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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 29, 1997
Commission File Number 0-26602
THE GRAND UNION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 22-1518276
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 973-890-6000
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Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, Par Value $0.01 National Market System of NASD
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Securities registered pursuant to Section 12 (g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. / X /
The aggregate market value of the voting stock held by nonaffiliates
of the registrant as of June 24, 1997 is approximately $16,200,000,
based upon the closing sales price of the Common Stock on such date.
Voting stock includes the Class A Cumulative Convertible Preferred Stock
and the Class B Cumulative Convertible Preferred Stock. For the purpose of
this calculation, all members of the Board of Directors and all
stockholders with sole or shared voting power over 10% or more of the
Company's Common Stock are presumed to be affiliates.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes X No
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As of June 24, 1997 there were issued and outstanding 10,000,000 shares, par
value $0.01 per share, of the Registrant's Common Stock.
Documents Incorporated by Reference: The Proxy Statement for the 1997 Annual
Meeting of Shareholders has been incorporated by reference partially in Part
III hereof.
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[EXPLANATORY NOTE]
THIS REPORT ON FORM 10-K/A AMENDS AND RESTATES IN ITS ENTIRETY PART IV ITEM 14
OF THE ANNUAL REPORT ON FORM 10-K OF THE GRAND UNION COMPANY FOR THE FISCAL
YEAR ENDED MARCH 29, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON FORM 8-K
THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT:
(a) FINANCIAL STATEMENTS
All financial statements as set forth under Item 8.
(b) REPORT ON FORM 8-K
No reports on Form 8-K were filed during the fourth quarter of
Fiscal 1997.
(c) EXHIBITS
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Exhibit
Number Description of Document
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2.1 Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company ("Grand Union"),
filed with the United States Bankruptcy Court, District of Delaware, on April 19, 1995,
incorporated by reference to Exhibit T3E1 to Grand Union's Form T-3 dated May 8, 1995.
2.2 Findings of Fact, Conclusions of Law and Order Confirming the Second Amended Plan of
Reorganization proposed by Grand Union, dated May 31, 1995, incorporated by reference to
Exhibit 2.2 to Grand Union's Annual Report on Form 10-K for the fiscal year ended April 1, 1995
("Fiscal 1995").
2.3 Minute Order Clarifying Findings of Fact, Conclusions of Law and Order Confirming Second
Amended Plan of Reorganization proposed by Grand Union, dated June 14, 1995, incorporated by
reference to Exhibit 2.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
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3.1 Certificate of Incorporation of Grand Union, as amended through January 6, 1997.(1)
3.2 Certificate of Designation of Class A Convertible Preferred Stock, incorporated by reference to
Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12,
1996.
3.3 Certificate of Designation of Class B Convertible Preferred Stock, dated as of June 11, 1997.(1)
3.4 By-laws of The Grand Union Company, as amended through September 12, 1996, incorporated by
reference to Exhibit 3.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended
October 12, 1996.
4.1 Form of New Common Stock Certificate of Grand Union, incorporated by reference to Exhibit 4.1
to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.2 Warrant Agreement dated as of June 15, 1995, between Grand Union and American Stock Transfer &
Trust Company, as Warrant Agent for 300,000 Series 1 Warrants and 600,000 Series 2 Warrants,
incorporated by reference to Exhibit 4.5 to Grand Union's Annual Report on Form 10-K for Fiscal
1995.
4.3 Registration Rights Agreement dated as of June 15, 1995, among Grand Union and Each of the
Persons Named in Schedule A thereto for the New Common Stock, incorporated by reference to
Exhibit 4.6 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.4 Registration Rights Agreement dated as of June 15, 1995, by and among Grand Union and The
Holders Named therein for the Registrable Notes, incorporated by reference to Exhibit 4.7 to
Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.5 Indenture dated as of June 15, 1995, between Grand Union, as Issuer and IBJ Schroeder Bank &
Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, including form of the
12% Senior Notes due 2004, incorporated by reference to Exhibit 4.2 to Grand Union's Annual
Report on Form 10-K for Fiscal 1995.
4.6 First Supplement Indenture, dated September 9, 1996, to the Indenture dated as of June 15,
1995, between Grand Union, as Issuer, and IBJ Schroeder Bank & Trust Company, as Trustee for
the 12% Senior Notes due September 1, 2004, incorporated by reference to Exhibit 10.3 to Grand
Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996.
4.7 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union
to Bankers Trust Company ("Bankers Trust"), as Collateral Agent, incorporated by reference to
Exhibit 4.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.8 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union
and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 4.4 to Grand
Union's Annual Report on Form 10-K for Fiscal 1995.
10.1 Agreement to Hold Separate dated July 17, 1989, by and among MTH Holdings Inc. ("MTH Holdings"),
GU Acquisition Corporation ("GUAC"), Salomon Inc. and the Federal Trade Commission (the "FTC")
entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to
Exhibit No. 10.5 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-29707)
(the "1989 Grand Union Registration Statement").
10.2 Agreement containing Consent Order among MTH Holdings, GUAC and the FTC entered into in the
matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.6 to
the 1989 Grand Union Registration Statement.
10.3 Asset Purchase Agreement, dated as of January 25, 1990, by and between Grand Union and Price
Chopper Operating Co. of Vermont, Inc., incorporated by reference to Exhibit No. 10.15 to
Holdings Registration Statement on Form S-1 (Registration No. 33-32879).
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10.4 Asset Purchase Agreement, dated as of February 9, 1990, by and between Grand Union and Price
Chopper Operating Co., Inc., incorporated by reference to Exhibit No. 10.49 to GUAC's
Registration Statement on Form S-1 (Registration No. 33-22398).
10.5 Agreement and Master Sublease dated as of July 30, 1990, by and between Grand Union and P&C Food
Markets, Inc. ("P&C Foods"), incorporated by reference to Exhibit No.10.18 to Holdings' Report
on Form 10-Q dated July 21, 1990 (Commission File No. 33-29707).
10.6 Asset Purchase Agreement dated as of February 4, 1993, between The Great Atlantic & Pacific Tea
Company, Inc. and Grand Union, incorporated by reference to Exhibit No. 2.1 to Grand Union's
Report on Form 8-K dated February 4, 1993.
10.7 Asset Purchase Agreement dated as of September 20, 1993 among Foodarama Supermarkets, Inc.,
ShopRite of Malverne, Inc. and Grand Union, incorporated by reference to Exhibit No. 10.19 to
Grand Union's Registration Statement on Form S-1 (Registration No. 33-70956).
10.8 Letter dated June 15, 1995, containing MTH Settlement Agreement between Miller Tabak Hirsch +
Co. ("MTH") and Grand Union in connection with (i) the termination of the Agreement, dated July
22, 1992, between MTH and Grand Union, and (ii) the Second Amended Plan of Reorganization, dated
April 19, 1995, of Grand Union, incorporated by reference to Exhibit 10.15 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.9 Agreement dated as of April, 1995, among Grand Union, Grand Union Capital Corporation
("Capital"), Holdings, the Official Committee of Unsecured Creditors of Capital and certain
holders of Zero Coupon Notes issued by Capital and guaranteed by Holdings named therein,
incorporated by reference to Exhibit 10.16 to Grand Union's Annual Report on Form 10-K for
Fiscal 1995.
10.10 Waiver dated June 14, 1995, with respect to the Second Amended Chapter 11 Plan of Grand Union,
among Grand Union, Bankers Trust, the Official Committee of Unsecured Creditors of Grand Union
and the Informal Committee of Senior Noteholders, incorporated by reference to Exhibit 10.17 to
Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.11 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to
Bankers Trust, as Collateral Agent incorporated by reference to Exhibit 10.10 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.12 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union
and Bankers Trust, as Collateral Agent (included in Exhibit 4.4), incorporated by reference to
Exhibit 10.11 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.13 Subsidiary Security Agreement dated as of June 15, 1995, among the corporations listed on
Schedule 1 thereto and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit
10.12 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.14 Subsidiary Guaranty dated as of June 15, 1995, made by each of the corporations from time to
time listed on Annex A attached thereto in favor of the Banks and the Agent from time to time
party to the Credit Agreement, incorporated by reference to Exhibit 10.13 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.15 Form of Indenture of Open-End Mortgage, Deed of Trust, Deed to Secure Debt, Security Agreement,
Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing, dated as of
June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent, incorporated by
reference to Exhibit 10.14 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.16 Amended and Restated Credit Agreement dated as of June 15, 1995, (the "Credit Agreement"), among
Grand Union, the lending institutions listed from time to time on Schedule 1 thereto, and
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Bankers Trust, as Agent, including Exhibits A-1, A-2 and A-3, and various Schedules thereto,
incorporated by reference to Exhibit 10.9 to Grand Union's Annual Report on Form 10-K for Fiscal
1995.
10.18 Second Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.1 to Grand
Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996.
10.19 Third Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.2 to Grand
Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996.
10.20 Fourth Amendment to the Amended and Restated Credit Agreement incorporated by reference to
Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 4, 1997.
10.21 Fifth Amendment to the Credit Agreement.(1)
10.22 Sixth Amendment to the Credit Agreement.(1)
10.23 Seventh Amendment to the Credit Agreement.(1)
10.24 Eighth Amendment to the Credit Agreement.(1)
10.25** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated
June 15, 1995, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on
Form 10-QA for the period ended January 6, 1996.
10.26** First Amendment to the Supply and Distribution Agreement between The Grand Union Company and C&S
Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.4 to Grand Union's
Quarterly Report on Form 10-QA for the period ended January 6, 1996.
10.27** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated
January 2, 1996, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on
Form 10-QA for the period ended January 6, 1996.
10.28** Agreement with C&S Wholesalers Inc. dated January 21, 1996.
10.29* Third Amendment and Restatement of The Grand Union Company Supplemental Retirement Program for
Key Executives effective as of June 15, 1995, incorporated by reference to Exhibit 10.8 to Grand
Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996.
10.30 Executive Severance Policy, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly
Report on Form 10-Q for the period ended July 20, 1996.
10.31* The Grand Union Company 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to
Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996.
10.32* First Amendment to the 1995 Equity Incentive Plan of the Grand Union Company, incorporated by
reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended
July 20, 1996.
10.33* Second Amendment to the 1995 Equity Incentive Plan.(1)
10.34* Resolution amending the number of shares issuable under the 1995 Equity Incentive Plan.(1)
10.35* Letters dated December 14, 1995, with respect to the 1995 Equity Incentive Plan, incorporated by
reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended
July 20, 1996.
10.36* Option Agreement with Jeffrey P. Freimark.(1)
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10.37 The Grand Union Company 1995 Non-Employee Directors Stock Option Plan, incorporated by
reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended
January 6, 1996.
10.38* First Amendment to the 1995 Non-Employee Directors' Stock Option Plan of The Grand Union
Company, incorporated by reference to Exhibit 10.6 to Grand Union's Quarterly Report on Form
10-Q for the period ended July 20, 1996.
10.39* Resolution amending the number of shares issuable under the 1995 Non-Employee Directors' Stock
Option Plan.(1)
10.40* Letters dated April 3, 1996, with respect to the 1995 Non-Employee Directors' Stock Option Plan,
incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-Q for the
period ended July 20, 1996.
10.41 Non-competition Agreement between The Grand Union Company and Joseph J. McCaig, incorporated by
reference to Exhibit 10.23 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.42 Non-competition Agreement between The Grand Union Company and William A. Louttit, incorporated
by reference to Exhibit 10.24 of Grand Union's Annual Report on Form 10-K for the fiscal year
ended March 30, 1996.
10.43 Non-competition Agreement between The Grand Union Company and Kenneth R. Baum, Jr., incorporated
by reference to Exhibit 10.25 of Grand Union's Annual Report on Form 10-K for the fiscal year
ended March 30, 1996.
10.44 Non-competition Agreement between The Grand Union Company and Darrell W. Stine, incorporated by
reference to Exhibit 10.26 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.45 Non-competition Agreement between The Grand Union Company and Gilbert C. Vuolo, incorporated by
reference to Exhibit 10.27 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.46 Form of Indemnification Agreement between the Company and R. Stangeland, D. Josephs, W. Kagler,
D. McClure, Jr., D. Ying, J. McCaig, W. Louttit, K. Baum, D. Stine, G. Vuolo and J. Schroeder,
incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the
period ended July 20, 1996.
10.47 Form of Indemnification Agreement between the Company and J. Costello, C. Miller, G. Moore and
J.R. Stonesifer, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on
Form 10-Q for the period ended October 12, 1996.
10.48 Investment Banking Agreement between The Grand Union Company and Donaldson, Lufkin & Jenrette,
incorporated by reference to Exhibit 10.28 of Grand Union's Annual Report on Form 10-K for the
fiscal year ended March 30, 1996.
10.49 Stock Purchase Agreement dated July 30, 1996, among The Grand Union Company, Trefoil Capital
Investors II, L.P. and GE Investment Private Placement Partners II, A Limited Partnership
incorporated by reference to Exhibit 10.1 to The Grand Union Company report filed on Form 8-K
dated July 30, 1996.
10.50 Amendment No. 1 to the Stock Purchase Agreement dated July 30, 1996, among the Grand Union
Company, Trefoil Capital Investors II, L.P., and GE Investment Private Placement Partners II, a
Limited Partnership.(1)
10.51 Management Agreement between The Grand Union Company and Shamrock Capital Advisors,
Inc., dated July 30, 1996, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly
Report on Form 10-Q for the period ended October 12, 1996.
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10.52 Stock Purchase Agreement by and between The Grand Union Company and Roger Stangeland, dated
as of February 25, 1997.(1)
10.53 Amendment No. 1, dated March 20, 1997, to the Stock Purchase Agreement between The Grand Union Company
and Roger Stangeland, dated as of February 25, 1997.(1)
10.54 Assignment and Assumption Agreement by and between Roger Stangeland and The Stangeland Family
Limited Partnership, dated March 20, 1997.(1)
10.55 Stockholder Agreement between Trefoil Capital Investors II, L.P., a Delaware limited
partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware
limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware
corporation.(1)
10.56 Addendum to Stockholder Agreement among Trefoil Capital Investors II, L.P., a Delaware limited
partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware
limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware
corporation.(1)
10.57 Acceleration and Exchange Agreement, dated as of June 5, 1997, by and among The Grand Union
Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments
Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, including
Exhibits thereto.(1)
10.58 Amendment No. 1, dated as of June 5, 1997, to the Registration Rights Agreement dated as of
July 30, 1996, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a
Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited
Partnership, a Delaware limited partnership.(1)
21.1 Subsidiaries of Grand Union.(1)
27.1 Financial Data Schedule.(1)
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* Compensatory plan or arrangement
** Confidential treatment requested
(1) Previously filed
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
THE GRAND UNION COMPANY
(Registrant)
/s/ Jeffrey P. Freimark Date: March 27, 1998
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Jeffrey P. Freimark
Executive Vice President, Chief Financial
Officer
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EXHIBIT INDEX
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Exhibit
Number Description of Document
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2.1 Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company ("Grand Union"),
filed with the United States Bankruptcy Court, District of Delaware, on April 19, 1995,
incorporated by reference to Exhibit T3E1 to Grand Union's Form T-3 dated May 8, 1995.
2.2 Findings of Fact, Conclusions of Law and Order Confirming the Second Amended Plan of
Reorganization proposed by Grand Union, dated May 31, 1995, incorporated by reference to
Exhibit 2.2 to Grand Union's Annual Report on Form 10-K for the fiscal year ended April 1, 1995
("Fiscal 1995").
2.3 Minute Order Clarifying Findings of Fact, Conclusions of Law and Order Confirming Second
Amended Plan of Reorganization proposed by Grand Union, dated June 14, 1995, incorporated by
reference to Exhibit 2.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
3.1 Certificate of Incorporation of Grand Union, as amended through January 6, 1997.(1)
3.2 Certificate of Designation of Class A Convertible Preferred Stock, incorporated by reference to
Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12,
1996.
3.3 Certificate of Designation of Class B Convertible Preferred Stock, dated as of June 11, 1997.(1)
3.4 By-laws of The Grand Union Company, as amended through September 12, 1996, incorporated by
reference to Exhibit 3.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended
October 12, 1996.
4.1 Form of New Common Stock Certificate of Grand Union, incorporated by reference to Exhibit 4.1
to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.2 Warrant Agreement dated as of June 15, 1995, between Grand Union and American Stock Transfer &
Trust Company, as Warrant Agent for 300,000 Series 1 Warrants and 600,000 Series 2 Warrants,
incorporated by reference to Exhibit 4.5 to Grand Union's Annual Report on Form 10-K for Fiscal
1995.
4.3 Registration Rights Agreement dated as of June 15, 1995, among Grand Union and Each of the
Persons Named in Schedule A thereto for the New Common Stock, incorporated by reference to
Exhibit 4.6 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.4 Registration Rights Agreement dated as of June 15, 1995, by and among Grand Union and The
Holders Named therein for the Registrable Notes, incorporated by reference to Exhibit 4.7 to
Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.5 Indenture dated as of June 15, 1995, between Grand Union, as Issuer and IBJ Schroeder Bank &
Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, including form of the
12% Senior Notes due 2004, incorporated by reference to Exhibit 4.2 to Grand Union's Annual
Report on Form 10-K for Fiscal 1995.
4.6 First Supplement Indenture, dated September 9, 1996, to the Indenture dated as of June 15,
1995, between Grand Union, as Issuer, and IBJ Schroeder Bank & Trust Company, as Trustee for
the 12% Senior Notes due September 1, 2004, incorporated by reference to Exhibit 10.3 to Grand
Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996.
4.7 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union
to Bankers Trust Company ("Bankers Trust"), as Collateral Agent, incorporated by reference to
Exhibit 4.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
4.8 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union
and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 4.4 to Grand
Union's Annual Report on Form 10-K for Fiscal 1995.
10.1 Agreement to Hold Separate dated July 17, 1989, by and among MTH Holdings Inc. ("MTH Holdings"),
GU Acquisition Corporation ("GUAC"), Salomon Inc. and the Federal Trade Commission (the "FTC")
entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to
Exhibit No. 10.5 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-29707)
(the "1989 Grand Union Registration Statement").
10.2 Agreement containing Consent Order among MTH Holdings, GUAC and the FTC entered into in the
matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.6 to
the 1989 Grand Union Registration Statement.
10.3 Asset Purchase Agreement, dated as of January 25, 1990, by and between Grand Union and Price
Chopper Operating Co. of Vermont, Inc., incorporated by reference to Exhibit No. 10.15 to
Holdings Registration Statement on Form S-1 (Registration No. 33-32879).
10.4 Asset Purchase Agreement, dated as of February 9, 1990, by and between Grand Union and Price
Chopper Operating Co., Inc., incorporated by reference to Exhibit No. 10.49 to GUAC's
Registration Statement on Form S-1 (Registration No. 33-22398).
10.5 Agreement and Master Sublease dated as of July 30, 1990, by and between Grand Union and P&C Food
Markets, Inc. ("P&C Foods"), incorporated by reference to Exhibit No.10.18 to Holdings' Report
on Form 10-Q dated July 21, 1990 (Commission File No. 33-29707).
10.6 Asset Purchase Agreement dated as of February 4, 1993, between The Great Atlantic & Pacific Tea
Company, Inc. and Grand Union, incorporated by reference to Exhibit No. 2.1 to Grand Union's
Report on Form 8-K dated February 4, 1993.
10.7 Asset Purchase Agreement dated as of September 20, 1993 among Foodarama Supermarkets, Inc.,
ShopRite of Malverne, Inc. and Grand Union, incorporated by reference to Exhibit No. 10.19 to
Grand Union's Registration Statement on Form S-1 (Registration No. 33-70956).
10.8 Letter dated June 15, 1995, containing MTH Settlement Agreement between Miller Tabak Hirsch +
Co. ("MTH") and Grand Union in connection with (i) the termination of the Agreement, dated July
22, 1992, between MTH and Grand Union, and (ii) the Second Amended Plan of Reorganization, dated
April 19, 1995, of Grand Union, incorporated by reference to Exhibit 10.15 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.9 Agreement dated as of April, 1995, among Grand Union, Grand Union Capital Corporation
("Capital"), Holdings, the Official Committee of Unsecured Creditors of Capital and certain
holders of Zero Coupon Notes issued by Capital and guaranteed by Holdings named therein,
incorporated by reference to Exhibit 10.16 to Grand Union's Annual Report on Form 10-K for
Fiscal 1995.
10.10 Waiver dated June 14, 1995, with respect to the Second Amended Chapter 11 Plan of Grand Union,
among Grand Union, Bankers Trust, the Official Committee of Unsecured Creditors of Grand Union
and the Informal Committee of Senior Noteholders, incorporated by reference to Exhibit 10.17 to
Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.11 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to
Bankers Trust, as Collateral Agent incorporated by reference to Exhibit 10.10 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.12 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union
and Bankers Trust, as Collateral Agent (included in Exhibit 4.4), incorporated by reference to
Exhibit 10.11 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.13 Subsidiary Security Agreement dated as of June 15, 1995, among the corporations listed on
Schedule 1 thereto and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit
10.12 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.14 Subsidiary Guaranty dated as of June 15, 1995, made by each of the corporations from time to
time listed on Annex A attached thereto in favor of the Banks and the Agent from time to time
party to the Credit Agreement, incorporated by reference to Exhibit 10.13 to Grand Union's
Annual Report on Form 10-K for Fiscal 1995.
10.15 Form of Indenture of Open-End Mortgage, Deed of Trust, Deed to Secure Debt, Security Agreement,
Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing, dated as of
June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent, incorporated by
reference to Exhibit 10.14 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
10.16 Amended and Restated Credit Agreement dated as of June 15, 1995, (the "Credit Agreement"), among
Grand Union, the lending institutions listed from time to time on Schedule 1 thereto, and
Bankers Trust, as Agent, including Exhibits A-1, A-2 and A-3, and various Schedules thereto,
incorporated by reference to Exhibit 10.9 to Grand Union's Annual Report on Form 10-K for Fiscal
1995.
10.18 Second Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.1 to Grand
Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996.
10.19 Third Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.2 to Grand
Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996.
10.20 Fourth Amendment to the Amended and Restated Credit Agreement incorporated by reference to
Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 4, 1997.
10.21 Fifth Amendment to the Credit Agreement.(1)
10.22 Sixth Amendment to the Credit Agreement.(1)
10.23 Seventh Amendment to the Credit Agreement.(1)
10.24 Eighth Amendment to the Credit Agreement.(1)
10.25** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated
June 15, 1995, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on
Form 10-QA for the period ended January 6, 1996.
10.26** First Amendment to the Supply and Distribution Agreement between The Grand Union Company and C&S
Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.4 to Grand Union's
Quarterly Report on Form 10-QA for the period ended January 6, 1996.
10.27** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated
January 2, 1996, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on
Form 10-QA for the period ended January 6, 1996.
10.28** Agreement with C&S Wholesalers Inc. dated January 21, 1996.
10.29* Third Amendment and Restatement of The Grand Union Company Supplemental Retirement Program for
Key Executives effective as of June 15, 1995, incorporated by reference to Exhibit 10.8 to Grand
Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996.
10.30 Executive Severance Policy, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly
Report on Form 10-Q for the period ended July 20, 1996.
10.31* The Grand Union Company 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to
Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996.
10.32* First Amendment to the 1995 Equity Incentive Plan of the Grand Union Company, incorporated by
reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended
July 20, 1996.
10.33* Second Amendment to the 1995 Equity Incentive Plan.(1)
10.34* Resolution amending the number of shares issuable under the 1995 Equity Incentive Plan.(1)
10.35* Letters dated December 14, 1995, with respect to the 1995 Equity Incentive Plan, incorporated by
reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended
July 20, 1996.
10.36* Option Agreement with Jeffrey P. Freimark.(1)
10.37 The Grand Union Company 1995 Non-Employee Directors Stock Option Plan, incorporated by
reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended
January 6, 1996.
10.38* First Amendment to the 1995 Non-Employee Directors' Stock Option Plan of The Grand Union
Company, incorporated by reference to Exhibit 10.6 to Grand Union's Quarterly Report on Form
10-Q for the period ended July 20, 1996.
10.39* Resolution amending the number of shares issuable under the 1995 Non-Employee Directors' Stock
Option Plan.(1)
10.40* Letters dated April 3, 1996, with respect to the 1995 Non-Employee Directors' Stock Option Plan,
incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-Q for the
period ended July 20, 1996.
10.41 Non-competition Agreement between The Grand Union Company and Joseph J. McCaig, incorporated by
reference to Exhibit 10.23 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.42 Non-competition Agreement between The Grand Union Company and William A. Louttit, incorporated
by reference to Exhibit 10.24 of Grand Union's Annual Report on Form 10-K for the fiscal year
ended March 30, 1996.
10.43 Non-competition Agreement between The Grand Union Company and Kenneth R. Baum, Jr., incorporated
by reference to Exhibit 10.25 of Grand Union's Annual Report on Form 10-K for the fiscal year
ended March 30, 1996.
10.44 Non-competition Agreement between The Grand Union Company and Darrell W. Stine, incorporated by
reference to Exhibit 10.26 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.45 Non-competition Agreement between The Grand Union Company and Gilbert C. Vuolo, incorporated by
reference to Exhibit 10.27 of Grand Union's Annual Report on Form 10-K for the fiscal year ended
March 30, 1996.
10.46 Form of Indemnification Agreement between the Company and R. Stangeland, D. Josephs, W. Kagler,
D. McClure, Jr., D. Ying, J. McCaig, W. Louttit, K. Baum, D. Stine, G. Vuolo and J. Schroeder,
incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the
period ended July 20, 1996.
10.47 Form of Indemnification Agreement between the Company and J. Costello, C. Miller, G. Moore and
J.R. Stonesifer, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on
Form 10-Q for the period ended October 12, 1996.
10.48 Investment Banking Agreement between The Grand Union Company and Donaldson, Lufkin & Jenrette,
incorporated by reference to Exhibit 10.28 of Grand Union's Annual Report on Form 10-K for the
fiscal year ended March 30, 1996.
10.49 Stock Purchase Agreement dated July 30, 1996, among The Grand Union Company, Trefoil Capital
Investors II, L.P. and GE Investment Private Placement Partners II, A Limited Partnership
incorporated by reference to Exhibit 10.1 to The Grand Union Company report filed on Form 8-K
dated July 30, 1996.
10.50 Amendment No. 1 to the Stock Purchase Agreement dated July 30, 1996, among the Grand Union
Company, Trefoil Capital Investors II, L.P., and GE Investment Private Placement Partners II, a
Limited Partnership.(1)
10.51 Management Agreement between The Grand Union Company and Shamrock Capital Advisors,
Inc., dated July 30, 1996, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly
Report on Form 10-Q for the period ended October 12, 1996.
10.52 Stock Purchase Agreement by and between The Grand Union Company and Roger Stangeland, dated
as of February 25, 1997.(1)
10.53 Amendment No. 1, dated March 20, 1997, to the Stock Purchase Agreement between The Grand Union Company
and Roger Stangeland, dated as of February 25, 1997.(1)
10.54 Assignment and Assumption Agreement by and between Roger Stangeland and The Stangeland Family
Limited Partnership, dated March 20, 1997.(1)
10.55 Stockholder Agreement between Trefoil Capital Investors II, L.P., a Delaware limited
partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware
limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware
corporation.(1)
10.56 Addendum to Stockholder Agreement among Trefoil Capital Investors II, L.P., a Delaware limited
partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware
limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware
corporation.(1)
10.57 Acceleration and Exchange Agreement, dated as of June 5, 1997, by and among The Grand Union
Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments
Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, including
Exhibits thereto.(1)
10.58 Amendment No. 1, dated as of June 5, 1997, to the Registration Rights Agreement dated as of
July 30, 1996, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a
Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited
Partnership, a Delaware limited partnership.(1)
21.1 Subsidiaries of Grand Union.(1)
27.1 Financial Data Schedule.(1)
</TABLE>
* Compensatory plan or arrangement
** Confidential treatment requested
(1) Previously filed
<PAGE>
Exhibit 10.28
SUPPLY AND OPERATING AGREEMENT
BETWEEN
THE GRAND UNION COMPANY
AND
C&S WHOLESALE GROCERS, INC.
DATED AS OF JANUARY 21, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. CERTAIN DEFINITIONS ......................................... 1
SECTION 1.1. Certain Defined Terms ....................................... 1
ARTICLE II. SCOPE AND TERM AGREEMENT, CHANGEOVER
PROVISIONS, MERCHANDISE ..................................... 5
SECTION 2.1. Agreement ................................................... 5
SECTION 2.2. Term ........................................................ 5
SECTION 2.3. Changeover Provisions ....................................... 6
SECTION 2.4. Provisions Relating to Merchandise .......................... 6
ARTICLE III. PURCHASE, SALE AND DISTRIBUTION ............................. 8
SECTION 3.1. Agreement ................................................... 8
SECTION 3.2. Delivery .................................................... 8
SECTION 3.3. Price ....................................................... 9
SECTION 3.4. Other Pricing Provisions .................................... 9
SECTION 3.5. Payments .................................................... 10
SECTION 3.6. Service Level ............................................... 11
ARTICLE IV. OPERATION AND FEES .......................................... 12
SECTION 4.1. Operation of Facility ....................................... 12
SECTION 4.2. Non-Merchandise Inventory ................................... 12
SECTION 4.3. Use of Slots; Storage ....................................... 13
SECTION 4.4. Payment of Costs and Fees ................................... 13
SECTION 4.5. Determination of Operating Expense Amount
and Other Costs ............................................. 13
SECTION 4.6. Cooperation ................................................. 14
SECTION 4.7. Maintenance of Fees ......................................... 14
*
ARTICLE V. CERTAIN COVENANTS ........................................... 15
SECTION 5.1. Information ................................................. 15
*
SECTION 5.3. Sublease; Assignment ........................................ 15
*
SECTION 5.5. Compliance with Law ......................................... 16
SECTION 5.6. Insurance ................................................... 16
*
SECTION 5.8. Affirmation and Acknowledgment .............................. 17
ARTICLE VI. MONTGOMERY INVENTORY ........................................ 17
SECTION 6.1. Initial Inventory ........................................... 17
SECTION 6.2. Inventory Administrative Charge ............................. 18
SECTION 6.3. Inventory Limits ............................................ 18
ARTICLE VII. ADDITIONAL BUSINESS ......................................... 19
SECTION 7.1. Additional Business ......................................... 19
ARTICLE VIII. TERMINATION ................................................. 20
SECTION 8.1. Termination by C&S .......................................... 20
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
i
<PAGE>
SECTION 8.2. Termination by Grand ........................................ 21
SECTION 8.3. Termination of Sublease ..................................... 22
SECTION 8.4. Negotiations, Interim Period ................................ 22
SECTION 8.5. Waiver ...................................................... 23
ARTICLE IX. REPRESENTATIONS AND WARRANTIES .............................. 23
SECTION 9.1. Representations and Warranties of C&S ....................... 23
SECTION 9.2. Representation and Warranties of Grand Union ................ 24
ARTICLE X. GENERAL PROVISIONS .......................................... 24
SECTION 10.1. Entire Agreement ............................................ 24
SECTION 10.2. Expenses .................................................... 24
SECTION 10.3. Amendments .................................................. 25
SECTION 10.4. Notices ..................................................... 25
SECTION 10.5. Binding Effect; Assignment .................................. 25
SECTION 10.6. Counterparts ................................................ 26
SECTION 10.7. Confidentiality ............................................. 26
SECTION 10.8. Relationship of Parties ..................................... 27
SECTION 10.9. No Third-Party Beneficiaries ................................ 27
SECTION 10.l0.Severability ................................................ 27
SECTION 10.11.Headings .................................................... 28
SECTION 10.12.Governing Law ............................................... 28
SECTION 10.13.Arbitration ................................................. 28
Exhibit A - Montgomery Lease Agreement dated September 29, 1989
Exhibit B - Existing Grand Union Stores
Exhibit C - Merchandise
Exhibit D - Operating Expenses and Other Costs
Exhibit E - Forms of Notices
Exhibit F - Form of Landlord Consent
Exhibit G - Overage/Shortage Policy
Exhibit H - Montgomery Facility Slots
Exhibit I - Montgomery Facility Storage
*
Exhibit K - Terms of Sublease
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
ii
<PAGE>
SUPPLY AND OPERATING AGREEMENT, dated as of January 21, 1996 (this
"Agreement"), between THE GRAND UNION COMPANY, a Delaware corporation ("Grand
Union"), and C&S WHOLESALE GROCERS, INC., a Vermont corporation ("C&S").
W I T N E S S E T H:
WHEREAS, Grand Union operates supermarkets and food stores in the States
of New York, Vermont, New Jersey, Connecticut, Pennsylvania and New Hampshire;
and
WHEREAS, certain of such stores are presently supplied through a facility
leased by Grand Union in Montgomery, New York, pursuant to that certain lease
agreement attached hereto as Exhibit A (the "Montgomery Facility"); and
WHEREAS, C&S is a wholesale supplier of food products and other
merchandise sold in supermarkets and food stores; and
WHEREAS, Grand Union intends to retain possession of the Montgomery
Facility (except as otherwise provided herein), and Grand Union and C&S desire
to enter into an agreement relating to Merchandise to be provided to Grand Union
through the Montgomery Facility;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, Grand Union and C&S hereby agree
as follows:
ARTICLE I.
CERTAIN DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Agreement" has the meaning specified in the preamble to this
Agreement.
"Assignment" has the meaning specified in Section 5.3.
*
"Bank Agreement" shall mean the Amended and Restated Credit
Agreement dated as of June 15, 1995 among Grand Union, Bankers Trust Company, as
agent, and the lending institutions
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
party thereto, as amended from time to time, and any other revolving credit
agreement that provides for the refinancing or replacement of the revolving
credit obligations of Grand Union under such Credit Agreement.
"Base Costs" has the meaning specified in section 8.2.
*
"Business Day" means a day on which banks in New York, New York and
Boston, Massachusetts are open for business.
"Changeover Date" means the date specified in the Changeover
Election Notice as the date on which the C&S Purchase Period shall commence.
"Changeover Election Notice" has the meaning specified in Section
2.3
"Contract Year" means any consecutive twelve-month period during the
Term commencing on January 21 and ending the following January 20, the first
such Contract Year to commence January 21, 1996.
"C&S Purchase Period" means the period commencing on the Changeover
Date and ending on the date on which this Agreement expires or otherwise
terminates.
"C&S Supply Agreements" means the two Supply and Distribution
Agreements between C&S and Grand Union dated as of June 15, 1995 and January 2,
1996, as amended from time to time.
"Employee Costs" means payroll, fringe benefits and other amounts
payable to employees of Grand Union, pursuant to the Labor Service Agreement or
otherwise, for their services in connection with the operation of the Montgomery
Facility.
"Event of Force Majeure" means, with respect to any Person, any
event, circumstance or condition described in any of clauses (a) through (e)
below that is beyond the control of such Person, and is not the result of
negligence or failure of such Person to act with due care, and that prevents
such Person from performing, in whole or in part, its obligations under this
Agreement. The following occurrences shall be deemed to be Events of Force
Majeure: (a) Acts of God, fire, explosion, accident, flood, storm or other
natural phenomenon; (b) war (whether declared or undeclared); (c) national
defense requirements; (d) compliance with any law, rule, regulation or
governmental order that (x) becomes effective after the date hereof and (y) is
binding on such Person, and compliance therewith by such Person is not voluntary
or optional; and (e) producers or manufacturers establish industry-wide
allocations or restrictions on quantities of products available to such Person.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
2
<PAGE>
"Event of Insolvency" means that, with respect to any Person, such
Person shall admit in writing its inability to pay its debts generally or shall
make a general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur, or such Person shall take any corporate action to
authorize any of the actions set forth above in this definition.
*
"Grand Union Merchandise" means Merchandise owned by Grand Union and
held at the Montgomery Facility as of the commencement date of this Agreement.
"Grand Union Purchase Period" means the period commencing on the
first day of the Term and ending on the day prior to the Changeover Date.
"Grand Union Stores" shall mean (i) all existing Grand Union stores
currently supplied by the Montgomery Facility as itemized on Exhibit B and (ii)
all new Grand Union stores hereafter acquired.
"Indenture" means the Indenture dated as of June 15, 1995 between
Grand Union and IBJ Schroder Bank & Trust Company, as Trustee, as amended from
time to time, and any indenture or other agreement that provides for the
refinancing or replacement of the Notes issued by Grand Union under such
Indenture.
"Labor Service Agreement" means the agreement referred to in Section
5.4.
"Lease" has the meaning specified in Section 5.3(a).
"Liquidity Amount" means at any time of determination hereunder, the
amount then available for borrowing by Grand Union under the Bank Agreement.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
3
<PAGE>
"Merchandise" means products in the following categories currently
carried by Grand Union at the Montgomery Facility and which are to be sold by
Grand Union through Grand Union Stores: health, beauty care and cosmetics
products and general merchandise supplied through the Montgomery Facility. The
Merchandise is more particularly described in Exhibit C hereto.
"Montgomery Facility" has the meaning specified in the second
recital to this Agreement.
"Non-Merchandise Inventory" has the meaning specified in Section
4.2.
"Operating Expense Amount" has the meaning provided in Section
4.5(a).
"Operating Expenses" means the *
"Order and Polling Schedules" means the order and polling schedules
as mutually agreed to by C&S and Grand Union from time to time.
"Other Costs" means costs incurred by C&S in connection with the
Montgomery Facility of the kinds specified in Part II of Exhibit D hereto.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity or any
government or governmental authority or agency.
"Service Level" means at any time during the C&S Purchase Period a
percentage reflecting the ratio of (i) the number of cases of Merchandise
actually delivered or available for pick-up within the delivery windows as
provided in the applicable delivery schedules and in accordance with the
requirements of Section 3.2 hereof to (ii) the total number of cases of such
Merchandise ordered by Grand Union for delivery or pick-up, as the case may be,
during the same period, less unauthorized Merchandise and manufacturers'
out-of-stock Merchandise, and as otherwise determined in accordance with the
provisions of Section 3.6.
"Service Level Breach" has the meaning specified in Section 3.6.
"Sublease" has the meaning specified in section 5.3.
"Sublease Effective Date" has the meaning specified in Section 5.3.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
4
<PAGE>
"Term" has the meaning specified in Section 2.2.
"Termination Fee" has the meaning specified in section 8.2.
"Weekly Fee" has the meaning specified in section 4.4.
ARTICLE II.
SCOPE AND TERM OF AGREEMENT; CHANGEOVER PROVISIONS; MERCHANDISE
SECTION 2.1. Agreement.
Grand Union hereby agrees to purchase from C&S, subsequent to the
shipment of the Grand Union Merchandise to Grand Union Stores, substantially all
of Grand Union's requirements for Merchandise, and C&S hereby agrees to supply
to Grand Union all merchandise ordered by Grand Union hereunder, upon the terms
and subject to the conditions herein set forth.
(a) Grand Union Purchase Period. C&S authorizes Grand Union, during
the Grand Union Purchase Period, to act as agent of C&S for the procurement of
Merchandise. Grand Union shall negotiate, procure, process, purchase and pay for
such Merchandise, which shall be delivered to the Montgomery Facility. C&S shall
reimburse Grand Union for such purchases based on the provisions of section 3.5.
At all times during the Grand Union Purchase Period, Grand Union shall purchase
Merchandise only in such amounts and on such terms as may be permitted under
Article VI of this Agreement. Grand Union shall not hold itself out as an agent
for C&S except for the limited purpose set forth in this Section 2.1(a).
(b) Direct-to-Store Purchases. Subject to the provisions of the
first paragraph of this Section 2.1, Grand Union shall have the right to supply
Merchandise to Grand Union Stores on a "direct-to-store" basis, rather than
through purchases from the Montgomery Facility as provided herein. Subject to
such provisions, Grand Union may supply Merchandise on a direct-to-store basis
at any time and from time to time and notwithstanding that Merchandise of any
particular kind had previously been, or may thereafter be, supplied through
purchase from the Montgomery Facility. Merchandise supplied on a direct-to-store
basis may be delivered for cross-docking at the Montgomery Facility.
SECTION 2.2. Term.
(a) Implementation will begin on January 21, 1996, and the term
of this Agreement (the "Term") will begin on January 21, 1996 and end on
January 20, 2002; provided, however, that if the Term has not been extended
by written agreement
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
5
<PAGE>
entered into prior to January 20, 2002 the Term shall be extended, without
any action of the parties hereto, for an additional year, to expire
January 20, 2003. Notwithstanding the foregoing provisions, if the date on which
Grand Union commences purchasing substantially all of its requirements of
Merchandise from C&S occurs after January 21, 1996, the Term will commence on
the first Sunday after such date.
(b) C&S has the right, which may be exercised by giving notice to
Grand Union at any time prior to July 1, 2002 to extend the Term for two
additional Contract Years and a portion of a third additional Contract Year
so that the Term is extended to February 24, 2005. Grand Union shall also
have the right, which may be exercised by giving notice to C&S at any time
prior to July 1, 2002 to extend the Term for two additional Contract Years
and a portion of a third additional Contract Year so that the Term is
extended to February 24, 2005. All fees set forth in this Agreement shall
remain unchanged during such extension, except as otherwise expressly
provided herein.
SECTION 2.3. Changeover Provisions. During the Grand Union Purchase
Period, Grand Union will purchase Merchandise directly from vendors as provided
in Section 2.1(a), and certain provisions of this Agreement, as specified
herein, are applicable only during the Grand Union Purchase Period. C&S shall
have the right, by written notice given to Grand Union at any time, to elect
that C&S shall purchase Merchandise hereunder directly from vendors. Such notice
shall state that C&S elects to have the C&S Purchase Period commence, stating
the commencement date of such Period, which shall be not earlier than 90 days
after the date of such notice. Certain provisions of this Agreement, as
specified herein, shall be applicable only during the C&S Purchase Period. All
provisions of this Agreement that do not by their terms apply only to the Grand
Union Purchase Period or the C&S Purchase Period shall apply to both such
Periods.
SECTION 2.4. Provisions Relating to Merchandise.
(a) At all times during the Term, Grand Union agrees to take all
reasonable measures to assure that the Merchandise (other than Grand Union
Merchandise) is deemed for all purposes to be the property of C&S. Such measures
shall include, but not be limited to, segregating such Merchandise from
Non-Merchandise Inventory and other property of Grand Union; posting signs
identifying such Merchandise as property of C&S; and correctly identifying the
ownership of such Merchandise in all relevant communications with third parties,
including any collateral certificates furnished by Grand Union to its lenders.
If so requested by C&S, Grand Union agrees to execute and deliver appropriate
UCC-1 financing statements or other documentation for filing in public records.
(b) Promptly upon commencement of the Term, Grand Union shall give
written notice (the forms of which are appended
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
6
<PAGE>
to this Agreement as Exhibit E) (i) to all vendors of Merchandise, that Grand
Union is making purchases of Merchandise in its capacity as agent for C&S and
(ii) to its bank agent and the landlord under the Lease, that Merchandise (other
than Grand Union Merchandise) in the Montgomery Facility is the property of C&S.
Upon commencement of the C&S Purchase Period, Grand Union shall give notice to
such vendors that Grand Union's authority to act as C&S' agent has terminated.
Grand Union shall deliver copies of each such notice to C&S.
(c) Within 30 days following commencement of the Term, Grand Union
shall obtain from each holder of a security interest in inventory at the
Montgomery Facility that filed a UCC-1 financing statement with respect to such
inventory UCC-3s suitable for filing in all locations where such holders have
filed UCC-1 financing statements, acknowledging C&S' rights with respect to
Merchandise, such UCC-3s to be in form and substance reasonably satisfactory to
C&S. Further, within 60 days following commencement of the Term, Grand Union
shall furnish C&S with a search report from a recognized search firm identifying
all holders of security interests in inventory at the Montgomery Facility with
filed UCC-1 financing statements with respect to such inventory. Such search
report shall be conducted for filings during the period from October 15, 1995
through the date of the search. Grand Union shall, within 30 days after delivery
of such search report to C&S, deliver appropriate UCC-3s suitable for filing in
all locations where such holders have filed UCC-1 financing statements if UCC-3s
were not previously delivered with respect to such holders pursuant to this
subsection (c).
(d) On Friday of each week during the Grand Union Purchase Period,
Grand Union agrees to furnish to C&S a certificate, signed by its Chief
Financial Officer (or his designee), certifying the quantity of Merchandise in
the Montgomery Facility (by shopkeeping unit) and that payments to vendors are
being made in accordance with normal terms.
(e) To provide C&S collateral security for Grand Union's obligation
to act as C&S' agent to pay for Merchandise, as well as to provide collateral
security for the payment and performance of all other obligations owing from
Grand Union to C&S under this Agreement and the C&S Supply Agreements, Grand
Union agrees to provide a stand-by, irrevocable letter of credit in favor of C&S
in the amount of $2,625,000. Such letter of credit shall be issued by a bank
reasonably satisfactory to C&S and shall be delivered to C&S no later than
February 15, 1996. The letter of credit shall provide that it may be drawn upon
(i) the occurrence of any event permitting C&S to terminate this Agreement or
either of the C&S Supply Agreements; or (ii) failure by Grand Union to provide
C&S a replacement letter of credit not less than thirty days prior to the
expiration date of the existing letter of credit. Grand Union shall have the
right to require that C&S release and return to Grand Union any such letter of
credit and any proceeds of any drawing on such letter
7
<PAGE>
of credit obtained pursuant to clause (ii) if, as of any date within 30 days
after any interest payment date under the Indenture on which Grand Union shall
have paid the full amount of the interest then due on the Notes outstanding
under the Indenture, the Liquidity Amount is at least $40 million and Grand
Union shall have delivered to C&S a certificate of the Chief Financial Officer
(or his designee) of Grand Union setting forth such Liquidity Amount and the
calculation thereof. Thereafter, the Chief Financial Officer of Grand Union (or
his designee) shall provide quarterly certificates setting forth the Liquidity
Amount and the calculation thereof. If at any time following the release and
return of any such letter of credit the Liquidity Amount falls below $40
million, Grand Union shall deliver to C&S another letter of credit on the same
terms and conditions set forth above.
ARTICLE III.
PURCHASE, SALE AND DISTRIBUTION
SECTION 3.1. Agreement. During the C&S Purchase Period, C&S shall
negotiate, procure, process, purchase and pay for Merchandise from vendors
thereof, and shall maintain stock and inventory thereof at the Montgomery
Facility, at such times and in such amounts as shall be necessary to provide
Merchandise to Grand Union pursuant to section 2.1.
SECTION 3.2. Delivery.
(a) All Merchandise and Non-Merchandise Inventory ordered hereunder
for Grand Union Stores whose grocery and perishable inventory requirements are
serviced by C&S pursuant to the C&S Supply Agreements shall be delivered by C&S
F.O.B. destination to the C&S distribution center applicable to each such Grand
Union Store where such Merchandise shall be "cross-docked" in accordance with
the C&S Supply Agreements (or any future agreements) and delivered to such Grand
Union Stores in accordance with the C&S Supply Agreements (or future
agreements). Title to, and risk of loss with respect to, such Merchandise shall
remain with C&S until delivery to the respective Grand Union Store.
(b) All Merchandise and Non-Merchandise Inventory ordered hereunder
for Grand Union Stores that are not serviced by C&S pursuant to the C&S Supply
Agreements shall be picked up at the Montgomery Facility by Grand Union in
accordance with schedules to be agreed to by the parties from time to time.
Title to, and risk of loss with respect to, such Merchandise shall pass to Grand
Union upon pick-up from the Montgomery Facility.
8
<PAGE>
SECTION 3.3. Price.
(a) Grand Union Purchase Period. During the Grand Union Purchase
Period, C&S will sell Merchandise to Grand Union based on *
(b) C&S Purchase Period. During the C&S Purchase Period, C&S will
sell Merchandise to Grand Union at *
SECTION 3.4. Other Pricing Provisions. In addition to the provisions
of Section 3.3(b), the following provisions shall be applicable to the purchase
and supply by C&S of Merchandise hereunder during the C&S Purchase Period:
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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(d) C&S will carry Grand Union's full assortment of private label
Merchandise and will treat private label Merchandise as it does any other
product.
(e) Grand Union will be responsible for providing C&S with ad
quantity requirements.
*
SECTION 3.5. Payments.
(a) During the Grand Union Purchase Period, C&S will pay Grand Union
* the purchase price of the Merchandise purchased by Grand Union as C&S'
agent *
(b) During the Grand Union Purchase Period, Grand Union will pay C&S
* the Merchandise shipped to Grand Union Stores during the preceding week. *
(c) During the C&S Purchase Period, Grand Union will pay C&S *
Merchandise shipped to Grand Union Stores, based on *
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
10
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(d) Grand Union will pay C&S * for fees and charges, other than
Merchandise payments, under this Agreement.
(e) Grand Union will provide to C&S * C&S will pay Grand Union
by wire transfer *
(f) In the event Grand Union or C&S fails to make any payment as
provided in this Section 3.5, C&S or Grand Union will immediately provide
written notice to the counterparty that payment has not been received and the
counterparty will have *. If the payment is not received within * C&S shall
have the right *. If payment is not received within * from receipt by Grand
Union or C&S of such notice, C&S or Grand Union shall have the right to
terminate this Agreement as provided in Section 8.1 or 8.2. Notwithstanding
the foregoing, each party agrees to notify the other promptly if it believes
there is an error. The parties agree to use their best efforts to resolve any
disputes * of such notice. If any such dispute is not resolved *, the parties
will submit the dispute to binding arbitration as provided in Section 10.13.
For purposes of this Section 3.5, time is of the essence, subject to the
express provisions hereof.
(g) The parties agree to establish jointly an overage/shortage
policy, attached hereto as Exhibit G (the "Credit Policy"), which will provide
for a shortage adjustment factor on all shipments based on actual audits
performed by C&S personnel and witnessed by Grand Union representatives. The
Credit Policy will also provide for store delivery documentation and remedy
procedures in the event of a "missing pallet."
SECTION 3.6. Service Level. C&S agrees that, during the C&S Purchase
Period, the Service Level for all Merchandise ordered by Grand Union hereunder
will be maintained at a minimum *. C&S will provide Grand Union, during such
Period, a weekly Service Level Reconciliation Report showing, with respect to
each invoice, the number of cases ordered, the number of cases shipped or
available for pick-up, as the case may be, the number of cases that are out of
stock (including "warehouse scratches") and the number of cases that are
unauthorized. Service Level percentages will not be adversely affected by any
error by Grand Union in booking advertising and feature items, including sales
levels of feature items in excess of projections made by Grand Union. If the
Service Level for any week falls below the level
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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required by the first sentence of this Section 3.6 (a "Service Level Breach"),
Grand Union shall give notice to C&S and C&S shall use its best efforts to
immediately restore the required Service Level. If, during * following the
occurrence of a Service Level Breach the required Service Level is
achieved, then the Service Level Breach shall be cured. Failure to achieve the
required Service Level during * shall constitute a breach of this
Agreement by C&S, * Notwithstanding the foregoing provisions, C&S will not be
in breach of this Section 3.6 if its failure to maintain the Service Level as
provided herein is a result of a material default by Grand Union under this
Agreement, picketing or other labor disputes at Grand Union Stores or an Event
of Force Majeure.
ARTICLE IV.
OPERATION AND FEES
SECTION 4.1. Operation of Facility. (a) Prior to the Sublease
Effective Date, Grand Union shall operate and manage the Montgomery Facility in
accordance with normal operating procedures and subject to the provisions of
this Agreement. From and after the Sublease Effective Date, C&S shall operate
and manage the Montgomery Facility in accordance with normal operating
procedures and subject to the provisions of the Sublease, the Assignment, if
entered into, and this Agreement, provided that Grand Union shall provide
employees for such operation in accordance with the Labor Service Agreement. The
provisions of Section 3.2 hereof with respect to title to, and risk of loss with
respect to, Merchandise will be applicable both before and after the Sublease
Effective Date.
SECTION 4.2. Non-Merchandise Inventory. The parties acknowledge that
Grand Union currently utilizes, and will continue to utilize, the Montgomery
Facility for cigarettes and certain grocery and other products that do not
constitute Merchandise and that C&S will have no rights hereunder in respect of
such inventory ("Non-Merchandise Inventory"). The parties agree to cooperate in
establishing procedures for segregation, handling and recordkeeping, and for
other administrative matters, relating to Non-Merchandise Inventory. Physical
inventories with respect to Non-Merchandise Inventory and with respect to
inventory acquired by or through C&S hereunder will be taken on the same date as
agreed to by the parties. Costs solely and exclusively relating to
Non-Merchandise Inventory shall be allocated solely and exclusively to Grand
Union, and C&S shall bear none of such costs. Costs that relate to both
Non-Merchandise Inventory and Merchandise inventory *
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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* C&S agrees that, if the Sublease or the Assignment is
entered into, C&S will enter into or will provide such agreements as shall be
necessary so that Grand Union may continue to utilize the Montgomery Facility
for Non-Merchandise Inventory as referred to above.
SECTION 4.3. Use of Slots; Storage.
(a) Grand Union and C&S acknowledge that Exhibit H hereto reflects
the current numbers of in-use and open slots in the "quick-pick" portion of the
Montgomery Facility. Grand Union and C&S further acknowledge that Grand Union
will have the right, in its sole discretion, to add selected single items to the
products for which such slots are used, but that Grand Union will use reasonable
efforts, consistent with business requirements, to maintain slot counts
generally at current levels in order to accommodate C&S' needs as contemplated
by Section 7.1.
(b) Grand Union and C&S will segregate the storage section of the
Montgomery Facility based on the diagram set forth as Exhibit I hereto.
SECTION 4.4. Payment of Costs and Fees.
(a) Prior to the Sublease Effective Date, Grand Union shall pay (i)
to the Persons entitled thereto, * (ii) to C&S for its provision of
Merchandise hereunder, * the amount determined pursuant to Section 4.5(b)
hereof.
(b) Prior to the Sublease Effective Date, C&S shall pay to Grand
Union, *
(c) From and after the Sublease Effective Date:
(i) C&S shall pay, to the Persons entitled thereto (or to
Grand Union, for the purpose of making such payments),*; and
(ii) Grand Union shall pay to C&S *
SECTION 4.5. Determination of Operating Expense Amount
and Other Costs
(a) The Operating Expense Amount shall consist of the amount
determined in accordance with the following provisions of this Section, as
adjusted on an annual basis to reflect *
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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(b) Other Costs shall be determined * the parties agree to
cooperate and negotiate in good faith in the determination of Other Costs.
(c) Notwithstanding the foregoing provisions, determinations with
respect to *
(d) Notwithstanding any other provision of this Agreement to the
contrary, *.
SECTION 4.6. Cooperation. The parties agree to cooperate and
negotiate in good faith in the determination of the amounts and adjustments
provided for in Sections 4.4 and 4.5.
SECTION 4.7. Maintenance of Fees. *
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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ARTICLE V.
CERTAIN COVENANTS
SECTION 5.1. Information. During the C&S Purchase Period, C&S agrees
to provide Grand Union, in addition to the pricing reports provided for in
Section 3.3, with such information as Grand Union may reasonably request from
time to time in order to monitor compliance by C&S with the provisions of, and
to carry out the transactions contemplated by, this Agreement. C&S further
agrees that Grand Union will be allowed to conduct, * Grand Union agrees to
provide C&S with such information and with such access to the Montgomery
Facility as C&S may reasonably request in order to monitor compliance by Grand
Union with the provisions of, and to carry out the transactions contemplated
by, this Agreement.
SECTION 5.2. Reclamation. *
SECTION 5.3. Sublease; Assignment.
(a) C&S shall have the right to request that Grand Union enter into
a sublease of the Montgomery Facility (the "Sublease") upon the terms set forth
in Exhibit K. Grand Union will agree to indemnify C&S against any environmental
liabilities with respect to the leased premises arising out of a release of
hazardous substances occurring prior to the effective date of the Sublease. The
Sublease shall take effect no later than 90 days following the date of C&S'
request that the parties enter into a Sublease. Grand Union represents and
warrants to C&S that a true and correct copy of the Lease for the Montgomery
Facility (the "Lease"), as in effect on the date of this Agreement, is appended
to this Agreement as Exhibit A. During the Term, Grand Union agrees to comply
with the terms of the Lease (except for any non-compliance that would not
materially affect C&S' rights or obligations hereunder) and agrees not to amend,
modify or extend that Lease without the prior written consent of C&S, which
consent shall not be unreasonably withheld, delayed or conditioned.
(b) C&S shall have the right to request that Grand Union's rights,
interests and obligations under the Lease (including for this purpose the
Sublease) be assigned to C&S, effective as of a date not earlier than the fourth
anniversary of
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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the date of this Agreement. C&S shall give Grand Union notice of such request
not later than 90 days prior to the date on which such assignment (the
"Assignment") is to be effective as aforesaid, specifying such date, provided
that no such notice shall be given, and no assignment shall be effective, unless
the Sublease is in effect at each such time. Grand Union and C&S agree to
negotiate in good faith with respect to the terms of the Assignment, taking into
consideration the purposes of this Agreement and the terms of the Sublease.
(c) Within 45 days following the commencement of the Term, Grand
Union shall obtain (i) from the landlord under the Lease a Consent and Waiver in
substantially the form appended to this Agreement as Exhibit F and (ii) all
lender approvals to the Sublease and the Assignment. The Sublease and the
Assignment shall by their terms be subject to the provisions of this Agreement.
(d) C&S agrees that, if the Assignment becomes effective, C&S will
not (i) further assign its rights or interests in and to the Assignment or the
Lease, (ii) cease operations at or otherwise close the Montgomery Facility or
(iii) enter into any agreement providing for any action referred to in clauses
(i) or (ii), unless it shall have offered Grand Union the right to re-acquire
the Lease upon the terms upon which the Assignment was made.
SECTION 5.4. *
SECTION 5.5. Compliance with Law. Each of Grand Union and C&S
covenants and agrees that in performing its obligations hereunder, it will
comply with all applicable laws, rules, regulations and orders and will have and
maintain all permits, licenses and authorizations necessary for the conduct of
its business and the performance of its obligations hereunder.
SECTION 5.6. Insurance. C&S agrees that all material properties and
risks of C&S shall at all times be covered by valid and currently effective
insurance policies or binders of insurance or programs of self-insurance in such
types and amounts as are consistent with customary practices and standards of
companies engaged in businesses and operations similar to those of C&S. Grand
Union agrees that all material properties and risks of Grand Union shall at all
times be covered by valid and currently effective insurance policies or binders
of insurance or programs of self-insurance in such types and amounts as are
consistent with customary practices and standards of companies engaged in
businesses and operations similar to those of Grand Union.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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SECTION 5.7. *
SECTION 5.8. Affirmation and Acknowledgment. Grand Union affirms and
acknowledges that (i) upon an Event of Insolvency with respect to Grand Union or
a failure by Grand Union to make any payment when due pursuant to Section 3.5 of
this Agreement, C&S may fully enforce against Grand Union any and all rights
that C&S may possess pursuant to Section 2-702 of the Uniform Commercial Code as
enacted in the State of New York ("Section 2-702"), including without
limitation, the right to reclaim goods delivered to Grand Union upon the terms
and conditions set forth in Section 2-702, and (ii) upon a failure of Grand
Union to make any payment when due under this Agreement or either of the C&S
Supply Agreements (a "Grand Union Payment Obligation"), including without
limitation, those payment obligations arising under each of Sections 3.05, 4.01,
4.05 and 7.04 of either of the C&S Supply Agreements, C&S may, and is hereby
authorized by Grand Union, at any time and from time to time, to the fullest
extent permitted by applicable law, without advance notice to Grand Union (any
such notice being expressly waived by Grand Union), to set off and apply any and
all amounts owed by C&S to Grand Union under this Agreement, including without
limitation against any or all of the Grand Union Payment Obligations that have
not been paid when due and remain unpaid, irrespective of whether or not C&S has
exercised any other rights that it has or may have with respect to such Grand
Union Payment Obligations. Grand Union shall execute and deliver to C&S, from
time to time during the term of this Agreement, such documents as C&S may
reasonably request to create, maintain, acknowledge or confirm the rights of C&S
affirmed and acknowledged by Grand Union pursuant to this Section 5.8.
ARTICLE VI.
MONTGOMERY INVENTORY
SECTION 6.1. Initial Inventory. Grand Union Merchandise will be
shipped to Grand Union Stores *. In the event that any portion of such
Merchandise is identified as being unsalable *. The parties agree that for
purposes of payment and
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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purchase terms under this Agreement, shipments of Merchandise to Grand Union
Stores from the date of commencement of this Agreement *
SECTION 6.2. Inventory Administrative Charge. Grand Union agrees to
minimize excess inventory under this Agreement at all times. Grand Union will
pay an annual inventory administrative charge at a rate per annum equal to * In
determining charges under this Section 6.2, appropriate allocations will be made
to reflect proportionate inventory drawn in the event that C&S is serving other
Persons at the Montgomery Facility pursuant to Section 7.1 hereof.
SECTION 6.3. Inventory Limits. During the Grand Union Purchase
Period, C&S shall not be required to reimburse Grand Union, pursuant to Section
2.1(a), for purchases of inventory by Grand Union to the extent the respective
week's C&S inventory balance exceeds *. During the C&S Purchase Period, the
inventory purchased and kept for Grand Union will not exceed *. For purposes of
this Section 6.3, inventory shall be measured as of *. Prior
to commencement of the Term, Grand Union and C&S shall analyze the categories of
inventory at the Montgomery Facility and measure each of the following
categories: (i) "turn" inventory, (ii) "all other" inventory, *. Based upon
this analysis, Grand Union and C&S shall establish the amount of inventory in
each category required by Grand Union for its everyday business needs and its
seasonal business needs. The parties will measure "all other" inventory on a
weekly basis, and *
The following example illustrates this analysis:
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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* Grand Union will
communicate to C&S its requirements and needs in these areas on a basis
consistent with the practices established in the C&S Supply Agreement dated June
15, 1995.
Grand Union has advised C&S that as of December 1995, "turn"
inventory amounts to * and "all other" inventory amounts to *. Within 90 days
of commencement of the Term, the parties shall recalculate the levels of
"turn" inventory and "all other" inventory and adjust such inventory levels
accordingly. The inventory levels are based upon annual estimated inventory
purchases by Grand Union of *. If the annual level of inventory
purchases by Grand Union changes during the Term of the Agreement, the
inventory levels provided for in Section 6.3 shall change by mutual agreement of
the parties.
C&S agrees that, upon delivery of the Merchandise, it will *.
Notwithstanding the foregoing, the provisions of this Section 6.3
shall be reevaluated and adjusted as appropriate and on a periodic basis to take
into account other business serviced by C&S pursuant to Section 7.1.
ARTICLE VII.
ADDITIONAL BUSINESS
SECTION 7.1. Additional Business.
(a) Grand Union agrees that, if the Changeover Date has occurred,
C&S may utilize the Montgomery Facility to supply food products and other
merchandise to supermarkets and food stores other than Grand Union. C&S agrees
that any such increase in the utilization of the Montgomery Facility shall not
interfere
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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in any significant respect with C&S' obligations to Grand Union under this
Agreement. In the event of any conflict (as to, for example, scheduling or
allocation of employees) between the requirements of Grand Union under this
Agreement and the requirements of or relating to other business serviced by C&S
pursuant to this Section 7.1, the *
(b) Physical inventories shall be taken *. The costs of such
physical inventories shall be allocated to Grand Union and C&S based upon
the respective amounts of inventory held for Grand Union and for such other
customers.
(c) During the C&S Purchase Period, for purposes of Grand Union's
annual store LIFO calculation, C&S will supply Grand Union *
ARTICLE VIII.
TERMINATION
SECTION 8.1. Termination by C&S. C&S may terminate this Agreement
(i) in the event of a default by Grand Union under Section 3.5 which remains
uncured * receipt by Grand Union of written notice thereof from
C&S (subject, however, to the provisions of such Section for arbitration), (ii)
in the event that Grand Union materially breaches its other obligations under
this Agreement and such breach is curable and remains uncured after * receipt
by Grand Union of written notice of such breach from C&S, (iii) upon the
occurrence of an Event of Insolvency with respect to Grand Union (provided,
however, that C&S shall not terminate this Agreement upon the occurrence of an
Event of Insolvency in the event that Grand Union is otherwise in compliance
with the terms of this Agreement and Grand Union provides adequate
assurance of future performance under this Agreement) or (iv) upon termination
of either of the C&S Supply Agreements pursuant to Section 7.01 thereof.
Notwithstanding the foregoing, in the event that Grand Union defaults under
Section 3.5 * C&S may, on the occurrence of * terminate this Agreement
immediately upon notice to Grand Union. In the event of termination by C&S
under this Section 8.1, Grand Union shall pay to C&S, as full and liquidated
damages (including damages for lost profits), the applicable termination fee
set forth in this Article VIII.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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SECTION 8.2. Termination by Grand Union. Grand Union may
terminate this Agreement (i) in the event of a default by C&S under Section
3.5 which remains uncured for * of written notice thereof from Grand Union
(subject to the provisions of such Section for arbitration), (ii) in the
event that C&S materially breaches its other obligations under this Agreement
and such breach is curable and remains uncured after * written notice of such
breach from Grand Union, (iii) upon the occurrence of an Event of Insolvency
with respect to C&S (provided, however that Grand Union shall not terminate
this Agreement upon the occurrence of an Event of Insolvency in the event
that C&S is otherwise in compliance with the terms of this Agreement and C&S
provides adequate assurance of future performance under this Agreement) or
(iv) upon the termination of either of the C&S Supply Agreements pursuant to
Section 7.02 thereof. Notwithstanding the foregoing, in the event that C&S
defaults under Section * in any Contract Year and thereafter cures its
default within the *, or if a Service Level Breach occurs under Section * in
any Contract Year and such Breach is thereafter cured within the *, Grand
Union may, on the occurrence of any subsequent default under Section 3.5 or
any subsequent Service Level Breach, as the case may be, occurring in the
same Contract Year, terminate this Agreement immediately upon notice to C&S.
Grand Union may also terminate this Agreement *. In the event
that Grand Union exercises its rights to terminate *, Grand Union * and shall
pay to C&S the applicable Termination Fee as full and liquidated damages to
C&S. Grand Union shall pay the Termination Fee and all amounts due and owing
C&S resulting from the inventory repurchase upon the expiration of the *. As
used herein, "Termination Fee" shall mean that amount equal to *
The following example illustrates the calculation of the Termination
Fee:
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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*
The parties acknowledge that it would be difficult and costly to
assess and establish C&S' losses arising out of termination of this Agreement on
account of Grand Union's breach or Grand Union's early termination *.
Nonetheless, the parties believe that the termination fee provisions set forth
above are reasonable in light of the costs C&S will incur to perform its
obligations under this Agreement and the damages C&S will suffer in the event
of such termination (including but not limited to damages for lost profits,
incidental damages and other consequential damages).
Notwithstanding any of the foregoing provisions of this Article VIII
or any other provision of this Agreement to the contrary, (i) no Termination Fee
(or any damages) shall be payable by Grand Union as a result of or in connection
with any termination of this Agreement (x) as a result of the failure of Grand
Union to obtain any consent or other document provided for in Section 2.4(c) or
5.3(c) or the failure to obtain any such consent or document within the period
required therefor or (y) pursuant to clause (iv) of Section 8.1 and (ii) no
damages shall be payable by either party hereto on account of any breach of this
Agreement (other than breach of a payment obligation) that results from an Event
of Force Majeure.
SECTION 8.3. Termination of Sublease. Upon any termination of this
Agreement pursuant to Section 8.1 or 8.2, the Sublease, if any, shall
automatically terminate at the same time.
SECTION 8.4. Negotiations; Interim Period.
(a) The parties shall meet at least * provided for in
Section 8.1(ii) or Section 8.2(ii) hereof to attempt to cure any breach
as provided in such Sections.
(b) During the period following delivery of any notice of
termination and prior to the termination of this Agreement, each party shall
perform its obligations under this Agreement in substantially the same manner as
they were performed prior to the date of delivery of such notice, with no
disruption to Grand Union's supply of Merchandise; provided, however, that the
parties shall negotiate in good faith to agree to a "winding-up" schedule for
such period.
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
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SECTION 8.5. Waiver. Either party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other party or (b) waive compliance with any of the agreements or conditions of
the other party contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any
of such rights.
ARTICLE IX.
REPRESENTATIONS AND WARRANTIES
SECTION 9.1. Representations and Warranties of C&S. C&S hereby
represents and warrants to Grand Union as follows:
(a) Corporate Organization and Authority. C&S (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Vermont and is authorized to transact business in the States of New
Hampshire and New York; and (ii) has the corporate power and authority to own
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted.
(b) Authorization. C&S has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and has taken
all necessary corporate action to authorize its execution, delivery and
performance of this Agreement. This Agreement has been duly executed and
delivered on behalf of C&S and constitutes the legal, valid and binding
obligation of C&S, enforceable in accordance with its terms.
(c) No Consents; Conflicts. No consent, authorization by, approval
of or other action by, and no notice to, or filing or registration with, any
governmental authority, agency, regulatory body, lender, lessor, franchisee or
other Person is required for the execution, delivery or performance of this
Agreement by C&S, other than those that have been obtained and are in full force
and effect. The execution, delivery and performance of this Agreement will not
result in any violation or breach of any provision of the charter or by-laws of
C&S, any judgment, decree or order to which C&S is a party or by which it is
bound, any indenture, mortgage or other agreement or instrument to which C&S is
a party or by which it is bound or any statute, rule or regulation applicable to
C&S.
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SECTION 9.2. Representation and Warranties of Grand Union. Grand
Union hereby represents and warrants to C&S as follows:
(a) Corporate Organization and Authority. Grand Union (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is authorized to transact business in the States of
New Hampshire, Vermont and New York; and (ii) has the corporate power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Authorization. Grand Union has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly executed and
delivered on behalf of Grand Union and constitutes the legal, valid and binding
obligation of Grand Union, enforceable in accordance with its terms.
(a) No Consents; Conflicts. No consent, authorization by, approval
of or other action by, and no notice to, or filing or registration with, any
governmental authority, agency, regulatory body, lender, lessor, franchisee or
other Person is required for the execution, delivery or performance of this
Agreement by Grand Union, other than any consents (including consent of any
lender) necessary in connection with the Sublease and the Assignment, which
consents will be obtained in accordance with Sections 2.4(c) and 5.3(c). The
execution, delivery and performance of this Agreement will not result in any
violation or breach of any provision of the charter or by-laws of Grand Union,
any judgment, decree or order to which Grand Union is a party or by which it is
bound, any indenture, mortgage or other agreement or instrument to which Grand
Union is a party or by which it is bound or any statute, rule or regulation
applicable to Grand Union.
ARTICLE X.
GENERAL PROVISIONS
SECTION 10.1. Entire Agreement. This Agreement, together with the
documents referred to herein, constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
SECTION 10.2. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors
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and accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring the same.
SECTION 10.3. Amendments. This Agreement may not be amended or
modified except (i) by an instrument in writing signed by, or on behalf of, each
of Grand Union and C&S, or (ii) by a waiver in accordance with Section 8.5.
SECTION 10.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by telecopy (such telecopy transmission to be
effective only if made by confirmed transmission to the telecopier number set
forth below for such party) or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this section 10.4);
(a) If to Grand Union:
William A. Louttit
Executive Vice President and Chief Operating Officer
The Grand Union Company
20 Willowbrook Boulevard
Wayne, New Jersey 07470-0966
Telephone: (201) 890-6000
Telecopier: (201) 890-6012
(b) If to C&S:
Richard B. Cohen
President and Chief Executive Officer
C&S Wholesale Grocers, Inc.
Old Ferry Road
Brattleboro, Vermont 05301
Telephone: (802) 275-6700
Telecopier: (802) 257-6620
SECTION 10.5. Binding Effect; Assignment.
(a) This Agreement shall be binding upon and inure to the benefit of
Grand Union and C&S and their respective successors and assigns; provided that
(i) C&S shall not have the right to assign or subcontract its rights or
obligations hereunder or any interest herein (excluding the transportation of
Merchandise) without the prior written consent of Grand Union, which consent
shall not be unreasonably withheld, conditioned or delayed, and (ii) Grand Union
may assign its rights and delegate its obligations hereunder only so long as (w)
Grand Union is not in default under this Agreement, (x) Grand Union shall
assign, and the assignee shall assume, all such rights and obligations,
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(y) the assignment is to a Person or Persons who are acquiring all or
substantially all of Grand Union's business or assets, and (z) Grand Union
demonstrates, to the reasonable satisfaction of C&S, that such Person has the
financial capability to perform the obligations of Grand Union hereunder. C&S
agrees that it shall respond, in respect of clause (z) above, promptly, and in
any event with 10 business days of receipt of notice from Grand Union of any
such proposed assignment. Failure by C&S to respond to Grand Union within such
10 business day period shall be deemed to be a confirmation by C&S to Grand
Union of its reasonable satisfaction with the financial capability of the
proposed assignee.
(b) The provisions of subsection (a) of this Section 10.5 shall not
prohibit the assignment by Grand Union of its duties, obligations, rights and
interests under this Agreement to the lenders (or an agent therefor) under the
Bank Agreement as security for obligations of Grand Union thereunder or under
agreements or instruments provided for therein, and C&S hereby consents to any
such assignment; provided, however, that such C&S consent is expressly
conditioned upon the assignee's assumption of all of Grand Union's duties and
obligations under this Agreement. C&S agrees to execute and deliver such further
consents or other instruments as Grand Union or any such lender may reasonably
request to confirm or implement any such assignment, provided that (i) the
rights and interests of C&S hereunder are not thereby affected in any material
respect and (ii) such other consent or instrument expressly acknowledges the
assignee's assumption of Grand Union's duties and obligations under this
Agreement.
SECTION 10.6. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 10.7. Confidentiality. Each of Grand Union and C&S agrees to
and will cause its respective authorized agents, representatives, affiliates,
employees, officers, directors, accountants, counsel and other designated
representatives (collectively, "Representatives") to (i) treat and hold as
confidential (and not disclose or provide access to any Person to) all records,
books, contracts, instruments, computer data and other data and information
(collectively, "Information") concerning the other in its possession or
furnished by the other or the other's Representatives pursuant to this
Agreement, (ii) in the event that either party or its Representatives become
legally compelled to disclose any such Information, provide the other party with
prompt written notice of such requirement so that such other party may seek a
protective order or other remedy or waive compliance with this Section 10.7, and
(iii) in the event that such protective order or other remedy is not obtained,
or the other party waives
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compliance with this Section 10.7, furnish only that portion of such Information
which is legally required to be provided and exercise its best efforts to obtain
assurances that confidential treatment will be accorded such Information;
provided, however, that this sentence shall not apply to any Information that,
at the time of disclosure, is available publicly and was not disclosed in breach
of this Agreement by such party or its Representatives; and provided further,
however, that C&S agrees that Grand Union is the owner of all Information
relating to Grand Union's purchasing practices and that Grand Union may in its
sole discretion sell such purchasing related information to third parties. The
provisions of clauses (i) and (ii) above shall not preclude a party from
disclosing Information to its Representatives or to its lenders or their
Representatives (provided that each such Representative shall be advised of the
confidential nature of such Information) or from disclosing Information to or
filing Information within any governmental authority or agency with jurisdiction
over such party. Each party agrees and acknowledges that remedies at law for any
breach of its obligations under this Section 10.7 are inadequate and that in
addition thereto the other party shall be entitled to seek equitable relief,
including injunction and specific performance, in the event of any such breach,
without the necessity of demonstrating the inadequacy of monetary damages.
SECTION 10.8. Relationship of Parties. In all matters relating to
this Agreement, both parties shall be acting solely as independent contractors
and shall be solely responsible for the acts of their employees, officers,
directors and agents. Employees, agents or contractors of one party shall not be
considered employees, agents (except for the limited purpose specified in
Section 2.1(a)) or contractors of the other party.
SECTION 10.9. No Third-Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the parties thereto and their
permitted assigns, and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever.
SECTION 10.10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
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SECTION 10.11. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 10.12. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to the principles of conflicts of laws thereof.
SECTION 10.13. Arbitration.
(a) Any matter required to be submitted to arbitration pursuant to
Section 3.5 of this Agreement shall be subject to this Section 10.13. Any such
matter shall be submitted to binding arbitration in Springfield, Massachusetts
(or another location agreed to by the parties) in accordance with the rules and
procedures of the American Arbitration Association (or another organization
agreed to by the parties). The arbitration shall be conducted in accordance with
(i) the terms of this Section 10.13; (ii) the commercial arbitration rules of
the American Arbitration Association (or the corresponding rules of any such
other organization); (iii) the Federal Arbitration Act (Title 9 of the United
States Code); and (iv) to the extent the foregoing are inapplicable,
unenforceable or invalid, the laws of the State of New York. Judgment upon any
award rendered hereunder may be entered in any court having jurisdiction.
(b) A single arbitrator shall be selected by mutual agreement of the
parties, or, if the parties fail to reach such agreement within ten days after
either party has requested arbitration hereunder in writing, by, or in a manner
provided by the American Arbitration Association (or such other organization
referred to above).
(c) The arbitrator is empowered to resolve the mater in dispute by
summary ruling substantially similar to a summary judgment and motion to
dismiss. The arbitrator shall resolve all disputes in accordance with applicable
substantive law. The determination of the arbitrator shall be binding on all
parties and shall not be subject to further review or appeal except as allowed
by applicable law. The costs and expenses of the arbitrator shall be apportioned
between the parties hereto as determined by the arbitrator in such manner as the
arbitrator deems reasonable.
(d) The arbitrator and the parties shall take all actions necessary
to the end that the arbitration proceeding shall be conducted as promptly as
practicable.
(e) The provisions of this Section 10.13 shall not preclude a party
from exercising any right or remedy with respect to any matter that is not
expressly required to be submitted to arbitration pursuant to Section 3.5 of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first written above.
THE GRAND UNION COMPANY
By: /s/ William A. Louttit
---------------------------------
Name: William A. Louttit
Title: Executive Vice President
Chief Operating Officer
C&S WHOLESALE GROCERS, INC.
By: /s/ William C. Hamlin
---------------------------------
Name: William C. Hamlin
Title: Senior Vice President
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EXHIBITS
Exhibit A - Montgomery Lease Agreement dated September 29, 1989
Exhibit B - Existing Grand Union Stores
Exhibit C - Merchandise
Exhibit D - Operating Expenses and Other Costs
Exhibit E - Forms of Notices
Exhibit F - Form of Landlord Consent
Exhibit G - Overage/Shortage Policy (eliminated by agreement of the parties)
Exhibit H - Montgomery Facility Slots
Exhibit I - Montgomery Facility Storage (eliminated by agreement of the
parties)
Exhibit J - Assumptions and Information Relating to Operating
Expenses and Other Costs
Exhibit K - Terms of Sublease
Exhibit L - *
* Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
EXHIBIT A
THIS LEASE, dated the 29TH day of September 1989, between MACK BRACKEN
ROAD PROPERTIES LIMITED and MONTGOMERY '89 ASSOCIATES L.P., doing business as
BRACKEN '89 JOINT VENTURE, with offices at c/o The Mack Company, 370 West
Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as
the "Landlord"); and THE GRAND UNION COMPANY, with offices at 201 Willowbrook
Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as the
"Tenant").
W I T N E S S E T H:
ARTICLE I
DEMISE OF PREMISES
SECTION 1.01. The Landlord, for and in consideration of the rents to be
paid and of the covenants and agreements hereinafter contained to be kept and
performed by the Tenant, hereby demises and leases unto the Tenant, and the
Tenant hereby hires and takes from the Landlord, for the term and the rent,
and upon the covenants and agreements hereinafter set forth, the premises
situated in the Town of Montgomery, County of Orange, State of New York,
commonly known as Bracken Road, Montgomery, New York, and identified on the
tax assessment map of said Town as Section 30, Lot 65.2 in Block 1, and about
to be identified as Section 30, Lot 71 in Block 1, as more particularly
described on Exhibit A attached hereto and made a part hereof (such premises
together with the Building as hereinafter defined being hereinafter referred
to as the "Demised Premises").
The Landlord and the Tenant covenant and agree as follows:
ARTICLE II
TERM OF LEASE
SECTION 2.01. The term of this Lease and the demise of the Demised
Premises shall be for twenty (20) years beginning on September 29, 1989 and
ending at 12:00 midnight on September 28, 2009 or on such earlier or later
termination as hereinafter set forth (which term is hereinafter called the
"Term").
ARTICLE III
RENT
SECTION 3.01. The Tenant shall pay to the Landlord, during the Term
without counterclaim, deduction or setoff, rent in the amount of Twenty-seven
Million Nine Hundred Twelve Thousand Nine Hundred Twenty-five and 00/100
($27,912,925.00) Dollars, payable in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
SECTION 3.02. The rent shall accrue at the following yearly and monthly
rates:
COPR. 1989 DOLLINGER & DOLLINGER, P.A.
<PAGE>
YEARS YEARLY RENT MONTHLY RENT
1-10 $1,292,000.00 $107,666.67
11-15 $1,428,260.00 $119,021.67
16-20 $1,570,325.00 $130,860.42
The aforesaid monthly rents shall be payable in advance on the first day of each
calendar month during the Term, except that a proportionately lesser sum may be
paid for the first and last months of the Term of this Lease if the Term
commences on a date other than the first day of the month, in accordance with
the provisions of this Lease hereinafter set forth. The rent shall be payable
at the office of the Landlord, at the address above set forth, or as may
otherwise be directed by notice from the Landlord to the Tenant.
SECTION 3.03. The Tenant shall, and will, during the Term well and truly
pay, or cause to be paid, to the Landlord, the monthly payments of rent as
herein provided and all other sums that may become due and payable by the
Tenant, hereunder, at the time and in the manner herein provided, without
counterclaim, offset or deduction; and all other sums due and payable by the
Tenant hereunder may, at the Landlord's option, be deemed to be, and treated as,
additional rent, and added to any fixed rent due and payable by the Tenant
hereunder, and, in the event of nonpayment of such other sums, the Landlord
shall have all the rights and remedies herein provided for in the case of the
nonpayment of rent, or of a breach of any covenant to be performed by the
Tenant.
SECTION 3.04. The rent payable by the Tenant pursuant to this Lease is
intended to be net to the Landlord, and all other charges and expenses imposed
upon the Demised Premises or incurred in connection with its use, occupancy,
care, maintenance, operation and control, including but not limited to the
charges and expenses payable pursuant to Articles VII and VIII of this Lease,
shall be paid by the Tenant, excepting liens resulting from acts or omissions of
the Landlord and other payments to be paid or obligations undertaken by the
Landlord as specifically provided in this Lease.
ARTICLE IV
THE DEMISED PREMISES
SECTION 4.01. The Demised Premises consists of a building of approximately
225,000 gross rentable square feet (which building is hereinafter called the
"Building") previously erected thereon and approximately 12.066 acres of land,
which the Tenant acknowledges that it has inspected and is fully familiar with
its condition and is leasing the same in an "AS IS" condition.
SECTION 4.02. The Demised Premises hereinabove described constitutes a
self-contained unit and nothing in this Lease shall impose upon the Landlord any
obligation to provide any services for the benefit of the Tenant, including but
not limited to water, gas, electricity, heat or janitorial, unless and to the
extent expressly provided in this Lease.
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ARTICLE V
USE
SECTION 5.01. The Demised Premises may be used for any lawful use by the
Tenant.
SECTION 5.02. The aforesaid permitted use does not permit the stacking of
merchandise and/or materials against walls or columns, nor does it permit the
hanging of equipment from (or otherwise loading) the roof or structural members
of the Building except in accordance with the standards set forth with respect
to good and sound engineering practices. Notwithstanding anything contained
herein to the contrary, any damage or wear and tear to the walls, columns, roof
or structural members of the Building arising out of or in connection with any
of the activities described in this Section 5.02 shall not be deemed to be
ordinary wear and tear and shall be repaired, restored and/or replaced by Tenant
at its sole cost and expense.
ARTICLE VI
QUIET ENJOYMENT
SECTION 6.01. The Landlord covenants that if, and so long as, the Tenant
pays the rent, and any additional rent as herein provided, and performs the
covenants hereof, the Landlord shall do nothing to affect the Tenant's right to
peaceably and quietly have, hold and enjoy the Demised Premises for the Term
herein mentioned, subject to the provisions of this Lease.
ARTICLE VII
ADDITIONAL RENT, TAXES, ASSESSMENTS,
WATER RATES, CHARGES, ETC.
SECTION 7.01. The Tenant shall pay, before any interest or penalties accrue
thereon, all real estate taxes, water and sewer rates and charges and all other
governmental charges imposed during the Term on the Demised Premises or on the
rents, as such, payable to the Landlord hereunder, and on request shall exhibit
to the Landlord receipted bills or other proof of payment. There shall be
apportioned any tax or charge relating to the fiscal year in which the Term of
this Lease terminates. The Tenant shall be responsible for any tax or charge
relating to the fiscal year in which the Term of this commenced.
SECTION 7.02. The Tenant shall not be required to pay any estate,
inheritance, devolution, succession, transfer, legacy or gift tax charged
against the Landlord or the estate or interest of the Landlord in the Demised
Premises or upon the right of any person to succeed to the same or any part
thereof by inheritance, succession, transfer or gift, nor any capital stock tax
or corporate franchise tax incurred by the Landlord, nor any income tax upon or
against the income of the Landlord (including any rental income derived by the
Landlord from the Demised Premises).
SECTION 7.03. The Tenant shall pay all assessments that may be imposed upon
the Demised Premises by reason of any specific public improvement (including but
not limited to
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assessments for street openings, grading, paving and sewer installations and
improvements) except that if by law any such special assessment is payable, or
may, at the option of the taxpayer, be paid, in installments, the Tenant may,
whether or not interest accrues on the unpaid balance thereof, pay the same and
any accrued interest on any unpaid balance thereof in installments as each
installment becomes due and payable, but in any event before any penalty or cost
may be added thereto for nonpayment of any installment or interest. Any such
benefit, assessment or installment thereof relating to a fiscal period in which
the Term of this Lease begins or ends shall be apportioned.
SECTION 7.04. The Tenant, in its name or the Landlord's name shall have the
right to contest, or review, by appropriate proceedings, in such manner as it
may deem suitable, at its own expense, and without expense to the Landlord, any
tax, assessment, water and sewer rents or charges, or other charges payable by
the Tenant pursuant to this Lease, and upon the request of the Tenant, the
Landlord will protest any tax, assessment, water or sewer rent or charge, or any
other charge payable by the Tenant pursuant to this Lease, which shall be
contested or reviewed by the Tenant. Any refund resulting from such contest or
review shall be assigned to and belong to the Tenant and shall be paid to the
Tenant promptly upon its receipt by the Landlord. If the refund relates to a
tax year that is apportioned between the Landlord and the Tenant, the refund
shall be apportioned between the Landlord and the Tenant.
ARTICLE VIII
INSURANCE
SECTION 8.01. During the Term, Tenant shall maintain the following
insurance, insuring the Landlord and ground lessor, if any, and any
mortgagee(s), as their respective interests may appear:
(A) Insurance against damage to the Building by all risks of direct
physical loss (at Landlord's option to include earthquake and flood) with
the policy to contain either the agreed amount endorsement or a replacement
cost endorsement, in amounts sufficient to prevent the Landlord from
becoming a co-insurer, but in no event less than one hundred (100%) percent
of the Building's then replacement value. Policy to include a contingent
liability endorsement and/or demolition and increased cost of construction
endorsement in order for the Building to be constructed in accordance with
all requirements and regulations which may be applicable at the time of
loss or damage, of all governmental agencies having jurisdiction over the
Building and construction of such Building.
(B) If appropriate, boiler and machinery insurance coverage for all
eligible objects, including pressure vessels and air conditioning
equipment, with the electrical apparatus clause, with such limits as may be
reasonably necessary to properly insure the values at risk in the Building.
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(C) Plate glass insurance. At the option of the Tenant, Tenant may elect
to self-insure for plate glass.
(D) The policies of insurance provided for herein shall be from a company
rated in the A.M. Best Key Rating Guide with a policyholder's service
rating of A+ and a financial rating of XV. The company shall be licensed by
the State of New York and a certificate (s) evidencing the existence of
such policy shall be delivered to the Landlord, together with evidence of
the payment of the premiums therefor, not less than fifteen (15) days prior
to the commencement of the Term. At least fifteen (15) days prior to the
expiration or termination date of any policy, the Tenant shall deliver a
renewal or replacement policy, or certificate (s) evidencing the existence
thereof, to Landlord together with proof of the payment of the premium
therefor.
All insurance maintained pursuant to this Article VIII may be effected by
blanket insurance policies.
SECTION 8.02. The Tenant shall provide and keep in force, during the Term
of this Lease, for the benefit of the Landlord and ground lessor, if any,
comprehensive general liability insurance policies in standard form (containing
the so-called "occurrence clause"), insuring the Landlord and Landlord's
managing agent as an additional named insured with respect to ownership,
operation, maintenance, use and control against liability for injury or damage
to persons or property in or upon the Demised Premises during the Term of this
Lease, which shall include a contractual liability endorsement. Said policies
shall be written by insurance companies licensed to do business in the State of
New York and shall cover the entire Demised Premises as well as any sidewalk in
front of the same, and shall be in the minimum amount of Three Million and
00/100 ($3,000,000.00) Dollars.
SECTION 8.03. Tenant represents, said representation being specifically
designed to induce the Landlord to execute this Lease, that Tenant's personal
property, fixtures, betterments, improvements, goods and inventory at the
Demised Premises and any other items which Tenant may bring to the Premises or
which may be under Tenant's care, custody and control which may be subject to
any claim for damages or destruction shall never exceed the amount of insurance
which Tenant is required to carry pursuant to this Lease and for which Tenant
shall name the Landlord as an additional named insured as its interest may
appear. If at any time the value of the aforesaid exceeds the amount of such
insurance, Tenant covenants to so notify Landlord and at the same time to
immediately increase the amount of insurance required to be carried pursuant to
Section 8.01 to an amount sufficient to cover the aforesaid to preclude any
liability on Landlord's or Landlord's ground lessor's or mortgagee's part to
Tenant. Should Tenant fail to do so, or fail to maintain insurance coverage
adequate to cover the aforesaid, then Tenant shall not be in default hereunder
unless Tenant makes a claim against Landlord for damages or destruction which
would have been covered by insurance but for Tenant's failure to meet its
obligations as set forth in this Article VIII.
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SECTION 8.04. Tenant is and shall be in exclusive control and
possession of the Demised Premises as provided herein, and Landlord shall not in
any event whatsoever be liable for any injury or damage to any property or to
any person happening on or about the Demised Premises, nor for any injury or
damage to the Demised Premises, nor to any property of Tenant, or of any other
person contained therein.
Tenant shall indemnify and save Landlord harmless against and
from all liabilities, claims, suits, fines, penalties, damages,
losses, fees, costs and expenses (including reasonable attorneys'
fees) which may be imposed upon, incurred by or asserted against
Landlord by reason of:
(A) Any work or thing done in, on or about the Demised
Premises or any part thereof by or on behalf of Tenant;
(B) Any use, occupation, condition, operation of the Demised
Premises or any part thereof or of any street, alley, sidewalk, curb,
vault, passageway or space adjacent thereto or any occurrence on any
of the same on the part of Tenant;
(C) Any act or omission on the part of Tenant or any subtenant
or any employees, licensees or invitees;
(D) Any accident, injury (including death) or damage to any
person or property occurring in, on or about the Demised Premises, or
any part thereof or in, on or about any street, alley, sidewalk, curb,
vault, passageway or space adjacent thereto alleged to have been
caused by Tenant's acts or omissions; and
(E) Any failure on the part of Tenant to perform or comply with
any of the covenants, agreements, terms or conditions contained in
this Lease, or recording of this Lease. The provisions of this
Paragraph shall survive the expiration or earlier termination thereof
for as long as any applicable statute of limitations.
SECTION 8.05. All losses paid under the policy or policies carried pursuant
to Section 8.01 shall be adjusted by the Landlord and Tenant and the proceeds
thereof shall be payable to the Landlord, to be held in trust to be used for
repair and restoration of the Demised Premises by the Tenant. If the proceeds
of insurance are not sufficient to cover the cost of restoration as required by
Tenant, then Tenant shall be responsible for the cost of any deficiency. Each
insurance policy carried by Tenant and insuring the Demised Premises and its
fixtures and contents against loss by fire, water and causes covered by standard
extended coverage, shall be written in a manner so as to provide that the
insurance company waive all rights of recovery by way of subrogation against
Landlord in connection with any loss or damage covered by such policies.
Neither party shall be liable to the other for any loss or damage caused by
fire, water or any of the risks enumerated in standard extended coverage
insurance, provided such insurance was obtainable at the time of such loss or
damage. If such insurance policies are obtainable only by the payment of an
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additional premium charge, the same shall be obtained and such additional
premium paid for by the Tenant. If the release of either Landlord or Tenant, as
set forth in the third sentence of this Paragraph, shall contravene any law with
respect to exculpatory agreements, the liability of the party in question shall
be deemed not released but shall be deemed secondary to the latter's insurer.
SECTION 8.06. The Tenant shall also furnish insurance for such other
hazards and in such amounts as the Landlord may reasonably require and as at the
time are commonly insured against with respect to buildings similar in
character, general location and use and occupancy to the Demised Premises in
relative amounts normally carried with respect thereto. The Landlord reserves
the right at any time and from time to time to require that the limits for any
of the insurance required pursuant to Article VIII be increased to limits as at
the time are reasonable with respect to Tenant's use and to buildings similar in
character, general location and use and occupancy to the Demised Premises.
SECTION 8.07. Landlord shall maintain rent insurance against the loss of
rent and additional rent for no less than one (1) year as provided herein, and
Tenant shall reimburse Landlord for the entire cost of said rent insurance,
promptly when billed, as additional rent.
SECTION 8.08. All policies required pursuant to this Article VIII shall
contain provision for thirty (30) days' written notice by registered mail to the
Landlord of any change or cancellation of said policy.
ARTICLE IX
REPAIRS
SECTION 9.01. The Tenant shall keep the Demised Premises in good condition
and repair, and shall redecorate, paint and renovate the Demised Premises as may
be necessary to keep them in good condition and repair and good appearance. The
Tenant shall keep the Demised Premises and all parts thereof in a clean and
sanitary condition and free from trash, inflammable material and other
objectionable matter. The Tenant shall keep the sidewalks and roadways forming
part of the Demised Premises clean and free of obstructions, snow and ice.
Throughout the Term of this Lease, the Tenant, at its sole cost and expense,
will take good care of the Demised Premises and the sidewalks and curbs
adjoining the Demised Premises and will keep the same in good order and
condition and make all necessary repairs thereto, structural and nonstructural,
interior and exterior, ordinary and extraordinary, foreseen and unforeseen.
The Tenant shall replace, at the Tenant's expense, all glass in and on the
Demised Premises which may become broken after the date of Tenant's occupancy.
When used in this Article, the term "repairs" shall include all necessary
replacements and renewals. All repairs made by Tenant shall be equal in quality
and class to the original work. The Tenant shall quit and surrender the Demised
Premises at the end of the Term in as good condition as the reasonable use
thereof will permit and in compliance with the requirements stated herein and in
a "broom-clean" condition, and shall, by way of example and not by way of
limitation, clean and reseal all concrete floors.
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SECTION 9.02. The Tenant shall not make any alterations, additions or
improvements to the Demised Premises without the prior written consent of the
Landlord, which Landlord shall not unreasonably withhold. In making its
determination, Landlord shall consider, among other considerations, the
standards set forth with respect to good and sound engineering practices.
Notwithstanding the provisions of this Section 9.02, Landlord's prior written
consent shall not be required for any alterations, additions or improvements
which, in the aggregate, do not exceed the cost of Five Hundred Thousand and
00/100 ($500,000.00) Dollars per lease year, and which do not adversely affect
any structural portion of the Building or any Building mechanical, electrical,
HVAC, or plumbing system. All erections, alterations, additions and
improvements, whether temporary or permanent in character, which may be made
upon or to the Demised Premises either by the Landlord or the Tenant, except
furniture or movable trade fixtures installed at the expense of the Tenant,
shall be the property of the Landlord and shall remain upon and be surrendered
with the Demised Premises as a part thereof at the expiration or sooner
termination of this Lease, without compensation to the Tenant; or, in the
alternative and at the direction of Landlord, Tenant shall remove all or so much
of the property therefrom as directed or such property shall be conclusively
deemed abandoned and may be removed by Landlord, and Tenant shall reimburse
Landlord for the cost of such removal. Landlord may have any such property
stored at Tenant's risk and expense. Landlord, at Landlord's option, may require
as a condition of its consent, that Tenant remove, at the expiration or sooner
termination of the Lease Term, any erections, alterations, additions or
improvements made by Tenant, and restore the Demised Premises to a substantially
similar condition to that in existence as of the commencement date of the Lease,
and that the Tenant use contractors approved by Landlord.
ARTICLE X
CASUALTY
SECTION 10.01. If the Demised Premises or the Building is damaged or
destroyed by fire, explosion, the elements or otherwise during the Term so as to
render the Demised Premises wholly untenantable or unfit for occupancy, or
should the Demised Premises be so badly injured that the same cannot be repaired
within one hundred eighty (180) days from the happening of such injury, then,
and in such case, the Term hereby created shall, at the option of either the
Landlord or the Tenant, terminate upon the giving of a notice of termination.
If a notice of termination is given, the Term of this Lease shall terminate
effective as of the date of such damage or destruction, and the Tenant shall
immediately surrender the Demised Premises and all the Tenant's interest therein
to the Landlord, and pay rent to the time of such damage or destruction, and the
Landlord may re-enter and repossess the Demised Premises discharged from this
Lease and may remove all parties therefrom.
SECTION 10.02. Should the Demised Premises be rendered untenantable and
unfit for occupancy, but yet be repairable within one hundred eighty (180) days
from the happening of said injury, the Landlord will make the proceeds of
insurance available to Tenant so that Tenant may repair the Demised Premises
with reasonable speed, and the rent shall not
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accrue after said injury and while repairs are being made, provided Landlord
receives the proceeds of rent insurance, but shall recommence immediately after
such repairs shall be completed.
SECTION 10.03. If the Demised Premises shall be so slightly injured as not
to be rendered untenantable and unfit for occupancy, the Tenant shall repair the
same with reasonable promptness and the rent accrued and accruing shall not
cease or terminate. The Tenant shall immediately notify the Landlord in case of
fire or other damage to the Demised Premises.
SECTION 10.04. Notwithstanding anything to the contrary in Section 10.01,
neither the Landlord nor the Tenant shall have any option to terminate this
Lease upon the happening of an injury referred to in Section 10.01 provided that
the happening of such injury occurs at a time when the unexpired Term of this
Lease is one (1) year or more. In such event, the Landlord shall make the
proceeds of insurance available to the Tenant and the Tenant shall repair the
Demised Premises, even to the extent of rebuilding the Building if necessary.
The Tenant shall promptly enter and repair the Demised Premises with reasonable
speed, making due allowance for conditions beyond the Tenant's control,
including, but not limited to time lost in adjusting insurance claims and
strikes, and the rent shall not accrue after such injury and while repairs are
being made, provided Landlord receives the proceeds of rent insurance, but shall
recommence immediately after said repairs shall be completed. Landlord shall
have no obligation to repair or restore Tenant's improvements. Notwithstanding
anything contained herein to the contrary, in the event the happening of an
injury referred to in Section 10.01 occurs when the unexpired Term of this Lease
is less than one (1) year and Landlord exercises its option to terminate this
Lease, then and in that event, Tenant can negate Landlord's termination by
exercising its option to renew in accordance with Article XXXII.
SECTION 10.05. Prior to the performance of any work by Tenant pursuant
to the provisions of this Article X, Tenant shall first submit plans and
specifications to Landlord and Landlord shall have the right to review and
approve said plans and specifications and to require modifications thereto. All
work shall be performed by Tenant in accordance with good and sound engineering
practices and in compliance with all laws, ordinances and regulations.
SECTION 10.06. Notwithstanding anything contained to the contrary in this
Article X, in the event the proceeds of insurance are not sufficient to cover
the cost of restoration, the Tenant shall be responsible for the cost of any
deficiency.
ARTICLE XI
CONDEMNATION
SECTION 11.01. If, during the Term, twenty-five (25%) percent or more of the
area of the Demised Premises shall be taken under any power of eminent domain or
condemnation then, at the option of the Tenant, to be exercised in writing
within thirty (30) days of the taking of title thereto, this Lease shall expire
within thirty (30) days of the date of such notice and the rent herein reserved
shall be apportioned as of said date. However, if the Tenant does not exercise
the afore-
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mentioned option, or if the taking does not deprive the Tenant of at least
twenty-five (25%) percent of the area of the Demised Premises, this Lease shall
not expire but the rent shall be equitably apportioned. If the Landlord and the
Tenant fail to agree upon an equitable apportionment, the rent for the Building,
after such taking, shall be determined in accordance with the Commercial Rules
of the American Arbitration Association, in the City of New York, New York, and
the arbitrator shall be empowered to assess the costs and expenses of the
proceedings as part of the determination. Pending such determination the Tenant
shall pay, on account of the rent, such proportion of the rent reserved in this
Lease as the total area of the Building after the taking bears to the total area
of the Building before the taking, subject to adjustment in accordance with the
arbitrator's award. If the Landlord can, after such taking, construct an
addition to the remaining Building so as to restore all of the Building area and
Building facilities theretofore taken, the Landlord shall, subject to the
adequacy of the condemnation award and to the mortgagee making the same
available to the Landlord, promptly construct such addition and restore such
facilities so taken and upon the completion of such restoration, the full rent
reserved by this Lease shall be reinstated, as of the date of such restoration,
and, if the Tenant is able to occupy and use the Building, the proportionate
rent shall be paid by the Tenant as herein provided, during the period between
the taking and the restoration of the Building and facilities. No part of any
award shall belong to the Tenant except that nothing contained herein is
intended to affect or limit the Tenant's claim for fixtures or other
improvements owned by Tenant provided the same does not diminish the Landlord's
award. It is expressly understood and agreed that the provisions of this
Article XI shall not be applicable to any condemnation or taking for
governmental occupancy for a limited period of time.
ARTICLE XII
COMPLIANCE WITH LAWS, ETC.
SECTION 12.01. The Tenant shall not do or permit anything to be done in
the Demised Premises which shall constitute a public nuisance or which will
conflict with the regulations of the Fire Department or with any insurance
policy upon said improvements or any part thereof.
SECTION 12.02. The Tenant shall, at its own expense, obtain all necessary
environmental and operating permits and comply with all requirements of law and
with all ordinance or orders, rules and regulations of any State, Municipal or
other public authority affecting the Demised Premises and with all requirements
of the Fire Insurance Exchange or similar body, and of any liability insurance
company insuring the Landlord against liability for accidents in or connected
with the Demised Premises including, but not limited to laws, ordinance, orders,
rules and regulations which apply to the interior or exterior of the Demised
Premises, the structural or nonstructural parts thereof, and to make all
improvements and repairs required by such laws, ordinances, orders, rules and
regulations, ordinary or extraordinary, foreseen or unforeseen.
SECTION 12.03. Tenant acknowledges the existence of environmental laws,
rules and regulations now or hereafter
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enacted by any federal, state or municipal authority and Tenant agrees to comply
therewith.
Tenant agrees not to generate, store, manufacture, refine, transport,
treat, dispose of, or otherwise permit to be present on or about the Demised
Premises, any Hazardous Substances. As used herein, Hazardous Substances shall
be defined as any "hazardous chemical," "hazardous substance" or similar term as
defined in the Comprehensive Environmental Responsibility Compensation and
Liability Act, as amended (42 U.S.C. 9601, ET SEQ.), any rules or regulations
promulgated thereunder, or in any other applicable federal, state or local law,
rule or regulation dealing with environmental protection. It is understood and
agreed that the provisions contained in this Article shall be applicable
notwithstanding the fact that any substance shall not be deemed to be a
Hazardous Substance at the time of its use by the Tenant but shall thereafter be
deemed to be a Hazardous Substance.
Tenant agrees to indemnify and hold harmless the Landlord and each
mortgagee of the Demised Premises from and against any and all liabilities,
damages, claims, losses, judgments, causes of action, costs and expenses
(including the reasonable fees and expenses of counsel) which may be incurred by
the Landlord or any such mortgagee or threatened against the Landlord or such
mortgagee, relating to or arising out of any breach by Tenant of the
undertakings set forth in this Article, said indemnity to survive the Lease
expiration or sooner termination.
ARTICLE XIII
SUBORDINATION
SECTION 13.01. This Lease is and shall be subject and subordinate to all
present and future first mortgages or deeds of trust affecting the Demised
Premises, provided (i) that any such mortgage, deed of trust, or ground lease
shall include therein a covenant on the part of the holder thereof or the
landlord thereunder (as the case may be) substantially to the effect that it
will not at any time join Tenant as a party defendant in any action which may be
brought to foreclose said mortgage or deed of trust or terminate said ground
lease (as the case may be), or disturb Tenant's possession of the Demised
Premises, so long as Tenant is not in default under any provision of this Lease,
or provided Landlord obtains a non-disturbance agreement in favor of Tenant from
said first mortgagee or holder of any deed of trust or the landlord thereunder
(as the case may be) providing the above, and provided further that in either
event Tenant agrees, at the first mortgagee's option or at the option of the
holder of any deed of trust or at the option of the landlord under the ground
lease (as the case may be), to attorn to said mortgagee or holder of said trust
deed or landlord (as the case may be), and (ii) that any such mortgagee shall
agree to make the proceeds of casualty insurance available to Landlord for
restoration. The Tenant shall execute, any instrument which may be deemed
necessary or desirable by the Landlord to further effect or to evidence the
subordination of this Lease to any such mortgage or deed of trust. The Landlord
may assign this Lease to any such mortgagee or trust deed holder in connection
with any such lien superior to this Lease, and the Tenant shall execute, at no
expense to the Tenant, any instrument which may be necessary or desirable by the
Landlord or the
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holder of said lien in connection with said assignment. Any expense incurred in
the preparing, executing or recording of such assignment to any such holder
shall be without expense or cost to the Tenant. The Tenant further agrees, upon
not less then ten (10) days' prior written request of the Landlord, to certify
by written instrument duly executed and acknowledged to any mortgagee, trust
deed holder or purchaser, or any proposed mortgage lender, trust deed holder or
purchaser, that this Lease is in full force and effect, or if not, in what
respect it is not, that this Lease has not been modified, or the extent to which
it has been modified, that there are no existing defaults hereunder to the best
of the knowledge of the party so certifying, or specifying the defaults, if any.
Any such certification in connection with a mortgage shall be without prejudice
as between the Landlord and the Tenant, it being agreed that any document
required hereunder shall not be used in any litigation between the Landlord and
the Tenant.
ARTICLE XIV
DEFAULTS, REMEDIES
SECTION 14.01. If, during the Term, any one or more of the following acts
or occurrences (any one of such occurrences or acts being hereinafter called an
Event of Default) shall happen:
(A) The Tenant shall default in making any payment of rent or any
additional rent as and when the same shall become due and payable, and such
default shall continue for a period of ten (10) days after notice from the
Landlord that such payment is due and unpaid; or
(B) The Tenant shall default in the performance of or compliance with
any of the other covenants, agreements, terms or conditions of this Lease
to be performed by the Tenant (other than any default curable by payment of
money), and such default shall continue for a period of thirty (30) days
after written notice thereof from the Landlord to the Tenant, or, in the
case of a default which cannot with due diligence be cured within thirty
(30) days, the Tenant shall fail to proceed promptly (except for
unavoidable delays) after the giving of such notice and with all due
diligence to cure such default and thereafter to prosecute the curing
hereof with all due diligence (it being intended that as to a default not
susceptible of being cured with due diligence within thirty (30) days, the
time within which such default may be cured shall be extended for such
period as may be reasonably necessary to permit the same to be cured with
all due diligence); or
(C) The Tenant or any guarantor of this Lease shall make an
assignment for the benefit of creditors or file a voluntary petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, composition,
readjustment or similar relief under any present or
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future bankruptcy or other applicable law, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver, or liquidator of the
Tenant or any guarantor of this Lease or of all or any substantial part of
its properties or of all or any part of the Demised Premises; or
(D) If, within sixty (60) days after the filing of an involuntary
petition in bankruptcy against the Tenant or any guarantor of this Lease,
or the commencement of any proceeding against the Tenant or such guarantor
seeking any reorganization, composition, readjustment or similar relief
under any law, such proceeding shall not have been dismissed, or if, within
sixty (60) days after the appointment, without the consent or acquiescence
of the Tenant or such guarantor, of any trustee, receiver or liquidator of
the Tenant or such guarantor, or of all or any part of the Demised
Premises, such appointment shall not have been vacated or stayed on appeal
or otherwise, or if, within sixty (60) days after the expiration of any
such stay, such appointment shall have been vacated, or if, within sixty
(60) days after the taking possession, without the consent or acquiescence
of the Tenant or such guarantor, of the property of the Tenant, or of such
guarantor by any governmental office or agency pursuant to statutory
authority for the dissolution or liquidation of the Tenant or such
guarantor, such taking shall not have been vacated or stayed on appeal or
otherwise; or
(E) If the Demised Premises shall be abandoned by the Tenant for a
period of thirty (30) consecutive days,
then, and in any such event, and during the continuance thereof, the Landlord
may, at its option, then or thereafter while any such Event of Default shall
continue and notwithstanding the fact that the Landlord may have any other
remedy hereunder or at law or in equity, by notice to the Tenant, designate a
date, not less than ten (10) days after the giving of such notice, on which this
Lease shall terminate; and thereupon, on such date the Term of this Lease and
the estate hereby granted shall expire and terminate upon the date specified in
such notice with the same force and effect as if the date specified in such
notice was the date hereinbefore fixed for the expiration of the Term of this
Lease, and all rights of the Tenant hereunder shall expire and terminate, but
the Tenant shall remain liable as hereinafter provided. Additionally, Tenant
agrees to pay, as additional rent, all attorney's fees and other expenses
incurred by the Landlord in enforcing any of the obligations under this Lease,
this covenant to survive the expiration or sooner termination of this Lease.
Notwithstanding anything contained herein to the contrary, the abandonment of
the Demised Premises shall not be deemed to be a default hereunder so long as
Tenant shall continue to pay rent and additional rent and shall otherwise comply
with all of the terms and conditions of this Lease, including but not limited to
repair, maintenance and insurance obligations.
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SECTION 14.02. If this Lease is terminated as provided in Section 14.01, or
as permitted by law, the Tenant shall peaceably quit and surrender the Demised
Premises to the Landlord, and the Landlord may, without further notice, enter
upon, re-enter, possess and repossess the same by summary proceedings, ejectment
or other legal proceedings, and again have, repossess and enjoy the same as if
this Lease had not been made, and in any such event neither the Tenant nor any
person claiming through or under the Tenant by virtue of any law or an order of
any court shall be entitled to possession or to remain in possession of the
Demised Premises, and the Landlord, at its option, shall forthwith,
notwithstanding any other provision of this Lease, be entitled to recover from
the Tenant in lieu of all other claims for damages on account of such
termination) as and for liquidated damages an amount equal to the excess of all
rents reserved hereunder for the unexpired portion of the Term of this Lease
discounted at the rate of six (6%) percent per annum to the then present worth,
over the fair rental value of the Demised Premises at the time of termination
for such unexpired portion of the Term (the rent received on a reletting shall
be conclusively accepted as the fair rental value). Nothing herein contained
shall limit or prejudice the right of the Landlord, in any bankruptcy or
reorganization or insolvency proceeding, to prove for and obtain as liquidated
damages by reason of such termination an amount equal to the maximum allowed by
any bankruptcy or reorganization or insolvency proceedings, or to prove for and
obtain as liquidated damages by reason of such termination, an amount equal to
the maximum allowed by any statute or rule of law whether such amount shall be
greater or less than the excess referred to above.
SECTION 14.03. If the Landlord re-enters and obtains possession of the
Demised Premises, as provided in Section 14.02 of this Lease, following an Event
of Default, the Landlord shall have the right, without notice, to repair or
alter the Demised Premises in such manner as the Landlord may deem necessary or
advisable so as to put the Demised Premises in good order and to make the same
rentable, and shall have the right, at the Landlord's option, to relet the
Demised Premises or a part thereof, and the Tenant shall pay to the Landlord on
demand all reasonable expenses incurred by the Landlord in obtaining possession,
and in altering, repairing and putting the Demised Premises in good order and
condition and in reletting the same, including reasonable fees of attorneys and
architects, and all other reasonable expenses or commissions, and the Tenant
shall pay to the Landlord upon the rent payment dates following the date of such
re-entry and including the date for the expiration of the Term of this Lease in
effect immediately prior to such re-entry, the sum of money which would have
been payable by the Tenant as rent hereunder on such rent payment dates if the
Landlord has not re-entered and resumed possession of the Demised Premises,
deducting only the net amount of rent, if any, which the Landlord shall actually
receive (after deducting from the gross receipts the expenses, costs and
payments of the Landlord which in accordance with the terms of this Lease would
have been borne by the Tenant) in the meantime from and by any reletting of the
Demised Premises, and the Tenant shall remain liable for all sums otherwise
payable by the Tenant under this Lease, including but not limited to the expense
of the Landlord aforesaid, as well as for any deficiency aforesaid, and the
Landlord shall have the right from time to time to begin and maintain successive
actions or other legal proceedings against the Tenant for the recovery of such
deficiency, expenses or damages or for a sum equal to any rent payment and
additional
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rent. As an alternative remedy, the Landlord shall be entitled to damages
against the Tenant for breach of this Lease, at any time (whether or not the
Landlord shall have become entitled to or shall have received any damages as
hereinabove provided) in an amount equal to the excess, if any, of the rent and
additional rent which would be payable under this Lease at the date of the
expiration of the Term, less the amount of rent and additional rent received by
the Landlord upon any reletting, both discounted to present worth at the rate of
six (6%) percent per annum, semiannually. The obligation and liability of the
Tenant to pay the rent and the additional rent shall survive the commencement,
prosecution and termination of any action to secure possession of the Demised
Premises. Nothing herein contained shall be deemed to require the Landlord to
wait to begin such action or other legal proceedings until the date when this
Lease would have expired had there not been an Event of Default.
SECTION 14.04. The Tenant hereby waives all right of redemption to which
the Tenant or any person under it may be entitled by any law now or hereafter in
force. The Landlord's remedies hereunder are in additional to any remedy
allowed by law.
SECTION 14.05. In the event of any breach or threatened breach by Tenant of
any of the agreements, terms, covenants or conditions contained in this Lease,
Landlord shall be entitled to enjoin such breach or threatened breach and shall
have the right to invoke any right or remedy allowed at law or in equity or by
statute or otherwise as though re-entry, summary dispossess proceedings, and
other remedies were not provided for in this Lease. During the pendency of any
proceedings brought by Landlord to recover possession by reason of default,
Tenant shall continue all money payments required to be made to Landlord, and
Landlord may accept such payments for use and occupancy of the Demised Premises.
In such event, Tenant waives its right in such proceedings to claim as a defense
that the receipt of such money payments by Landlord constitutes a waiver by
Landlord of such default.
ARTICLE XV
ASSIGNMENT AND SUBLEASE
SECTION 15.01. (A) The Tenant may assign this Lease and sublet the whole or
any part of the Demised Premises, with the consent of the Landlord which consent
shall not be unreasonably withheld subject to the following conditions:
(1) A copy of the assignment or sublease shall be furnished to the
Landlord.
(2) The assignee shall assume by written instrument all of the obligations
of this Lease, and a copy of such assumption agreement shall be furnished to the
Landlord within ten (10) days of its execution.
(3) The Tenant and each assignee shall be and remain liable for the
observance of all of the covenants and provisions of this Lease, including but
not limited to the payment of the rent reserved herein, through the entire Term
of
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this Lease, as the same may be renewed, extended or otherwise modified.
(4) The Tenant and any assignee shall promptly pay to Landlord
one-half (1/2) of any net consideration received for any assignment or
one-half (1/2) of the net rent, as and when received in excess of the rent
required to be paid by Tenant for the area sublet, computed on the basis of
an average square foot rent for the entire Building. As used herein, net
consideration and/or net rent shall mean gross rent or gross consideration
less any reasonable brokerage or tenant work paid by Tenant in connection
with the assignment or sublet, said brokerage or tenant work to be
amortized over the term of the assignment or sublet.
(B) Notwithstanding anything herein contained, the Tenant may assign or
sublet the whole or any part of the Demised Premises to an affiliated
corporation, or to any corporation with which it shall be merged or which shall
acquire the assets of the Tenant, all without notice to the Landlord.
(C) In any event, the acceptance by the Landlord of any rent from the
assignee, or of any of the subtenants, or the failure of the Landlord to insist
upon a strict performance of any of the terms, conditions and covenants herein
shall not release the Tenant herein, nor any assignee assuming this Lease, from
any and all of the obligations herein during and for the entire Term of this
Lease.
(D) Notwithstanding anything herein contained, prior to any sublet of the
whole or any portion of the Demised Premises or an assignment of the within
Lease to any other party, other than sublets or assignments permitted by
Subsection (B) hereof, the Tenant shall first offer, in writing, to surrender
the Demised Premises to the Landlord, and the Landlord shall either accept or
refuse to accept such surrender within ten (10) days after the receipt of such
offer, failing which the offer shall automatically be deemed refused. In the
event Landlord shall accept such surrender, the within tenant shall be released
from any and all obligations hereunder.
(E) The Landlord may require a payment to cover its handling charges for
each request for consent to any sublet or assignment prior to its consideration
of the same, which payment shall be equal to those charges, if any, assessed by
Landlord's mortgagee.
(F) The Tenant acknowledges that its sole remedy with respect to any
assertion that the Landlord's failure to consent to any sublet or assignment is
unreasonable shall be the remedy of specific performance and the Tenant shall
have no other claim or cause of action against the Landlord as a result of the
Landlord's actions in refusing to consent thereto.
(G) Without limiting any of the provisions of Article XIV, if pursuant to
the Federal Bankruptcy Code (or any similar Law hereafter enacted having the
same general purpose), Tenant is permitted to assign this Lease, notwithstanding
the restrictions contained in this Lease, adequate assurance of future
performance by an assignee expressly permitted under such Code shall be deemed
to mean the deposit of cash security in an
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amount equal to the sum of one (1) year's fixed rent plus an amount equal to the
sum of all other charges due and payable by Tenant hereunder for the Calendar
Year preceding the year in which such assignment is intended to become
effective, which deposit shall be held by Landlord for the balance of the Term,
without interest, as security for the full performance of all of Tenant's
obligations under this Lease, to be held and applied in the manner specified for
security in Section 22.02.
(H) Except as specifically set forth above, no portion of the Demised
Premises or of Tenant's interest in this Lease may be acquired by any other
person or entity, whether by assignment, mortgage, sublease, transfer, operation
of law or act of the Tenant, nor shall Tenant pledge its interest in this Lease
or in any security deposit required hereunder.
ARTICLE XVI
NOTICES
SECTION 16.01. All notices, demands, consents, approvals, requests and
instruments or documents by this Lease required or permitted to be given to or
served upon the Landlord or the Tenant shall be in writing. Any such notice,
demand, consent, approval, request, instrument or document shall be sufficiently
given or served if sent by certified or registered mail, postage prepaid,
addressed at the address set forth below, or at such other address as it shall
designate by notice, as follows:
If to the Landlord: MACK BRACKEN ROAD PROPERTIES
LIMITED and MONTGOMERY '89 ASSOCIATES L.P. doing
business as BRACKEN '89 JOINT VENTURE
c/o The Mack Company
370 West Passaic Street
Rochelle Park, NJ 07662
With Copy to: DOLLINGER & DOLLINGER, P.A.
365 West Passaic Street
Rochelle Park, NJ 07662
Attn: Martin E. Dollinger
If to the Tenant: THE GRAND UNION COMPANY
201 Willowbrook Boulevard
Wayne, NJ 07470-0966
Attn: Vice President, Real Estate
Any notice so sent shall be deemed given or served on the second (2nd)
business day following the date mailed as aforesaid.
ARTICLE XVII
HOLDING OVER
SECTION 17.01. If the Tenant shall remain in the Demised Premises after the
expiration of the Term without having executed and delivered a new lease with
the Landlord, such holding over shall not constitute a renewal or extension of
this
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Lease. The Landlord may, at its option, elect to treat the Tenant as one who
has not removed at the end of its Term, and thereupon be entitled to all the
remedies against the Tenant provided by law in that situation, or the Landlord
may elect, at its option, to construe such holding over as a tenancy from month
to month, subject to all the terms and conditions of this Lease, except as to
duration thereof, and in that event the Tenant shall pay monthly rent in advance
which is the greater of (i) two hundred (200%) percent of the fair rental value
then being obtained for the Demised Premises or (ii) two hundred (200%) percent
of the rent payable for the month immediately preceding such holdover.
ARTICLE XVIII
LIENS
SECTION 18.01. This Lease may be cancelled by the Landlord if any
mechanic's lien is filed against the Demised Premises as a result of
alterations, additions or improvements made by the Tenant and not discharged by
payment or bonding within thirty (30) days after notice by the Landlord to the
Tenant. In addition, after thirty (30) days' written notice to the Tenant, the
Landlord, at its option, may pay and discharge such lien, without inquiring into
the validity thereof, and the Tenant shall, on demand of the Landlord, reimburse
the Landlord as additional rent hereunder for the total expense incurred by the
Landlord in discharging such lien.
ARTICLE XIX
CONDITION OF DEMISED PREMISES, LOSS, ETC.
SECTION 19.01. After the commencement of the Tenant's occupancy, the
Landlord shall not be responsible for the loss of, or damage to, property or
injury to persons occurring in or about the Demised Premises, for any reason
whatsoever, to include but not be limited to: any existing or future condition,
defect, matter or thing in the Demised Premises; the acts, omissions or
negligence of other persons or tenants in and about the Demised Premises; theft
or burglary from the Demised Premises; the negligence of Landlord, its agents,
servants or invitees; and defects, errors or omissions in the construction or
design of the Demised Premises and/or the Building including the structural and
nonstructural portions thereof. Tenant covenants and agrees to make no claim
for any such loss, damage or injury at any time.
ARTICLE XX
INSPECTION, FOR SALE AND FOR RENT SIGNS
SECTION 20.01. The Landlord, or its agents, shall have the right to enter
the Demised Premises at reasonable hours to examine the same, or to exhibit the
Demised Premises to prospective purchasers. For twelve (12) months prior to the
expiration of the Term, the Landlord, or its agents, may exhibit the Demised
Premises to prospective tenants and may place the usual "To Let" signs thereon.
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ARTICLE XXI
SIGNS
SECTION 21.01. No sign, advertisement or notice shall be affixed to or
placed upon any part of the Demised Premises by the Tenant, except in such
manner of annexation as shall be in accordance with good and sound engineering
practices, provided: (i) that Tenant shall comply with all applicable
governmental ordinances and regulations and receives all necessary governmental
approvals required for erection and maintenance of the sign and (ii) no later
than the last day of the Term, Tenant shall, at Tenant's expense, remove the
sign and repair all injury done by or in connection with the installation or
removal of the sign.
ARTICLE XXII
ADVANCE RENT, SECURITY AND LATE CHARGE
SECTION 22.01. Simultaneously herewith, the Tenant has deposited with the
Landlord the sum of One Hundred Seven Thousand Six Hundred Sixty-six and 67/100
($107,666.67) Dollars, as advance rent for the first month of the Tenant's
rental obligation.
SECTION 22.02. In the event of the insolvency of Tenant or in the event of
the entry of a judgment in bankruptcy in any court against Tenant which is not
discharged within thirty (30) days after entry, or in the event a petition is
filed by or against Tenant under any chapter of the bankruptcy laws of the State
of New York or the United States of America, then and in such event Landlord may
require the Tenant to deposit security in an amount which in Landlord's sole
judgment would be sufficient to adequately assure Tenant's performance of all of
its obligations under this Lease, including all payments subsequently accruing.
Failure of Tenant to deposit the security required by this Section within ten
(10) days after Landlord's written demand shall constitute a material breach of
this Lease by Tenant.
SECTION 22.03. Anything in this Lease to the contrary notwithstanding, at
Landlord's option, Tenant shall pay a "Late Charge" of eight (8%) percent of any
installment of rent or additional rent paid more than ten (10) days after the
due date thereof, to cover the extra expense involved in handling delinquent
payments. Notwithstanding anything contained herein to the contrary, in the
event that Landlord shall be charged a late charge on any mortgage, then and in
that event, Tenant shall pay a Late Charge of eight (8%) percent of any
installment of rent or additional rent paid after the due date thereof,
provided, however, that the first time during any Lease year that Tenant shall
be late in the payment of rent, Landlord shall not impose a Late Charge.
ARTICLE XXIII
FINANCIAL STATEMENTS
SECTION 23.01. The Tenant agrees, within ninety (90) days after the end of
the Tenant's accounting year, at the request of the Landlord, or at the request
of the holder of any
PAGE 19
<PAGE>
first mortgage upon the Demised Premises, to furnish to the Landlord or
mortgagee, a certified balance sheet and profit and loss statement for the last
accounting year.
ARTICLE XXIV
BROKER
SECTION 24.01. The Landlord and the Tenant represent and warrant one to
the other that no broker brought about this transaction, and the Landlord and
the Tenant agree to indemnify and hold each other harmless from any and all
claims of any brokers arising out of or in connection with the negotiations of
or the entering into this Lease by the Landlord and the Tenant.
ARTICLE XXV
SHORT FORM OR MEMORANDUM OF LEASE
SECTION 25.01. At the request of either party the Landlord and the Tenant
will execute and deliver, in duplicate original counterparts, a recordable
memorandum of this Lease identifying the Demised Premises and stating the
commencement and termination dates of the Term of this Lease.
ARTICLE XXVI
WAIVER OF TRIAL BY JURY
SECTION 26.01. The Landlord and the Tenant waive trial by jury in any
action, proceeding or counterclaim brought by either the Landlord or the Tenant
against the other in any matters whatsoever arising out of or in any way
connected with this Lease, the Tenant's use or occupancy of the Demised
Premises, and/or any claim of injury or damage.
ARTICLE XXVII
WAIVER OF DISTRAINT
SECTION 27.01. Landlord waives all lien, right, interest and claim it
might otherwise have in and waives its right of distraint of, the machinery,
fixtures and other property of the Tenant, and in any other property of any
nature whether on or off the Demised Premises, belonging to the Tenant. The
provisions of this section are intended to apply to the Landlord's common law
(if any) and statutory right of distraint because of failure to pay rent.
ARTICLE XXVIII
MISCELLANEOUS
SECTION 28.01. PARTIAL INVALIDITY. If any term or provision of this Lease or
the application thereof to any party or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease or the application of
such term or provision to parties or circumstances other than those to which
it is held invalid or unenforceable, shall not be
PAGE 20
<PAGE>
affected thereby, and each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
SECTION 28.02. WAIVERS. One or more waivers by either party of the
obligation of the other to perform any covenant or condition shall not be
construed as a waiver of a subsequent breach of the same or any other covenant
or condition.
The receipt of rent by the Landlord, with knowledge of any breach of
this Lease by the Tenant or of any default on the part of the Tenant in the
observance or performance of any of the conditions or covenants of this Lease,
shall not be deemed to be a waiver of any provision of this Lease. Neither
acceptance of the keys nor any other act or thing done by the Landlord or any
agent or employee during the Term herein demised shall be deemed to be an
acceptance of a surrender of said Demised Premises, excepting only an agreement
in writing signed by the Landlord accepting or agreeing to accept such a
surrender.
SECTION 28.03. NUMBER, GENDER. Wherever herein the singular number is
used, the same shall include the plural, and the masculine gender shall include
the feminine and neuter genders.
SECTION 28.04. SUCCESSORS, ASSIGNS. The terms, covenants and conditions
herein contained shall be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
SECTION 28.05. HEADINGS. The Article and marginal headings herein are
intended for convenience in finding the subject matters, are not to be taken as
part of this Lease and are not to be used in determining the intent of the
parties to this Lease.
SECTION 28.06. ENTIRE AGREEMENT. This instrument contains the entire and
only agreement between the parties and no oral statements or representations or
prior written matter not contained in this instrument shall have any force or
effect. This Lease shall not be modified in any way or terminated except by a
writing executed by both parties.
SECTION 28.07. LANDLORD. The term "Landlord" as used in this Lease means
only the holder, for the time being, of the Landlord's interest under this Lease
so that in the event of any transfer of title to the Demised Premises the
Landlord shall be and hereby is entirely freed and relieved of all obligations
of the Landlord hereunder accruing after such transfer, and it shall be deemed
without further agreement between the parties that such grantee, transferee or
assignee has assumed and agreed to observe and perform all obligations of the
Landlord hereunder arising during the period it is the holder of the Landlord's
interest hereunder.
SECTION 28.08. WORDS OF DUTY. Whenever in this Lease any words of
obligation or duty are used, such words or expressions shall have the same force
and effect as though made in the form of covenants.
SECTION 28.09. CUMULATIVE REMEDIES. The specified remedies to which the
Landlord or the Tenant may resort under
PAGE 21
<PAGE>
the terms of this Lease are cumulative and are not intended to be exclusive of
any other remedies or means of redress to which the Landlord or the Tenant may
lawfully be entitled in case of any breach or threatened breach of any provision
of this Lease.
SECTION 28.10. NO OPTION. The submission of this Lease Agreement for
examination does not constitute a reservation of, or option for, the Demised
Premises, and this Lease Agreement becomes effective as a Lease Agreement only
upon execution and delivery thereof by Landlord and Tenant.
SECTION 28.11. ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent and additional charges payable
hereunder shall be deemed to be other than a payment on account of the earliest
stipulated basic rent and additional rent, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment for rent
or additional rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent and additional rent or pursue any other remedy provided
herein or by law.
SECTION 28.12. CORPORATE AUTHORITY. If Tenant is a corporation, Tenant
represents and warrants that this Lease and the undersigned's execution of this
Lease has been duly authorized and approved by the corporation's Board of
Directors. The undersigned officers and representatives of the corporation
executing this Lease on behalf of the corporation represent and warrant that
they are officers of the corporation with authority to execute this Lease on
behalf of the corporation, and within fifteen (15) days of execution hereof,
Tenant will provide Landlord with a corporate resolution confirming the
aforesaid.
ARTICLE XXIX
PERSONAL LIABILITY
SECTION 29.01. Notwithstanding anything to the contrary provided in this
Lease, it is specifically understood and agreed, such agreement being a primary
consideration for the execution of this Lease by Landlord, that there shall be
absolutely no personal liability on the part of Landlord, its successors,
assigns or any mortgagee in possession (for the purposes of this Paragraph,
collectively referred to as "Landlord"), with respect to any of the terms,
covenants and conditions of this Lease, and that Tenant shall look solely to the
equity of Landlord in the Building for the satisfaction of each and every remedy
of Tenant in the event of any breach by Landlord of any of the terms, covenants
and conditions of this Lease to be performed by Landlord, such exculpation of
liability to be absolute and without any exceptions whatsoever.
ARTICLE XXX
GUARANTY
SECTION 30.01. This Lease is expressly conditioned on the execution by
CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP. of the guaranty of the
terms, covenants and conditions in this Lease to be performed and observed by
Tenant
PAGE 22
<PAGE>
in the form and substance attached hereto and made a part hereof as Exhibit B.
ARTICLE XXXI
CROSS-COLLATERALIZATION
SECTION 31.01. Tenant acknowledges that this Lease shall be
cross-collateralized with its lease with Mack Waterford Properties Limited and
Bells Lane '89 Associates L.P. doing business as Waterford '89 Joint Venture
dated May 1, 1989 covering the property located in the Town of Waterford,
Saratoga County, New York, so that a default under that lease shall be deemed a
default under this Lease and, similarly, a default under this Lease shall be
deemed a default under the aforesaid lease dated May 1, 1989.
ARTICLE XXXII
RENEWAL OPTIONS
SECTION 32.01. Tenant is hereby granted four (4) options to renew this
Lease upon the following terms and conditions:
(A) At the time of each renewal, the Tenant shall not be in default
in accordance with the terms and provisions of this Lease, and shall be in
possession of the Demised Premises pursuant to this Lease.
(B) Each of the renewal options shall be deemed automatically
exercised unless Tenant notifies Landlord to the contrary, in writing, at
least twelve (12) months before the expiration of the Term, or twelve (12)
months before the expiration of the preceding renewal term, as the case may
be.
(C) The renewal terms shall be for the term of five (5) years each,
the first renewal term to commence at the expiration of the Term of this
Lease, the second renewal term to commence upon the expiration of the first
renewal term, the third renewal term to commence upon the expiration of the
second renewal term, and the fourth renewal term to commence upon the
expiration of the third renewal term, and all of the terms and conditions
of this Lease, other than the rent, shall apply during any such renewal
terms.
(D) The basic rent to be paid during the first renewal term shall be
Eight Million Two Hundred Ninety-eight Thousand Nine Hundred Sixty-five and
00/100 ($8,298,965.00) Dollars; the basic rent to be paid during the second
renewal term shall be Nine Million One Hundred Twenty-eight Thousand Eight
Hundred Sixty and 00/100 ($9,128,860.00) Dollars; the basic rent to be paid
during the third renewal term shall be Ten Million Forty-one Thousand Seven
Hundred Fifty and 00/100 ($10,041,750.00) Dollars; and
PAGE 23
<PAGE>
the basic rent to be paid during the fourth renewal term shall be Eleven
Million Forty-five Thousand Nine Hundred Twenty-five and 00/100
($11,045,925.00) Dollars. The basic rent during each of the renewal terms
shall be payable in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public
and private debts and shall accrue at the following yearly and monthly
rates:
Renewal Term Yearly Rent Monthly Rent
First
(Years 21-25) $1,659,793.00 $138,316.08
Second
(Years 26-30) $1,825,772.00 $152,147.67
Third
(Years 31-35) $2,008,350.00 $167,362.50
Fourth
(Years 36-40) $2,209,185.00 $184,098.75
The aforesaid monthly rents shall be payable in advance on the first day of each
calendar month during the respective renewal term, except that a proportionately
lesser sum may be paid for the first month of any of the renewal terms if said
renewal term commences on a date other than the first of the month.
ARTICLE XXXIII
RIGHT OF FIRST OFFER TO PURCHASE
SECTION 33.01. Tenant shall have the right of first offer to purchase the
Demised Premises during the Term of this Lease as the same may be renewed.
Landlord will advise the Tenant of the terms and conditions Landlord would be
willing to accept with respect to the sale of the Demised Premises, and Tenant
shall have thirty (30) days within which to respond to Landlord's offer. Should
Tenant decline Landlord's offer or fail to respond, then, and in such event,
Tenant shall lose any prospective rights of first offer and Landlord shall be
free to sell to any other party upon substantially similar terms but at the
basic price no less than that quoted to Tenant, provided that title closes
within twelve (12) months from the date of Tenant's refusal or from the
expiration of said thirty (30) day period should Tenant fail to respond. Any
downward deviation from the basic price as quoted to Tenant or any proposed sale
after the aforesaid twelve (12) month period will necessitate a
PAGE 24
<PAGE>
re-offer to the Tenant, upon the terms and conditions contained in this Article.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.
BRACKEN '89 JOINT VENTURE
BY: MACK BRACKEN ROAD PROPERTIES LIMITED
By:/S/
--------------------------------
BY: MONTGOMERY '89 ASSOCIATES L.P.
BY: HAMPSHIRE MANAGEMENT COMPANY,
General Partner
By: /S/ James E. Hanson II
----------------------
JAMES E. HANSON II, PRESIDENT
THE GRAND UNION COMPANY, Tenant
By: /S/ Robert F. Catherman
-----------------------------------
PAGE 25
<PAGE>
Exhibit B
GUARANTY OF LEASE
WHEREAS, THE GRAND UNION COMPANY, with offices at 201 Willowbrook
Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as "Tenant") is
desirous of entering into the lease hereinafter mentioned; and
WHEREAS, CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP., with
offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter,
individually and collectively, referred to as "Guarantor") has requested MACK
BRACKEN ROAD PROPERTIES LIMITED AND MONTGOMERY 89 ASSOCIATES L.P. DOING
BUSINESS AS BRACKEN 89 JOINT VENTURE, WITH OFFICES AT C/O THE MACK COMPANY, 370
West Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as
"Landlord") to enter into a lease with the Tenant, for a Term of twenty (20)
years with four (4), five (5) year renewal options, for a building situated in
the Town of Montgomery, County of Orange, State of New York, commonly known as
Bracken Road, Montgomery, New York (hereinafter referred to as "Lease"); and
WHEREAS, the Landlord has refused to enter into the said Lease unless the
Guarantor guarantees said Lease in the manner hereinafter set forth.
NOW, THEREFORE, to induce the Landlord to enter into said Lease, which
Lease is dated this day and is being executed simultaneously herewith, the
Guarantor hereby agrees as follows:
1. (a) The Guarantor jointly and severally unconditionally guarantees to
the Landlord and the successors and assigns of the Landlord the full and
punctual performance and observance, by the Tenant, of all of the terms,
covenants and conditions in said Lease contained on Tenant's part to be kept,
performed or observed.
(b) If, at any time, default shall be made by the Tenant in the
performance or observance of any of the terms, covenants or conditions in said
Lease contained on the Tenant's part to be kept, performed or observed, the
Guarantor will keep, perform and observe the same, as the case may be, in place
and stead of the Tenant.
(c) The liability of the Guarantor hereunder shall be enforceable
against the Guarantor without the necessity for any suit or proceedings on the
Landlord's part of any kind or nature whatsoever against the Tenant.
2. Any act of the Landlord, or the successors or assigns of the Landlord,
consisting of a waiver of any of the terms or conditions of said Lease, or the
giving of any consent to any manner or thing relating to said Lease, or the
granting of any indulgences or extensions of time, to the Tenant, may be done
without notice to the Guarantor and without releasing the obligations of the
Guarantor hereunder.
3. The obligations of the Guarantor hereunder shall not be released by
Landlord's receipt, application or release of security given for the performance
and observance of covenants and conditions in said Lease contained on the
Tenant's part to be performed or observed; nor by any modification of such
Lease,
<PAGE>
but in the case of any such modification the liability of the Guarantor shall be
deemed modified in accordance with the terms of any such modification of the
Lease.
4. The liability of the Guarantor hereunder shall in no way be affected
by (a) the release or discharge of the Tenant in any creditors' receivership,
bankruptcy or other proceedings; (b) the impairment, limitation or modification
of the liability of the Tenant or the estate of the Tenant in bankruptcy, or of
any remedy for the enforcement of the Tenant's said liability under the Lease,
resulting from the operation of any present or future provision of the National
Bankruptcy Act or other statute or from the decision in any court; (c) the
rejection or disaffirmance of the Lease in any such proceedings; (d) the
assignment or transfer of the Lease by the Tenant; (e) any disability or other
defense of the Tenant, or (f) the cessation from any cause whatsoever of the
liability of the Tenant.
5. Until all the covenants and conditions in said Lease on the Tenant's
part to be performed and observed are fully performed and observed, the
Guarantor: (a) shall have no right of subrogation against the Tenant by reasons
of any payments or acts of performance by the Guarantor hereunder; (b) waives
any right to enforce any remedy which the Guarantor now or hereafter shall have
against the Tenant by reason of any one or more payment or acts of performance
in compliance with the obligations of the Guarantor hereunder.
6. This Guaranty shall apply to the said Lease and to any renewal or
extension thereof.
7. This instrument may not be changed, modified, discharged or terminated
orally or in any manner other than by an agreement in writing signed by the
Guarantor and the Landlord.
IN WITNESS WHEREOF, the Guarantor has hereunto set his hands and seals
the 29TH day of SEPTEMBER 1989.
GUARANTOR:
CAVENHAM HOLDINGS
BY: /S/ Robert Terrence Galvin
---------------------------
VICE PRESIDENT
THE GRAND UNION ACQUISITION CORP.
BY: /S/ Robert Terrence Galvin
-------------------------
VICE PRESIDENT
PAGE 2
<PAGE>
GUARANTY OF LEASE
WHEREAS, THE GRAND UNION COMPANY, with offices at 201 Willowbrook
Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as "Tenant") is
desirous of entering into the lease hereinafter mentioned; and
WHEREAS, CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP., with
offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter,
individually and collectively, referred to as "Guarantor") has requested MACK
BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY 89 ASSOCIATES L.P. doing
business as BRACKEN 89 JOINT VENTURE, with offices at c/o The Mack Company, 370
West Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as
"Landlord") to enter into a lease with the Tenant, for a Term of twenty (20)
years with four (4), five (5) year renewal options, for a building situated in
the Town of Montgomery, County of Orange, State of New York, commonly known as
Bracken Road, Montgomery, New York (hereinafter referred to as "Lease"); and
WHEREAS, the Landlord has refused to enter into the said Lease unless the
Guarantor guarantees said Lease in the manner hereinafter set forth.
NOW, THEREFORE, to induce the Landlord to enter into said Lease, which
Lease is dated this day and is being executed simultaneously herewith, the
Guarantor hereby agrees as follows:
1. (a) The Guarantor jointly and severally unconditionally guarantees to
the Landlord and the successors and assigns of the Landlord the full and
punctual performance and observance, by the Tenant, of all of the terms,
covenants and conditions in said Lease contained on Tenant's part to be kept,
performed or observed.
(b) If, at any time, default shall be made by the Tenant in the
performance or observance of any of the terms, covenants or conditions in said
Lease contained on the Tenant's part to be kept, performed or observed, the
Guarantor will keep, perform and observe the same, as the case may be, in place
and stead of the Tenant.
(c) The liability of the Guarantor hereunder shall be enforceable
against the Guarantor without the necessity for any suit or proceedings on the
Landlord's part of any kind or nature whatsoever against the Tenant.
2. Any act of the Landlord, or the successors or assigns of the Landlord,
consisting of a waiver of any of the terms or conditions of said Lease, or the
giving of any consent to any manner or thing relating to said Lease, or the
granting of any indulgences or extensions of time, to the Tenant, may be done
without notice to the Guarantor and without releasing the obligations of the
Guarantor hereunder.
3. The obligations of the Guarantor hereunder shall not be released by
Landlord's receipt, application or release of security given for the performance
and observance of covenants
<PAGE>
and conditions in said Lease contained on the Tenant's part to be performed or
observed; nor by any modification of such Lease, but in the case of any such
modification the liability of the Guarantor shall be deemed modified in
accordance with the terms of any such modification of the Lease.
4. The liability of the Guarantor hereunder shall in no way be affected
by (a) the release or discharge of the Tenant in any creditors' receivership,
bankruptcy or other proceedings; (b) the impairment, limitation or modification
of the liability of the Tenant or the estate of the Tenant in bankruptcy, or of
any remedy for the enforcement of the Tenant's said liability under the Lease,
resulting from the operation of any present or future provision of the National
Bankruptcy Act or other statute or from the decision in any court; (c) the
rejection or disaffirmance of the Lease in any such proceedings; (d) the
assignment or transfer of the Lease by the Tenant; (e) any disability or other
defense of the Tenant, or (f) the cessation from any cause whatsoever of the
liability of the Tenant.
5. Until all of the covenants and conditions in said Lease on the
Tenant's part to be performed and observed are fully performed and observed, the
Guarantor: (a) shall have no right of subrogation against the Tenant by reasons
of any payments or acts of performance by the Guarantor hereunder; and (b)
waives any right to enforce any remedy which the Guarantor now or hereafter
shall have against the Tenant by reason of any one or more payment or acts of
performance in compliance with the obligations of the Guarantor hereunder.
6. This Guaranty shall apply to the said Lease and to any renewal or
extension thereof.
7. This instrument may not be changed, modified, discharged or terminated
orally or in any manner other than by an agreement in writing signed by the
Guarantor and the Landlord.
IN WITNESS WHEREOF, the Guarantor has hereunto set his hands and seals
the ____day of September 1989.
GUARANTOR:
CAVENHAM HOLDINGS
BY:__________________________________
THE GRAND UNION ACQUISITION CORP.
BY:__________________________________
PAGE 2
<PAGE>
DESCRIPTION
ALL THAT CERTAIN PLOT, piece or parcel of land situate, lying and being in
the Town of Montgomery, County of Orange and State of New York, and being more
particularly bounded and described as follows:
BEGINNING at a point on the northerly side of Bracken Road, said point
being the southeasterly corner of the premises, being marked by an iron pipe,
being the southwesterly corner of the lands now or formerly of Toohey (Tax Lot
30-1-25 on the Town of Montgomery tax map) and running thence (1) North 84 32
22 West along the northerly side of Bracken Road 583.56 feet to the
southwesterly corner of the premises and the southeasterly corner of lands to be
retained by Anthonisen, thence; (2) northeasterly along the westerly line of the
premises and the easterly line of those lands to be retained by Anthonisen the
following two (2) courses and distances: (a) North 05 27 38 East 190.97 feet,
thence; (b) North 21 43 58 East 636.85 feet to a point in the southerly line
of lands now or formerly of Geraghty, being the northwesterly corner of the
premises and the northeasterly corner of those lands to be retained by
Anthonisen, thence; (3) South 68 16 02 East along the northerly line of the
premises (and through a stone wall for a portion thereof) and the southerly line
of lands now or formerly of Geraghty (Tax Lot 24-1-7.1), Yannone (Tax Lot
24-1-7.2), Compa (Tax Lot 24-1-18.1) and DeWitt (Tax Lot 24-1-13) the distance
of 768.00 feet to a point in the westerly line of lands now or formerly of
Bromberg, Jacobowitz and Kramer (Tax Lot 23-1-57.1) and being the northeasterly
corner of the premises and the southeasterly corner of lands now or formerly of
DeWitt, thence; (4) South 22 45 57 West along the westerly line of said lands
now or formerly of Bromberg, Jacobowitz and Kramer 367.78 feet to an iron
marking the southwesterly corner of said lands of Bromberg, Jacobowitz and
Kramer and being the northwesterly corner of other lands to be retained by
CONTINUED
<PAGE>
DESCRIPTION CONTINUED PAGE 2
Anthonisen, thence; (5) South 22 59 41 West along the westerly line of said
others lands to be retained by Anthonisen 99.71 feet to an iron pipe marking the
northeasterly corner of lands now or formerly of Toohey (as aforesaid), thence;
(6) North 76 53 32 West along the northerly line of said lands now or
formerly of Toohey 132.45 feet to the northwesterly corner of said lands now or
formerly of Toohey, thence; (7) South 26 38 04 West along the westerly line
of said lands now or formerly of Toohey 170.01 feet to an iron pipe on the
northerly side of Bracken Road, being the southwesterly corner of said lands now
or formerly of Toohey, the southeasterly corner of the premises and the point
or place of beginning.
<PAGE>
October 2, 1989
The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470-0966
Re: Lease Agreement between Mack Bracken Road Properties
Limited and Montgomery 89 Associates L.P., and
The Grand Union Company; Bracken Road, Montgomery, NY
Gentlemen:
Notwithstanding anything contained in the above-referenced lease to the
contrary, in the event our lender shall require the maintenance of an escrow
reserve for the tax or insurance obligations of the Tenant or for any other
reoccurring charges required pursuant to the lease, you agree to promptly pay to
the escrowee appointed by the lender the required amount as same may be
periodically adjusted from time to time.
You shall be free to deal directly with said lender in an effort to obtain said
lender's waiver of any such requirement or to arrange for the escrowee to
maintain any such escrow reserve in an interest-bearing account for your
benefit.
If the foregoing accurately reflects our understanding, please sign and return a
copy of this letter to the undersigned.
Very truly yours,
MACK BRACKEN ROAD PROPERTIES
LIMITED
BY:
-------------------------
MONTGOMERY 89 ASSOCIATES L.P.
BY: HAMPSHIRE MANAGEMENT COMPANY,
General Partner
By: /s/ James E. Hanson II
-------------------------
JAMES E. HANSON II
THE GRAND UNION COMPANY
BY: Raymond H. Ayers
----------------------
Raymond H. Ayers
Vice President
<PAGE>
October 2, 1989
The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470-0966
Re: Lease Agreement between Mack Bracken Road Properties
Limited and Montgomery 89 Associates L.P. ("Landlord"), and The Grand
Union Company ("Tenant"); Bracken Road, Montgomery, New York
Gentlemen:
Notwithstanding anything contained in the above-referenced lease to the
contrary, in the event Landlord is unable to obtain a nondisturbance agreement
from a future mortgagee as required by Section 13.01 of the Lease as a result of
the requirements set forth in said Section 13.01 that said mortgagee must agree
to make the proceeds of casualty insurance available to Landlord for
restoration, then, and in that event, you hereby agree that said requirement
obligating said mortgagee to make the proceeds of casualty insurance available
to Landlord for restoration shall be deemed waived and eliminated from the
provisions of said Section 13.01 with the express understanding that in the
event of a casualty Landlord will make available to the Tenant for restoration
of the Premises an amount equal to the proceeds of insurance, provided that at
the time of the casualty there shall be at least ten (10) years remaining in the
Term of the Lease, failing which you shall be required to exercise the next
successive renewal option(s) such that the remaining term of the Lease shall be
at least ten (10) years. In the event casualty occurs at any time after the
expiration of the first year of the third renewal term and if Landlord does not
elect to make available to the Tenant an amount equal to the insurance proceeds,
then, and in that event, Tenant shall have the right to cancel and terminate the
Lease provided that Tenant shall pay to Landlord any difference in the amount of
insurance proceeds and the costs of restoration of the Premises, in the event
the cost of restoration shall exceed the amount of insurance proceeds.
<PAGE>
The Grand Union Company
October 2, 1989
Page Two
If the foregoing accurately reflects our understanding, please sign and return a
copy of this letter to the undersigned.
Very truly yours,
MACK BRACKEN ROAD PROPERTIES
LIMITED
BY:
-------------------------
MONTGOMERY 89 ASSOCIATES L.P.
BY: HAMPSHIRE MANAGEMENT COMPANY,
General Partner
By: /s/ James E. Hanson II
-------------------------
JAMES E. HANSON II
THE GRAND UNION COMPANY
BY: Raymond H. Ayers
----------------------
Raymond H. Ayers
Vice President
<PAGE>
New York Region
EXHIBIT B KIM KOHLER
as of 1/15/96
102 OPERATING
STORE LOCATION STATE COUNTY
OPERATING STORES
1 PORT JEFFERSON NY SUFFOLK
6 LITTLE NECK NY QUEENS
7 HERRICKS NY NASSAU
8 NORTH PORT WASHINGTON NY NASSAU
36 MASSAPEQUA NY NASSAU
38 SMITHTOWN NY SUFFOLK
39 WEST HEMPSTEAD NY NASSAU
52 GARDEN CITY NY NASSAU
64 NORTH BELLMORE NY NASSAU
65 WEST BABYLON NY SUFFOLK
68 DEER PARK NY SUFFOLK
82 SAYVILLE NY SUFFOLK
84 COMMACK NY SUFFOLK
95 NORTH PORT NY SUFFOLK
98 WEST ISLIP NY SUFFOLK
107 MAHOPAC NY PUTNAM
114 PEEKSKILL NY WESTCHESTER
130 TARRYTOWN NY WESTCHESTER
137 LARCHMONT NY WESTCHESTER
155 DARIEN CT FAIRFIELD
203 PLEASANTVILLE NY WESTCHESTER
207 NEW CANAAN CT FAIRFIELD
212 RIDGEFIELD CT FAIRFIELD
213 NORWALK CT FAIRFIELD
227 CROTON-ON-HUDSON NY WESTCHESTER
231 NEWTOWN CT FAIRFIELD
239 DOBBS FERRY NY WESTCHESTER
242 TRUMBULL CT FAIRFIELD
247 MT KISCO NY WESTCHESTER
248 CHAPPAQUA NY WESTCHESTER
416 BLEEKER ST. NY MANHATTAN
422 COLD SPRING NY PUTNAM
434 BRONX-TREMONT NY BRONX
437 GLENVILLE CT FAIRFIELD
801 BEACON NY DUTCHESS
805 EASTCHESTER NY WESTCHESTER
810 WESTPORT CT FAIRFIELD
811 GREENWICH CT FAIRFIELD
812 GLENBROOK CT FAIRFIELD
820 FISHKILL NY DUTCHESS
823 CARMEL NY PUTNAM
825 MONROE CT FAIRFIELD
827 NEW FAIRFIELD CT FAIRFIELD
828 SOUTHBURY CT NEW HAVEN
829 PAWLING NY DUTCHESS
3100 ELMWOOD PARK NJ BERGEN
3101 DOVER TOWNSHIP NJ OCEAN
3103 SUFFERN NY ROCKLAND
3109 HACKENSACK NJ BERGEN
3110 MATAMORAS PA PIKE
3112 WOODRIDGE NJ BERGEN
<PAGE>
EXHIBIT B KIM KOHLER
as of 1/15/96
STORE LOCATION STATE COUNTY
3109 HACKENSACK NJ BERGEN
3110 MATAMORAS PA PIKE
3112 WOODBRIDGE NJ BERGEN
3114 MONROE NY ORANGE
3116 WASHINGTONVILLE NY ORANGE
3120 MANALAPAN NJ MONMOUTH
3122 LIVINGSTON NJ ESSEX
3150 GOSHEN NY ORANGE
3151 FAIRLAWN-RADBURN NJ BERGEN
3180 RIDGEWOOD NJ BERGEN
3197 SOMMERVILLE NJ SOMERSET
3250 BERKELEY HEIGHTS NJ UNION
3253 NORTH BRUNSWICK NJ MIDDLESEX
3269 CORNWALL NY ORANGE
3273 DENVILLE NJ MORRIS
3277 HIGHLAND FALLS NY ORANGE
3281 TENAFLY NJ BERGEN
3282 CLIFTON-LEXINGTON NJ PASSAIC
3286 CLOSTER NJ BERGEN
3291 TEANECK NJ BERGEN
3400 MILFORD PA PIKE
3451 CLIFTON-BROAD NJ PASSAIC
3457 WALDWICK NJ BERGEN
3463 RAMAPO NY ROCKLAND
3472 MONTVALE-CHESTNUT NJ BERGEN
3477 DUMONT NJ BERGEN
3480 LAKE HIAWATHA NJ MORRIS
3481 GREENWOOD LAKE NY ORANGE
3486 BUTLER NJ MORRIS
3489 BASKING RIDGE NJ SOMERSET
3491 MT IVY NY ROCKLAND
3492 POINT PLEASANT NJ OCEAN
3498 MONTVALE-KINDERKAMACK NJ BERGEN
3499 STONY POINT NY ROCKLAND
3545 SOUTH BRUNSWICK NJ MIDDLESEX
3551 WARWICK NY ORANGE
3552 OAKLAND NJ BERGEN
3553 PARAMUS NJ BERGEN
3554 SPARTA NJ SUSSEX
3556 LANDING NJ MORRIS
3558 HOWELL TOWNSHIP NJ MONMOUTH
3562 BRICKTOWNSHIP NJ OCEAN
3563 FLEMINGTON NJ HUNTERDON
3564 ROCKY HILL NJ SOMERSET
3565 RAMSEY NJ BERGEN
3568 MATAWAN NJ MONMOUTH
3570 WESTWOOD NJ BERGEN
3571 RINGWOOD NJ PASSAIC
3572 TOMS RIVER NJ OCEAN
3573 BELLEVILLE NJ ESSEX
3574 WYCKOFF NJ BERGEN
3575 WEST NYACK NY ROCKLAND
3576 FORT LEE NJ BERGEN
3580 MIDDLETOWN NJ MONMOUTH
<PAGE>
NORTHERN REGION
- ---------------
EXHIBIT B KIM KOHLER
as of 1/15/96
128 OPERATING
OPERATING STORES
1103 JOHNSON VT LAMOILLE
1106 FORT EDWARDS NY WASHINGTON
1107 ROUSES POINT NY CLINTON
1112 ALBANY-LIQUOR STORE NY ALBANY
1113 POULTNEY VT RUTLAND
1114 CORINTH NY SARATOGA
1134 BURLINGTON VT CHITTENDON
1135 KEESVILLE NY ESSEX
1139 WOODSTOCK NY ULSTER
1147 LA GRANGE NY DUTCHESS
1153 PORT HENRY NY ESSEX
1160 MANCHESTER VT BENNINGTON
1161 ENOSBURG FALLS VT FRANKLIN
1166 STOWE VT LAMOILLE
1167 SOUTH BURLINGTON VT CHITTENDEN
1169 RUTLAND VT RUTLAND
1171 SARANAC LAKE NY FRANKLIN
1175 WHITEHALL NY WASHINGTON
1183 PLATTSBURG-AIRBASE NY CLINTON
1195 SCHROON LAKE NY ESSEX
1197 ST. ALBANS VT FRANKLIN
1198 NORTHVILLE NY FULTON
1370 TUPPER LAKE NY FRANKLIN
1802 FORT PLAIN NY MONTGOMERY
1803 STAMFORD NY DELAWARE
1804 INDIAN LAKE NY HAMILTON
1805 SARANAC LAKE NY ESSEX
1810 LUDLOW VT WINDSOR
1811 WINDSOR VT WINDSOR
1812 BRUNSWICK-TROY NY RENSSLAER
1814 SOUTH BURLINGTON VT CHITTENDEN
1815 GRANVILLE NY WASHINGTON
1816 PLEASANT VALLEY NY DUTCHESS
1818 WAITSFIELD VT WASHINGTON
1819 ESSEX CENTER VT CHITTENDON
1820 NEWPORT VT ORLEANS
1821 ESSEX JUNCTION VT CHITTENDON
1823 BURNT HILLS NY SARATOGA
1824 RHINEBECK NY DUTCHESS
1825 ELIZABETHTOWN NY ESSEX
1826 CHESTERTOWN NY WARREN
1828 NORTHFILED VT WASHINGTON
1836 BENNINGTON VT BENNINGTON
1844 BALLSTON SPA NY SARATOGA
1845 CHAMPLAIN NY CLINTON
1852 HOOSICK FALLS NY RENSSELAER
1855 ELSMERE NY ALBANY
1859 PERU NY CLINTON
1861 BRATTLEBORO VT WINDHAM
1867 GREENWICH NY WASHINGTON
<PAGE>
EXHIBIT B KIM KOHLER
as of 1/15/96
128 OPERATING
STORE LOCATION STATE COUNTY
1870 BARRE VT WASHINGTON
1872 PALANTINE BRIDGE NY MONTGOMERY
1873 TICONDEROGA NY ESSEX
1874 HYDE PARK NY DUTCHESS
1876 MILTON VT CHITTENDON
1878 DOVER PLAIN NY DUTCHESS
1879 LOUDONVILLE NY ALBANY
1884 BRISTOL VT ADDISON
1885 HARDWICK VT ULSTER
1888 ELLENVILLE NY ULSTER
1892 MALTA NY SARATOGA
1893 WINOOSKI VT CHITTENDEN
1895 AMENIA NY DUTCHESS
1897 HUDSON FALLS NY WASHINGTON
1899 RAVENA NY ALBANY
1900 MIDDLEBURGH NY SCHOHARIE
1902 LAKE PLACID NY ESSEX
1903 COXSACKIE NY GREENE
1905 WATERVLIET NY ALBANY
1906 GLENMONT NY ALBANY
1907 HIGHLAND NY ULSTER
1908 FAIR HAVEN VT RUTLAND
1909 NORTH CREEK NY WARREN
1914 HANOVER NH GRAFTON
1915 WEST LEBANON NH GRAFTON
1922 MORRISVILLE VT LAMOILLE
1925 KINGSTON NY ULSTER
1928 SPRINGFIELD VT WINDSOR
1930 GUILDERLAND NY ALBANY
1933 MONTPELIER VT WASHINGTON
1935 SCHENECTADY NY SCHENECTADY
1937 AUSABLE FORKS NY ESSEX
1938 LINCOLN NH GRAFTON
1939 BRADFORD VT ORANGE
1940 NISKAYUNA NY SCHENECTADY
1941 BOLTON LANDING NY WARREN
1942 WILLSBORO NY ESSEX
1943 HOPEWELL JUNCTION NY DUTCHESS
1946 WATERFORD NY SARATOGA
1947 SCOTIA NY SCHENECTADY
1950 SAUGERTIES NY ULSTER
1951 WILMINGTON VT WINDHAM
1953 SCHODACK NY RENSSELAER
1954 WARRENSBURG NY WARREN
1955 CAMBRIDGE NY WASHINGTON
1957 MECHANICVILLE NY SARATOGA
1958 SWANTON VT FRANKLIN
1960 EAST GREENBUSH NY RENNSELAER
1962 BROADALBIN NY FULTON
1966 COLCHESTER VT CHITTENDON
1967 RANDOLPH VT ORANGE
1968 WATERBURY VT WASHINGTON
1969 WHITE RIVER VT WINDSOR
1973 TANNERSVILLE NY GREENE
1974 ROTTERDAM NY SCHENECTADY
1975 CLIFTON PARK NY SARATOGA
<PAGE>
EXHIBIT B KIM KOHLER
as of 1/15/96
STORE LOCATION STATE COUNTY
1974 ROTTERDAM NY SCHENECTADY
1975 CLIFTON PARK NY SARATOGA
1977 VALATIE NY COLUMBIA
1979 WAPPINGERS FALLS NY DUTCHESS
1981 WOODSTOCK VT WINDSOR
1983 ST. JOHNSBURY VT CALEDONIA
1985 NORTH CLARENDON VT RUTLAND
1988 CHATHAM NY COLUMBIA
1989 SCHAGHTICOKE NY RENSSELAER
1992 BRANDON VT RUTLAND
1993 MIDDLEBURY VT ADDISON
1994 SOUTH GLENS FALLS NY SARATOGA
1996 PLATTSBURG NY CLINTON
1997 SARATOGA NY SARATOGA
2101 SIDNEY NY DELAWARE
2110 BINGHAMTON NY BROOME
2133 VESTAL NY BROOME
2150 HAMILTON NY MADISON
2312 VESTAL PLAZA NY BROOME
2356 HANCOCK NY DELAWARE
2359 NORWICH NY CHENAGO
2362 ONEONTA NY OTSEGO
2370 BINGHAMTON NY BROOME
2373 DELHI NY DELAWARE
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
Exhibit C
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
085 00 00 HEALTH & BEAUTY AIDS
085 01 00 ORAL HYGIENE
085 01 01 TOOTHPASTE - TUBE - TARTAR
085 01 02 TOOTHPASTE - TUBE - NON TARTAR
085 01 03 TOOTHPASTE - PUMP - TARTAR
085 01 04 TOOTHPASTE - PUMP - NON TARTAR
085 01 05 TOOTHPASTE - SMOKERS/MISC
085 01 06 TOOTH POLISH
085 01 10 DENTURE CLEANSERS
085 01 11 DENTURE ADHESIVES
085 01 12 ORAL HYGIENE MEDICATIONS
085 01 20 TOOTHBRUSHES
085 01 21 DENTAL FLOSS
085 01 30 MOUTHWASH
085 01 31 BREATH SPRAY/DROPS
085 01 98 ORAL HYGIENE PREPACKS
085 01 99 ORAL HYGIENE RACKS
085 02 00 HAIR CARE PREPARATIONS
085 02 01 HAIR CARE PREPARATIONS HAIR SPRAY AEROSOL
085 02 02 HAIR CARE PREPARATIONS HAIR SPRAY NON AEROSOL
085 02 03 HAIR CARE PREPARATIONS WIG ACCESSORIES
085 02 04 HAIR CARE PREPARATIONS WAVESET GEL & LOTIONS
085 02 05 HAIR CARE PREPARATIONS SHAMPOOS REG
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
085 02 06 HAIR CARE PREPARATIONS DANDRUFF SHAMPOOS
085 02 07 HAIR CARE PREPARATIONS CREME RINSES
085 02 08 HAIR CARE PREPARATIONS CONDITIONERS
085 02 09 HAIR CARE PREPARATIONS HAIR COLORINGS
085 02 10 HAIR CARE PREPARATIONS HAIR COLORINGS ACCESSORIES
085 02 11 HAIR CARE PREPARATIONS HOME PERMANENTS
085 02 12 HAIR CARE PREPARATIONS MEN'S HAIR SPRAYS
085 02 13 HAIR CARE PREPARATIONS MEN'S TONIC & CREAMS
085 02 14 HAIR CARE PREPARATIONS STYLING SPRITZS
085 03 00 DEODORANTS & ANTI PERSPIRANTS
085 03 01 DEODORANTS CREAM & PAD
085 03 02 DEODORANTS STICK
085 03 03 ANTI PERSPIRANTS STICK
085 03 04 DEODORANTS ROLL ON
085 03 05 ANTI PERSPIRANTS ROLL ON
085 03 06 DEODORANTS SPRAYS
085 03 07 ANTI PERSPIRANTS SPRAYS
085 03 08 BODY SPRAYS (IMPULSE, ETC)
085 03 99 MISC DEOD & ANTI PERSPIRANTS
085 04 00 SHAVING SUPPLIES
085 04 01 SHAVING SUPPLIES RAZORS
085 04 02 SHAVING SUPPLIES BLADES
085 04 03 SHAVING SUPPLIES CREAMS & GELS
085 04 04 SHAVING SUPPLIES AFTER SHAVE & COLOGNE
085 04 99 SHAVING SUPPLIES, OTHERS
085 05 00 BABY PRODUCTS/BABY NEEDS NON-HBA
085 05 01 BABY PRODUCTS POWDER
085 05 02 BABY PRODUCTS BABY OILS
085 05 03 BABY PRODUCTS BABY LOTIONS & CREAMS
085 05 04 BABY PRODUCTS BABY OINTMENTS
085 05 05 BABY PRODUCTS BABY SHAMPOOS
085 05 06 BABY PRODUCTS BABY BOTTLES & ACCESSORIES
085 05 07 BABY PRODUCTS BABY WIPES & CLOTH
085 05 08 BABY PRODUCTS MISC. BABY
085 05 20 BABY NEEDS NON-HBA CLOTHING-EXCEPT PANTS
085 05 21 BABY NEEDS NON-HBA PANTS
085 05 22 BABY NEEDS NON-HBA FEEDING IMPLEMENTS TEETHERS & PACIF
085 05 23 BABY NEEDS NON-HBA MEDICAL ITEMS
085 05 24 BABY NEEDS NON-HBA BATH AND PERSONAL CARE
085 05 25 BABY NEEDS NON-HBA TOYS
085 05 29 BABY NEEDS NON-HBA MISCL
085 06 00 FIRST AID PRODUCTS
085 06 01 FIRST AID PRODUCTS PLASTIC STRIPS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
085 06 02 FIRST AID PRODUCTS TAPE BANDAGE GUAZE DRESSING
085 06 03 FIRST AID PRODUCTS COTTON BALLS
085 06 04 FIRST AID PRODUCTS COTTON SWABS
085 06 05 FIRST AID PRODUCTS PETROLEUM JELLY
085 06 06 FIRST AID PRODUCTS FIRST AID LIQUID CREAMS ANTISEPTI
085 06 07 FIRST AID PRODUCTS SUPPOSITORIES & OINTMENTS
085 06 08 FIRST AID - WRAPS/BRACES
085 07 00 SKIN PREPARATIONS
085 07 01 SKIN PREPARATIONS ACNE MEDICATIONS
085 07. 02 SKIN PREPARATIONS MEDICATED/SPECIAL SOAPS
085 07 03 SKIN PREPARATIONS FACE CREAMS & LOTIONS
085 07 04 SKIN PREPARATIONS HAND LOTIONS & CREAMS
085 07 05 SKIN PREPARATIONS BATH OILS & BEADS
085 07 06 SKIN PREPARATIONS TALC & DUSTING POWDERS
085 07 07 SKIN PREPARATIONS COLOGNES & PERFUMES
085 07 08 SKIN PREPARATIONS MISC SKIN PREPARATIONS
085 07 09 SKIN PREPARATIONS NAIL POLISH REMOVERS
085 07 10 SKIN PREPARATIONS-FACIAL SCRUBS, FRESHENERS ETC.
085 08 00 EYE & EAR PREPARATIONS
085 08 01 EYE DROPS & LOTIONS
085 08 02 CONTACT LENS PREPARATIONS
085 08 03 EAR ITEMS
085 08 04 READING GLASSES/ACCESSORIES
085 09 00 ANTACIDS & LAXATIVES
085 09 01 LIQUID ANTACIDS
085 09 02 ANTACID TABLETS
085 09 03 POWDER & GRANULE ANTACIDS
085 09 04 PILL TABLET & GRANULE LAXATIVES
085 09 05 LIQUID LAXATIVES
085 09 06 SUPPOSITORIES & ENEMAS
085 09 07 MISC ANTACIDS & LAXATIVES
085 10 00 COUGH & COLD REMEDIES
085 10 01 LIQUID COUGH & COLD MEDICINES
085 10 02 NASAL SPRAY-NOSE DROPS
085 10 03 THROAT LOZENGES
085 10 04 COLD TABLETS
085 10 05 DECONGESTANT TABLETS & CAPSULES
085 10 06 SINUS TABLETS & CAPSULES
085 10 07 BRONCHIAL SPRAYS & TABLETS
085 10 08 ALLERGY TABLETS & CAPSULES
085 10 09 MISC COUGH & COLD
085 11 00 ANALGESICS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
085 11 01 ASPIRIN TABLETS
085 11 02 ASPIRIN CAPSULES
085 11 03 NON ASPIRIN TABLETS
085 11 04 NON ASPIRIN CAPSULES
085 11 05 ARTHRITIS STRENGTH TABLETS & CAPSULES
085 11 06 SLEEP AIDS (DOWNERS)
085 11 07 NON SLEEP AIDS (UPPERS)
085 11 08 EXTERNAL ANALGESICS (BEN GAY, ABSORBINE JR, ETC)
085 11 09 MENSTRUAL ANALGESICS (PAMPRIN, MIDOL, ETC)
085 11 99 MISC ANALGESICS
085 12 00 VITAMINS
085 12 01 PRIVATE LABEL NATURAL
085 12 02 NATIONAL BRAND NATURAL
085 12 03 NATIONAL BRAND MULTIPLES
085 12 04 PRIVATE LABEL MULTIPLES
085 12 05 VITAMIN/DIETARY SUPPLEMENTS - ALL
085 13 00 FEMININE HYGIENE PRODUCTS
085 13 01 FEMININE HYGIENE PRODUCTS TAMPONS
085 13 02 FEMININE HYGIENE PRODUCTS SANITARY NAPKINS
085 13 03 FEMININE HYGIENE PRODUCTS SANITARY BELTS
085 13 04 FEMININE HYGIENE PRODUCTS FEMININE DEODORANTS
085 13 05 FEMININE HYGIENE PRODUCTS DOUCHE POWDERS & LIQUIDS
085 13 06 FEMININE HYGIENE PRODUCTS MISC
085 13 07 FEMININE HYGIENE PRODUCTS, PANTY LINERS
085 14 00 FOOT PRODUCTS
085 14 01 FOOT PRODUCTS DR. SCHOLLS
085 14 02 FOOT PRODUCTS, OTHERS
085 15 00 DIET AIDS - SUPPLEMENTS & BARS
085 15 01 DIET AIDS - SUPPLEMENTS & BARS - ALL
085 16 00 BIRTH CONTROL DEVICES
085 16 01 BIRTH CONTROL DEVICES, ALL
085 17 00 HOME HEALTH & SUPPLIES
085 17 01 HOME HEALTH & SUPPLIES, ALL
085 18 00 DIABETIC SUPPLIES
085 18 01 DIABETIC SUPPLIES, ALL
085 19 00 HEALTH APPLIANCES
085 19 01 HEALTH APPLIANCES, ALL
085 20 00 INCONTINENTS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
085 20 01 INCONTINENTS, ALL
085 70 00 HEALTH CARE 8 BEAUTY CARE (GREENHOUSE)
085 70 01 HEALTH CARE
085 70 02 BEAUTY CARE
085 80 00 SEASONAL & PROMOTIONAL H.B.A.
085 80 01 SUNTAN CREAMS, LOTIONS, SPRAYS
085 80 02 SUNGLASSES
085 90 00 WAREHOUSE BUYS GEN MDSE & H.B.A.
085 90 01 WAREHOUSE BUYS GEN MDSE & H.B.A.
085 99 00 MISCELLANEOUS H.B.A.
085 99 01 MISCELLANEOUS ALL
085 99 02 GENERAL MERCHANDISE PREPACK/ HBA PREPACK
085 99 03 HBC TEST
085 99 04 GM TEST
085 99 05 TRAIL SIZE
086 00 00 HAIR CARE & COSMETICS
086 03 00 HAIR CARE
086 03 01 HAIR CARE CURLERS & ROLLERS
086 03 02 HAIR CARE PINS & CLIPS
086 03 03 HAIR CARE NETS, PAPERS, TAPES, ACCOUTREMENTS
086 03 04 HAIR CARE COMBS
086 03 05 HAIR CARE BRUSHES
086 03 06 HAIR CARE BARRETTES
086 03 07 HAIR CARE HEADBANDS, PONYTAIL HOLDERS, ETC
086 03 08 HAIR CARE CAPS-SHOWER, SLUMBER, RAIN
086 03 09 HAIR IMPLEMENTS, TWEEZERS, OTHER TOOLS
086 03 99 MIRRORS
086 04 00 COSMETICS
086 04 01 MAYBELLINE EYE COSMETICS
086 04 02 MAYBELLINE LIPSTICKS, ETC
086 04 03 MAYBELLINE ROUGES, POWDERS, ETC
086 04 04 MAYBELLINE NAIL POLISHES
086 04 05 MAX FACTOR EYE COSMETICS
086 04 06 MAX FACTOR LIPSTICKS, ETC
086 04 07 MAX FACTOR ROUGE, POWDER, ETC
086 04 08 MAX FACTOR NAIL POLISHES
086 04 09 ANDREA EYE COSMETICS
086 04 10 ANDREA NAIL POLISHES
086 04 11 COVER GIRL EYE COSMETICS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
086 04 12 COVER GIRL LIPSTICKS, ETC
086 04 13 COVER GIRL ROUGES, POWDERS, ETC
086 04 14 COVER GIRL NAIL POLISHES
086 04 15 BONNE BELL EYE COSMETICS
086 04 16 BONNE BELL LIPSTICKS, ECT
086 04 17 BONNE BELL ROUGE, POWDERS, ECT
086 04 18 AZIZA EYE COSMETICS
086 04 19 AZIZA ROUGE, POWDERS, ECT
086 04 20 ALMAY EYE COSMETICS
086 04 21 ALMAY LIPSTICKS, ETC
086 04 22 ALMAY ROUGES, POWDERS, ETC
086 04 23 ALMAY NAIL POLISHES, ETC
086 04 28 CUTEX LIPSTICKS, ETC
086 04 29 CUTEX EYE COSMETICS
086 04 30 CUTEX NAIL POLISHES, ETC
086 04 37 POSNER LIPSTICKS, ALL
086 04 38 POSNER NAIL POLISHES, ETC
086 04 40 HONEY & SPICE LIPSTICKS
086 04 44 L'OREAL EYE COSMETICS
086 04 45 L'OREAL LIPSTICKS, ETC
086 04 46 L'OREAL ROUGES, POWDERS, ETC
086 04 47 L'OREAL NAIL POLISHES, ETC
086 04 51 QUENCHER LIPSTICKS, ETC
086 04 53 QUENCHER NAIL POLISHES, ETC
086 04 54 REVLON EYE COSMETICS
086 04 55 REVLON LIPSTICKS, ETC
086 04 56 REVLON ROUGES, POWDERS, ETC
086 04 57 REVLON NAIL POLISHES, ETC
086 04 61 SALLY HANSEN EYE COSMETICS
086 04 62 SALLY HANSEN LIPSTICKS, ETC
086 04 63 SALLY HANSEN ROUGE, POWDERS, ETC
086 04 64 SALLY HANSEN NAIL POLISH, ETC
086 04 66 ARTMATIC EYE COSMETICS
086 04 67 ARTMATIC LIPSTICKS, ETC
086 04 68 ARTMATIC ROUGE, POWDERS, ETC
086 04 69 ARTMATIC NAIL POLISHES, ETC
086 04 70 FLAME GLO EYE COSMETICS
086 04 71 FLAME GLO LIPSTICKS, ETC
086 04 72 FLAME GLO ROUGES, POWDERS, ETC
086 04 76 HAZEL BISHOP EYE COSMETICS
086 04 77 HAZEL BISHOP LIPSTICKS, ETC
086 04 78 HAZEL BISHOP ROUGES, POWDERS ETC
086 04 79 HAZEL BISHOP NAIL POLISHES, ETC
086 04 80 WET N WILD EYE COSMETICS
086 04 81 WET N WILD LIPSTICKS, ETC
086 04 82 WET N WILD ROUGES, PWDERS, ETC
086 04 83 WET N WILD NAIL POLISHES, ETC
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
086 04 87 CORN SILK ROUGES, POWDERS, ETC
086 04 92 ULTRA SHEEN ROUGES, POWDERS ETC.
086 04 99 COSMETICS, OTHERS
087 00 00 HOSIERY
087 01 00 PRIVATE LABEL ASSTD PREPACKS
087 01 01 PRIVATE LABEL ASSTD PREPACKS, ALL
087 05 00 P/L THRIFTIES HOSIERY
087 05 01 THRIFTIES PANTY HOSE
087 05 02 THRIFTIES KNEE HIGH
087 06 00 P/L FASHION HOSIERY
087 06 01 P/L FASHION PANTY HOSE
087 06 02 P/L FASHION KNEE HIGHS
087 07 00 P/L DELUXE HOSIERY
087 07 03 DANCERS KNEE HIGH STOCKINGS
087 07 04 DANCERS SHEER TO WAIST P/H
087 07 06 DANCERS DELUXE P/H
087 07 07 DANCERS SHEER SUPPORT P/H
087 07 08 DANCERS CLASSIC EX LARGE P/H
087 07 09 DANCERS REAL P/H
087 07 10 DANCERS TRIM TOP P/H
087 07 11 ULTRA SHEER P/H
087 07 99 PRIVATE LABEL FIXTURES
087 08 00 NO NONSENSE - HOSIERY
087 08 01 NO NONSENSE - REGULAR
087 08 02 NO NONSENSE - SHEER TO WAIST
087 08 03 NO NONSENSE - KNEE HIGH
087 08 04 NO NONSENSE - CONTROL TOP
087 08 05 NO NONSENSE - LIGHT SUPPORT
087 08 06 NO NONSENSE - SHEER & SILKY
087 08 07 NO NONSENSE - FASHION COLORS
087 08 08 NO NONSENSE 2PACKS-
087 08 99 NO NONSENSE - RACKS
087 09 00 L`EGGS HOSIERY
087 09 01 L`EGGS REGULAR
087 09 02 L`EGGS SHEER ENERGY
087 09 03 L`EGGS SHEER ELEGANCE
087 09 04 L`EGGS KNEE HIGHS
087 09 05 L`EGGS CONTROL TOP
087 09 06 L`EGGS ACTIVE SUPPORT
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
087 09 99 L`EGGS PREPACKS
087 99 00 HOSIERY, MISCELLANEOUS
087 99 01 AFRO-TIQUE HOSIERY
087 99 99 HOSIERY, MISCELLANEOUS
088 00 00 MISC GENERAL MERCHANDISE
088 01 00 FILM FLASH
088 01 01 NEGATIVE FILM
088 01 02 POSITIVE FILM
088 01 03 INSTANT FILM
088 01 10 PHOTO FINISHING
088 01 11 ENLARGING
088 01 20 CAMERAS
088 01 50 FLASH
088 01 99 FILM FLASH, MISC
088 02 00 BLANK VIDEO TAPES
088 02 01 VHS-REGULAR
088 02 02 VHS-HI GRADE
088 02 03 VHS-PREMIUM GRADE
088 02 04 BETA-HI GRADE
088 02 05 BETA-REGULAR
088 02 09 CLEANING KITS
088 02 98 TAPE LIBRARIES
088 02 99 VIDEO TAPE PREPACKS
088 03 00 VIDEO RENTALS
088 04 00 BLANK AUDIO TAPES
088 04 01 LOW NOISE/NORMAL BIAS (GOOD)
088 04 02 NORMAL BIAS (BETTER)
088 04 03 NORMAL BIAS (BEST)
088 04 04 HIGH BIAS (PREMIUM)
088 04 09 CLEANING KITS
088 04 98 AUDIO LIBRARY/CARRY CASES
088 05 00 PRE-RECORDED AUDIO CASSETTE TAPES
088 05 01 PRE-RECORDED AUDIO CASSETTE TAPES, ALL TITLES
088 10 00 MISC GENERAL MERCHANDISE TOYS, GAMES, OTHERS
088 10 01 MISC GENERAL MERCHANDISE TOYS
088 10 10 MISC GENERAL MERCHANDISE GAMES
088 10 99 MISC GENERAL MERCHANDISE, OTHERS
088 15 00 GENERAL MERCHANDISE SOUVENIRS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
088 15 01 GENERAL MERCHANDISE SOUVENIRS, ALL
088 20 00 SEWING NOTIONS
088 20 10 SEWING NOTIONS ALL
088 50 00 CIGARETTE LIGHTERS
088 50 01 CIGARETTE LIGHTERS, DISPOSABLE
088 60 00 CANDLES & ACCESSORIES
088 60 01 COLUMNS
088 60 02 VOTIVES
088 60 03 TAPERS
088 60 04 FEDERALS
088 60 05 SPIRALS
088 60 06 COUNTY PEGS
088 60 07 SPECIALTIES
088 60 08 HOUSEHOLD
088 60 97 VOTIVE CUPS
088 60 98 HOLDERS
088 60 99 MISCELLANEOUS
088 70 00 SEASONAL
088 70 01 FURNITURE
088 90 00 CONTINUITIES
088 90 01 NEWCOR KNIFE, CONTINUITY
088 90 02 COVINGTON STONEWARE, CONTINUITY
088 90 03 PLAYFOLD, CONTINUITY
088 90 04 READERS DIGEST, CONTINUITY
088 90 05 ENCYCLOPEDIA
088 90 06 SESAME STREET
088 90 07 PALMER COOKWARE
088 90 08 FRESH FLOWERS DINNERWARE
088 90 09 FRONT END PEG H.B.C.
089 00 00 CLEANING AIDS
089 01 00 STICK GOODS & REFILLS
089 01 01 BROOMS
089 01 02 SPONGE MOPS
089 01 03 SPONGE MOPS REFILLS
089 01 04 COTTON MOPS (DECK MOPS)
089 01 05 COTTON MOPS (DECK MOPS) REFILLS
089 01 06 DUST MOPS
089 01 07 DUST MOPS REFILLS
089 01 08 WAX APPLICATORS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
089 01 09 WAX APPLICATORS REFILLS
089 01 99 STICK GOODS & REFILLS, MISC.
089 10 00 BRUSHES
089 10 01 BOWL BRUSHES
089 10 02 BODY BRUSHES
089 10 03 HAND/NAIL BRUSHES
089 10 04 KITCHEN BRUSHES
089 10 06 DUST PAN BRUSHES
089 10 08 SCRUB BRUSHES
089 10 10 CLOTHES BRUSHES, DELINTERS
089 20 00 DISH/DUST CLOTHS, VAC BAGS, GLOVES
089 20 03 DISH, DUST, ALL PURPOSE CLOTHS
089 20 04 GLOVES, RUBBER
089 20 05 GLOVES, WORK
089 20 06 DUST PANS
089 20 07 VACUUM BAGS, BELTS, FRESHNERS ETC.
089 20 08 30 QT STEP BKT ALM 28581
089 20 09 11 QT NT/TIDY BKT AL 29631
089 30 00 CLOTHESPINS, CLOTHESLINE, MOTHBALLS
089 30 01 CLOTHESPINS
089 30 02 CLOTHESLINE
089 30 03 MOTHBALLS
089 30 04 CLOSET
089 99 00 MISC DEODORIZERS
089 99 01 TOILET BOWL DEODORIZERS
090 00 00 MAGAZINES, BOOKS, NEWSPAPERS
090 01 00 MAGAZINES, FAMILY CIRCLE
090 01 01 MAGAZINES, FAMILY CIRCLE, REGULAR ISSUES
090 01 02 MAGAZINES, FAMILY CIRCLE, SPECIAL ISSUES
090 02 00 MAGAZINES, WOMAN'S DAY
090 02 01 MAGAZINES, WOMAN'S DAY, REGULAR ISSUES
090 02 02 MAGAZINES, WOMAN'S DAY, SPECIAL ISSUES
090 03 00 MAGAZINES/COMIC BOOKS
090 03 01 MAGAZINES, ALL
090 03 02 COMIC BOOKS, ALL
090 05 00 HARDCOVER BOOK-BESTSELLER
090 05 01 HARDCOVER BOOKS-BESTSELLER
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
090 10 00 PAPERBACK & HARDCOVER BOOKS (SUPERMART)
090 10 01 HARDCOVER BOOK, NEW RELEASE
090 10 02 PAPERBACK-MASS MARKET & TRADE PAPERBACK
090 10 03 PAPERBACK PROMO
090 10 04 HARDCOVER BOOK PROMO
090 10 05 HARDCOVER BOOK-BESTSELLER
090 10 06 PAPERBACK BOOK-BESTSELLER
090 10 07 PAPERBACK BOOKS, MISCELLANEOUS
090 20 00 HARDCOVER & PAPERBACK BOOKS (SHER)
090 20 01 PAPERBACK
090 20 02 PROMOTIONAL BOOKS
090 20 03 CHILDREN AND TRADE BOOKS
090 20 04 COLORING AND ACTIVITY BOOKS
090 20 05 NEW YORK TIMES BEST SELLERS HARDCOVER
090 20 06 PAPERBACK BEST SELLERS
090 20 09 FORMER BEST SELLERS
090 20 99 MISCELLANEOUS
090 50 00 NEWSPAPERS
090 50 01 NEWSPAPERS, ALL
090 60 00 MAPS
090 60 01 MAPS, ALL
091 00 00 PET SUPPLIES
091 01 00 DOG SUPPLIES
091 01 01 FLEA COLLARS
091 01 02 CHEMICALS
091 01 03 RAWHIDE CHEWABLES
091 01 04 TOYS (RUBBER, LATEX)
091 01 05 GROOMING AIDS
091 01 06 COLLARS, CHAINS
091 01 07 LEADS, LEASHES
091 01 08 TIE OUT CHAINS
091 01 09 FEEDING DISHES
091 01 10 PRESSED GELATIN (RAWHIDE) CHEWABLES
091 01 11 TREATS & EDIBLES
091 01 99 MISC DOG PET SUPPLIES
091 02 00 CAT SUPPLIES
091 02 01 CHEMICALS, FLEA COLLARS
091 02 02 TOYS
091 02 03 COLLARS (EXCEPT FLEA)
091 02 04 SNACKS, TREATS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
091 02 05 PANS, LINERS, SCOOPS, ETC
091 03 00 BIRD SUPPLIES
091 03 01 FOOD
091 03 02 BIRD TOYS & ACCESSORIES
091 03 03 CAGE SUPPLIES
091 04 00 FISH SUPPLIES
091 04 01 FOOD
091 04 99 FISH SUPPLIES, OTHERS
091 05 00 HAMSTER/GERBIL SUPPLIES
091 05 01 FOOD
091 05 03 CAGE SUPPLIES, LITTER, ETC
091 10 00 PET SUPPLIES, MISC
091 10 99 PET SUPPLIES-MISC
092 00 00 HOUSEWARES
092 01 00 BAKEWARE
092 01 01 FOIL BAKEWARE
092 01 99 FOIL, MISC
092 02 00 BAKEWARE/COOKWARE
092 02 01 COOKWARE ALUMINUM
092 02 02 COOKWARE COATED
092 02 03 BAKEWARE COATED
092 02 04 COOKWARE MICROWAVE
092 02 05 BAKEWARE/GLASS
092 02 06 BAKEWARE TIN
092 02 08 BAKEWARE ALUMINUM
092 02 10 BOXED COOKWARE/ACCESSORIES
092 02 99 COOKWARE/BAKEWARE, MISC
092 03 00 COOKING UTENSILS
092 03 01 COOKING TOOLS
092 03 02 COOKING GADGETS
092 03 99 COOKING UTENSILS, MISC
092 06 00 GADGETS
092 06 01 GADGETS CAN OPENER
092 06 02 GADGETS BOTTLE OPENER
092 06 03 GADGETS PEELERS
092 06 04 GADGETS CHEESE IMPLEMENTS
092 06 05 GADGETS MEASURING
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
092 06 06 GADGETS GRATERS
092 06 07 GADGETS TIMERS
092 06 08 GADGETS SPATULAS
092 06 09 GADGETS WHISKS
092 06 10 GADGETS THERMOMETERS
092 06 11 GADGETS FUNNELS
092 06 12 GADGETS CUTTING/SERVING BOARDS
092 06 13 GADGETS TEA ITEMS
092 06 14 GADGETS STEAMERS
092 06 15 GADGETS BAKING ITEMS
092 06 16 GADGETS MAGNETS
092 06 99 GADGETS MISC
092 07 00 KITCHEN ACCESSORIES
092 07 01 K/A SINK ITEMS
092 07 02 K/A RANGE ITEMS
092 07 03 K/A CABINET ITEMS
092 07 04 KITCHEN ACCESSORIES, SHELF PAPER & LINERS
092 07 99 KITCHEN ACCESSORIES MISC
092 09 00 STORAGE CONTAINERS
092 09 01 STORAGE CONTAINERS DRY
092 09 02 STORAGE CONTAINERS FREEZER
092 09 03 STORAGE CONTAINERS REFRIGERATOR
092 09 04 STORAGE CONTAINERS ICE TRAYS
092 09 05 STORAGE CONTAINERS PITCHERS, WATER BOTTLES
092 09 06 STORAGE CONTAINERS HOT COLD
092 09 99 STORAGE CONTAINERS MISC
092 10 00 COFFEE FILTERS, SUPPLIES
092 10 03 COFFEE FILTERS, STAR
092 10 04 COFFEE FILTERS, MR. COFFEE
092 10 05 COFFEE FILTERS, MELITTA
092 10 06 COFFEE FILTERS, PRIVATE LABEL
092 10 07 COFFEE POT CLEANERS
092 10 08 COFFEE POTS
092 10 09 TEA POTS
092 10 10 THERMOS
092 10 11 COFFEE MUGS
092 10 12 OTHER MUGS
092 10 99 COFFEE SUPPLIES MISC
092 15 00 SMALL ELECTRICAL APPLIANCES
092 15 01 SMALL ELECTRICAL APPLIANCES, ALL
092 50 00 MISC SEASONAL GEN MDSE
092 50 01 MISC SEASONAL BARBECUE GRILLS
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
092 50 02 MISC SEASONAL, COOLERS, CHESTS, ETC.
092 50 99 MISC SEASONAL, OTHERS
092 60 00 HARDWARE/TOOLS
092 60 01 HARDWARE, ALL
092 60 02 TOOLS, ALL
092 90 00 BATHROOM ACCESSORIES
092 90 01 BATHROOM ACCESSORIES WASTE
092 90 02 BATHROOM ACCESSORIES LAUNDRY
092 90 99 BATHROOM ACCESSORIES MISC
092 99 00 MISCELLANEOUS
092 99 01 MISCELLANEOUS OVEN MITTENS, POT HOLDERS
092 99 02 MISCELLANEOUS CLIP STRIP PROGRAM
092 99 11 MISCELLANEOUS CANDLES, TABLE/EMERG, STERNO
092 99 21 MISCELLANEOUS STRING (TWINE IN 0930503)
092 99 31 MISCELLANEOUS ASH TRAYS
092 99 99 MISCELLANEOUS, OTHERS
093 00 00 STATIONERY
093 02 00 WRITING IMPLEMENTS
093 02 01 WRITING IMPLEMENTS PENS
093 02 02 WRITING IMPLEMENTS PENCILS
093 02 03 WRITING IMPLEMENTS MARKERS
093 02 04 WRITING IMPLEMENTS CRAYONS
095 02 05 WRITING IMPLEMENTS CHALK
093 02 99 WRITING KITS, PENCILS BOXES
093 03 00 SCHOOL SUPPLIES
093 03 01 SCHOOL SUPPLIES FILLER PAPER
093 03 02 SCHOOL SUPPLIES WIRE BOUND NOTEBOOKS
093 03 03 SCHOOL SUPPLIES LOOSELEAF BINDERS, ETC
093 03 04 SCHOOL SUPPLIES TABLETS
093 03 99 SCHOOL SUPPLIES, OTHERS
093 04 00 HOME AND OFFICE SUPPLIES
093 04 01 HOME AND OFFICE SUPPLIES SUNDRIES
093 04 02 HOME AND OFFICE SUPPLIES SCRATCH/MEMO PADS, TABLETS
093 04 03 HOME AND OFFICE SUPPLIES ENVELOPES
093 04 04 TYPING & CARBON PAPER
093 04 99 HOME AND OFFICE SUPPLIES MISC DESK, ACCOUTREMENTS
093 05 00 TAPES, GLUES, ADHESIVES, TWINE
093 05 01 TGAT - TAPES
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
093 05 02 TGAT - GLUE, ETC
093 05 03 TGAT - TWINE
093 20 00 ARTIST SUPPLIES
093 20 01 SKETCH PADS, DRAWING TABLETS, ETC
093 20 02 BROWSE, PENS, PENCILS
093 20 03 PAINTS, INKS
093 20 99 MISCELLANEOUS
093 30 00 CHILDRENS ITEMS
093 30 01 CONSTRUCTION PAPER
093 30 02 LEARNING CENTER CHILDRENS TOYS, GAMES, CARDS, ETC
093 30 03 LEARNING CENTER CHILDRENS BOOKS
093 30 99 MISCELLANEOUS
093 50 00 PLAYING CARDS
093 50 01 PLAYING CARDS, ALL TYPES
093 99 00 STATIONERY MISCELLANEOUS
093 99 01 STATIONERY MISCELLANEOUS
094 00 00 BATTERIES, ELECTRICAL, SHOE CARE
094 01 00 BATTERIES, FLASHLIGHTS, BULBS
094 01 01 BATTERIES, DURACELL ALKALINE
094 01 02 BATTERIES, ENERGIZER ALKALINE
094 01 03 BATTERIES, RAYOVAC ALKALINE
094 01 04 BATTERIES, KODAK
094 01 05 BATTERIES, PRIVATE LABEL
094 01 08 BATTERIES, CONDUCTOR
094 01 11 BATTERIES, HEAVY DUTY
094 01 21 BATTERIES, GENERAL PURPOSE
094 01 31 FLASHLIGHT
094 01 80 MARKUP SHIPPERS 3%
094 01 81 MARKUP SHIPPERS 5%
094 01 82 MARKUP SHIPPERS 10%
094 01 98 LIGHT BULBS
094 01 99 MISCELLANEOUS
094 02 00 ELECTRICAL EQUIPMENT
094 02 01 ELECTRICAL EQUIPMENT, ALL
094 02 02 TELEPHONE ACCESSORIES
094 03 00 ELECTRICAL EQUIPMENT RENTALS
094 03 01 ELECTRICAL EQUIPMENT RENTALS, ALL
094 50 00 SHOE BRUSHES, ACCESSORIES
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
094 50 01 SHOE BRUSHES, ACCESSORIES
094 51 00 SHOE LACES
094 51 01 SHOE LACES, DRESS
094 51 02 SHOE LACES, CASUAL
094 51 03 SHOE LACES, ATHLETIC
094 51 04 SHOE LACES, BOOT/WORK
094 51 05 SHOE LACES, SPECIALTY
094 51 99 SHOE LACES, RACKS W/MDSE
094 52 00 SHOE POLISHES
094 52 01 SHOE POLISHES, PASTE, CREAM, KITS, ETC.
094 52 02 SHOE POLISHES, LIQUID
094 52 03 SHOE POLISHES, AEROSOL
094 52 04 SHOE POLISHES, WATERPROOF ITEMS
094 99 00 SHOE CARE RACKS/FIXTURES(NO CHARGE)
094 99 01 SHOE CARE RACKS/FIXTURES(NO CHARGE)
095 00 00 GREETING CARDS, PARTY SUPPLIES
095 10 00 GREETING CARDS
095 10 01 GREETING CARDS, SINGLES
095 10 02 GREETING CARDS HOLIDAY SINGLES
095 10 03 GREETING CARDS HOLIDAY TRAYS
095 10 99 GREETING CARDS, OTHERS
095 11 00 GIFT WRAP, TRIM, ENCL.CARDS
095 11 01 GIFT WRAP, TRIM, ENCL.CARDS
095 50 00 PARTY SUPPLIES
095 50 01 PARTY SUPPLIES CAKE DECORATIONS
095 50 02 PARTY SUPPLIES BIRTHDAY CANDLES
095 50 03 PARTY SUPPLIES, OTHER CANDLES
095 50 08 PARTY SUPPLIES, MISC PAPER, TOYS, ETC
096 00 00 VIDEO RENTALS/SELL THROUGH
096 01 00 VIDEO EQUIPMENT RENTALS
096 01 01 VIDEO EQUIPMENT RENTALS, ALL
096 02 00 VIDEO TAPE RENTALS
096 02 01 VIDEO TAPE RENTALS, ALL
096 03 00 VIDEO SELL THROUGH
<PAGE>
CGX080 GU Category Code Listing RUN DATE 11/03/95
RCG080
- -GU CATEGORY CODE- DESCRIPTION
MAJ INT MIN
096 03 01 VIDEO SELL THROUGH, ALL
096 03 02 PRE-VIEWED VIDEOS, ALL
097 00 00 SOFT GOODS
097 01 00 SOFT GOODS KITCHEN
097 01 01 SOFT GOODS KITCHEN TOWELS
097 01 02 SOFT GOODS KITCHEN DISH CLOTHS
097 01 04 SOFT GOODS KITCHEN POT HOLDERS
097 01 05 SOFT GOODS KITCHEN MITTS
097 01 10 SOFT GOODS KITCHEN ASSTD SET
097 01 12 SOFT GOODS PLACE MATS/TABLECLOTHS
097 01 99 SOFT GOODS, MISC
097 10 00 MENS UNDERWEAR
097 10 01 MENS BRIEF
097 10 02 MENS FASHION BRIEF
097 10 03 MENS A-SHIRT
097 10 04 MENS V-SHIRT
097 10 05 MENS T-SHIRT
097 10 99 MENS MISCELLANEOUS
097 11 00 BOYS UNDERWEAR
097 11 01 BOYS BRIEF
097 11 02 BOYS FASHION BRIEF
097 11 99 BOYS MISCELLANEOUS
097 12 00 GIRLS UNDERWEAR
097 12 01 GIRLS BRIEF
097 12 02 GIRLS FASHION BRIEF
097 12 99 GIRLS MISCELLANEOUS
<PAGE>
EXHIBIT D
OPERATING EXPENSES AND OTHER COSTS
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
EXHIBIT E
[Form of Notice to Vendors]
TO: Grand Union Vendors
FROM: ___________________
RE: Agreement with C&S Wholesale Grocers for
Montgomery Facility
DATED: January ___, 1996
- --------------------------------------------------------------------------------
Grand Union and C&S Wholesale Grocers, Inc. ("C&S") have entered into an
agreement effective January 21, 1996 under which C&S will supply health and
beauty care and general merchandise products to our Montgomery, New York
distribution center. While this arrangement will not change the manner in which
Grand Union does business with its vendors, please note that in purchasing
merchandise on behalf of C&S under this arrangement, Grand Union will be acting
as agent for C&S and C&S shall be the owner of title to the merchandise.
Payments to vendors will continue to be made by Grand Union. Grand Union is not
authorized to act as agent for C&S for any purpose other than the purchase of
such merchandise.
If you have any questions, please feel free to contact _______ at
__________________.
cc: C&S Wholesale Grocers, Inc.
<PAGE>
[Form of Notice to Bank Agent and Landlord]
TO: _________________
FROM: _________________
RE: Agreement with C&S Wholesale Grocers for
Montgomery Facility
DATED: January ___, 1996
- --------------------------------------------------------------------------------
Grand Union has entered into an agreement with C&S Wholesale Grocers, Inc.
("C&S") effective January 21, 1996 pursuant to which C&S will supply health and
beauty care and general merchandise to our Montgomery, New York distribution
center. Such products will be acquired from vendors either by Grand Union
acting as agent for C&S or by C&S directly. All such products to be held at the
Montgomery facility will be owned by C&S and will not constitute property or
inventory of Grand Union.
Health and beauty care and general merchandise products that are presently
owned by Grand Union and held at the Montgomery facility as of the effective
date of the agreement, as well as other kinds of merchandise owned by Grand
Union and held or to be held at such facility, will constitute Grand Union-owned
inventory.
If you have any questions, please contact _________ at _____________.
cc: C&S Wholesale Grocers, Inc.
<PAGE>
EXHIBIT F
CONSENT AND WAIVER
THIS CONSENT AND WAIVER, dated the ______ day of _______________, 1996, is
among MACK BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY '89 ASSOCIATES L.P.,
doing business as BRACKEN '89 JOINT VENTURE, with offices at c/o The Mack
Company, 370 West Passaic Street, Rochelle Park, New Jersey 07662 ("Landlord");
THE GRAND UNION COMPANY, with offices at 201 Willowbrook Boulevard, Wayne, New
Jersey 07470-0966 ("Tenant") and C&S WHOLESALE GROCERS, INC., with offices at
Old Ferry Road, P.O. Box 821, Brattleboro, Vermont 05302 ("C&S").
WHEREAS, Tenant is the tenant under the following lease (together with any
and all amendments thereto, the "Lease"):
Lease between Landlord and Tenant dated September 29, 1989 with
respect to land and improvements now or hereafter located thereon
located at Bracken Road, Montgomery, New York (the "Leased Premises");
WHEREAS, C&S and Tenant have entered into a Supply and Operating Agreement
dated as of January 21, 1996 (the "Supply Agreement") pursuant to which, during
the "Grand Union Purchase Period" (as defined therein), Tenant purchases
certain merchandise as the agent for C&S and receives delivery of such
merchandise at the Leased Premises;
WHEREAS, during the "C&S Purchase Period" (as defined in the Supply
Agreement) C&S purchases certain merchandise and receives delivery of such
merchandise at the Leased Premises;
WHEREAS, at all times during the Grand Union Purchase Period and the C&S
Purchase Period, C&S holds title to and is the owner of the merchandise
purchased by Tenant in its capacity as agent for C&S, as well as merchandise
purchased directly by C&S (all such merchandise being referred to in this
Consent and Waiver as the "Merchandise");
WHEREAS, C&S and Tenant have requested Landlord to execute a Consent and
Waiver with respect to certain aspects of such transactions and Landlord is
prepared to do so on the terms and conditions set forth herein.
NOW, THEREFORE, based on these premises and for good and valuable
consideration, receipt of which is hereby acknowledged:
1. Landlord disclaims any title to or right in the Merchandise and
subordinates to the interest of C&S any security interest, lien, encumbrance,
attachment or other interest which Landlord may now or hereafter have or acquire
in the Merchandise by statute, agreement or otherwise.
2. Landlord agrees that, on default of Tenant's obligations to C&S, C&S
or its agents may remove the Merchandise from the Leased Premises and Landlord
agrees that it will grant C&S or its agents the right of entry at all reasonable
times and after reasonable notice, from time to time, to remove such property
from the Leased Premises. In connection with such removal, however, C&S shall
be required to use reasonable care, and to repair promptly any physical damage
done to the Leased Premises caused by such removal.
<PAGE>
3. Landlord agrees not to interfere with and to reasonably cooperate with
C&S or its agents in the event of any foreclosure, assignment, taking of
possession, sale (by auction or otherwise) or other enforcement by C&S of its
rights as owner of the Merchandise and creditor of the Tenant, provided C&S and
its agents shall use best efforts not to disrupt the ongoing business of
other tenants or Landlord in the vicinity of the Leased Premises.
4. Landlord shall send to C&S expeditiously and concurrently with any
default or termination notices sent to Tenant a copy of any such default or
termination notice, and Landlord shall accept a cure of such default from C&S if
C&S chooses to cure the default, as its option, on or before thirty days after
the grace period provided for in the Lease.
5. Landlord and Tenant agree that they shall not materially alter or
amend or and shall not cancel the Lease without C&S' prior written consent so
long as C&S owns Merchandise located on or in the Leased Premises, which consent
shall not be unreasonably withheld, delayed or conditioned.
6. Landlord acknowledges that true copies as executed of the Lease is
annexed hereto and that, to Landlord's knowledge, Tenant is not now in default
thereunder.
7. Landlord hereby consents to the assignment or subleasing to C&S of
Tenant's rights, title and interest under the Lease.
8. This Consent and Waiver shall be binding upon the Landlord, Tenant,
and C&S and shall inure to the benefit of Landlord and C&S, and their successors
and assigns and transferees.
IN WITNESS WHEREOF, Landlord, Tenent and C&S have hereby caused this
Consent and Waiver to be executed under seal as of the date above first written.
BRACKEN 89 JOINT VENTURE
BY: MACK BRACKEN ROAD PROPERTIES LIMITED
By:
-----------------------------------------
Name:
Title:
BY: MONTGOMERY '89 ASSOCIATES L.P.
By: HAMPSHIRE MANAGEMENT COMPANY,
General Partner
BY:
-----------------------------------------
Name:
Title:
THE GRAND UNION COMPANY
By:
-----------------------------------------
Name:
Title:
C&S WHOLESALE GROCERS, INC.
By:
-----------------------------------------
Name:
Title:
<PAGE>
EXHIBIT H
January 18, 1996
To: Mr. J. Hinkel
From: Jim O'Keefe
Re: Slotting Information - Montgomery S & G
Item count as of 11/95:
Dept. 00 1473 items
422 Full Case
1051 S,T,U
Dept. 01 1824 items
548 Quick Pick
298 Cigarettes
975 Full Case
Dept. 02 7741 items
6583 Quick Pick
1161 Full Case
Total Items: 11,038
2558 Full Case
7131 Quick Pick
298 Cigarettes
1051 S,T,U
Quick Pick: 9011 slots
7131 items
1880 available slots
Full Case: 3282 slots
2558 items
724 available slots
Reserves: 13,570 total
4091 available
Total Pick Slots Q.P. and F.C. 12,293
Available Pick Slots Q.P. and F.C. 2604
<PAGE>
Exhibit J
C&S Wholesale Grocers, Inc.
Corporate Offices
Old Ferry Road, P.O. Box 821
Brattleboro, Vermont 05302
(802) 257-4371
October 10, 1995
John Hinkel
Corporate Vice President Distribution
The Grand Union Company
201 Willowbrook Blvd.
Wayne, N.J. 07470-0966
Dear John:
Thanks for the time you and Jim O'Keefe spent with Duane and myself reviewing
the Montgomery operation. Using Jack's proforma numbers and adding other
expenses discussed, we should be able to agree on the methodology used in
determining base operating cost in the near term and the future. Until the
total effects of Penn Traffic's deletion have been completed, we both agree that
it would be difficult to determine those base costs. We also agree that 90 days
from the date you cease servicing Penn Traffic should be sufficient time to
establish base operating expenses, after which we would meet again to review and
agree upon any changes. Below you'll find a line by line review of the
proforma a copy of which is enclosed.
Montgomery Warehouse Expenses
*
Labor
1. Productive wages *
Productivity using a 10 week average:
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
3. Fringe Salaries
Vacation Pay - Contractual for union employees - need Grand Union
vacation policy and what are the entitlements for
non-union employees.
Holiday Pay - same as vacation pay
Sick Pay - Same as vacation pay
4. Fringe Tax
Payroll Tax - Per state and federal schedules
*
5. Other Department Expense
*
6. Administrative Salary
*
7. Administrative Expense
*
Walter: Tony needs to review detail confirm numbers or revise based on
required modifications. Also need to establish replacement and upgrade policy.
8. Occupation Expenses
Building Repair and Maintenance Outside
Jim O'Keefe has supplied agreements covering
Landscaping/snowplowing - V.V. Landscaping Inc.
Plumbing - Capitol Plumbing/Heating
Electrician - Castleberry Electrical Services
Fencing - B.J. Fencing Contractors
Security - S.E.M. Security Systems, Inc.
Sanitation - BFI
Time Clocks - Simplex
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
HVAC - Mechanical Construction Corp.
Elevator - Otis
Cigarette Stamp Machine - Meyercord
Copy Machines - Pitney Bowes - lease held in Wayne corporate account
Equipment Repair Outside - included above in building room outside
Parts/Materials - parts or materials purchased to make building and
equipment repairs.
9. Occupation Expenses
Heat, power, water - Should be the actual cost for each
Security/Protection - SEM Security Systems
Telephone - Telephone - should be what actual cost is each
month
Rubbish Removal - BFI monthly invoices
Rent - Per lease agreement
Real Estate tax - Per current base (local/school) and any
increases
Insurance Charge back - With comp - need to get workmen's compensation
history
*
Fixed Insurance/Liability *
improvements based on insurance carrier
coverage requirements. Aerosols, Class I,
Class II, flammables, etc.
Depreciation/Amortization - *
Please review the enclosed and I'll call you next week to discuss it's content
or answer any questions you may have.
Thanks again.
Very truly yours,
C & S WHOLESALE GROCERS, INC.
Steve Albanese
Vice President Distribution Projects
SA/tw
Encs.
cc: Ron Wright
Bill Hamlin
Duane Wilkes
Paul Moshovetis
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
CROWN CREDIT #A
*
________________________________________________________________________
EQUIPMENT COUNT
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
#B
August 28, 1995
To: Mr. J. Hinkel
From: Jim O'Keefe
Re: Crown Credit/Miscellaneous
CROWN: We presently have an arrangement with Crown to provide
service/maintenance known as a "Planned Maintenance Agreement." The arrangement
works as follows:
*
MISCELLANEOUS: The items contained in this account are varied. Some examples
are:
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
September 17, 1995
To: Mr. S. Albanese
Mr. D. Wilks
From: Jim O'Keefe
Re: Meeting 9/13/95
Below and attached are some of the items requested at our meeting on the 13th of
this month:
Number of Purchase Orders Received/Trucks/Pieces
*
List of Major Contractors:
*
Copy of last telephone bills, utility bills are also attached. You'll
note a small cellular bill as well. This is a backup to the main
telephone line in the event the lines are cut or out of service when the
building is alarmed.
Also attached please find a list of equipment leases covering forklifts,
batteries the yard horse and the cigarette stamping machines. These
figures are based on a per month payment.
cc: Mr. J. Hinkel
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
MONTGOMERY WHSE EXPENSES
ACTUAL WITH PENN TRAFFIC
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
MONTGOMERY WHSE EXPENSES
BUDGET GRAND UNION ONLY
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
<PAGE>
EXHIBIT K
SUBLEASE TERMS AND CONDITIONS
LESSEE: C&S Wholesale Grocers, Inc.
LOCATION: Montgomery, Orange County, New York
Bracken Road
SIZE AND TYPE 215,000 square feet plus 10,000 square foot mezzanine warehouse
RENT: 2/21/96-9/28/99 $1,292,000.00 p.a. ($107,666.67 p.m.)
9/29/99-9/28/04 $1,428,260.00 p.a. ($119,021.67 p.m.)
9/29/04-9/28/09 $1,570,325.00 p.a. ($130,860.42 p.m.)
COMMENCEMENT DATE: Date of Sublease Effective Date through 9/29/2009
RENEWAL OPTIONS: 4 AT 5 YEARS EACH
OPTION RENT:
First $1,659,793.00 p.a. $138,316.08 p.m.
Second $1,825,772.00 p.a. $152,147.67 p.m.
Third $2,008,350.00 p.a. $167,362.50 p.m.
Fourth $2,209,185.00 p.a. $184,098.75 p.m.
LAST DATE FOR NOTICE TO CANCEL OPTIONS: 18 months prior to expirarion of
initial term or renewal term, as the case may be.
CO-OCCUPANCY: Changes to take into account that Grand Union will be a
co-occupant of a portion of the premises. This will include acknowledging that
Tenant will not have exclusive possession and control, and that each party will
have liability for the portions they do possess and control.
CROSS-INDEMNITIES: A provision requiring Grand Union and C&S to each indemnify
the other for the negligent and intentional misconduct of their own employees,
subject to the allocation of responsibilities in the Agreement.
SUBSIDIARY: A provision permitting C&S to sublease and or assign to a
wholly-owned subsidiary, limited liability company or similar entity.
The Sublease shall contain the following clauses and such additional clauses as
is customary and usual for this type of transaction. It is intended that C&S
will Sublease on substantially the same terms and conditions as are in the
underlying lease, but subject to the provisions of the Agreement.
<PAGE>
THE DEMISED PREMISES
The Demised Premises consists of a building of approximately 215,000 gross
rentable square feet (which building is hereinafter called the "Building")
previously erected thereon and approximately 12.066 acres of land, which the
Tenant acknowledges that it has inspected and is fully familiar with its
condition and is leasing the same in an "AS IS" condition.
The Demised Premises hereinabove described constitutes a self-contained
unit and nothing in this Lease shall impose upon the Landlord any obligation
to provide any services for the benefit of the Tenant, including but not
limited to water, gas, electricity, heat or janitorial, unless and to the
extent expressly provided in this Lease.
USE
The Demised Premises may be used for any lawful use by the Tenant.
The aforesaid permitted use does not permit the stacking of merchandise
and/or materials against walls or columns, nor does it permit the hanging of
equipment from (or otherwise loading) the roof or structural members of the
Building except in accordance with the standards set forth with respect to
good and sound engineering practices. Notwithstanding anything contained
herein to the contrary, any damage or wear and tear to the walls, columns,
roof or structural members of the Building arising out of or in connection
with any of the activities described in this Section 5.02 shall not be deemed
to be ordinary wear and tear and shall be repaired, restored and/or replaced
by Tenant at its sole cost and expense.
QUIET ENJOYMENT
The Landlord covenants that if, and so long as, the Tenant pays the
rent, and any additional rent as herein provided, and performs the covenants
hereof, the Landlord shall do nothing to affect the Tenant's right to
peaceably and quietly have, hold and enjoy the Demised Premises for the Term
herein mentioned, subject to the provisions of this Lease.
ADDITIONAL RENT, TAXES, ASSESSMENTS, WATER RATES, CHARGES, ETC.
The Tenant shall pay, before any interest or penalties accrue thereon,
all real estate taxes, water and sewer rates and charges and all other
governmental charges imposed during the Term on the Demised Premises or on
the rents, as such, payable to the Landlord hereunder, and on request shall
exhibit to the Landlord receipted bills or other proof of payment. There
shall be apportioned any tax or charge relating to the fiscal year in which
the Term of this Lease terminates. The Tenant shall be responsible for any
tax or charge relating to the fiscal year in which the Term of this
commenced.
The Tenant shall pay all assessments that may be imposed upon the
Demised Premises by reason of any specific public improvement (including but
not limited to assessments for street openings, grading, paving and sewer
installations and
<PAGE>
improvements) except that \if by law any such special assessment is payable,
or may, at the option of the taxpayer, be paid, in installments, the Tenant
may, whether or not interest accrues on the unpaid balance thereof, pay the
same and any accrued interest on any unpaid balance thereof in installments
as each installment becomes due and payable, but in any event before any
penalty or cost may be added thereto for nonpayment of any installment or
interest. Any such benefit, assessment or installment thereof relating to a
fiscal period in which the Term of this Lease begins or ends shall be
apportioned.
The Tenant shall not be required to pay any estate, inheritance,
devolution, succession, transfer, legacy or gift tax charged against the
Landlord or the estate or interest of the Landlord in the Demised Premises or
upon the right of any person to succeed to the same or any part thereof by
inheritance, succession, transfer or gift, nor any capital stock tax or
corporate franchise tax incurred by the Landlord, nor any income tax upon or
against the income of the Landlord (including any rental income derived by
the Landlord from the Demised Premises).
The Tenant, in its name or the Landlord's name shall have the right to
contest, or review, by appropriate proceedings, in such manner as it may deem
suitable, at its own expense, and without expense to the Landlord, any tax,
assessment, water and sewer rents or charges, or other charges payable by the
Tenant pursuant to this Lease, and upon the request of the Tenant, the
Landlord will protest any tax, assessment, water or sewer rent or charge, or
any other charge payable by the Tenant pursuant to this Lease, which shall be
contested or reviewed by the Tenant. Any refund resulting from such contest
or review shall be assigned to and belong to the Tenant and shall be paid to
the Tenant promptly upon its receipt by the Landlord. If the refund relates
to a tax year that is apportioned between the Landlord and the Tenant, the
refund shall be apportioned between the Landlord and the Tenant.
INSURANCE
During the Term, Tenant shall maintain the following insurance, insuring
the Landlord and ground lessor, if any, and any mortgagee(s), as their
respective interests may appear:
(A) Insurance against damage to the Building by all risks of
direct physical loss (at Landlord's option to include earthquake and
flood) with the policy to contain either the agreed amount endorsement
or a replacement cost endorsement, in amounts sufficient to prevent the
Landlord from becoming a co-insurer, but in no event less than one
hundred (100%) percent of the Building's then replacement value. Policy
to include a contingent liability endorsement and/or demolition
and increased cost of construction endorsement in order for the Building
to be constructed in accordance with all requirements and regulations which
may be applicable at the time of loss or damage, of all governmental
agencies having jurisdiction over the Building and construction of such
Building.
<PAGE>
(B) If appropriate, boiler and machinery insurance coverage for all
eligible objects, including pressure vessels and air conditioning
equipment, with the electrical apparatus clause, with such limits as may
be reasonably necessary to properly insure the values at risk in the
Building.
(C) Plate glass insurance. At the option of the Tenant, Tenant may
elect to self-insure for plate glass.
(D) The policies of insurance provided for herein shall be from a
company rated in the A.M. Best Key Rating Guide with a policyholder's
service rating of A+ and a financial rating of XV. The company shall be
licensed by the State of New York and a certificate(s) evidencing the
existence of such policy shall be delivered to the Landlord, together with
evidence of the payment of the premiums therefor, not less than fifteen
(15) days prior to the commencement of the Term. At least fifteen (15)
days prior to the expiration or termination date of any policy, the Tenant
shall deliver a renewal or replacement policy, or certificate(s) evidencing
the existence thereof, to Landlord together with proof of the payment of
the premium therefor.
All insurance maintained pursuant to this Article may be effected by blanket
insurance policies.
The Tenant shall provide and keep in force, during the Term of this
Lease, for the benefit of the Landlord and ground lessor, if any,
comprehensive general liability insurance policies in standard form
(containing the so-called "occurrence clause"), insuring the Landlord and
Landlord's managing agent as an additional named insured with respect to
ownership, operation, maintenance, use and control against liability for
injury or damage to persons or property in or upon the Demised Premises
during the Term of this Lease, which shall include a contractual liability
endorsement. Said policies shall be written by insurance companies licensed
to do business in the State of New York and shall cover the entire Demised
Premises as well as any sidewalk in front of the same, and shall be in the
minimum amount of Three Million and 00/100 ($3,000,000.00) Dollars.
Tenant represents, said representation being specifically designed to
induce the Landlord to execute this Lease, that Tenant's personal property,
fixtures, betterments, improvements, goods and inventory at the Demised
Premises and any other items which Tenant may bring to the Premises or which
may be under Tenant's care, custody and control which may be subject to any
claim for damages or destruction shall never exceed the amount of insurance
which Tenant is required to carry pursuant to this Lease and for which Tenant
shall name the Landlord as an additional named insured as its interest may
appear. If at any time the value of the aforesaid exceeds the amount of such
insurance, Tenant covenants to so notify Landlord and at the same time to
immediately increase the amount of insurance required to be carried pursuant
to Section 3.01 to an amount sufficient to cover the aforesaid to preclude
any liability on Landlord's or Landlord's ground lessor's or mortgagee's part
to Tenant. Should Tenant fail to do so, or fail to maintain insurance
coverage adequate to cover the aforesaid, then Tenant shall not be in default
hereunder unless Tenant makes a claim against Landlord for
<PAGE>
damages or destruction which would have been covered by insurance but for
Tenant's failure to meet its obligations as set forth in this Article.
Tenant shall indemnify and save Landlord harmless against and from all
liabilities, claims, suits, fines, penalties, damages, losses, fees, costs
and expenses (including reasonable attorneys' fees) which may be imposed
upon, incurred by or asserted against Landlord by reason of:
(A) Any work or thing done in, on or about the Demised Premises or any
part thereof by or on behalf of Tenant;
(B) Any use, occupation, condition, operation of the Demised Premises
or any part thereof or of any street, alley, sidewalk, curb, vault,
passageway or space adjacent thereto or any occurrence on any of the same
on the part of Tenant;
(C) Any act or omission on the part of Tenant or any subtenant or any
employees, licensees or invitees;
(D) Any accident, injury (including death) or damage to any person or
property occurring in, on or about the Demised Premises, or any part
thereof or in, on or about any street, alley, sidewalk, curb, vault,
passageway or space adjacent thereto alleged to have been caused by
Tenant's acts or omissions; and
(E) Any failure on the part of Tenant to perform or comply with any
of the covenants, agreements, terms or conditions contained in this Lease,
or recording of this Lease. The provisions of this Paragraph shall survive
the expiration or earlier termination thereof for as long as any applicable
statute of limitations.
Providing, however, Tenant shall not be responsible for nor required to
indemnify Landlord for any acts or omissions resulting in liability, fees,
costs, etc., to Landlord arising from or in connection with Labor Services
Agreement.
All losses paid under the policy or policies carried pursuant to Section
8.01 shall be adjusted by the Landlord and Tenant and the proceeds thereof
shall be payable to the Landlord, to be held in trust to be used for repair
and restoration of the Demised Premises by the Tenant. If the proceeds of
insurance are not sufficient to cover the cost of restoration as required by
Tenant, then Tenant shall be responsible for the cost of any deficiency.
Each insurance policy carried by Tenant and insuring the Demised Premises and
its fixtures and contents against loss by fire, water and causes covered by
standard extended coverage, shall be written in a manner so as to provide
that the insurance company waive all rights of recovery by way of subrogation
against Landlord in connection with any loss or damage covered by such
policies, Neither party shall be liable to the other for any loss or damage
caused by fire, water or any of the risks enumerated in standard extended
coverage insurance, provided such insurance was obtainable at the time of
such loss or damage. If such insurance policies are obtainable only by the
payment of an additional premium charge, the same shall be obtained and such
additional premium paid for by the Tenant. If the release of either Landlord
or
<PAGE>
Tenant, as set forth in the third sentence of this Paragraph, shall
contravene any law with respect to exculpatory agreements, the liability of
the party in question shall be deemed not released but shall be deemed
secondary to the latter's insurer.
The Tenant shall also furnish insurance for such other hazards and in such
amounts as the Landlord may reasonably require and as at the time are commonly
insured against with respect to buildings similar in character, general location
and use and occupancy to the Demised Premises in relative amounts normally
carried with respect thereto. The Landlord reserves the right at any time and
from time to time to require that the limits for any of the insurance required
pursuant to Article VIII be increased to limits as at the time are reasonable
with respect to Tenant's use and to buildings similar in character, general
location and use and occupancy to the Demised Premises.
Landlord shall maintain rent insurance against the loss of rent and
additional rent for no less than one (1) year as provided herein, and Tenant
shall reimburse Landlord for the entire cost of said rent insurance, promptly
when billed, as additional rent.
All policies required pursuant to this Article shall contain provision for
thirty (30) days' written notice by registered mail to the Landlord of any
change or cancellation of said policy.
REPAIRS
The Tenant shall keep the Demised Premises in good condition and repair,
and shall redecorate, paint and renovate the Demised Premises as may be
necessary to keep them in good condition and repair and good appearance. The
Tenant shall keep the Demised Premises and all parts thereof in a clean and
sanitary condition and free from trash, inflammable material and other
objectionable matter. The Tenant shall keep the sidewalks and roadways forming
part of the Demised Premises clean and free of obstructions, snow and ice.
Throughout the Term of this Lease, the Tenant, at its sole cost and expense,
will take good care of the Demised Premises and the sidewalks and curbs
adjoining the Demised Premises and will keep the same in good order and
condition and make all necessary repairs thereto, structural and nonstructural,
interior and exterior, ordinary and extraordinary, foreseen and unforeseen.
The Tenant shall replace, at the Tenant's expense, all glass in and on the
Demised Premises which may become broken after the date of Tenant's occupancy.
When used in this Article, the term "repairs" shall include all necessary
replacements and renewals. All repairs made by Tenant shall be equal in quality
and class to the original work. The Tenant shall quit and surrender the Demised
Premises at the end of the Term in as good condition as the reasonable use
thereof will permit and in compliance with the requirements stated herein and in
a "broom-clean" condition, and shall, by way of example and not by way of
limitation, clean and reseal all concrete floors.
The Tenant shall not make any alterations, additions or improvements to the
Demised Premises without the prior written consent of the Landlord, which
Landlord shall not unreasonably withhold. In making its determination, Landlord
shall consider,
<PAGE>
among other considerations, the standards set forth with respect to good and
sound engineering practices. Notwithstanding the provisions of this Section
9.02, Landlord's prior written consent shall not be required for any
alterations, additions or improvements which, in the aggregate, do not exceed
the cost of Five Hundred Thousand and 00/100 ($500,000.00) Dollars per lease
year, and which do not adversely affect any structural portion of the
Building or any Building mechanical, electrical, HVAC, or plumbing system.
All erections, alterations, additions and improvements, whether temporary or
permanent in character, which may be made upon or to the Demised Premises
either by the Landlord or the Tenant, except furniture or movable trade
fixtures installed at the expense of the Tenant, shall be the property of the
Landlord and shall remain upon and be surrendered with the Demised Premises
as a part thereof at the expiration or sooner termination of this Lease,
without compensation to the Tenant; or, in the alternative and at the
direction of Landlord, Tenant shall remove all or so much of the property
therefrom as directed or such property shall be conclusively deemed abandoned
and may be removed by Landlord, and Tenant shall reimburse Landlord for the
cost of such removal. Landlord may have any such property stored at Tenant's
risk and expense. Landlord, at Landlord's option, may require as a condition
of its consent, that Tenant remove, at the expiration or sooner termination
of the Lease Term, any erections, alterations, additions or improvements made
by Tenant, and restore the Demised Premises to a substantially similar
condition to that in existence as of the commencement date of the Lease, and
that the Tenant use contractors approved by Landlord.
CASUALTY
If the Demised Premises or the Building is damaged or destroyed by fire,
explosion, the elements or otherwise during the Term so as to render the
Demised Premises wholly untenantable or unfit for occupancy, or should the
Demised Premises be so badly injured that the same cannot be repaired within
one hundred eighty (180) days from the happening of such injury, then, and in
such case, the Term hereby created shall, at the option of either the
Landlord or the Tenant, terminate upon the giving of a notice of termination.
If a notice of termination is given, the Term of this Lease shall terminate
effective as of the date of such damage or destruction, and the Tenant shall
immediately surrender the Demised Premises and all the Tenant's interest
therein to the Landlord, and pay rent to the time of such damage or
destruction, and the Landlord may re-enter and repossess the Demised Premises
discharged from this Lease and may remove all parties therefrom.
Should the Demised Premises be rendered untenantable and unfit for
occupancy, but yet be repairable within one hundred eighty (180) days from the
happening of said injury, the Landlord will make the proceeds of insurance
available to Tenant so that Tenant may repair the Demised Premises with
reasonable speed, and the rent shall not accrue after said injury and while
repairs are being made, provided Landlord receives the proceeds of rent
insurance, but shall recommence immediately after such repairs shall be
completed.
If the Demised Premises shall be so slightly injured as not to be rendered
untenantable and unfit for occupancy, the Tenant shall repair the same with
reasonable promptness and the rent accrued and accruing shall not cease or
terminate. The Tenant
<PAGE>
shall immediately notify the Landlord in case of fire or other damage to the
Demised Premises.
Notwithstanding anything to the contrary in Section 10.01, neither the
Landlord nor the Tenant shall have any option to terminate this Lease upon the
happening of an injury referred to in Section 10.01 provided that the happening
of such injury occurs at a time when the unexpired Term of this Lease is one (1)
year or more. In such event, the Landlord shall make the proceeds of insurance
available to the Tenant and the Tenant shall repair the Demised Premises, even
to the extent of rebuilding the Building if necessary. The Tenant shall promptly
enter and repair the Demised Premises with reasonable speed, making due
allowance for conditions beyond the Tenant's control, including, but not limited
to time lost in adjusting insurance claims and strikes, and the rent shall not
accrue after such injury and while repairs are being made, provided Landlord
receives the proceeds of rent insurance, but shall recommence immediately after
said repairs shall be completed. Landlord shall have no obligation to repair or
restore Tenant's improvements. Notwithstanding anything contained herein to the
contrary, in the event the happening of an injury referred to in Section 10.01
occurs when the unexpired Term of this Lease is less than one (1) year and
Landlord exercises its option to terminate this Lease, then and in that event,
Tenant can negate Landlord's termination by exercising its option to renew in
accordance with Article.
Prior to the performance of any work by Tenant pursuant to the provisions
of this Article, Tenant shall first submit plans and specifications to Landlord
and Landlord shall have the right to review and approve said plans and
specifications and to require modifications thereto. All work shall be performed
by Tenant in accordance with good and sound engineering practices and in
compliance with all laws, ordinances and regulations.
Notwithstanding anything contained to the contrary in this Article, in the
event the proceeds of insurance are not sufficient to cover the cost of
restoration, the Tenant shall be responsible for the cost of any deficiency.
CONDEMNATION
Section 11.01. If, during the Term, twenty-five (25%) percent or more of
the area of the Demised Premises shall be taken under any power of eminent
domain or condemnation then, at the option of the Tenant, to be exercised in
writing within thirty (30) days of the taking of title thereto, this Lease shall
expire within thirty (30) days of the date of such notice and the rent herein
reserved shall be apportioned as of said date. However, if the Tenant does not
exercise the aforementioned option, or if the taking does not deprive the Tenant
of at least twenty-five (25%) percent of the area of the Demised Premises, this
Lease shall not expire but the rent shall be equitably apportioned. If the
Landlord and the Tenant fail to agree upon an equitable apportionment, the rent
for the Building, after such taking, shall be determined in accordance with the
Commercial Rules of the American Arbitration Association, in the City of New
York, New York, and the arbitrator shall be empowered to assess the costs and
expenses of the proceedings as part of the determination. Pending such
determination the Tenant shall pay, on account of the rent, such proportion of
the rent reserved in this Lease as the total area of the Building after the
taking bears to the total
<PAGE>
area of the Building before the taking, subject to adjustment in accordance
with the arbitrator's award. If the Landlord can, after such taking,
construct an addition to the remaining Building so as to restore all of the
Building area and Building facilities theretofore taken, the Landlord shall,
subject to the adequacy of the condemnation award and to the mortgagee making
the same available to the Landlord, promptly construct such addition and
restore such facilities so taken and upon the completion of such restoration,
the full rent reserved by this Lease shall be reinstated, as of the date of
such restoration, and, if the Tenant is able to occupy and use the Building,
the proportionate rent shall be paid by the Tenant as herein provided, during
the period between the taking and the restoration of the Building and
facilities. No part of any award shall belong to the Tenant except that
nothing contained herein is intended to affect or limit the Tenant's claim
for fixtures or other improvements owned by Tenant provided the same does not
diminish the Landlord's award. It is expressly understood and agreed that the
provisions of this Article XI shall not be applicable to any condemnation or
taking for governmental occupancy for a limited period of time.
COMPLIANCE WITH LAWS, ETC.
The Tenant shall not do or permit anything to be done in the Demised
Premises which shall constitute a public nuisance or which will conflict with
the regulations of the Fire Department or with any insurance policy upon said
improvements or any part thereof.
The Tenant shall, at its own expense, obtain all necessary environmental
and operating permits and comply with all requirements of law and with all
ordinance or orders, rules and regulations of any State, Municipal or other
public authority affecting the Demised Premises and with all requirements of the
Fire Insurance Exchange or similar body, and of any liability insurance company
insuring the Landlord against liability for accidents in or connected with the
Demised Premises including, but not limited to laws, ordinance, orders, rules
and regulations which apply to the interior or exterior of the Demised Premises,
the structural or nonstructural parts thereof, and to make all improvements and
repairs required by such laws, ordinances, orders, rules and regulations,
ordinary or extraordinary, foreseen or unforeseen.
Tenant acknowledges the existence of environmental laws, rules and
regulations now or hereafter enacted by any federal, state or municipal
authority and Tenant agrees to comply therewith.
Tenant agrees not to generate, store, manufacture, refine, transport,
treat, dispose of, or otherwise permit to be present on or about the Demised
Premises, any Hazardous Substances. As used herein, Hazardous Substances shall
be defined as any "hazardous chemical", "hazardous substance" or similar term as
defined in the Comprehensive Environmental Responsibility Compensation and
Liability Act, as amended (42 U.S.C. 9601, ET SEQ.), any rules or regulations
promulgated thereunder, or in any other applicable federal, state or local law,
rule or regulation dealing with environmental protection. It is understood and
agreed that the provisions contained in this Article shall be applicable
notwithstanding the fact that any substance shall not be deemed to be a
Hazardous Substance at the time of its use by the Tenant but shall thereafter be
deemed to be a Hazardous Substance.
<PAGE>
Tenant agrees to indemnify and hold harmless the Landlord and each
mortgagee of the Demised Premises from and against any and all liabilities,
damages, claims, losses, judgments, causes of action, costs and expenses
(including the reasonable fees and expenses of counsel) which may be incurred by
the Landlord or any such mortgagee or threatened against the Landlord or such
mortgagee, relating to or arising out of any breach by Tenant of the
undertakings set forth in this Article, said indemnity to survive the Lease
expiration or sooner termination.
ASSIGNMENT AND SUBLEASE
(A) The Tenant may assign this Lease and sublet the whole or any part of
the Demised Premises, with the consent of the Landlord which consent shall not
be unreasonably withheld subject to the following conditions:
(1) A copy of the assignment or sublease shall be furnished to the
Landlord.
(2) The assignee shall assume by written instrument all of the
obligations of this Lease, and a copy of such assumption agreement shall
be furnished to the Landlord within ten (10) days of its execution.
(3) The Tenant and each assignee shall be and remain liable for the
observance of all of the covenants and provisions of this Lease, including
but not limited to the payment of the rent reserved herein, through the
entire Term of this Lease, as the same may be renewed, extended or
otherwise modified.
(4) The Tenant and any assignee shall promptly pay to Landlord one-half
(1/2) of any net consideration received for any assignment or one-half
(1/2) of the net rent, as and when received in excess of the rent required
to be paid by Tenant for the area sublet, computed on the basis of an
average square foot rent for the entire Building. As used herein, net
consideration and/or net rent shall mean gross rent or gross consideration
less any reasonable brokerage or tenant work paid by Tenant in connection
with the assignment or sublet, said brokerage or tenant work to be
amortized over the term of the assignment or sublet.
(B) Notwithstanding anything herein contained, the Tenant may assign
or sublet the whole or any part of the Demised Premises to an affiliated
corporation, or to any corporation with which it shall be merged or which
shall acquire the assets of the Tenant, all without notice to the Landlord.
(C) In any event, the acceptance by the Landlord of any rent from the
assignee, or of any of the subtenants, or the failure of the Landlord to
insist upon a strict performance of any of the terms, conditions and
covenants herein shall not release the Tenant herein, nor any assignee
assuming this Lease, from any and all of the obligations herein during and
for the entire Term of this Lease.
(D) Notwithstanding anything herein contained, prior to any sublet of the
whole or any portion of the Demised Premises or an assignment of the within
Lease to any other
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party, other than sublets or assignments permitted by Subsection (B) hereof,
the Tenant shall first offer, in writing, to surrender the Demised Premises
to the Landlord, and the Landlord shall either accept or refuse to accept
such surrender within ten (10) days after the receipt of such offer, failing
which the offer shall automatically be deemed refused. In the event Landlord
shall accept such surrender, the within tenant shall be released from any and
all obligations hereunder.
(E) The Landlord may require a payment to cover its handling charges for
each request for consent to any sublet or assignment prior to its consideration
of the same, which payment shall be equal to those charges, if any, assessed by
Landlord's mortgagee.
(F) The Tenant acknowledges that its sole remedy with respect to any
assertion that the Landlord's failure to consent to any sublet or assignment is
unreasonable shall be the remedy of specific performance and the Tenant shall
have no other claim or cause of action against the Landlord as a result of the
Landlord's actions in refusing to consent thereto.
(G) Without limiting any of the provisions of Article XIV, if pursuant to
the Federal Bankruptcy Code (or any similar Law hereafter enacted having the
same general purpose), Tenant is permitted to assign this Lease, notwithstanding
the restrictions contained in this Lease, adequate assurance of future
performance by an assignee expressly permitted under such Code shall be deemed
to mean the deposit of cash security in an amount equal to the sum of one (1)
year's fixed rent plus an amount equal to the sum of all other charges due and
payable by Tenant hereunder for the Calendar Year preceding the year in which
such assignment is intended to become effective, which deposit shall be held by
Landlord for the balance of the Term, without interest, as security for the full
performance of all of Tenant's obligations under this Lease, to be held and
applied in the manner specified for security in Section 22.02.
(H) Except as specifically set forth above, no portion of the Demised
Premises or of Tenant's interest in this Lease may be acquired by any other
person or entity, whether by assignment, mortgage, sublease, transfer, operation
of law or act of the Tenant, nor shall Tenant pledge its interest in this Lease
or in any security deposit required hereunder.
RENEWAL OPTIONS
Tenant is hereby granted four (4) options to renew this Lease upon the
following terms and conditions:
(A) At the time of each renewal, the Tenant shall not be in default in
accordance with the terms and provisions of this Lease, and shall be in
possession of the Demised Premises pursuant to this Lease.
(B) Each of the renewal options shall be deemed automatically exercised
unless Tenant notifies Landlord to the contrary, in writing, at least
eighteen (18) months before the expiration of the Term, or eighteen (18)
months before the expiration of the preceding renewal term, as the case
may be.
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(C) The renewal terms shall be for the term of five (5) years each, the
first renewal term to commence at the expiration of the term of this
Lease, the second renewal term to commence upon the expiration of the first
renewal term, the third renewal term to commence upon the expiration of the
second renewal term, and the fourth renewal term to commence upon the
expiration of the third renewal term, and all of the terms and conditions of
this Lease, other than the rent, shall apply during any such renewal terms.
(D) The basic rent to be paid during the first renewal term shall be
Eight Million Two Hundred Ninety-eight Thousand Nine Hundred Sixty-five and
00/100 ($8,298,965.00) Dollars; the basic rent to be paid during the second
renewal term shall be Nine Million One Hundred Twenty-eight Thousand Eight
Hundred Sixty and 00/100 ($9,128,860.00) Dollars; the basic rent to be paid
during the third renewal term shall be Ten Million Forty-one Thousand Seven
Hundred Fifty and 00/100 ($10,041,750.00) Dollars; and the basic rent to be
paid during the fourth renewal term shall be Eleven Million Forty-five
Thousand Nine Hundred Twenty-five and 00/100 ($11,045,925.00) Dollars. The
basic rent during each of the renewal terms shall be payable in such coin
or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts and shall
accrue at the following yearly and monthly rates:
Renewal Term Yearly Rent Monthly Rent
First
(Years 21-25) $1,659,793.00 $138,316.08
Second
(Years 26-30) $1,825,772.00 $152,147.67
Third
(Years 31-35) $2,008,350.00 $167,362.50
Fourth
(Years 36-40) $2,209,185.00 $184,098.75
The aforesaid monthly rents shall be payable in advance on the first day of
each calendar month during the respective renewal term, except that a
proportionately lesser sum may be paid for the first month of any of the
renewal terms if said renewal term commences on a date other than the first
of the month.
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Exhibit L
*
*Material omitted and filed separately with the SEC pursuant to a request for
Confidential Treatment.
