without limitation, costs incurred to
buyout Lesco's new lease agreement, costs to move back into the Demised Premises
and build out the space as required, costs incurred to find a replacement tenant
to occupy the Demised Premises, broker fees, etc.) Assignee shall be entitled to
two (2) days prior written notice from Assignor/Lesco of an intended draw.
21. SELF HELP RIGHTS / DEFAULT. (a) Assignor, Lesco and
Assignee shall each have the right to cure any default by the other party under
the Lease as follows: (i) if a default has been declared by Landlord, then at
any time during the applicable cure or grace period; or (ii) if a default has
not been declared by Landlord, then at any time following thirty (30) days after
receipt of written notice of such default (or such longer period if such default
cannot be reasonably cured in a thirty (30) day period and the defaulting party
has commenced such cure during said thirty (30) day period and diligently
pursues such cure to completion). The non-defaulting party shall invoice the
defaulting party for any amounts paid by the non-defaulting party to cure such
default, which invoice shall be immediately due and payable and which amounts
shall incur interest at a rate of ten percent (10%) per annum, or the highest
permitted by law, whichever is less, until paid in full.
(b) In the event that Assignor or Lesco fails to perform any
covenant or obligation under this Assignment and such failure is not cured
within thirty (30) days of receipt of written notice sent by Assignee (or such
longer period if such default cannot be reasonably cured in a thirty (30) day
period and the defaulting party has commenced such cure during said thirty (30)
day period and diligently pursues such cure to completion), Assignee may, but
shall not be obligated to, cure such default and invoice Assignor and Lesco for
the actual amount expended by Assignee to so cure the event of default which
amount shall be immediately due and payable and shall incur interest at a rate
of ten percent (10%) per annum. Assignee shall further have all rights and
remedies available to it at law and equity. Notwithstanding any provision in
this Assignment or the Escrow Agreement to the contrary, neither Assignor nor
Lesco shall be deemed to be in default under this Assignment unless Lesco and/or
Assignor fails to cure any default within the grace and cure periods set forth
in this Assignment.
(c) In the event that Assignee fails to perform any covenant
or obligation under this Assignment and such failure is not cured within thirty
(30) days of receipt of written notice sent by Assignor (or such longer period
if such default cannot be reasonably cured in a thirty (30) day period and the
defaulting party has commenced such cure during said thirty (30) day period and
diligently pursues such cure to completion), Assignor and/or Lesco shall cure
such default and invoice Assignee for the actual amount expended by
Assignor/Lesco to so cure the event of default which amount shall be immediately
due and payable and shall incur interest at a rate of ten percent (10%) per
annum. Assignor and/or Lesco shall further have all rights and remedies
available to it at law and equity. Notwithstanding any provision in this
Assignment or the Escrow Agreement to the contrary, Assignee shall not be deemed
to be in default under this Assignment unless Assignee fails to cure any default
within the grace and cure periods set forth above.
22. PARTIAL INVALIDITY. If any term, covenant or condition of
this Assignment or the application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this Assignment or
the application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby and each term, covenant or condition of this Assignment shall
be valid and be enforced to the fullest extent permitted by law.
23. CONSTRUCTION. No provision of this Assignment shall be
construed by any court or other judicial authority against any party hereto by
reason of such party's being deemed to have drafted or structured such
provision.
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24. CAPTIONS. The captions and headings in this Assignment
shall be solely for convenience of reference and shall in no way define, limit
or describe the scope or intent of any provisions or Sections of this
Assignment.
25. FURTHER ASSURANCES. Assignor, Lesco and Assignee shall,
and without charge to the other, take such additional actions and execute,
deliver and file such additional instruments as may be necessary or appropriate
to give effect to the transactions contemplated hereby. Assignor and Lesco agree
to take such additional actions as are required to deliver exclusive possession
of the Demised Premises to Assignee on the Delivery Date and to transfer the
utilities to Assignee. Notwithstanding any provision in this Assignment or the
Lease to the contrary, Assignee shall have no liability to Assignor or Lesco if
Landlord refuses to release Assignor and Lesco of liability under the Lease
pursuant to Article XVII of the Lease as is herein amended per Section 13 of
this Assignment and Assumption Agreement.
26. ENTIRE AGREEMENT/AMENDMENTS. This Assignment: (a) contains
all the terms agreed upon by the parties with respect to the subject matter
hereof; (b) may be amended or modified only by a written instrument signed by
the parties against whom enforcement of any waiver, change, modification,
extension or discharge is sought; and (c) is not intended to confer any rights
or remedies upon any individual or organization other than the parties hereto.
27. ASSIGNMENT. No party may assign its rights or obligations
under this Assignment; provided, however, Assignee may further assign the Lease
or sublet the Demised Premises in accordance with the terms and conditions of
the Lease, but only if Lesco and Assignor have been released from all liability
under the Lease or have consented to the assignment/sublease.
28. UTILITY PRORATION. Until the Delivery Date, Assignor
and/or Lesco shall pay all utilities, contract sums and other utility
obligations with respect to the Demised Premises. All utilities (including
without limitation, water, sewer, gas, and electric) furnished to the Demised
Premises shall be prorated as of the Delivery Date and Assignee shall reimburse
Assignor and/or Lesco for utilities, contract sums and other utility obligations
paid by Assignor/Lesco and attributable to any period subsequent to the Delivery
Date. Deposits for utilities at the Demised Premises (the "Utility Deposits"),
plus any interest on the Utility Deposits to which Assignor/Lesco is or will be
entitled, held by the provider of the utilities shall be returned to
Assignor/Lesco. With respect to water, sewer, electric and gas charges, Assignor
shall cooperate with Assignee so that Assignee may obtain a reading of the meter
or other consumption measuring device as of the Delivery Date. If Assignee is
unable to obtain such a reading, Assignor shall furnish a reading as of a date
not more than thirty (30) days prior to the Delivery Date and the unknown
charges shall be apportioned on the basis of an estimate computed by utilizing
such reading and the most recent bill from the utility provider. Assignee shall,
on or prior to the Delivery Date, arrange for new utility accounts to be
established in its name and shall provide evidence to Landlord of such
establishment, including contacts, account numbers and the like.
29. INSURANCE AND OPERATING COSTS PRORATION. Until the
Delivery Date, Assignor or Lesco shall pay all insurance and Operating Costs (as
defined in Article VII) incurred under the Lease; provided, however, that
insurance and Operating Costs shall be prorated as of the Delivery Date and
Assignee shall reimburse Assignor and/or Lesco for insurance and Operating Costs
paid by Assignor or Lesco and attributable to any period subsequent to the
Delivery Date.
30. JOINT AND SEVERAL LIABILITY. The obligations of Assignor
and Lesco under this Assignment are joint and several.
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31. DAMAGE/DESTRUCTION.
(a) Notwithstanding any provision of this Section 31, the
rights and obligations of the Landlord shall be governed by the Lease in
connection with any event relating to "Damage and/or Destruction of the
Premises" and the provisions of the balance of this Section 31 shall not
terminate, modify or affect the Landlord's rights and obligations as specified
in the Lease. (b) If, before the Delivery Date, the Demised Premises is
destroyed or so damaged by any cause so as to be unfit, in whole or in part, for
occupancy and Landlord elects not to repair or rebuild pursuant to Article XII,
Paragraph 2 of the Lease, then this Assignment (including without limitation
Paragraph 1(b) above) shall terminate and Assignee, Assignor and Lesco shall
have no further rights or obligations hereunder except as expressly set forth
herein.
(c) If, before the Delivery Date:
(i) the Demised Premises is destroyed or so damaged by any
cause so as to be unfit, in whole or in part, for occupancy and such destruction
or damage cannot in Landlord's reasonable opinion be substantially repaired
within twelve (12) months from the happening thereof but Landlord elects to
repair or rebuild, then Assignee shall have the right, for a period of up to
fifteen (15) days following receipt of notice from Landlord of its election to
rebuild, to terminate this Assignment, including, without limitation, Section
1(b) above ("Termination Rights"), and Assignee, Assignor and Lesco shall have
no further rights or obligations hereunder. Notwithstanding any provision herein
or the Escrow Agreement to the contrary, upon any such termination under this
Section 31, Assignee shall be entitled to payment or reimbursement from the
Escrowed Sum for all costs and expenses and liabilities paid or incurred by or
on behalf of Assignee prior to the effective date of termination and which are
eligible for reimbursement in accordance with the provisions of Section 19 and
the Escrow Agreement, with the remaining balance of the Escrowed Sum to be
disbursed to Assignor and/or Lesco.
(ii) In the event that Assignee opts not to terminate this
Assignment and Assumption Agreement as provided in Section (c)(i) above, the
terms and conditions of this Assignment and the indemnity provisions of Section
1(b) shall continue in full force and effect; provided, however, that in no
event shall Assignor and/or Lesco be liable for any costs or expenses that
Assignee incurs more than fifteen (15) months after the date of the event(s)
giving rise to the Termination Right. To the extent that rent is abated during
this time, Assignor and Lesco shall be entitled to the benefit of the abatement.
Any losses incurred by Assignee following the expiration of the 15-month period
will be covered under Assignee's business interruption coverage.
(iii) The parties recognize that if the Demised Premises
are destroyed or damaged in close proximity to the Delivery Date, the Delivery
Date may occur before Landlord has made his decision(s) about
rebuilding/repairing the Demised Premises. In such event, the parties agree that
if Assignee is the tenant at the time a decision or election is required by
tenant under the Lease, Assignee shall be entitled to exercise the tenant's
right under Lease. In this event, the following will apply:
(a) If Assignee elects to terminate the Lease, then
this Assignment (including, without limitation,
Section 1(b)) shall terminate immediately and
Assignee, Assignor and Lesco shall have no further
rights or obligations hereunder. Notwithstanding
any provision herein or the Escrow Agreement to
the contrary, upon any such termination under this
Section 31, Assignee shall be entitled to payment
or reimbursement from the Escrowed Sum for all
costs and expenses and liabilities paid or
incurred by or
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on behalf of Assignee prior to the effective date
of termination and which are eligible for
reimbursement in accordance with the provisions of
Section 19 and the Escrow Agreement, with the
remaining balance of the Escrowed Sum to be
disbursed to Assignor and/or Lesco.
(b) If Assignee elects not to terminate the Lease,
then the terms and conditions of this Assignment
and the indemnity provisions of Section 1(b) shall
continue in full force and effect; provided,
however, that in no event shall Assignor and/or
Lesco be liable for any costs or expenses that
Assignee incurs more than fifteen (15) months
after the date of the event(s) giving rise to the
Termination Right. To the extent that rent is
abated during this time, Assignor and Lesco shall
be entitled to the benefit of the abatement. Any
losses incurred by Assignee following the
expiration of the 15-month period will be covered
under Assignee's business interruption coverage.
As it relates to this Section 31, Assignee, Lesco and Assignor
represent, warrant and specifically reaffirm their commitment in Section 2(b)
that Assignee will perform no construction in the Demised Premises prior to the
Delivery Date without the written consent of Assignor, Lesco and Landlord.
(d) If, before the Delivery Date, the Demised Premises is destroyed
or so damaged by any cause so as to be unfit, in whole or in part, for occupancy
and Landlord elects to repair or rebuild pursuant to Article XII, Section 1 of
the Lease, but such repairs/rebuilding are not substantially complete by the
Delivery Date, then the terms and condition of this Assignment and the indemnity
provisions of Section 1(b) shall continue in full force and effect; provided,
however, that in no event shall Assignor and/or Lesco be liable for any costs or
expenses that Assignee incurs more than fifteen (15) months after the date of
the event(s) giving rise to the Termination Right. To the extent that rent is
abated during this time, Assignor and Lesco shall be entitled to the benefit of
the abatement. Any losses incurred by Assignee following the expiration of the
15-month period will be covered under Assignee's business interruption coverage.
(e) If repairs/rebuilding are substantially complete by the Delivery
Date, then Assignee shall have no remedy against Assignor or Lesco.
(f) If, before the Delivery Date, the FF&E is destroyed, Assignee's
only remedy against Assignor and Lesco shall be a refund of the amount paid by
Assignee, prorated for any usable FF&E that Assignee, in its sole discretion,
elects to keep.
32. In so far as it relates to Landlord and its rights under the
Lease, Assignor, Lesco and Assignee can terminate the Assignment in accordance
with the terms hereof, but such termination shall not terminate, modify or
affect the Lease except as expressly and specifically set forth herein.
33. This Assignment supercedes and terminates the Assignment and
Assumption Agreement dated as of July 19, 2004.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed on the day and year first set forth above.
ASSIGNOR:
LESCO SERVICES, INC., an Ohio corporation
By: /s/ Michael P. DiMino
------------------------------------------
Printed: Michael P. DiMino
Title: President
LESCO:
LESCO, INC., an Ohio corporation
By: /s/ Michael P. DiMino
-----------------------------------------
Printed: Michael P. DiMino
Title: President and Chief Executive Officer
ASSIGNEE:
THE GLIDDEN COMPANY, d/b/a ICI Paints,
a Delaware corporation
By: /s/ David Jucha
-----------------------------------------
Printed: David Jucha
Title: Chief Financial Officer
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STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
On this ___ day of August , 2004, before me appeared THE GLIDDEN
COMPANY, D/B/A ICI PAINTS, a Delaware corporation, by David Jucha, its Chief
Financial Officer, who executed the within and foregoing instrument as such
officer by authority of said corporation and acknowledged said instrument to be
the free act and deed of said corporation and of him as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
at Cleveland, Ohio.
____________________________________________
NOTARY PUBLIC
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
On this ___ day of August , 2004, before me appeared LESCO, INC., an
Ohio corporation, by Michael P. DiMino, its President and Chief Executive
Officer, who executed the within and foregoing instrument as such officer by
authority of said corporation and acknowledged said instrument to be the free
act and deed of said corporation and of him as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
at Strongsville, Ohio.
____________________________________________
NOTARY PUBLIC
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
On this ___ day of August , 2004, before me appeared LESCO SERVICES,
INC., an Ohio corporation, by Michael P. DiMino, its President, who executed the
within and foregoing instrument as such officer by authority of said corporation
and acknowledged said instrument to be the free act and deed of said corporation
and of him as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
at Strongsville, Ohio.
____________________________________________
NOTARY PUBLIC
This instrument prepared by:
Amy E. Kellogg, Esq.
BAKER & HOSTETLER LLP
3200 National City Center
1900 E. 9th Street
Cleveland, Ohio 44114-3485
(216) 621-0200
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LANDLORD'S CONSENT
This Landlord's Consent, subject to the conditions herein defined,
is granted by Lescar Company, Ltd, an Ohio Limited Liability Company with an
address at 27500 Detroit Road, Westlake, Ohio 44145. as "Landlord" of a certain
building and related grounds which are the subject of a certain ASSIGNMENT AND
ASSUMPTION OF LEASE (the "Assignment"), which Assignment was entered into as of
the _____ day of August , 2004, by and among LESCO SERVICES, INC., an Ohio
corporation, having an address of 15885 Sprague Road, Strongsville, OH 44136
("Assignor"), LESCO, INC., an Ohio corporation, having an address of 15885
Sprague Road, Strongsville, OH 44136 ("Lesco") and THE GLIDDEN COMPANY, D/B/A
ICI PAINTS , a Delaware corporation, having an address of 925 Euclid Avenue,
Cleveland, Ohio 44115 ("Assignee"). This Assignment relates to the building and
grounds located at 15885 Sprague Road, Strongsville, OH 44136 owned by Landlord
and currently leased by Assignor.
Landlord's consent to the Assignment from Assignor to Assignee shall
be subject only to the requirement that there shall have been no declaration of,
nor actual knowledge of, a default under the Lease that shall be continuing as
of the Delivery Date.
Notwithstanding the terms or implications of the foregoing consent
and any other term hereof, the parties hereto understand, acknowledge and agree
(and the Landlord is relying on such understanding, acknowledgements and
agreements) as follows, provided, however, that, the provisions of the Lease
shall absolutely control and govern in connection with the obligations of
Assignor, Lesco and Assignee in connection with the Premises unless as expressly
otherwise agreed by Landlord in writing and, further, the following language
shall be fully controlling in connection with Landlord's consent to this
Assignment and Assumption of Lease Agreement, in the event of any conflict or
uncertainty between the following clauses and the express or implied language of
the foregoing portions of said Assignment:
Warranties and representations set forth herein by and between Lesco
and/or Assignor to Assignee or, conversely, from Assignee to Lesco and/or
Assignor have not been independently reviewed or verified by Landlord and are
not to be deemed confirmed nor assented to by Landlord. The Landlord shall not
be required to participate in or await the resolution of any dispute or conflict
by or between Lesco, Assignor and/or Assignee, it being recognized that
Landlord's consent is an accommodation to the business plans and objectives of
the Assignor, Lesco and/or Assignee.
Landlord shall indemnify and hold Assignor and Lesco harmless from and against
(i) any commission contemplated to be owed pursuant to any separate agreement
with CB Richard Ellis; and (ii) any and all brokers' commissions owed for the
Extension Term, if any.
The foregoing consent shall not constitute a waiver of the requirement for
Landlord's consent to any subsequent assignment, subletting or other transfer of
the Lease. Except as permitted in the Lease and/or the Assignment, the foregoing
Consent shall not operate to relieve Lesco and Assignor from the primary
obligation to keep, perform and be bound by the terms, conditions and covenants
of the Lease in the event of this or any future assignment, subletting or other
transfer of the Lease by the Assignee, even with the consent of Landlord
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LANDLORD
LESCAR COMPANY, LTD., an Ohio
limited liability company
By: Carnegie Management and
Development Corporation, its Managing
Member
By: /s/ Rustom R. Khouri
-------------------------------------
Printed: Rustom R. Khouri
Title: President of Carnegie Management and
Development Corporation
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STATE OF OHIO )
)SS:
COUNTY OF CUYAHOGA )
On this ___ day of August, 2004, before me appeared Rustom R.
Khouri, President of Carnegie Management and Development Corporation, the
Managing Member of LESCAR COMPANY, LTD., an Ohio limited liability company, who
executed the within and foregoing instrument as such officer by authority of
said limited liability company and acknowledged said instrument to be the free
act and deed of said limited liability company and of him as such officer of its
managing member.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
at Cleveland, Ohio.
____________________________________________
NOTARY PUBLIC
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