UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 20, 2006
ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 516-466-3100
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
-- Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
-- Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
-- Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
-- Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.01. Completion of Acquisition or Disposition of Assets.
On November 6, 2006, OLP Baltimore LLC, a wholly-owned subsidiary of the
registrant ("Buyer"), entered into a Purchase and Sale Agreement, as amended
(the "Agreement"), with FR Hollins Ferry, LLC ("Seller"), pursuant to which the
Seller agreed to sell, and the Buyer agreed to purchase, an industrial building
situated on approximately 28 acres in Baltimore, Maryland consisting of
approximately 367,000 square feet of grade level space for a purchase price of
$32.2 million. On December 20, 2006, the Agreement was amended, as described
below, and immediately thereafter, the closing was consummated in accordance
with the Agreement.
The property is net leased to Ferguson Enterprises, Inc. Prior to the closing,
the lease for the property provided the tenant with an improvement period which
was to expire not later than March 31, 2007, and also provides for a reduction
in the base rent during the improvement period. On December 13, 2006, the lease
for the property was amended to extend the improvement period to no later than
July 31, 2007 thereby potentially extending the period in which the base rent
under the lease will be reduced. The Agreement provides that Seller will provide
a reserve for the benefit of Buyer, which reserve shall equal the difference
between the base rent and the tenant's reduced rent thereby insuring that Buyer
receives an amount equal to the base rent during the improvement period. Due to
the extension of the improvement period under the lease, the Agreement was
amended simultaneously with the acquisition of the property to increase the
reserve the Seller shall provide for the benefit of Buyer in order to insure
that Buyer receives an amount equal to the base rent for the entire improvement
period.
The acquisition purchase price was financed from the proceeds received by the
Buyer from a $23 million mortgage it obtained, which mortgage is secured by
the property, and the balance of the purchase price was paid in cash.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Financial statements will be filed by an Amendment to this Current
Report not later than March 5, 2007.
(b) Pro Forma Financial Information.
Pro forma financial information will be filed by an Amendment to this
Current Report not later than March 5, 2007.
(c) Shell Company Transactions.
Not applicable.
(d) Exhibits.
10.1 Fourth Amendment to Purchase and Sale Agreement, dated as of December
20, 2006, between FR Hollins Ferry, LLC and OLP Baltimore LLC.
10.2 Lease, dated as of June 29, 2006, by and between FR Hollins Ferry LLC
and Ferguson Enterprises, Inc.
10.3 First Modification to Lease Agreement, dated as of December 13, 2006,
by and between FR Hollins Ferry LLC and Ferguson Enterprises, Inc.
10.4 Assignment and Assumption of Lease, dated as of December 20, 2006, by
FR Hollins Ferry LLC in favor of OLP Baltimore LLC.
99.1 Press release issued by One Liberty Properties, Inc. on
December 21, 2006.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: December 21, 2006 By: /s/ David W. Kalish
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David W. Kalish
Senior Vice President and
Chief Financial Officer
EXHIBIT 10.1
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Fourth Amendment to Purchase and Sale Agreement (this "Amendment")
is dated as of December ____, 2006 and is made by and between FR HOLLINS FERRY,
LLC, a Delaware limited liability company having an address at c/o SunTrust
Equity Funding, LLC, 303 Peachtree Street, 24th Floor, MC 3951, Atlanta, Georgia
30308 (the "Seller") and OLP BALTIMORE LLC, a Maryland limited liability company
having an address at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
(the "Buyer").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller and Buyer previously entered into that certain Purchase
and Sale Agreement dated November 6, 2006, as amended by First Amendment to
Purchase and Sale Agreement dated as of November 21, 2006, by Second Amendment
to Purchase and Sale Agreement dated as of November 29, 2006 and by Third
Amendment to Purchase and Sale Agreement dated as of December 6, 2006
(collectively, the "Contract") regarding the sale by Seller and the purchase by
Buyer of the "Premises" (as such term is defined in the Contract); and
WHEREAS, Seller and Buyer now wish to further modify the Contract on
the terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the sufficiency of which being hereby acknowledged, the parties
hereto do hereby agree as follows:
1. Capitalized terms. Capitalized terms used herein but not defined
herein shall have the respective meanings ascribed thereto in the Contract.
2. Rent Reserve Escrow.
A. The parties acknowledge that pursuant to that certain First
Modification to Lease Agreement being entered into between Seller, as landlord,
and Tenant (the agreed-upon form of which is attached hereto as Schedule 1 and
which is herein referred to as the "Lease Modification"), the commencement of
the "Remaining Period" under the Lease is being extended, with an outside date
for same of August 1, 2007. Accordingly, section 33 of the Contract (as such
section was previously modified in the Third Amendment to Purchase and Sale
Agreement) is hereby further modified such that the actual amount of the "rent
reserve" referred to therein shall be equal to an amount sufficient to assure
Buyer (and Lender) that a monthly base rent of $195,076.88 will be received by
Buyer at all times until the occurrence of such extended "Remaining Period". At
Closing, the base rent proration between the parties shall also be based on such
full base rent amount.
B. To illustrate the foregoing by way of example, if the Closing shall
occur on December 19, 2006 then (i) at Closing Buyer shall receive a credit for
Buyer's share of base rent for December, 2006 in the amount of $81,806.43 and
(ii) at Closing the rent reserve required by such section 33 shall be $416,500
(or, if the Lender requires prorated rent for the balance of December 2006 to
also be included in such reserve account, then such rent reserve amount would be
increased to $441,451.55). It shall be a condition to the Closing that Lender
shall not require any additional funds to be held in such reserve and shall
reserve only such amount as determined by the foregoing for such purpose.
3. Escrow Agent; SunTrust. Escrow Agent joins in the execution of this
Amendment to acknowledge and agree to the foregoing to the extent the Contract
modifications contained herein are deemed also to be a modification of that
certain Escrow Agreement dated November 6, 2006 among Seller, Buyer and Escrow
Agent. SunTrust Equity Funding, LLC joins in the execution of this Amendment to
consent to the foregoing and to acknowledge its continuing reaffirmation of the
Seller's representations and warranties set forth in section 11 of the Contract
and its continuing liability for any damages permitted against Seller in favor
of Buyer pursuant to the indemnity contained in section 29 of the Contract,
subject, however, to all of the qualifications, limitations and applicable time
periods set forth in the Contract.
4. Ratification; Miscellaneous. Except as expressly modified by this
Amendment, the Contract remains unmodified and in full force and effect and is
hereby ratified and confirmed in all respects by the parties. This Amendment may
be executed in counterparts, all of which when taken together shall constitute
one and the same instrument, and this Amendment may be executed and delivered by
fax or email transmission with the same effect as if originals were exchanged.
IN WITNESS WHEREOF, this First Amendment has been executed as of the
[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
date first set forth above.
SELLER:
FR HOLLINS FERRY, LLC, a Delaware limited
liability company
By: MRLL, LLC, a Delaware limited liability
company,its Sole Member
By: SunTrust Equity Funding, LLC, a Delaware
limited liability company, its Sole Member
By:
---------------------------------
Name:
Title:
BUYER:
OLP BALTIMORE LLC, a Maryland limited
liability company
By:
---------------------------------
Name:
Title:
ESCROW AGENT:
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LAWYERS TITLE INSURANCE CORPORATION
By:
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Name:
Title:
SUNTRUST EQUITY FUNDING, LLC, a Delaware limited
liability company
By:
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Name:
Title:
SCHEDULE 1
FORM OF LEASE MODIFICATION
Exhibit 10.2
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of the 29th day of June, 2006, by and between FR
HOLLINS FERRY, LLC, a Delaware limited liability company, together with its
successor and assigns hereinafter called "Landlord," and FERGUSON ENTERPRISES,
INC., a Virginia corporation, hereinafter called "Tenant," provides:
WITNESSETH
1. PREMISES
1.1. In consideration of the rents and covenants hereinafter reserved and
contained and other good and valuable consideration, subject to the conditions
hereinafter expressed, Landlord leases to Tenant, and Tenant leases from
Landlord, that certain parcel of improved real property (the "Property") having
a mailing address of 4501 Hollins Ferry Road, located in the City of Baltimore,
and independent city in the State of Maryland and more particularly described on
Exhibit "A" attached hereto and made a part hereof, including the approximately
367,000 square foot building (the "Building") and other improvements thereon to
be constructed by Tenant in accordance with Paragraph 6 of this Lease, together
with a yard area for the outdoor storage of materials, and together with all
rights, privileges, tenements, hereditaments, easements and appurtenances
thereunto belonging or in anywise appertaining being hereinafter referred to as
the "Premises."
2. TERM
2.1. The term of this Lease shall commence on the date hereof (hereinafter
called the "Commencement Date"). Tenant's obligation to pay Rent and other
monetary sums due in accordance with this Lease shall commence on the
Commencement Date. The Term shall consist of two periods: (i) the Tenant
Allowance Period ("Tenant Allowance Period") which shall commence on the
Commencement Date and shall end on the sooner to occur of the Completion of the
Tenant Improvements (as hereinafter defined) or March 31, 2007 and (ii) the
Remaining Period ("Remaining Period") which shall commence on the first day of
the month following the end of the Tenant Allowance Period (unless such date is
the first of the month and then the Remaining Period shall begin on that date)
and end on March 31, 2022. The initial term of this Lease will consist of the
Tenant Allowance Period and the Remaining Period and shall expire at twelve
o'clock, midnight, on March 31, 2022, such period hereinafter called the
"Initial Period." The term "Lease Year" as used herein will mean a period of
twelve (12) consecutive full calendar months. If the Commencement Date is not
the first day of a calendar month, then the first Lease Year will begin on the
first day of the calendar month following the Commencement Date. Each succeeding
Lease Year will begin upon the anniversary date of the first Lease Year.
2.2. Provided no uncured Default or Event of Default (both as hereinafter
defined) has occurred and is continuing, Tenant shall have the option to extend
this Lease for four (4) additional periods of five (5) years each, hereinafter
called the "Extension Periods," upon the same terms and conditions as provided
herein, saving and excepting the increase in rent provided for herein. The
phrases "term of this Lease" or "Lease term" as used herein shall include all
properly exercised Extension Periods. An Extension Period shall be exercised by
Tenant giving written notice to Landlord not less than twelve (12) months prior
to the expiration of the then current Lease term. Time is of the essence for
this provision and any renewal option Tenant may then have for an Extension
Period shall expire if Tenant does give such prior notice within twelve (12)
months prior to the expiration of the then current Lease term.
3. RENT
3.1. Commencing with the Commencement Date and continuing throughout the Initial
Period Tenant covenants and agrees to pay to Landlord a monthly base rent (the
"Monthly Rent") in the following amounts for the following periods:
A. Rent due
on June 29, 2006 A prorated Rent installment in the amount of $9,038.46 for the
period of June 29, 2006 through Tune 30, 2006.
B. July 1, 2006 through October 31, 2006 Monthly Rent installments shall be due
on the first day of each month during this period in the amount of $135,576.88.
C. November 1, 2006 through the beginning of the Remaining Period Monthly Rent
installments shall be due and payable on the first day of each month during this
period in the amount equal to the sum of: (i) $135,576.88, and (ii) the
outstanding balance of the aggregated amount advanced from the Tenant
Improvement Amount on or before the first day of month times LIBOR. All terms
are as hereinafter set forth.
D. Beginning of the Remaining Period through March 31, 2022 Monthly Rent
installments shall be due on the first day of each month during this period in
the amount of $195,076.88. If a "stub period" exists from the end of the Tenant
Improvement because the Remaining Period commenced on a day other than the first
of the month, then Tenant shall make a rental payment on the date of the
beginning of the Remaining Period in the pro rata amount of the rent for the
stub period based on the number of days until the next rental installment is
payable. Tenant shall have the right to make a one-time buy-down of the Rent in
an amount of up to $500,000 but always on an even thousand dollar basis
("Buy-Down Amount"). Upon the exercise of this election, Tenant shall pay to the
Landlord the Buy-Down Amount and the Landlord shall then re-calculate the amount
of the monthly Rent for this period taking into account the Buy-Down Amount. The
recalculated rent shall be based on the formula of a reduction of the Rent in
the amount of $7.00 per $1,000 of the Buy-Down Amount. The buy-down right shall
expire if not exercised on or before April 1, 2007.
The Rent installment set forth in D. ($195,076.88) is based on an advance to the
Escrow Account on November 1, 2006 of $8,500,000. Tenant shall have the right to
designate the exact amount of the advance to the Escrow Account on or before
October 16, 2006. The advance shall be to the even $1,000 and shall be no less
than $7,500,000 and no greater than $8,500,000. In the event the amount advanced
is less than $8,500,000 then the rental amount in category D shall be reduced on
the basis of $7.00 per $1,000 of the amount of the reduction.
For the purpose of making the calculations set forth in Section 3.1 C, the
following definitions shall be applicable:
"Tenant Improvement Amount" shall mean the daily, aggregate balance advanced by
Landlord to Tenant on or prior to the end of the Tenant Advance Period for the
construction of the Tenant Improvements. Funds in the Escrow Account that have
not been advanced to the Tenant shall not be included in the Tenant Improvement
Amount.
"LIBOR" shall mean the U.S. Dollar rate (rounded upward to the nearest
one-sixteenth of one percent) listed on page 3750 (i.e., the LIBOR page) of the
Dow Jones Markets Services (f/k/a Telerate News Services) titled "British Banker
Association Interest Settlement Rates" for a designated maturity of one (1)
month determined as of 11:00 a.m. London Time on the second (2nd) full
Eurodollar Business Day next preceding the first day of each month with respect
to which Rent is payable (unless such date is not a Eurodollar Business Day in
which event the next succeeding Eurodollar Business Day which is also a Business
Day will be used). If the Dow Jones Markets Services (1) publishes more than one
(1) such LIBOR, the average of such rates shall apply, or (2) ceases to publish
the LIBOR, then the LIBOR shall be determined from such substitute financial
reporting service as Landlord in its discretion shall determine. All
computations of LIBOR, to the extent applicable, shall be based on a 30-day
month and 360-day year and paid for the actual number of days elapsed.
The term "Eurodollar Business Day" shall mean any day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
All payments of Monthly Rent and such other amounts payable by Tenant to or on
behalf of Landlord under this Lease, whether or not expressly denominated as
Rent, are hereinafter referred to as "Rent".
3.2. On the fifth anniversary of the commencement date of the Remaining Period
and on each successive fifth anniversary of that date thereafter, the Monthly
Rent during the immediately preceding five year fixed rent period, hereinafter
called the "Prior Rent Period," shall be increased, but shall not decrease, by
fifty percent (50%) of the cumulative percentage increase in the CPI during the
Prior Rent Period. In no event, however, shall such Monthly Rent, as adjusted,
be increased by more than seven and one-half percent (7.5%) at any such
adjustment date, nor be less than the monthly rent during the Prior Rent Period.
As used herein, the term "CPI" shall refer to the U.S. Department of Labor,
Bureau of Labor Statistics, Consumer Price Index, United States City Average for
Urban Wage Earners and Clerical Workers, Major Group Indexes, (19821984-100) All
Items. If CPI shall be discontinued, Landlord and Tenant shall agree upon a
substitute index or a substitute formula. In the absence of such agreement, the
matter shall be referred to arbitration under the rules of the American
Arbitration Association then in effect.
3.3. All payments of Rent hereunder shall be made at Landlord's election in cash
or by check payable or via wire transfer in immediately available funds to
Landlord, without demand, and shall be mailed to Landlord at the address
specified in the Notice section of this Lease or to such other party and place
as may be designated by written notice from Landlord to Tenant.
3.4. Tenant
shall pay a service charge equal to three percent (3.0%) of the Rent due if not
received within ten days of its due date. In addition to such service charge,
any Rent paid more than thirty (30) days after due shall accrue interest at the
rate of ten percent (10.0%) per annum, if permissible, but in no event exceeding
the maximum rate allowed by law, from the due date until paid. Such service
charge and interest payments shall not be deemed consent by Landlord to late
payments, nor a waiver of Landlord's right to insist upon timely payments at any
time, nor a waiver of any remedies to which Landlord is entitled as a result of
the late payment of Rent.
4. USE OF PREMISES
4.1. The Premises may be used for wholesale distribution and ancillary retail
sales of plumbing, lighting, appliances, heating, ventilation, air conditioning,
waterworks, PVF, fire suppression, lumber, doors, windows and related building
materials, equipment, products, fixtures, parts and supplies, together with
related offices, administrative uses and outdoor storage of materials (the
"Tenant's Use"), and all other legally permitted uses incidental thereto and
subject in each event to the terms, conditions, covenants and restrictions set
forth herein.
5. UTILITIES
5.1. Tenant shall pay all utility charges and security deposits for electricity,
potable water, storm sewer, sanitary sewer, telephone and natural gas service to
the Premises, including any late fees, default charges or other penalties due
thereon arising as a result of Tenant's non-payment thereof (collectively, the
"Utilities"). All Utilities shall be placed in' Tenant's name promptly following
delivery of the Premises to Tenant provided that any Utilities not capable of
being separately metered shall be kept in Landlord's name during the term of
this Lease and Tenant shall pay to Landlord its share of such Utilities within
thirty (30) days of written request, accompanied by a copy of the subject
utility bill.
6. ALTERATIONS
6.1. During the term of this Lease, Tenant shall have the right at any time, and
from time to time, to make non-structural changes or alterations to the Premises
provided such changes or alterations do not (i) diminish the fair market value
or remaining useful life of the Premises, (ii) change the character or use of
the Premises from that permitted herein, (iii) will not cause the Premises to be
"limited use property" within the meaning of Revenue Procedure 76-30, 1976-2
C.B. 647 or "tax-exempt use property" within the meaning of Section 168(h) of
the Code in effect as of the date hereof Other than as specified in the
preceding sentence, no other changes or alterations may be made without the
prior written consent of Landlord. As a condition to the request of Landlord's
consent, if any proposed changes or alterations are structural in nature or the
value of such changes or alterations exceeds $500,000 in the aggregate, then the
Tenant shall provide the Landlord with plans and specifications, estimated
budgets and a proposed schedule of construction which shall be in form and
substance satisfactory to Landlord. Further, after completion of such
alterations, and upon written request, the Tenant will promptly deliver to the
Lender an updated as-built ALTA survey and title endorsements to the Landlord's
title insurance policies, all in form and substance satisfactory to the
Landlord. If requested by Landlord, Tenant shall deliver to Landlord such
evidence as may be reasonable necessary, including but not limited to
certification by a licensed appraiser, certifying the impact of such changes or
alterations on the value of the Premises. Any such changes or alterations shall
be made by Tenant at Tenant's sole cost and expense, in a good and workmanlike
manner pursuant to valid building permits, if required, and in accordance with
all Applicable Laws (as hereinafter defined). Landlord, to the extent required,
hereby consents to those proposed tenant improvements shown on Exhibit "B"
attached hereto and made a part hereof (the "Tenant's Improvements"). Tenant
shall have the right to arrange financing for any future improvements upon such
terms as it desires provided that no such financing shall involve the creation
of a lien against the Premises.
6.2. Landlord and Tenant acknowledge that: (i) the improvements currently
existing on the Property ("Improvements") are currently the subject of
demolition pursuant to the authority of the Tenant and the Landlord; (ii) an
entity owned by STEF (as hereinafter defined) has acquired the membership
interests of the Landlord from First Industrial Development Services, Inc., a
Maryland corporation on even date; (iii) Tenant intends to complete the
demolition of portions of the Improvements and thereafter complete the Tenant
Improvements pursuant to plans and specifications to be approved by Landlord
("Approved Plans and Specifications") and in accordance with the Project Budget,
a copy of which is attached hereto as Exhibit "C" hereto; and {iv) Landlord is
willing to fund $8,500,000 (or such lesser amount as the Tenant may designate
for the Tenant Improvements ("Escrow Amount").
Landlord shall deposit the Escrow Amount in an escrow account with SunTrust
(as hereinafter defined) pursuant to an escrow agreement among Landlord, Tenant,
and SunTrust ("Escrow Agreement"). The interest earned on the Escrow Fund shall
be for the account of the Landlord. Neither SunTrust nor Landlord shall have,
however, any obligation to maximize the interest earned on the Escrow Funds.
Tenant shall be responsible for all construction costs for the Tenant
Improvements and for the demolition costs for the first four months of the Term.
Thereafter, Landlord shall fund from the Escrow Amount in the amount up to
$8,500,000 that the Tenant designates as necessary for the completion of the
Tenant Improvements substantially in accordance with the Approved Plans and
Specifications ("Completion"). Tenant shall have the right to draw funds from
the Escrow Agreement for Tenant Improvements on the first day of each month
during the Tenant Allowance Period beginning November 1, 2006. Tenant agrees
that the right of Tenant to draw funds from the Escrow Account shall terminate
at such time as the Tenant Allowance Period terminates, provided, however, that
the balance in the Escrow Account shall be governed by the provisions below.
Tenant shall comply with all requirements of any applicable governmental
authority in connection with the construction of the Tenant Improvements. Tenant
shall be responsible for all letters of credit or other bonding obligations with
respect to the Improvements and the Tenant Improvements.
The Escrow Fund shall be disbursed from time to time to the Tenant, but only on
the first day of the month, based on the delivery by the Tenant of a certificate
executed by the Tenant in the form attached to the Escrow Agreement to pay for
or to reimburse Tenant for the costs of the Tenant Improvements. Tenant may
qualify for advances from the Escrow Account once per month. Upon completion of
the Tenant Improvements, the Tenant shall deliver to the Landlord a certificate
to the effect that (i) the Tenant Improvements have been completed substantially
in accordance with the Approved Plans and Specifications therefor, in a good and
workmanlike manner and in accordance with all Applicable Laws, (ii) all payments
to all contractors and subcontractors in connection with the Tenant Improvements
have been paid in full, and all liens in connection therewith have been
discharged in full or bonded, (iii) an endorsement to the owner's title
insurance policy issued in favor of the Landlord on even date to advance the
effective date to the most current date and to indicate no further exceptions
other than those approved by or caused by Landlord, and (iv) all insurance
required by this Lease remains in full force and effect; if the Tenant
Improvements have had the effect of changing the footprint of the original
building, together with the foregoing certificate, Tenant shall deliver to
Landlord an updated "as-built" survey of the Premises and, if an updated or new
certificate of occupancy is required pursuant to applicable law, a copy of such
certificate of occupancy. Upon the termination of the Tenant Allowance Period,
provided no Event of Default exits, any funds remaining in the Escrow Account
shall be disbursed to the Tenant to be used for any purpose. If an Event of
Default occurs at any time prior to the completion of the Tenant Improvements
and such Event of Default is not cured within the period provided, the Landlord,
at its option, may draw all of any portion of the Escrow Funds and apply them to
the payment of the Tenant's obligations hereunder or to the payment of the cost
of completing the Tenant Improvements. The Tenant Improvements shall be deemed
to be part of the Premises for all purposes of this Lease.
6.3 Tenant acknowledges that: (1) Landlord is a limited liability company under
the laws of the State of Delaware; (ii) the managing member and owner of
Landlord is an entity owned by SunTrust Equity Funding, LLC, a Delaware limited
liability company ("STEF"); and that (iii) STEF is an Affiliate of SunTrust Bank
("SunTrust"). Tenant hereby agrees that none of the Landlord Parties shall have
any liability under this Lease, for the construction of the Tenant Improvements;
the condition of the Improvements as of even date; the demolition of the
Improvements; or any liability with respect to any obligations of the Landlord
that relate to any action or contract or other circumstance or cause that
existed prior to even date (collectively "Trailing Liabilities"). "Landlord
Parties" shall mean STEF, SunTrust, or all of the other entities affiliated with
either of them and their officers, employees, and directors. Tenant hereby
indemnifies and holds harmless the Landlord Parties on an after tax basis from
all losses, costs, claims whatsoever with respect to the Trailing Liabilities.
Furthermore, Tenant hereby agrees that the Landlord shall have no obligations to
the Tenant with respect to any Trailing Liabilities. Tenant hereby indemnifies
and holds harmless the Landlord and the Landlord Parties with respect to any of
the Trailing Liabilities.
6.4 Tenant hereby indemnifies the Landlord Parties and Landlord against all
losses, costs, damages whatsoever arising with respect to any claims made by any
Sub-tenant of the Tenant on the Property.
7. LIENS
7.1. Tenant shall keep the Premises free and clear of mechanics', materialmen's
and other liens, and all charges, claims, and encumbrances caused or created by
them or anyone claiming through or under them. Tenant shall permit Landlord and
its agents to enter into and upon the Premises at all reasonable times for the
purpose of placing upon the Premises notices of non-responsibility for the
claims of mechanics, materialmen, and/or contractors, provided such entrance
does not interfere with Tenant's operations.
7.2. Tenant shall either cause any
mechanic's or other lien to be filed against the Premises to be discharged of
record within thirty (30) days after the date of filing or, if Tenant shall
desire to contest any such lien, Tenant shall furnish to Landlord a security
deposit in the amount of the claim, plus costs and interest, or shall procure a
bond of a reputable bonding company in such amount.
8. MAINTENANCE. Throughout the term of this Lease, Tenant shall keep all
portions of the Property, including without limitation all Building Systems, in
good repair and in good, safe and substantial order and condition, and in
accordance with standards applicable to its other owned or leased commercial
properties and in accordance with standards customarily applied (including any
legal or insurance requirements) by the other owners or tenants of comparable
properties in the related geographic area, ordinary wear and tear excepted and
excluding damage resulting from the negligence of Landlord, its agents,
employees or invitees.
9. TAXES.
9.1. Tenant covenants and agrees to pay all property (tangible or intangible),
municipal assessments, excise and stamp taxes, levies, imposts, duties, charges,
assessments or withholding, together with any penalties, fines, additions or
interest thereon or additions thereto (any of the forgoing being referred to
herein individually as a "Tax"), imposed by any governmental authority and
levied on the Property. All Taxes shall be paid by Tenant directly to the
appropriate governmental authority or other person to whom such payment is due,
except to the extent that any such governmental authority or other person
requires that such payment be remitted by Landlord. In the event such
governmental authority or other person requires that such payment be remitted by
Landlord, then Landlord shall promptly provide a copy of the subject tax bill
and Tenant shall within thirty (30) days of written request thereof reimburse
landlord for all Taxes levied on the Property during the term of this Lease,
subject to all early payment credits or other tax relief offered by the
applicable taxing authority. Tenant shall provide to Landlord evidence of the
payment of the taxes and other amounts due and payable under this section within
ten (10) days of the date of request by the Landlord.
9.2. Tenant further agrees to pay all franchise taxes, business taxes, personal
property taxes or other similar rates and taxes which may be levied or imposed
upon Tenant's business and personal property located on or about the Premises.
Landlord, however, shall remain solely responsible for all sales taxes due on
the rent payable herein and for its own income taxes, franchise taxes, business
taxes and other similar rates and taxes peculiar to Landlord.
10. INTENTIONALLY DELETED.
11. INSURANCE
(a) Tenant shall maintain at its sole cost and expense the following insurance
on the Premises:
(i) Insurance against loss or damage to the Improvements and
Equipment under an "all risk" extended coverage insurance policy,
which shall include coverage against all risks of direct physical loss,
including loss by fire, terrorism, lightning and other risks which at
the time are included under "extended coverage" endorsements
(which shall include flood insurance if the Premises is
located within a flood hazard area and which shall include earthquake
and/or windstorm insurance if the Premises is located in an area where
earthquake and/or windstorm insurance is customarily maintained for
similar commercial properties). Such insurance shall be in amounts
sufficient to prevent Landlord or Tenant from becoming a co-insurer
under the applicable policies, and in any event, after application of
the related deductible, in amounts not less than the actual replacement
cost of the Tenant Improvements and any personal property located
thereon (excluding footings and foundations and other parts of the
Improvements which are not insurable) as determined from time to time
at Landlord's request, but not more frequently than once in any
12-month period, by agreement of Landlord and Tenant, or if not so
agreed, by the insurer or insurers. Such insurance policies may contain
reasonable exclusions and deductible amounts of not more than
$150,000.00, all in accordance with industry standards.
(ii) Contractual and comprehensive general liability insurance
against claims for bodily injury, death or property damage occurring
on, in or about the Premises, which insurance shall be written on an
"Occurrence Basis", and shall provide minimum protection with a
combined single limit in an amount not less than Two Million Dollars
($2,000,000.00) per occurrence, Four Million Dollars ($4,000,000.00) in
the aggregate (or in such increased limits from time to time to reflect
declines in the purchasing power of the dollar as Landlord may
reasonably request) for bodily injury, death and property damage in any
one occurrence.
(iii) Worker's compensation insurance covering all persons
employed by Tenant on the Premises in connection with any work done on
or about any of the Premises for which claims for death or bodily
injury could be asserted against Landlord, Tenant or the Premises.
(iv) Insurance against loss or damage from explosion of any
steam or pressure boilers or similar apparatus, if any, located in or
about the Improvements in an amount not less than the actual
replacement cost of the Tenant Improvements and personal property
located thereon (excluding footings and foundations and other parts of
the Improvements which are not insurable).
(v) At any time during which any part of the Tenant
Improvements or any alteration is under construction, "all risks"
non-reporting completed value form of builder's risk insurance.
(vi) Business Interruption insurance for rental payments of
six months.
(vii) Such additional and/or other insurance with respect to
the Improvements located on the Premises and in such amounts as at the
time is customarily carried by prudent owners or tenants with respect
to improvements similar in character, location and use and occupancy to
the Tenant Improvements located on the Premises.
(b) The insurance required by Paragraph 11(a) shall be written by companies
having an A.M. Best's rating of not less than "A-": VIII and a financial size
category of "VIII", and all such companies shall be authorized to do
an insurance business in the State, or otherwise agreed to by Landlord
and any holder of a mortgage on Landlord's interest in the Property ("Lender").
The insurance policies (i) shall be in amounts sufficient at all times to
satisfy any coinsurance requirements thereof, and (ii) shall (except
for the worker's compensation insurance referred to in Paragraph 11
(a)(iii) hereof) name Landlord (and any successor to Landlord), Tenant and each
Lender (whose name and address have been provided to Tenant) as additional
insured parties, as their respective interests may appear. If said insurance or
any part thereof shall expire, be withdrawn, become void by breach of any
condition thereof by Tenant or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, Tenant shall immediately obtain new or
additional insurance reasonably satisfactory to Landlord and the Lender.
(c) Each insurance policy referred to in clauses (i), (iv), (v) (and
(vi) if requested by Lender) of Paragraph 11(a), shall contain standard
non-contributory mortgagee clauses in favor of each Lender. Each policy shall
provide that it may not be canceled except after thirty (30) days' prior notice
to Landlord and each Lender. Each policy of insurance shall contain a waiver of
subrogation or consent to a waiver of right of recovery against the Landlord.
Each policy shall also provide that any losses otherwise payable thereunder
shall be payable notwithstanding (i) any act or omission of Landlord or Tenant
or any other Person which might, absent such provision, result in a forfeiture
of all or a part of such insurance payment, or (ii) the occupation or use of any
of the Premises for purposes more hazardous than permitted by the provisions of
such policy.
(d) Tenant shall pay as they become due all premiums for the insurance
required by this Paragraph 11, shall renew or replace each policy, and shall
deliver to Landlord and Lender a certificate, a copy of the policy (at the
request of Landlord) or other evidence (reasonably satisfactory to Lender and
Landlord) of the existing policy and such renewal or replacement policy at least
thirty days prior to the insurance expiration date of each policy. Each such
policy shall provide that it shall not expire until the Landlord and each Lender
shall receive a notice from the insurer to the effect that such policy will
expire on the insurance expiration date, as set forth in such notice, which
shall be thirty (30) days following the date of the receipt by Landlord and each
Lender of such notice. In the event of Tenant's failure to comply with any of
the foregoing requirements of this Paragraph 10 within five (5) Business Days of
the giving of written notice by Landlord to Tenant, Landlord shall be entitled
to procure such insurance. Any sums expended by Landlord in procuring such
insurance shall be additional rent and shall be repaid by Tenant, together with
interest thereon at the Default Rate, from the time of payment by Landlord until
fully paid by Tenant immediately upon written demand therefor by Landlord.
(e) Anything in this Paragraph 11 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 11(a) may be
carried under a "blanket" policy or policies covering other properties or
liabilities of Tenant, provided that such "blanket" policy or policies otherwise
comply with the provisions of this Paragraph 11. In the event any such insurance
is carried under a blanket policy, Tenant shall deliver to Landlord and each
Lender evidence of the issuance and effectiveness of the policy, the amount and
character of the coverage with respect to the Premises and the presence in the
policy of provisions of the character required in the above sections of this
Paragraph 11.
12. WAIVER OF SUBROGATION
12.1. Anything in this Lease to the contrary notwithstanding, Landlord and
Tenant hereby release each other and each other's agents, officers and employees
of liability and responsibility, and each hereby waives any and every claim
which arises or may arise in its favor against the other party hereto during the
term of this Lease, for any loss or damage that may occur to the Premises or any
improvements thereto or any personal property located thereon, arising from any
cause that (i) would be insured against under the terms of any property
insurance required to be carried hereunder, or (ii) is insured against under the
terms of any property insurance actually carried by Landlord or Tenant,
regardless of whether it is required hereunder. Such mutual waivers by Landlord
and Tenant shall be in addition to, and not in limitation or derogation of, any
other waiver or release contained in this Lease with respect to any loss or
damage that may occur to the Premises or any improvements thereto or any
personal property located thereon. The foregoing waiver shall apply regardless
of the cause or origin of the claim, including but not limited to the negligence
of Landlord or Tenant or their agents, officers and employees, and shall apply
regardless of the extent of the actual coverage (for example, each party shall
be responsible for any deductible, co-insurance or self-insurance with respect
to the insurance maintained by that party). Inasmuch as such mutual waivers will
preclude the assignment of any aforesaid claim by way of subrogation or
otherwise to any insurance company (or any other person), Landlord and Tenant
hereby agree to give to each insurance company which has issued property
insurance covering the Premises written notice of the terms of such mutual
waivers, if required by the terms of such policies, and to cause such insurance
policies to be properly endorsed, if necessary, to prevent the invalidation of
such insurance coverages by reason of such mutual waivers.
13. FIRE AND CASUALTY DAMAGE
13.1. If the Building should be damaged or destroyed by fire or other casualty,
hereinafter called "Casualty Damage," Tenant shall give prompt written notice
thereof to Landlord. It within the last twenty-four (24) months of the Term,
more than fifty percent (50%) of the Building should be totally destroyed then
Tenant, at its option so long as no uncured Event of Default exists hereunder,
may terminate this Lease by giving Landlord written notice within thirty (30)
days of the date of the Casualty Damage, whereupon all rights and obligations
hereunder shall cease effective as of the date of the Casualty Damage and all
rents and other expenses paid or payable hereunder shall be apportioned and paid
as of such date.
13.2. Unless this Lease is terminated as provided above, Tenant shall proceed
promptly, using all available insurance proceeds, to restore the Building to its
pre-Casualty Damage condition, provided that if the Casualty Damage occurs
during the final twelve (12) months of the term of this Lease, Tenant shall not
be required to restore such damage unless Tenant shall have exercised its option
for the next Extension Period. In such event, if Tenant has not exercised its
next Extension Period, this Lease shall terminate whereupon all rights and
obligations hereunder shall cease, effective as of the date of the Casualty
Damage and all Rent and other expenses paid or payable hereunder shall be
apportioned and paid as of such date. Tenant shall, if necessary, assign all
insurance proceeds to Landlord and shall pay any applicable deductible.
13.3. If the Building is to be restored, Rent and other charges payable
hereunder shall not be reduced or abated.
14. CONDEMNATION
14.1. In the event that all or a portion of the Premises is taken by
condemnation or like proceeding and the remainder of the Premises shall be less
than 50% of the Premises as of the Commencement Date, Tenant, at Tenant's
option, may terminate this Lease and all rents and other charges payable
hereunder shall be prorated as of the date of termination. Landlord shall be
entitled to receive the entire award in any condemnation or like proceeding,
including any award for the value of any unexpired term of this Lease, and
Tenant shall have no claim against Landlord or against the proceeds of the
condemnation, except that Tenant shall have the right to claim and recover from
the condemning authority compensation for Tenant's moving expenses, business
interruption, increased rental costs or taking of Tenant's personal property
(not including Tenant's leasehold interest); provided that such damages may be
claimed only if they are separately awarded and do not reduce the damages
recoverable by Landlord.
14.2. Unless this Lease is terminated as provided above, Tenant shall restore
the remainder of the Premises as promptly as practicable to a satisfactory
condition so that Tenant may continue its operations as nearly as possible in
the same manner as before such taking. Rent and other charges payable hereunder
shall be temporarily abated in proportion to the percentage of the Premises
rendered untenantable during restoration and permanently abated thereafter in
proportion to the percentage of the Premises condemned or otherwise taken.
15. DEFAULT
15.1. Each of the following events, hereinafter called an "Event of Default,"
shall be a default hereunder by Tenant and a breach of this Lease. The term
Default shall mean any event that but for the giving of notice or passage of
time shall constitute an Event of Default. The term Event of Default shall mean
the occurrence of any of the following after the expiration of any applicable
cure period. The following shall constitute Defaults or Events of Default as
applicable:
a) (i) If Tenant shall violate any covenant or agreement providing for the
payment of Monthly Rent and such violation shall continue for five (5) Business
Days after notice that the same has not been received by Landlord provided that
the Landlord shall not be required to give such notice more frequently than once
per calendar year, or (ii) failure to pay other Rent payable hereunder and such
violation shall continue for fifteen (15) business days after written notice to
Tenant from Landlord, unless such delayed payment of other Rent would result in
the assessment of any late fee, penalty or other default charge or lien against
Landlord or the Property in which case such payment shall be made on the earlier
of fifteen (15) business days after written notice or prior to such assessment
being made.
b) If Tenant shall be adjudicated bankrupt, whether voluntarily or
involuntarily, or make any general assignment for the benefit of creditors or
take or attempt to take the benefit of any insolvency or bankruptcy act.
c) If a receiver or trustee shall be appointed for or take possession
of all or a substantial part of Tenant's assets.
d) The attachment, execution or other judicial seizure of all or a
substantial part of Tenant's assets, where such an attachment, execution or
seizure is not discharged within thirty (30) days.
e) If Tenant shall be in default in fulfilling any non-monetary
covenants and conditions of this Lease and such default shall continue for
thirty (30) days after written notice thereof from Landlord to Tenant, provided,
however, such time period shall be extended if the subject default is not
reasonably capable of being cured in such thirty (30) day period if Tenant
commences to cure in such thirty (30) day period and thereafter diligently and
in good faith prosecutes such cure to completion.
f) Any representation or warranty made in this Lease, or in connection
with this Lease, by Tenant is determined by Landlord to have been false or
misleading in any material respect at the time made.
g) If Tenant shall fail to maintain the insurance required by Section
11 herein.
15.2. Upon the occurrence of an Event of Default, Landlord may give Tenant
notice of Landlord's intention to terminate this Lease on a date specified in
such notice (which date shall be no sooner than ten (10) days after the date of
the notice). Upon the date therein specified the Term and the estate hereby
granted and all rights of Tenant hereunder shall expire and terminate as if such
date were the date hereinabove fixed for the expiration of the Term, but Tenant
shall remain liable for all its obligations hereunder through the date
hereinabove fixed for the expiration of the Term, including its liability for
Basic Rent and Additional rent as hereinafter provided.
(i) Landlord may, whether or not the Term of this Lease shall
have been terminated pursuant to clause (i) above give Tenant notice to
surrender the Premises to Landlord on a date specified in such notice
(which date shall be no sooner than ten (10) days after the date of the
notice), at which time Tenant shall surrender and deliver possession of
the Premises to Landlord. Upon or at any time after taking possession
of the Premises, Landlord may remove any persons or property therefrom.
Landlord shall be under no liability for or by reason of any such
entry, repossession or removal. No such entry or repossession shall be
construed as an election by Landlord to terminate this Lease unless
Landlord gives a written notice of such intention to Tenant pursuant to
clause (i) above.
(ii) After repossession of any of the Premises pursuant to
clause (ii) above, whether or not this Lease shall have been terminated
pursuant to clause (i above, Landlord may relet the Premises or any
part thereof to such tenant or tenants for such term or terms (which
may be greater or less than the period which would otherwise have
constituted the balance of the Term) for such rent, on such conditions
(which may include concessions or free rent) and for such uses as
Landlord, in its sole discretion, may determine; and Landlord shall
collect and receive any rents payable by reason of such reletting. The
rents received on such reletting shall be applied (A) first to the
reasonable and actual expenses of such reletting and collection,
including without limitation necessary renovation and Alterations of
the Premises, reasonable and actual attorneys' fees and any reasonable
and actual real estate commissions paid, and (B) thereafter toward
payment of all sums due or to become due Landlord hereunder. If a
sufficient amount to pay such expenses and sums shall not be realized
or secured, then Tenant shall pay Landlord any such deficiency monthly,
and Landlord may bring an action therefor as such monthly deficiency
shall arise. Landlord shall not, in any event, be required to pay
Tenant any sums received by Landlord on a reletting of the Premises in
excess of the rent provided in this Lease, but such excess shall reduce
any accrued present or future obligations of Tenant hereunder.
Landlord's re-entry and reletting of the Premises without termination
of this Lease shall not preclude Landlord from subsequently terminating
this Lease as set forth above. Landlord may make such Alterations as
Landlord in its reasonable discretion may deem advisable. Tenant agrees
to pay Landlord, as Additional rent, immediately upon demand, all
reasonable expenses incurred by Landlord in obtaining possession, in
performing Alterations and in reletting any of the Premises, including
fees and commissions of attorneys, architects, agents and brokers.
(iii) Landlord may exercise any other right or remedy now or
hereafter existing by law or in equity.
16. COVENANT OF QUIET ENJOYMENT
16.1. Landlord represents and warrants (i) that it is the fee simple owner of
the Premises and that it has full right, authority and power to execute and
perform this Lease and to grant the estate demised herein, (ii) that the person
signing this Lease on behalf of Landlord has authority to bind Landlord to the
terms hereof, and (iii) that the execution of this Lease by Landlord will not
contravene the terms of any financing or other agreement to which Landlord is a
party. Provided no uncured Event of Default has occurred, Landlord covenants and
warrants that Tenant will have quiet and peaceable possession and enjoyment of
the Premises free and clear of all prior tenancies or other parties in
possession for the full term of this Lease without hindrance or molestation by
Landlord or any third party, including without limitation parties claiming by,
through or under Landlord.
17. LANDLORD'S RIGHT OF ENTRY
17.1. Landlord and its authorized agents shall have the right to enter the
Premises during normal working hours and upon such prior notice as shall be
reasonable under the circumstances for the purposes of inspecting the general
conditions and state of repair of the Premises or the making of repairs by
Landlord, showing the Premises to prospective purchasers or mortgagees, and,
after expiration of any renewal notice period, for the purpose of showing the
Premises to prospective tenants, provided such entrance shall not unreasonably
interfere with Tenant's operations.
18. SURRENDER OF POSSESSION
18.1. Upon the expiration or earlier termination of this Lease, Tenant shall
peaceably leave and surrender the Premises to Landlord. Except for ordinary wear
and tear, casualty, condemnation and permitted improvements, Tenant shall return
the Premises in good repair and in good, safe and substantial order and
condition, and in accordance with standards applicable to its other owned or
leased commercial properties and in accordance with standards customarily
applied by the other owners or tenants of comparable properties in the related
geographic area.
18.2. All changes or alterations to the Premises made by Tenant pursuant to the
terms of this Lease and all permanently affixed Building Systems (excluding
Tenant's racking, trade fixtures and sales display fixtures) installed by Tenant
in the Premises shall become the property of Landlord at the expiration or
earlier termination of this Lease. Tenant shall repair any damage to the
Premises or the Building caused by removal of its racking, trade fixtures, signs
and sales display fixtures.
19. HOLDING OVER
19.1. Unless otherwise agreed in writing, should Tenant, or any of its
successors in interest, hold over the Premises or any part thereof at the
expiration of the Lease term, such holding over shall constitute and be
construed as tenancy from month to month only, at a rental equal to one hundred
fifty percent (150%) of the rent payable during the last month of the
immediately preceding Lease term. Inclusion of this section shall not be
construed as Landlord's consent for Tenant to hold over nor shall there be an
extension of this Lease by operation of law.
20. SALE, TRANSFER OR CONVEYANCE; SUBORDINATION; ESTOPPELS
20.1. Landlord covenants and agrees to make the purchaser in any sale of the
Premises expressly aware of this Lease and agrees that any sale, transfer, or
conveyance of the Premises shall be subject to the leasehold estate created
herein. It shall be deemed and construed without further agreement between the
parties to this Lease and the purchaser at any such sale, or the transferee or
conveyee, as the case may be, that such purchaser, transferee, or conveyee has
assumed and agreed to carry out all of Landlord's covenants and obligations
under this Lease, and Landlord shall be released from all further liability and
obligations under this Lease arising or accruing after the effective date of the
transfer.
20.2. Landlord and Tenant agree that this Lease and Tenant's rights in and to
the Premises shall be subject and subordinate to the lien of any mortgage or
deed of trust ("Mortgage") now or hereafter placed on all or any portion of the
Premises by Landlord, its heirs, successors or assigns; provided, however, that
the tenancy of Tenant shall not be disturbed by the holder or beneficiary of any
such Mortgage provided Tenant is not in default under the terms of this Lease
beyond any applicable notice and cure period provided for herein. Tenant agrees
that, upon written request of Landlord, Tenant shall execute from time to time a
subordination, non-disturbance and attornment agreement, in form attached hereto
as Exhibit "D" hereto, with the holder of any Mortgage now or hereafter placed
upon the Premises. Tenant shall execute and deliver such instrument within ten
(10) days of the request by Landlord. 20.3. Tenant also agrees that, upon
written request of Landlord from time to time, Tenant shall execute an estoppel
certificate in the form attached hereto as Exhibit "E". Tenant shall execute and
deliver such instrument within ten (10) days of the request by Landlord.
21. COMPLIANCE WITH LAW
21.1. Tenant shall comply with all applicable federal, state and local laws,
regulations, ordinances, rules, orders, building codes and zoning (collectively,
"Applicable Laws") relating to Tenant's use and occupancy of the Premises,
provided that Tenant shall not be required to modify or otherwise improve the
Premises unless required as a result of and specifically related to any
leasehold improvements performed by Tenant. Landlord shall comply with all
Applicable Laws requiring modifications or improvements to the Premises to
permit the full and beneficial use thereof, including Applicable Laws relating
to fire suppression, high piled warehouse storage above 12 feet, seismic
disturbance and handicapped accessibility.
22. INDEMNIFICATION
22.1. Tenant will indemnify Landlord and the SunTrust Parties on an after tax
basis and save it harmless from and against any and all claims, actions,
damages, liability and expense in connection with loss of life, bodily injury
and/or damage to personal property arising directly from or out of any
occurrence in, upon or at the Premises or the occupancy or use by Tenant of the
Premises or any part thereof occasioned by any negligent act or willful
misconduct of Tenant, its agents, employees, or invitees. In case Landlord
shall, without fault on its part, be made a party to any such litigation
commenced by or against Tenant, then Tenant shall protect and hold Landlord
harmless and shall pay all costs (on an After Tax Basis), expenses and
reasonable attorney's fees incurred or paid by Landlord in connection with such
litigation. Notwithstanding anything herein to the contrary, Landlord shall
remain solely liable for, and shall indemnify, defend and hold Tenant harmless
from, Landlord's and its employees', agents' and contractors' own gross
negligence and willful misconduct. After Tax Basis shall mean, with respect to
any payment received or accrued by any person, the amount of such payment (the
"base payment") supplemented by a further payment (the "additional payment") to
that person so that the sum of the base payment plus the additional payment
shall, after taking into account the amount of all taxes required to be paid by
such person in respect of the receipt or accrual of the base payment and the
additional payment (after any current credits or deductions arising therefrom
and the timing thereof), be equal to the amount required to be received.
23. HAZARDOUS MATERIAL
23.1. In the event the Premises are contaminated by Hazardous Materials (as
hereinafter defined), Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including without limitation, attorneys' fees, consultant
fees and expert fees). Without limiting the generality of the foregoing, the
indemnification, defense and hold harmless provided by this section shall
specifically cover: (i) costs incurred in connection with any investigation of
site conditions or any clean-up, remedial, removal or restoration work required
by any federal, state or local government agency or political subdivision
because of the presence of Hazardous Materials on, under, in or about the
Premises; and (ii) natural resource damages liability. The foregoing indemnity
shall survive the expiration or earlier termination of this Lease. 23.2.
"Hazardous Materials" as used herein shall mean any pollutant, toxic or
regulated substance or material, hazardous waste, hazardous material, hazardous
substance, asbestos, methane, petroleum product or oil as defined in or
regulated by the Resource Conservation and Recovery Act, as amended, the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), as amended, the Federal Clean Water Act, as amended, or any other
Applicable Laws for the preservation of public health, safety or the
environment, whether existing as of the Commencement Date or subsequently
enacted.
24. SIGNS
24.1. Subject to Applicable Laws and Landlord's prior written consent, not to be
unreasonably withheld, conditioned or delayed, Tenant shall have the right, at
its sole cost and expense, to erect signage upon the Building and/or otherwise
about the Premises, including temporary "coming soon" signage. Tenant shall not
erect any signs other than customary trade signs identifying its business and
products, and may not erect a sign or signs on the roof of the Building unless
approved in writing by Landlord. At the expiration or earlier termination of
this Lease, Tenant shall remove its signage and repair any damage to the
Premises or the Building caused thereby.
25. FINANCIAL STATEMENTS. Tenant shall deliver to Landlord (i) within 90 days
after the close of each fiscal year the financial statements of Tenant audited
by a firm of independent certified public accountants, together with a report
that such firm has audited such financial statements in accordance with
generally accepted accounting principles and expressing such firm's unqualified
opinion thereon and (ii) within 45 days after the end of each fiscal quarter of
each fiscal year (other than the last such fiscal quarter), the balance sheets
and related statements of operations, stockholders' equity and cash flows of
Tenant as of the end of such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of the previous fiscal year, all certified by
the chief financial officer or chief accounting officer of the Tenant as
presenting fairly in all material respects the financial condition and results
of operations of Tenant in accordance with generally accepted accounting
principles consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes.
26. NOTICES
26.1. All notices required or permitted herein shall be in writing and shall be
hand delivered, sent by certified or registered mail, return receipt requested
or sent by any other delivery service providing a delivery receipt. The first
(1st) day following receipt of such notice shall be the start date for all time
periods stated herein. Any time period provided for herein which shall end on a
Saturday, Sunday, or Federal holiday shall automatically be extended through the
next full business day. All notices shall be addressed to Landlord or Tenant,
respectively, at the following addresses, or to such other address as either
party may designate in writing from time to time:
LANDLORD:
FR Hollins Ferry, LLC
do SunTrust Equity Funding, LLC 303 Peachtree Street
24th Floor, MC 3951
Atlanta, GA
Attention: Allison McLeod
TENANT:
Ferguson Enterprises, Inc. 12500 Jefferson Avenue Newport News, VA 23602
Attn: Legal - Real Estate (757) 874-7795
(757) 989-2613 (fax)
27. WAIVER OF TRIAL BY JURY
27.1. Landlord and Tenant hereby agree to and do hereby waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties against
the other on any matters whatsoever arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy
of said Premises and/or any claim of injury or damage, and any statutory remedy.
28. GOVERNING LAW
28.1. This Lease shall be construed and governed by the Laws of the State in
which the Premises is located. Each term and provision of this Lease shall be
enforced to the fullest extent permitted by law. Should any provisions of this
Lease be held to be wholly invalid, illegal or not enforceable under such state
laws or any Federal laws, it or they shall be considered severable and the
Lease, its remaining terms and conditions, shall remain in full force and be
binding upon Landlord and Tenant as though such severed provisions had never
been included.
29. ATTORNEY'S FEES
29.1. In the event a suit is filed by either Landlord or Tenant in order to
enforce the terms, conditions and covenants of this Lease, the prevailing party
shall be entitled to reasonable attorney's fees and costs incurred in connection
therewith at both the trial and appellate levels.
30. ASSIGNMENT AND SUBLETTING
(a) Tenant shall have the right, upon prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed, to sublease the Premises or assign its rights under this Lease in whole
or in part. Notwithstanding the foregoing, Tenant may, without consent, assign
this Lease or sublet the Premises, in whole or in part, to any entity 100% owned
by Tenant or under 100% common ownership or control by Tenant (an "Affiliate").
Notwithstanding any assignment of this Lease or sublease of the Premises, in
whole or in part, including any such assignment or sublease to an Affiliate,
Landlord and Tenant acknowledge and agree that Tenant (or any successor by
merger with Tenant) shall remain fully liable for the payment of all rent and
the performance of all other Tenant obligations hereunder. Landlord hereby
consents to the existing subleases in effect as of the Commencement Date
provided that such sublease (1) is expressly subordinate to this agreement and
provided that such sub-tenant shall execute a subordination, non-disturbance and
attornment agreement, in form and substance reasonably acceptable to Landlord,
(ii) terminates on or prior to the end of the Term, (iii) provides for rent
payable monthly in arrears and (iv) does not permit payment of rent more than
one month in advance. No assignment or sublease shall affect or reduce any of
the obligations of Tenant hereunder, and all such obligations shall continue in
full force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment or sublease had been made. No assignment or
sublease shall impose any obligations on Landlord under this Lease except as
otherwise provided in this Lease. In the case of a sublease, Tenant shall,
within fifteen (15) days after the execution and delivery of such sublease,
deliver to Landlord a duplicate original of such sublease. In the event this
Lease is terminated following the occurrence of an Event of Default, Landlord
shall have the right to collect and enjoy all rents and other sums of money
payable under any sublease of any of the Leased Property, and, upon such event,
Tenant shall be deemed to have irrevocably and unconditionally assigned such
rents and money to Landlord.
31. INTERPRETIVE PROVISIONS
31.1. The captions are inserted only as a matter of convenience and reference
and in no way define, limit or describe the scope of this Lease, or the intent
of any provision hereof. The neuter singular pronoun shall be deemed to include
the masculine, the feminine, and the plural. The term "include" and "including"
shall mean without limitation by way of enumeration. Unless otherwise expressly
provided herein, the words "herein", "hereof', "hereunder" and similar words
refer to this Lease as a whole and not to any particular provision of this
Lease.
32. SUCCESSORS AND ASSIGNS
32.1. All of the covenants, agreements, terms, conditions and undertakings in
this Lease shall extend and inure to and be binding upon successors in interest,
transferees, heirs, legal representatives, successors and assigns of Landlord
and Tenant.
33. ENTIRE AGREEMENT
33.1. This Lease constitutes the sole and entire agreement of Landlord and
Tenant and supersedes any prior understandings or written or oral agreement
between the parties respecting the within subject matter. No amendment,
modification, or alteration of the covenants and terms of this Lease shall be
binding unless the same are in writing, dated subsequent to the date hereof and
duly executed by Landlord and Tenant. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and same Lease.
34. WAIVERS
34.1. No waiver by Landlord of any default or breach of any term, covenant or
condition of this Lease shall be deemed a waiver of any other term, covenant or
condition hereof, or of any subsequent default or breach of the same or any
other term, covenant or condition hereof. Landlord's consent to or approval of
any act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent or similar act by Tenant. In no event,
however, shall any claim for unpaid rent or other sums due hereunder first be
asserted more than twelve months after the accrual thereof. Further, Landlord
hereby waives any right of distraint or other common law or statutory lien it
may have, if any, on Tenant's personal property located on or about the
Premises.
35. PROPERTY TAKEN AS- IS. LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND
WILL TAKE THE PROPERTY "AS IS", AND TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER
ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT
MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PROPERTY, INCLUDING ANY WARRANTY
OR REPRESENTATION AS TO ITS FITNESS FOR USE OR PURPOSE, DESIGN OR CONDITION FOR
ANY PARTICULAR USE OR PURPOSE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP
THEREIN, LATENT OR PATENT, AS TO LANDLORD'S TITLE THERETO, OR AS TO VALUE,
COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE, CONDITION, MERCHANTABILITY,
QUALITY, DESCRIPTION, DURABILITY OR OPERATION, IT BEING AGREED THAT ALL RISKS
INCIDENT THERETO ARE TO BE BORNE BY TENANT. Tenant acknowledges that the
Property is of its selection and to its specifications, that the Property has
been inspected by Tenant and is satisfactory to it and that Tenant has examined
the title to the Property prior to the execution and delivery of this Lease and
has found such title to be satisfactory to Tenant. The provisions of this
Paragraph 35 have been negotiated, and the foregoing provisions are intended to
be a complete exclusion and negation of any warranties by Landlord, express or
implied, with respect to any of the Property, arising pursuant to the Uniform
Commercial Code or any other law now or hereafter in effect or otherwise.
36. NET LEASE; NON-TERMINABILITY. This is a net lease and the payment of Rent is
an absolute and unconditional obligation by Tenant. Except as otherwise
expressly provided herein, Tenant shall not have any right to terminate this
Lease, during the Term. Except as otherwise expressly provided in this Lease,
Tenant shall not be entitled to any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of or to the
payment of Rent; and the obligations of Tenant under this Lease shall not be
affected by any interference with Tenant's use of any of the Leased Property for
any reason, including but not limited to the following: (i) any damage to or
destruction of any of the Leased Property by any cause whatsoever, (ii) any
condemnation, (iii) the prohibition, limitation or restriction of Tenant's use
of any of the Property, (iv) any eviction by paramount title or otherwise, (v)
any default on the part of Landlord under this Lease or under any other
agreement, (vi) any latent or other defect in, or any theft or loss of any of,
the Property, (vii) any other cause, whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. It is the
intention of the parties hereto that the obligations of Tenant under this Lease
shall be separate and independent covenants and agreements, and that Rent shall
continue to be payable in all events (or, in lieu thereof, Tenant shall pay
amounts equal thereto), and that the obligations of Tenant under this Lease
shall continue unaffected, and unabated unless this Lease shall have been
terminated pursuant to an express provision of this Lease.
37. GRANT OF RIGHT OF FIRST REFUSAL
37.1. Landlord hereby grants to Tenant a right of first refusal (the "Refusal
Right"), to purchase Landlord's Interest on the following terms and conditions.
As used herein "Landlord's Interest" shall mean (i) Landlord's fee interest in
the Property; and (ii) if Landlord is a corporation, partnership, limited
liability company, trust or other entity, the sole asset of which is the
Property, any ownership or beneficial interest in such corporation, partnership,
limited liability company, trust or other entity representing the right to
receive fifty percent (50%) or more of the profits of such entity or which
otherwise results in a transfer of control of such entity. So long as no uncured
Event of Default exists hereunder, in the event Landlord has received from a
bona fide prospective purchaser a written offer to purchase Landlord's Interest
which Landlord has determined to accept or Landlord makes a written offer to
sell Landlord's Interest to a bona fide purchaser (the "Offer"), then Landlord
shall notify Tenant in writing prior to such acceptance ("Landlord's Refusal
Notice"). Landlord's Refusal Notice shall include a copy of such Offer. Tenant
shall have fifteen (15) days from the receipt of Landlord's Refusal Notice
within which to exercise such Refusal Right by written notice of exercise to
Landlord ("Tenant's Exercise Notice").
37.2. The failure to provide Tenant's Exercise Notice to Landlord within such
fifteen (15) day period shall be conclusively deemed to be and constitute a
rejection of the Offer by Tenant and a waiver of Tenant's Refusal Right as to
such Offer. In such event Landlord shall be free thereafter to sell Landlord's
Interest on the terms and conditions as set forth in the Offer to the entity
making such Offer or to whom such offer was made by Landlord 37.3. If an Offer
is validly accepted by Tenant, then Tenant shall purchase Landlord's Interest
from Landlord on the terms and conditions set forth in the Offer.
38. This is a continuing right of first refusal which shall apply to all Offers
received during the Term other than the first two Lease years of the Term.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Landlord and Tenant have hereunto subscribed their names.
LANDLORD:
FR. HOLLINS FERRY, LLC, a
Delaware limited liability company
By: MRLL, LLC, a Delaware limited liability
Company Is Sole member
By:
Name: Paul Severn
Title: Authorized Person
[SIGNATURES CONTINUED ON NEXT PAGE]
TENANT:
FERGUSON ENTERPRISES, INC., a Virginia corporation
By:
Name: Neil I. Rogers
Title: Vice President - Facilities
Schedule of Exhibits
Exhibit Description
A Property
B Proposed Tenant Improvement
C Project Budget
D Form of Subordination, Non-Disturbance and Attornment Agreement
E Form of Tenant Estoppel Certificate
EXHIBIT 'A'
LEGAL DESCRIPTION
BEGINNING for the first, at a point at the intersection of the northerly right
of way line of Maryland State Route 1-895 or The Harbor Tunnel Thruway, variable
width, and the easterly right of way line of Transway Road, variable width, said
point being opposite base line right of way station 181+53.15, 150.00 feet to
the left of said base line, measured radially as shown on Maryland State Highway
Administration Plat number 13499; thence binding on said right of way line
Transway Road as shown on said Plat and also on Maryland State Highway
Administration Plat number 14571, with meridian reference to the Baltimore
County Grid Meridian
1) North 38 degrees 28 minutes 53 seconds West 150.34 feet; thence
2) South 51 degrees 31 minutes 13 seconds West 20.00 feet; thence
3) North 38 degrees 28 minutes 47 seconds West 227.48 feet; thence
4) By a curve, to the right with a radius of 783.51 feet and an arc length of
491.66 feet, said curve having a chord bearing North 20 degrees 30 minutes 10
seconds West 483.64 feet; thence
5) North 02 degrees 31 minutes 33 seconds West 336.02 feet to intersect the
southerly right of way line of Hollins Ferry Road, 50 feet wide; thence binding
on said right of way line as shown on Maryland State Highway Administration Plat
number 10723
6) North 68 degrees 51 minutes 11 seconds East 637.38 feet to a pipe found;
thence
7) North 74 degrees 32 minutes 44 seconds East 100.52 feet to a pipe found;
thence
8) ) North 68 degrees 51 minutes 11 seconds East 150.00 feet; thence leaving
said right of way line of Hollins Ferry Road and binding on the westerly right
of way line of Maryland State Route 1-695, The Baltimore Beltway, variable width
9) South 76 degrees 19 minutes 14 seconds East 79.58 feet to a pipe found, said
pipe being opposite base line right of way Ramp "H" Station 4+50.00, 80.00 feet
to the right, as measured at right angles; thence
10) South 21 degrees 08 minutes 49 seconds East 112.17 feet to a pipe found;
thence
11) By a curve, to the left with a radius of 279.00 feet and an arc length of
250.68 feet, said curve having a chord bearing South 46 degrees 53 minutes 12
seconds East 242.33 feet; thence
12) By a cure, to the right with a radius of 425.84 feet and an arc length of
133.88 feet, said curve having a chord bearing South 63 degrees 37 minutes 12
seconds East 133.33 feet to a point opposite base line right of way ramp "H"
station 9+00, 80.00 feet to the right, as measured at right angles, thence
13) South 22 degrees 48 minutes 03 seconds East 203.11 feet to a pipe found
opposite base line right of way 1-695 station 69+03.37, 200.00 feet to right, as
measured at right angles and shown on State Highway Administration Plat number
10721; thence
14) South 19 degrees 06 minutes 20 seconds East 18.48 feet to a pipe found;
thence leaving said 1-695 right of way line and binding on the division line
between Lots 12 and 13 as shown on a Plat entitled, "Plat of Grosedale" and
recorded among the Plat records of Baltimore County, Maryland in Plat Book WPC 3
at folio 124
15) South 08 degrees 20 minutes 15 seconds East 52.19 feet to the southwesterly
corner of said Lot 13; thence binding on the southerly line of Lot 13
16) North 87 degrees 56 minutes 46 seconds East 8.83 feet to a point opposite
base line right of way 1-895 station 192+70.01, 363.47 feet to the left, as
measured radially and shown on Maryland State Highway Administration Plat number
12767; thence binding on said westerly right of way line of 1-695 as shown on
said Plat number 12767 and also Maryland State Highway Administration Plat
number 13497
17) South 17 degrees 20 minutes 39 seconds East 214.52 feet to a concrete
monument found at the intersection point of said right of way line 1-695, The
Baltimore Beltway, and aforementioned northerly right of way line of 1-895, The
Harbor Tunnel Thruway thence leaving said right of way line of 1-695 and binding
on said right of way line 1-895
18) By a curve, to the left with a radius of 4447.18 feet and an arc length of
1134.81 feet, said curve having a chord bearing South 59 degrees 32 minutes 21
seconds West 1131.73 feet to the point of beginning.
CONTAINING 27.99 acres of land, more or less.
Exhibit "B"
Proposed Tenant Improvement
Exhibit "C"
Project Budget
PROJECT ESTIMATE / BASE BID
PROJECT: FERGUSON - HOLLINS FERRY ROAD
BID DATE: May 11, 2006
BID TOTAL $ 7,173,897
PROJECT DURATION IN MONTHS:
ESTIMATOR: Andy Crosby
Exhibit "D"
Form of Subordination, Non-Disturbance and Attomment Agreement
After recording, mail to:
Charles T. Sharbaugh, Esq.
Paul, Hastings, Janofsky & Walker
600 Peachtree Street N.E. -- Suite 2400
Atlanta, GA 30308-2222
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
This SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT AGREEMENT (this "Agreement")
is entered into as of , 200 (the "Effective Date"), between , a
, ("Mortgagee"), and FERGUSON ENTERPRISES, INC., a Virginia
corporation, ("Tenant"), with reference to the following facts:
A. , a , ("Landlord"), owns the real property located at
(such real property, including all buildings, improvements, structures
and fixtures located thereon, "Property"), as more particularly described in
Schedule A.
B. Mortgagee has made a loan to Landlord in the original principal amount
of $ (the "Loan").
C. To secure the Loan, Landlord has encumbered the Property by entering into
that certain dated , 20_, in favor of Mortgagee (as amended, increased, renewed,
extended, spread, consolidated, severed, restated, or otherwise changed from
time to time, the "Mortgage") [to be] recorded [on , at Book __, Page ,] in the
Official Records of the County of , State of (the "Land Records").
D. Pursuant to a Lease Agreement dated as of , 2006 (the "Lease"), Landlord
demised to Tenant the Property and the exclusive rights thereto together with
all of Landlord's rights of access, in common with others, in and to the
Property and all appurtenances to and benefiting the Property ("Tenant's
Premises").
E. Tenant and Mortgagee desire to agree upon the relative priorities of their
interests in Property and their rights and obligations if certain events occur.
NOW, THEREFORE, for good and sufficient consideration, Tenant and Mortgagee
agree:
1. Definitions.
The following terms shall have the following meanings for purposes of this
Agreement.
1.1 Claim. A "Claim" means any claim, counterclaim, defense or other
alleged obligation against any other party.
1.2 Foreclosure Event. A "Foreclosure Event" means: (a) foreclosure under the
Mortgage; (b) any other exercise by Mortgagee of rights and remedies (whether
under the Mortgage or under applicable law, including bankruptcy law) as holder
of the Loan and/or the Mortgage, as a result of which Successor Landlord becomes
owner of the Property; or (c) delivery by Landlord to Mortgagee (or its designee
or nominee) of a deed or other conveyance of Landlord's interest in the Property
in lieu of any of the foregoing.
1.3 Former Landlord A "Former Landlord" means Landlord and any other party that
was landlord under the Lease at any time before the occurrence of any attornment
under this Agreement.
1.4 Rent. The "Rent" means any fixed rent, base rent, or additional rent
or other amounts payable under the Lease.
1.5 State. The state where the Property is located.
1.6 Successor Landlord. A "Successor Landlord" means any party that becomes
owner of the Property pursuant to or as a result of a Foreclosure Event.
Capitalized terms not otherwise defined herein shall have the meaning given to
that term in the Lease.
2. Subordination.
The Lease shall be, and shall at all times remain, subject and subordinate to
the lien imposed by the Mortgage, and all advances made under the Mortgage.
Mortgagee agrees that the Mortgage does not and shall not cover any personal
property owned or leased by the Tenant or any of its subtenants, including,
without limitation, inventory, furniture, and equipment owned or leased by
Tenant or its subtenants from any person or entity other than Landlord, to the
extent that Tenant or its subtenants are permitted or required to remove the
same from the Property pursuant to the Lease or otherwise.
3. Nondisturbance, Recognition and Attornment.
3.1 No Exercise of Mortgage Remedies Against Tenant. So long as the Lease has
not been terminated on account of an Event of Default, Mortgagee shall not name
or join Tenant as a defendant in any exercise of Mortgagee's rights and remedies
arising upon a default under the Mortgage unless applicable law requires Tenant
to be made a party thereto as a condition to proceeding against Landlord or
prosecuting such rights and remedies. In the latter case, Mortgagee may join
Tenant as a defendant in such action only for such purpose and not to terminate
the Lease or otherwise adversely affect Tenant's rights under the Lease or this
Agreement in such action.
3.2 Nondisturbance and Attornment. So long as no Event of Default exists, then,
if and when Successor Landlord takes title to the Property: (a) the Lease shall
continue in full force and effect, and neither the Lease, Tenant's right of
possession of the Property nor its rights under the Lease shall be disturbed,
terminated, altered or otherwise adversely affected, nor shall the Lease,
Tenant's right of possession of the Property nor Tenant's rights under the Lease
be disturbed, terminated, altered or otherwise adversely affected, by the
existence of, or any default under, any Mortgage, and in the event of a
Foreclosure Event, the Successor Landlord shall be bound to Tenant for the Term
of the Lease and any Renewal Term, the rights of Tenant under the Lease shall
expressly survive, and the Lease shall in all respects continue in full force
and effect so long as no Event of Default has occurred and is continuing; (b)
Tenant shall recognize and attom to Successor Landlord as Tenant's direct
landlord under the Lease as affected by this Agreement; and (c) any sale of the
Property or any portion thereof pursuant to any Foreclosure Event, shall be made
subject to the Lease and the rights of Tenant thereunder.
3.3 Further Documentation. The provisions of this Article shall be effective and
self-operative without any need for Successor Landlord or Tenant to execute any
further documents. Tenant and Successor Landlord shall, however, confirm the
provisions of this Article in writing upon request by either of them.
4. Protection of Successor Landlord.
Notwithstanding anything to the contrary in the Lease or the Mortgage, Successor
Landlord shall not be liable for or bound by any of the following matters: 4.1
Claims Against Former Landlord. Any Claim that Tenant may have against any
Former Landlord relating to any event or occurrence before the date of
acquisition of the Property by the Successor Landlord ("Acquisition Date"),
including any claim for damages of any kind whatsoever as the result of any
breach by Former Landlord that occurred before the Acquisition Date; provided,
however, the Tenant reserves its right to assert any and all Claims against the
Former Landlord.
4.2 Prepayments. Any payment of Rent that Tenant may have made to Former
Landlord more than thirty (30) days before the date such Rent was first due and
payable under the Lease with respect to any period after the Acquisition Date
other than, and only to the extent that, the Lease expressly required such a
prepayment.
4.3 Payment; Security Deposit. Any obligation: (a) to pay Tenant any sum(s) that
any Former Landlord owed to Tenant, or (b) with respect to any security
deposited with Former Landlord, unless such security was actually delivered to
Mortgagee.
4.4 Modification, Amendment, or Waiver. Any modification or amendment of the
Lease, or any waiver of any terms of the Lease, made without Mortgagee's written
consent which shall not be unreasonably withheld, delayed or conditioned.
4.5 Surrender, Etc. Any consensual or negotiated surrender, cancellation, or
termination of the Lease, in whole or in part, agreed upon between Landlord and
Tenant, unless effected unilaterally by Tenant pursuant to the express terms of
Paragraph 13 or 14 of the Lease.
5. Exculpation of Successor Landlord.
Notwithstanding anything to the contrary in this Agreement or the Lease, upon
any attornment pursuant to this Agreement, Successor Landlord's obligations and
liability under the Lease shall never extend beyond Successor Landlord's (or its
successors' or assigns') interest, if any, in the Property from time to time,
including but not limited to insurance and condemnation proceeds, Successor
Landlord's interest in the Lease, and the proceeds from any sale or other
disposition of the Property by Successor Landlord (collectively, "Successor
Landlord's Interest"). Tenant shall look exclusively to Successor Landlord's
Interest (or that of its successors and assigns) for payment or discharge of any
obligations of Successor Landlord under the Lease as affected by this Agreement.
If Tenant obtains any money judgment against Successor Landlord with respect to
the Lease or the relationship between Successor Landlord and Tenant, then Tenant
shall look solely to Successor Landlord's Interest (or that of its successors
and assigns) to collect such judgment. Tenant shall not collect or attempt to
collect any such judgment out of any other assets of Successor Landlord.
6. Mortgagee's Right to Cure.
6.1 Notice to Mortgagee. Tenant shall provide Mortgagee with notice of the
breach or default by Landlord under the Lease at the same time that it provides
notice of the alleged breach or default to the Landlord (the "Default Notice")
and, thereafter, the opportunity to cure such breach or default as provided for
below.
6.2 Mortgagee's Cure Period. After Mortgagee receives a Default Notice,
Mortgagee shall have a period of thirty (30) days beyond the time available to
Landlord under the Lease in which to cure the breach or default by Landlord.
Mortgagee shall have no obligation to cure (and shall have no liability or
obligation for not curing) any breach or default by Landlord, except to the
extent that Mortgagee agrees or undertakes otherwise in writing or as is
expressly provided for in this Agreement.
6.3 Extended Cure Period. In addition, as to any breach or default by Landlord
the cure of which requires possession and control of Property, provided only
that Mortgagee undertakes to Tenant by written notice to Tenant within thirty
(30) days after receipt of the Default Notice to exercise (and thereafter does
in fact continuously exercise) reasonable efforts to cure or cause to be cured
by a receiver such breach or default within the period permitted by this
paragraph, Mortgagee's cure period shall continue for such additional time (the
"Extended Cure Period") as Mortgagee may reasonably require to either (a) obtain
possession and control of Property and thereafter cure the breach or default
with reasonable diligence and continuity or (b) obtain the appointment of a
receiver and give such receiver a reasonable period of time in which to cure the
default; provided further however, that in no event shall any such extended
period of time extend beyond the date that the notice is delivered to the
Mortgagee.
7. Confirmation of Facts.
Tenant represents to Mortgagee and to any Successor Landlord, in each case as of
the Effective Date:
7.1 Effectiveness of Lease. The Lease is in full force and effect, has not been
modified except as described on Schedule B, and constitutes the entire agreement
between Landlord and Tenant relating to Tenant's Premises. No unfulfilled
conditions exist to Tenant's obligations under the Lease except as described in
Schedule B.
7.2 No Landlord Default. To the best of Tenant's knowledge, no breach or default
by Landlord exists and no event has occurred that, with the giving of notice,
the passage of time or both, would constitute such a breach or default except as
described in Schedule B.
7.3 No Tenant Default. To the best of Tenant's knowledge, Tenant is not in
default under the Lease and has not received any uncured notice of any default
by Tenant under the Lease except as described in Schedule B.
7.4 Commencement Date. The "Commencement Date" of the Lease was 2006.
7.5 No Transfer. Tenant has not transferred, encumbered, mortgaged, assigned,
conveyed, or otherwise disposed of the Lease or any interest therein, other than
sublease(s) or assignments, mortgages, encumbrances, transfers, conveyances or
dispositions made in compliance with the Lease and set forth on Schedule B.
7.6 Due Authorization. Tenant has full authority to enter into this Agreement,
which has been duly authorized by all necessary actions.
8. Miscellaneous.
8.1 Notices. All notices, requests and communications ("Notice") desired or
required to be provided hereunder shall be given in writing, and shall be
personally delivered or mailed by first class certified mail, postage prepaid,
return receipt requested or by recognized overnight delivery to Mortgagee,
Landlord or Tenant, as the case may be, at the addresses listed below. Any
Notice provided for herein shall become effective only upon and at the time of
receipt by the party to whom it is given, unless such Notice is mailed by
certified mail or recognized overnight delivery, in which case it shall be
deemed to be received (1) if mailed, on the earlier of the second business day
following the mailing thereof, or the day of its receipt if such day is a
business day (or if not a business day, the first business day thereafter); or
(ii) the date of delivery if sent by recognized overnight delivery.
If to Landlord:
c/o SunTrust Robinson Humphrey 303 Peachtree St.,
24th Floor MC 3951
Atlanta, GA 30308
Attn: Allison McLeod
With a copy to:
Charles T. Sharbaugh, Esq.
Paul, Hastings, Janofsky & Walker, LLP 600 Peachtree Street, N.E.
Suite 2400
Atlanta, GA 30308
If to Tenant:
Ferguson Enterprises, Inc.
12500 Jefferson Avenue
Newport News, VA 23602
Attn: Legal - Real Estate
757) 874-7795 (757) 989-2613 (fax)
If to Mortgagee:
Attn:
Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.
8.2 Successors and Assigns. This Agreement shall bind and benefit the
parties, their successors and assigns, any Successor Landlord, and its
successors and assigns. If Mortgagee assigns the Mortgage, then upon delivery to
Tenant of written notice thereof accompanied by the assignee's written
assumption of all obligations under this Agreement, all rights and liability of
the assignor under this Agreement shall terminate.
8.3 Entire Agreement. This Agreement constitutes the entire agreement
between Mortgagee and Tenant regarding the subordination of the Lease to the
lien of the Mortgage and the rights and obligations of Tenant and Mortgagee as
to the subject matter of this Agreement.
8.4 Interaction with Lease and with Mortgage. If this Agreement
conflicts with the Lease, then this Agreement shall govern as between the
parties and any Successor Landlord, including upon any attornment pursuant to
this Agreement. This Agreement constitutes full compliance with, any provisions
in the Lease that provide for subordination of the Lease to the lien of, or for
delivery of nondisturbance agreements by the holder of, the Mortgage. Mortgagee
confirms that Mortgagee has consented to Landlord's entering into the Lease.
8.5 Mortgagee's Rights and Obligations. Except as expressly provided
for in this Agreement, Mortgagee shall have no obligations to Tenant with
respect to the Lease. If an attornment occurs pursuant to this Agreement, then
all rights and obligations of Mortgagee under this Agreement shall terminate,
without thereby affecting in any way the rights and obligations of Successor
Landlord provided for in this Agreement.
8.6 Interpretation; Governing Law. The interpretation, validity and
enforcement of this Agreement shall be governed by and construed under the
internal laws of the State of, excluding its principles of conflict of laws.
8.7 Amendments. This Agreement may be amended, discharged or terminated, or
any of its provisions waived, only by a written instrument executed by all of
the parties hereto.
8.8 Execution. This Agreement may be executed in any number of counterparts,
with signature to each such counterpart being deemed signature to all such
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
8.9 Mortgagee's Representation. Mortgagee represents to tenant and to Landlord
that Mortgagee has full power and authority to enter into this Agreement, and
Mortgagee's entry into this Agreement has been duly authorized by all necessary
actions, that the individual executing this Agreement on behalf of the Mortgagee
has full authority to do so, and that this Agreement is binding and enforceable
against Mortgagee in accordance with its terms.
8.10 Attorney's Fees. In the event any legal action or proceeding is commenced
to interpret or enforce the terms of or obligations arising out of this
Agreement, or to recover damages for the breach thereof; the party prevailing in
any such action or proceeding shall be entitled to recover from the
non-prevailing party all reasonable attorney's fees, costs and expenses incurred
by the prevailing party as shall be plead and proven by such party and awarded
by a court of competent jurisdiction.
9. Miscellaneous.
This Agreement may not be modified orally or in any other manner than by an
agreement in writing signed by the parties hereto or their respective successors
in interest. This Agreement shall inure to the benefit of and be binding upon
the parties hereto, their successors and assigns. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement
to be duly executed as of the day and year first above written.
MORTGAGEE:
Witness
----------------------------- -------------------------------
Printed Name By:
Name:
Title:
-------------------------------
----------------------------------
Witness
----------------------------------
Printed Name
----------------------------------
STATE OF SS.
COUNTY OF
The foregoing instrument was acknowledged before me this day of
, 200 by of
, a corporation, a member on behalf of
, a limited liability company. is
personally known to me, or has produced as identification.
(NOTARIAL SEAL)
Notary Public Name:
My Commission Expires:
Commission No.:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
TENANT:
FERGUSON ENTERPRISES, INC.,
Witness a Virginia corporation
By:
Name:
Title:
Witness
Printed Name
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 200 by of
, a corporation, a member on behalf of
, a limited liability company. is
personally known to me, or has produced as identification.
(NOTARIAL SEAL)
Notary Public
My Commission Expires:
Commission No.:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
Schedule A to Exhibit "D"
Description of Property
ALL THAT CERTAIN REAL PROPERTY lying, being and situated in the City of , County
of , and State of , more particularly described as follows:
Schedule B to Exhibit "D"
Estoppel Clarifications, Exceptions and Lease Modification and Status
Exhibit "E"
FORM OF TENANT ESTOPPEL CERTIFICATE
( )
The undersigned, FERGUSON ENTERPRISES, INC., a Virginia Corporation ("Tenant"),
hereby certifies to ("Proposed Landlord"), as follows:
1. The undersigned is the tenant under that certain Lease Agreement dated as
of June , 2006 (the "Lease") executed by FR HOLLINS FERRY, LLC, a Delaware
limited liability corporation, as landlord (the "Landlord"), and the
undersigned, as tenant, demising certain premises located in Baltimore, Maryland
(the "Premises"). Capitalized terms used in this Certificate and not otherwise
defined herein shall have the meanings assigned thereto in the Lease.
2. Tenant has paid all Rent through , 200 . The current Basic Rent for the
Premises is $ per month. No Rent has been paid more than one (1) month
in advance.
3. The current term of the Lease will expire pursuant to its terms on .
Tenant has an option to renew the Term of the Lease
for ( ) additional terms of ) years.
4, To the best knowledge of the undersigned, there are no offsets, deductions or
credits against rentals payable under the Lease and no unexpired free rent
periods or rental concessions or abatements have been granted to Tenant.
5. To the best knowledge of the undersigned, neither the Landlord nor Tenant is
in default in the payment or performance of their respective obligations under
the Lease and there is no condition existing which with the passing of time or
the giving of notice, or both, would constitute a default or event of default
under the Lease.
6. This Certificate may be relied upon and inure to the benefit of Landlord,
Proposed Landlord and their affiliates, designees and agents and their
successors and assigns.
7. The Lease is in full force and effect, and the Lease has not been modified,
amended or altered in writing or otherwise.
8. To the knowledge of the undersigned, there are no proceedings pending or
threatened against Tenant before or by any court or administrative agency which
if adversely decided would materially and adversely affect the financial
condition and operations of Tenant.
As used in this Estoppel Certificate, "to the best of Tenant's knowledge" means
to the best actual knowledge (without duty to investigate) of the person
executing this Certificate, who in the normal course of business would be
informed of material information regarding the Lease.
Nothing in this Estoppel Certificate modifies the Lease or any of its terms.
Dated: , 200
TENANT:
FERGUSON ENTERPRISES, INC., A Virginia Corporation
By:
Name:
Title:
Exhibit 10.3
FIRST MODIFICATION TO
LEASE AGREEMENT
THIS FIRST MODIFICATION TO LEASE AGREEMENT (this "Agreement"), is made
this __ day of December, 2006 between FR HOLLINS FERRY, LLC, a Delaware limited
liability company ("Landlord") and FERGUSON ENTERPRISES, INC., a Virginia
corporation ("Tenant");
WITNESSETH:
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated June
29, 2006 ("Lease") with respect to the real property more particularly described
therein ("Premises");
WHEREAS, Landlord and Tenant desire to modify the Lease as provided
herein;
NOW THEREFORE, IN CONSIDERATION OF TEN AND NO/100 ($10.00) DOLLARS and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned Landlord and Tenant hereby agree that the
Lease is hereby modified as follows. All terms not otherwise defined herein
shall have the meaning as set forth in the Lease.
1. Term Modifications
a) By deleting the third sentence of Section 2.1 in its entirety and by
inserting in lieu thereof the following:
"The Term shall consist of two periods: (i) the
Tenant Allowance Period ("Tenant Allowance Period")
which shall commence on the Commencement Date and
shall end on the sooner to occur of (a) the last day
of the month during which the Completion of the
Tenant Improvements (as hereinafter defined) occurs
(unless such date is the first of the month, in which
case that date shall be used), or (b) July 31, 2007
and (ii) the Remaining Period ("Remaining Period")
which shall commence on the first day immediately
following the end of the Tenant Allowance Period and
shall end on March 31, 2022.
2. Selected Interest on Escrow Amount.
Tenant hereby agrees that all interest earned on the Escrow
Amount during the period commencing on April 1, 2007 and
ending on the last day of the Tenant Allowance Period shall be
paid on a bi-weekly basis by SunTrust to FR Hollins Ferry, LLC
(notwithstanding the fact that FR Hollins Ferry, LLC is no
longer the landlord under the Lease) without offset or claim
or counterclaim.
3. Construction Modifications
a) By adding the following at the end of the first paragraph of Section 6.2:
"Landlord and Tenant acknowledge that as of the date of the First
Modification to Lease Agreement, dated as of December __, 2006, the plans
and specifications ("Tenant's Plans") for the Tenant Improvements attached
hereto as Exhibit A and incorporated herein have been finalized and
approved by the Landlord. Tenant's Plans have been approved by all
necessary governmental authorities with minor modifications. Such approved
plans are hereinafter referred to as the "Final Plans". Tenant will provide
Landlord with a copy of the Final Plans, stamped by the local authority
showing their approval, upon receipt. Tenant has also provided Landlord
with a copy of the building permit issued to permit the construction of the
improvements reflected on the Final Plans. For purposes of this Section
6.2, the term "Tenant Improvements" shall mean the demolition of certain of
the existing improvements on the Premises and the construction and
equipping of the improvements to the Premises as more particularly
described and set forth in the Final Plans. Landlord and Tenant hereby
acknowledge that pursuant to this Section 6.2, Tenant designated $8,500,000
as the escrow amount to be placed in escrow. Landlord deposited with
SunTrust, as escrow agent pursuant to the Escrow Agreement (or any
successor thereto) ("SunTrust"), the full amount of $8,500,000 as the
"Escrow Amount" hereunder.
Tenant agrees to use so much of the Escrow Amount as may be required for
Completion (as hereinafter defined) of construction and equipping of the
Tenant Improvements in accordance with the Final Plans. Unless and until
the Tenant Improvements have been Completed in accordance with the Final
Plans, Tenant shall not use the Escrow Amount for purposes unrelated to the
construction of the Tenant Improvements. Tenant shall cause the Completion
of the Tenant Improvements to occur on or before September 30, 2007."
b) By adding the following phrase at the end of the fifth sentence of the
second paragraph of Section 6.2: ", subject in all respects to the
provisions of the third paragraph of this Section 6.2 governing
disbursement of the Escrow Amount, the substance of which shall be
reflected in the terms of the Escrow Agreement".
c) By deleting the seventh sentence of the second paragraph of Section 6.2 in
its entirety, which sentence reads as follows: "Tenant agrees that the
right of Tenant to draw funds from the Escrow Account shall terminate at
such time as the Tenant Allowance Period terminates, provided, however,
that the balance in the Escrow Account shall be governed by the provisions
below."
d) By deleting the first sentence of the third paragraph of Section 6.2 in its
entirety, and by substituting the following:
"So long as no Event of Default hereunder has
occurred and is continuing, Tenant shall have the
right to draw funds from the Escrow Amount as
follows. Tenant shall provide any request for
disbursement of proceeds from the Escrow Amount in
the form attached as Exhibit A to the Escrow
Agreement (a `Disbursement Request') to Landlord and
SunTrust at least five (5) days prior to the end of
any calendar month. With each Disbursement Request,
Tenant shall deliver to Landlord and SunTrust a
spreadsheet identifying each contactor and/or
supplier that will be paid pursuant to the
Disbursement Request and the amount of any such
payment.
Tenant shall permit representatives of the Landlord
and its lender, CWCapital LLC (and its assigns)
(collectively, `Lender') to inspect the construction
of the Tenant Improvements from time to time in order
to confirm that the Tenant Improvements are being
constructed in accordance with the Final Plans, and
to confirm that all proceeds of the Escrow Amount
have been used to pay for Tenant Improvement costs.
Tenant shall cause copies of all invoices and other
documentation evidencing the actual cost incurred by
Tenant for construction of the Tenant Improvements
described in any Disbursement Request to be kept at
Tenant's headquarters in Newport News, Virginia and
shall make the same available for inspection by
Landlord and Lender.
In the event Landlord or its Lender, based upon their
inspection of the Premises and the amount withdrawn
from the Escrow Amount, disputes that funds being
withdrawn from the Escrow Amount are being (or have
been) used for construction of the Tenant's
Improvements, then Landlord or its Lender may halt
further disbursements until the earlier of the date
Tenant provides copies of paid invoices (and
cancelled checks and/or other appropriate backup
documentation therefor) (collectively, the "Payment
Documentation") verifying that at least the amount
withdrawn from the Escrow Amount has been spent on
the Tenant Improvements or the date of Completion of
the Tenant Improvements, Tenant shall not be entitled
to make additional withdrawals from the Escrow
Amount. Upon either Completion of the Tenant
Improvements or Tenant providing the Payment
Documentation verifying that Tenant has paid toward
the construction of the Tenant Improvements an amount
equal to or greater than the amount withdrawn from
the Escrow Amount, then Tenant shall immediately be
entitled to continue withdrawing from the Escrow
Amount.
Tenant shall incur no charges or costs for any such
inspections. To the extent the terms of the Escrow
Agreement are inconsistent with this Lease, the
Escrow Agreement is hereby modified and amended
accordingly."
e) The third paragraph of Section 6.2 is amended by capitalizing the term
"Completion" wherever it appears in that paragraph.
f) The third paragraph of Section 6.2 is further amended by deleting from the
third to last sentence thereof in its entirety the phrase "Upon the
termination of the Tenant Allowance Period,", and by substituting in lieu
thereof the following new phrase: "Upon Completion of the Tenant
Improvements,".
4. Financial Reporting Modifications
a) By deleting Section 25 in its entirety and by inserting in lieu thereof the
following:
"FINANCIAL STATEMENTS. Tenant shall deliver to
Landlord within ninety (90) days after the close of
each fiscal year the balance sheet and profit and
loss statements of Tenant certified by its chief
financial officer as presenting fairly in all
material respects the financial conditions and
results of operations of Tenant for the applicable
fiscal year and will provide to Landlord the
certified financial statements within thirty (30)
days after certification by Tenant's independent
certified public accountants. In addition, until such
time as the audited financial statements are
delivered to Landlord, Tenant will provide to
Landlord a copy of its financial statements provided
to its parent company for consolidation by such
parent company to be used for the preparation of any
regulatory filings of such parent company.
5. Other Modifications
a) By substituting the word "Tenant" for the word "Landlord" in the last
sentence of Section 21.1 and by deleting the words "provided that Tenant
shall not be required to modify or otherwise improve the Premises unless
required as a result of and specifically related to any leasehold
improvements performed by Tenant" from such Section 21.1.
b) By deleting the third sentence of Section 30 (a) and by substituting the
following as the third sentence of this Section: "Landlord hereby approves
the existing Sublease affecting a portion of the Premises being the
Commercial Real Estate Lease dated June 21, 1999 between Wilkins-Rogers
Incorporated as landlord and Computer Distribution Services, Inc. as tenant
as affected by the Non-Disturbance and Estoppel Agreement dated June 29,
2006 between Landlord and Computer Distribution Services, Inc; however,
notwithstanding any assignment of Tenant's interest in this Lease or any
subletting of the whole or any portion of the Premises (including, without
limitation, the above-referenced existing Sublease and/or any assignment or
sublease to an Affiliate), Landlord and Tenant acknowledge and agree that
Tenant shall remain fully liable for the payment of all rent and the
performance of all other Tenant obligations hereunder."
c) Section 38 is amended by adding the following at the end of said Section:
"Notwithstanding anything contained in this Lease to
the contrary, no `Foreclosure Event' (as hereinafter
defined) and no sale or transfer by the holder or
beneficiary of any Mortgage following a Foreclosure
Event shall be subject to the Refusal Right and other
provisions of Sections 37 and 38 herein. For purposes
of this Lease, the term "Foreclosure Event" shall
mean (a) a foreclosure under any Mortgage; (b) any
other exercise by the holder or beneficiary of a
Mortgage of rights and remedies (whether under the
Mortgage or under applicable law, including
bankruptcy law), as a result of which a third party
becomes the owner of the Property; or (c) delivery by
Landlord to the holder or beneficiary of a Mortgage
(or its designee or nominee) of a deed or other
conveyance of Landlord's interest in the Property in
lieu of any of the foregoing."
6. Landlord Parties. Tenant acknowledges that OLP Baltimore LLC ("Prospective
Buyer") is currently in the process of evaluating the potential purchase of
the Premises and of the interest of the "landlord" in and to the Lease (and
Tenant confirms that Tenant's right of first refusal as contained in
Section 37 of the Lease is inapplicable to such potential purchase). If
such purchase is consummated, then effective upon the date, if ever, that
title passes to Prospective Buyer (i) Section 6.3 of the Lease will be
deemed modified to provide that Landlord is a Maryland (as opposed to
Delaware) limited liability company and (ii) all indemnities contained in
the Lease for the benefit of "Landlord Parties" and/or "SunTrust Parties"
will be deemed to be for the benefit of Landlord, OLP Baltimore MD, Inc.
and their parent company, One Liberty Properties, Inc., and their
respective officers, employees and directors.
7. Ratification. Except as modified hereby, the Lease shall otherwise remain
in full force and effect.
8. Successors and Assigns. This instrument shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto.
9. Governing Law. This instrument shall be governed by the laws of the State
of Maryland.
10. Time of the Essence. Time is of the essence of this Agreement.
11. Capitalized Terms. Capitalized terms not otherwise defined in this
Amendment shall have the meanings ascribed thereto in the Lease.
12. Multiple Counterparts. This instrument may be executed in multiple
counterparts and the counterparts taken together shall constitute the
executed version of this Agreement.
(SIGNATURES CONTINUE ON THE FOLLOWING PAGES)
IN WITNESS WHEREOF, the undersigned Landlord has hereunto caused this
instrument to be executed as of the day and year first above written.
FR HOLLINS FERRY, LLC,
a Delaware limited liability company
By: MRLL, LLC, a Delaware
limited liability company
By: SUNTRUST EQUITY FUNDING, LLC, a Delaware limited
liability company, its Sole Member
By:
---------------------------------------
Name: Paul Severn
Title: Manager
IN WITNESS WHEREOF, the undersigned has hereunto caused this instrument
to be executed as of the day and year first above written.
FERGUSON ENTERPRISES, INC.,
a Virginia corporation
By:
----------------------
Name:
--------------------
Title:
--------------------
Exhibit 10.4
ASSIGNMENT AND ASSUMPTION OF LEASE
KNOW ALL MEN BY THESE PRESENTS THAT, FR HOLLINS FERRY, LLC having an address at
303 Peachtree Street, 24th Floor, MC 3951, Atlanta, Georgia 30308 ("Assignor"),
for the consideration of Ten Dollars ($10.00) and other valuable considerations,
received to its full satisfaction from OLP BALTIMORE LLC, a Maryland limited
liability company, having an address at Sixty Cutter Mill Road, Suite 303, Great
Neck, New York 11201 ("Assignee"), has granted, bargained, sold, assigned,
transferred and conveyed, and by these presents does grant, bargain, sell,
assign, transfer and convey unto Assignee all of the right, title and interest
in and to the lease and the non-disturbance and estoppel agreement, both as
described on Exhibit A attached hereto and made a part hereof (collectively
"Lease"), together with all rentals, security deposits, advance rentals,
receivables, reimbursements and other monetary items, to the extent existing,
payable by the tenant under the Lease ("Tenant").
TO HAVE AND TO HOLD the foregoing unto Assignee, its successors and assigns,
forever.
And, Assignor does for itself and its successors and assigns, covenant and agree
with Assignee, its successors and assigns, that this Assignment includes all of
landlord's interest in and to such Lease, advance rentals, receivables,
reimbursements and other monetary items payable by the Tenant thereunder, to the
extent existing, and that Assignor is the true and lawful owner of the Lease and
has good right and lawful authority to grant, bargain, sell, assign, transfer
and convey the Lease unto Assignee in the manner and form as herein set forth
subject to the matters on Exhibit B ("Permitted Exceptions").
And, without limiting the foregoing, Assignor will indemnify, defend and hold
harmless Assignee and its members, officers, directors, shareholders, employees,
attorneys and agents and all of its and their respective heirs, legal
representatives, successors and assigns from and against any and all claims,
demands, suits, actions, proceedings, damages, liabilities, penalties, costs,
expenses, and fees (including reasonable attorneys' fees) arising from
liabilities under the Lease accruing on and prior to the date hereof subject to
the Permitted Exceptions.
In consideration of the foregoing and subject thereto, Assignee accepts the
within Assignment and assumes all obligations under the Lease after the date
hereof and will indemnify, defend and hold harmless Assignor and its members,
and its officers, directors, shareholders, employees, attorneys and agents and
their respective heirs, legal representatives, successors and assigns, subject
to the Permitted Exceptions, from and against any and all claims, demands,
suits, actions, proceedings, damages, liabilities, penalties, costs, expenses
and fees (including reasonable attorneys' fees) arising from liabilities under
the Lease first accruing after the date hereof.
The representations, warranties and indemnities contained herein shall survive
the delivery hereof for the Survival Period as described in the Purchase and
Sale Agreement dated November 6, 2006 between Assignor and Assignee ("Purchase
and Sale Agreement"). The liabilities and indemnities for the representations
and warranties and indemnities shall be subject to the limitations set forth in
Section 11 of the Purchase and Sale Agreement.
This Assignment may be executed in multiple counterparts or with multiple
signature pages which, when assembled as a single document or, if not so
assembled, when taken together shall be deemed to be fully effective and
operative as an original document.
IN WITNESS WHEREOF the parties have executed this instrument as of the
day of December, 2006.
ASSIGNOR:
WITNESS OR ATTEST:
FR HOLLINS FERRY, LLC, a Delaware limited
liability company
By: MRLL, LLC, a Delaware limited liability company,
its Sole Member
By: SunTrust Equity Funding, LLC, a Delaware limited
liability company, its Sole Member
By:
----------------------------------
Name: Paul Severn
Title: Manager
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
STATE OF GEORGIA: CITY/COUNTY OF FULTON: TO WIT:
I CERTIFY that on this day of December, 2006, before me, a Notary Public for the
state and county aforesaid, personally appeared Paul Severn, known to me or
satisfactorily proven to be the person whose name is subscribed to the foregoing
document, who acknowledged that he is the Manager of SUNTRUST EQUITY FUNDING,
LLC, the Sole Member of MRLL, LLC, the Sole Member of FR HOLLINS FERRY, LLC, a
Delaware limited liability company, that he has been duly authorized to sign,
and has signed, such document on its behalf for the purposes therein set forth;
and that the same is its act and deed. In witness whereof, I have set my hand
and Notarial Seal, the date first above written.
------------------------
Notary Public
My commission expires on ___________________
ASSIGNEE:
WITNESS OR ATTEST: OLP BALTIMORE LLC,
a Maryland limited liability company
By: OLP Baltimore MD, Inc., a Maryland corporation,
its Manager
By:
--------------------------------
Name: Mark H. Lundy
Title: Senior Vice President
STATE OF : CITY/COUNTY OF : TO WIT:
I CERTIFY that on this day of December, 2006, before me, a Notary Public for the
state and county aforesaid, personally appeared Mark H. Lundy, known to me or
satisfactorily proven to be the person whose name is subscribed to the foregoing
document, who acknowledged that he is the Senior Vice President of OLP Baltimore
MD, Inc., the Manager of OLP BALTIMORE LLC, that he has been duly authorized to
sign, and has signed, such document on its behalf for the purposes therein set
forth; and that the same is its act and deed. In witness whereof, I have set my
hand and Notarial Seal, the date first above written.
------------------------
Notary Public
My commission expires on ___________________
EXHIBIT A
Leases
1. Lease Agreement dated June 29, 2006 between Assignor and Ferguson
Enterprises, Inc.
2. Non-Disturbance and Estoppel Agreement dated June 29, 2006 between Assignor
and Computer Distribution Services, Inc.
EXHIBIT B
Permitted Exceptions
1. Taxes for the year 2006 and subsequent years not yet due and payable.
2. Metered water and/or waste water, not yet due and payable.
3. Rights of any persons or entities in possession of all or any portion of the
Premises or tenants under any leases as affected by any existing non-disturbance
agreement.
4. The following matters as indicated on the Survey Plat entitled, "ALTA/ACSM
Land Title Survey 4501 Hollins Ferry Road," performed by KCI Technologies, Inc.
dated November 28, 2004, last revised June 8, 2006:
a. Encroachment of fence into the bed of Transway Road along the west
side of the property;
b. Encroachment of fence along the bed of Baltimore Beltway on the east
side of the property;
c. Encroachment of fence in the easement area adjacent to Hollins Ferry
Road;
d. Encroachment, if any, of fence, macadam paving, and tank in storm
water management areas; and
e. Railroad tracts;
f. "High voltage area."
5. Easements, rights and/or controls relating to drainage, access and erection
of snow fences as set forth in Deed dated May 16, 1956 from Louis Heinzerling,
et ux to the Maryland State Roads Commission and recorded among the Land Records
of Baltimore County in Liber 2929, folio 333, re: denial of access and right to
erect snow fences with respect to State Roads Commission Plat No. 10722,
referred to on the Survey Plat entitled, "ALTA/ACSM Land title Survey 4501
Hollins Ferry Road," performed by KCI Technologies, Inc. dated November 28,
2004, last revised June 8, 2006.
6. Easements, rights and/or controls relating to drainage, access and erection
of snow fences as set forth in Deed dated June 12, 1956 from Henry C. Zepp to
the Maryland State Roads Commission and recorded among the Land Records of
Baltimore County in Liber 2947, folio 426, re: denial of access and right to
erect snow fences with respect to State Roads Commission Plat No. 10723,
referred to on the Survey Plat entitled, "ALTA/ACSM land Title Survey 4501
Hollins Ferry Road," performed by KCI Technologies, Inc. dated November 28,
2004, last revised June 8, 2006.
7. Rights of others and rights incident to the use of the railroad siding
traversing the property hereby insured, as shown on the Survey Plat entitled,
"ALTA/ACSM Land Title Survey 4501 Hollins Ferry Road," performed by KCI
Technologies, Inc. dated November 28, 2004, last revised June 8, 2006.
8. Rights-of-way lines and matters shown on the following State Highway Plats:
10721, 10722, 10723, 12767, 13497, 13498, 13499 and 14571, which Plats are
indicated on the Survey Plat entitled, "ALTA/ACSM Land Title Survey 4501 Hollins
Ferry Road," performed by KCI Technologies, Inc. dated November 28, 2004, last
revised June 8, 2006.
9. Deed of Dedication and Easement dated July 31, 1990 between Carling National
Breweries, Inc., et al, and Baltimore County, Maryland and recorded among the
Land Records of Baltimore County in Liber 8603, folio 95, re: storm water
management easements as shown on the Survey Plat entitled, "ALTA/ACSM Land Title
Survey 4501 Hollins Ferry road," performed by KCI Technologies, Inc. dated
November 28, 2004, last revised June 8, 2006.
10. Rights of Consolidated Gas Electric Light and Power Company by virtue of an
Agreement recorded among the Land Records of Baltimore County in Liber 2493,
folio 110.
Exhibit 99.1
ONE LIBERTY PROPERTIES, INC.
60 Cutter Mill Road - Suite 303
Great Neck, New York 11021
www.onelibertyproperties.com
Telephone 516.466.3100
Telecopier 516.466.3132
ONE LIBERTY PROPERTIES ACQUIRES PROPERTY
IN BALTIMORE, MARYLAND
Great Neck, New York - December 21, 2006 - One Liberty Properties, Inc.
(NYSE:OLP) announced that on December 20, 2006, its wholly-owned subsidiary
acquired a property with an industrial building situated on approximately 28
acres in Baltimore, Maryland for a purchase price of $32.2 million. The building
contains approximately 367,000 square feet of grade level space. The property is
net leased to Ferguson Enterprises, Inc., a distributor of plumbing supplies and
heating and cooling equipment. Ferguson is an indirect subsidiary of Wolseley
plc (NYSE: WOS).
Patrick J. Callan, Jr., President of One Liberty, commented that "by making this
acquisition, the Company is continuing to pursue its objective of acquiring
strategically-located, improved net-leased real property, leased to quality
tenants."
One Liberty is a New York-based REIT that specializes in the acquisition and
ownership of a diverse portfolio of real estate properties under long term net
leases. One Liberty's leases generally provide for contractual rent increases
with all operating expenses and most or all other property related expenses paid
by the tenant. For more information on One Liberty, please visit our website at
www.onelibertyproperties.com.
Materials included in this filing may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause actual results to be materially different from
historical results or from any future results expressed or implied by such
forward-looking statements. Statements that include the words "may," "will,"
"would," "could," "should," "believes," "estimates," "projects," "potential,"
"expects," "plans," "anticipates," "intends," "continues," "forecast,"
"designed," "goal," or the negative of those words or other comparable words
should be considered uncertain and forward-looking.
Contact: Mark H. Lundy - 516.466.3100