FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 24, 1999
TOPS APPLIANCE CITY, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-20498 22-3174554
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
45 Brunswick Avenue, Edison, New Jersey 08818
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (908) 248-2850
N/A
(Former name or former address, if changed since last report)
Page 1 of 93 pages
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Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposal of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
The Registrant has entered into a Lease with AM Coney Island, LLC, a New
York Limited Liability Company for the lease of certain property in Kings
County, New York. The lease is for a term of twenty-five years. A copy of the
Lease is attached hereto as Exhibit A.
Item 6. Resignation of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
Not Applicable
(b) Pro forma financial information
Not Applicable
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(c) Exhibits
A. Lease between AM Coney Island, LLC and Tops
Appliance City, Inc. dated May 24, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOPS APPLIANCE CITY, INC.
BY:/s/ Thomas L. Zambelli
------------------------
THOMAS L. ZAMBELLI
Executive Vice President
Dated: June 8, 1999
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LEASE
THIS LEASE entered into this _____ day of May, 1999 by and between AM Coney
Island, LLC, a New York limited liability company having an office located at 5
East 37th Street, 10th Floor, New York, New York 10016 (hereinafter called the
"Landlord") and TOPS APPLIANCE CITY, INC., a New Jersey corporation having an
office located at 45 Brunswick Avenue, Edison, New Jersey 08818 (hereinafter
called the "Tenant").
Upon the terms and subject to the conditions hereinafter set forth, the
Landlord leases to the Tenant and the Tenant leases from the Landlord, the
property hereinafter described:
1. THE LEASED PREMISES.
(a) The property hereby leased to the Tenant is the tract or tracts of land
(the "Land") situated in the County of Kings, City and State of New York, more
particularly described in schedule "A" annexed hereto and by this reference made
a part hereof, together with the buildings and other improvements now or
hereafter located thereon (collectively, the "Improvements").
(b) The Land and Improvements leased hereunder, together with all
Landlord's right, title and interest, if any, in and to all easements and other
appurtenances thereto, hereinafter sometimes collectively referred to as the
"Leased Premises", are demised and let subject to (a) the rights of any parties
in possession thereof and the existing state of the title thereof as of the
commencement of the term of this Lease, (b) any state of facts which an accurate
survey or physical inspection thereof might show, (c) all zoning regulations,
restrictions, rules and ordinances, building restrictions and other laws and
regulations now in effect or hereafter adopted by any governmental authority
having jurisdiction, and all agreements, licenses, easements, covenants,
restrictions and other matters which affect
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the Leased Premises, the title thereto, or the use, enjoyment, occupancy or
possession thereof, and (d) with respect to the Improvements, their condition as
of the commencement of the term of this Lease without representation or warranty
by Landlord. Tenant represents to Landlord that Tenant has examined the title to
and the physical condition of the Leased Premises prior to the execution and
delivery of this Lease and has found the same to be satisfactory for all
purposes hereof, and Tenant accepts the title and condition of the Leased
Premises in their respective, present condition "as is".
(c) Landlord makes no representation or Warranty with respect to the
condition of the Leased Premises or its fitness or availability for any
particular use, and Landlord shall not be liable for any latent or patent defect
therein.
2. TERM AND EXTENSION OPTIONS.
(a) The initial term of this Lease shall be for a period commencing on the
date of this Lease and terminating on the last day of the calendar month in
which the twenty-fifth (25th) anniversary of the date of this Lease occurs, or
on such earlier date upon which said term may expire or be terminated pursuant
to any of the conditions of limitation or other provisions of this Lease or
pursuant to the provisions of any present or future constitution, law, statute,
ordinance, rule, regulation, other governmental order or controlling judicial
determination of any federal, state, local, municipal or other governmental
body, agency or authority having or asserting jurisdiction and all departments,
commissions, boards and officers thereof (collectively the "Laws").
(b) Provided the Tenant shall keep, observe and perform all of the terms,
covenants and conditions of this Lease on Tenant's part to be kept, observed and
performed, Tenant shall have the right to extend the term of this Lease for two
(2) consecutive periods of ten (10) Lease Years each (each hereinafter referred
to as an "Extended Term", and referred to respectively as the "First Extended
Term" and the "Second Extended Term"), provided
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Tenant shall notify Landlord, in
writing, by registered or certified mail, return receipt requested, not more
than twenty-four (24) months nor less than twelve (12) months prior to the
expiration of the then existing term hereof, time being of the essence therefor,
that Tenant elects to extend the term of this Lease, and provided further that
this Lease, as extended, shall be upon the same terms, covenants and conditions
as are contained herein, except as to the duration of the term hereof, the
Minimum Rental (as hereinafter defined) and any other provisions of this Lease
which by their terms are applicable only to any portions of the term and
excluding, upon the expiration of the Second Extended Term, any further option
of extension. Failure to strictly comply with the provisions of this paragraph
shall be deemed a complete waiver of the options herein granted.
(c) The expression the "Initial Term" shall mean the period described in
Section 2(a) as the initial term.
3. FIXED ANNUAL MINIMUM RENTAL.
Commencing on the Rent Commencement Date (as hereinafter defined), Tenant
covenants to pay Landlord, without previous demand therefore and without any set
off or deduction whatsoever a net fixed annual minimum rent (the "Minimum
Rental") for each year of the Initial Term and any Extended Term of this Lease,
payable in equal monthly installments, in advance on or before the first (1st)
day of each and every calendar month during the term of this Lease in amounts
set forth on Schedule "B" annexed hereto and by this reference made a part
hereof. In the event that the Rent Commencement Date does not commence on the
first day of a calendar month, the installment of Minimum Rental for the partial
calendar month in which the Rent Commencement Date occurs shall be prorated on
the basis of the number of days of the term within such calendar month. Landlord
may, if required by any Mortgagee (as hereinafter defined), direct Tenant from
time to time to pay all or any portion of the Minimum Rental directly to a
Mortgagee(s), and to pay the balance of the Minimum Rental, if any, to Landlord.
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4. UTILITIES.
Tenant shall furnish, at its own expense, all utilities of every type and
nature required by it in its use of the Leased Premises and shall pay or cause
to be paid, when due, all bills for water, sewerage, heat, gas, electricity and
other utilities, if any, used on, in connection with, or chargeable against the
Leased Premises until the termination of this Lease and all bills for utility
charges relating to the Leased Premises or the use thereof and imposed on users
of utilities, whether or not such charges shall relate to services or benefits
available to the Tenant during the term of this Lease, and the Tenant shall
indemnify and save harmless the Landlord from and against any loss, cost and
expense in connection therewith.
5. ADDITIONAL RENT.
(a) It is the purpose and intent of the Landlord and Tenant that the rent
payable hereunder shall be absolutely net to the Landlord so that this Lease
shall yield, net to the Landlord, the Minimum Rental due with respect to each
Lease Year during the term of this Lease.
(b) Tenant covenants to pay, before any fine, penalty, interest or cost may
be added thereto for the non-payment thereof, as additional rent, all taxes,
assessments (including but not limited to, all assessments for public
improvements or benefits, whether or not commenced or completed within the term
of this Lease), water, sewer and other rents, rates and charges, charges for
public utilities, excises, levies, license and permit and inspection fees and
other governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever, which at any time
prior to or during the term of this Lease may have been or may be assessed,
levied, confirmed, imposed upon, or grow to become due or payable out of or in
respect of, or become a lien on, the Leased Premises or any part thereof or any
appurtenance thereto,
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any personal property, the rent and income received by
Tenant from subtenants, any use, possession or occupation of the Leased
Premises, or rentals or sales therefrom or activity conducted therein, such
franchises as may be appurtenant to the use or occupation of the Leased
Premises, this transaction or any document to which Tenant is a party creating
or transferring any right, title or interest or estate in the Leased Premises
(all of the foregoing, together with any and all Premiums (as hereinafter
defined), and together with any and all penalties, fines and/or interest
thereon, being hereinafter sometimes collectively referred to as "Impositions",
and any of the same being hereinafter sometimes referred to as an "lmposition").
Nothing herein contained shall require Tenant to pay income taxes assessed
against Landlord, or any capital levy, corporation franchise, excess profits,
estate, succession, inheritance or transfer taxes of Landlord, unless such taxes
are imposed or levied upon or assessed as a total or partial substitute for, or
in lieu of, any other Imposition required to be paid by Tenant pursuant to this
Section 5(b), in which event same shall be deemed Impositions and shall be paid
by Tenant; provided, however, that if at any time during the term of this Lease,
the method of taxation shall be such that there shall be levied, assessed or
imposed on Landlord a capital levy, gross receipts or other tax directly on the
gross rents received therefrom and/or a franchise tax or an assessment, levy or
charge measured by or based, in whole or in part, upon such rents, the Leased
Premises (including but not limited to the acquisition, leasing, use, or value
thereof) or the present or any future Improvements on the Leased Premises or the
construction thereof and/or measured in whole or in part by Landlord's income
from the Leased Premises if in computing such income there is not allowed as a
deduction any significant portion of the depreciation or interest deduction
allowed for federal income tax purposes, then all such taxes, assessments,
levies and charges, or the part thereof so measured or based, shall be deemed to
be included within the term "Imposition" for the purposes hereof, but only to
the extent that such taxes would be payable if the Leased Premises were the only
property of Landlord, and Tenant shall pay and discharge the
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same as herein
provided in respect of the payment of Impositions. Tenant shall furnish to
Landlord, promptly after payment of any real estate taxes or Premiums, and, with
respect to any other Impositions, promptly upon request of Landlord, official
receipts or other satisfactory proof evidencing payment of such Imposition. In
addition, Tenant shall furnish to Landlord semi-annually, throughout the term of
this Lease, a certificate executed by an executive officer of Tenant, stating
that all Impositions have been paid to date. Landlord shall have the right, at
Landlord's option, to require Tenant to: (i) promptly deposit with Landlord,
Landlord's Mortgagees (as hereinafter defined) or the designee of Landlord or
its Mortgagee, funds for the payment of current Impositions required to be paid
by Tenant hereunder; and (ii) also deposit monthly one-twelfth (1/12th) of the
amount which would be sufficient at all times to pay the Impositions thirty (30)
days before such Impositions are payable, or estimated by Landlord or any
Mortgagee to be payable, during the ensuing twelve (12) months and all
additional funds required for the payment of any Imposition shall also be
deposited with Landlord or its Mortgagee on the first day of the month during
which or at the end of which an Imposition is due and payable without interest,
penalty or liability and any interest earned on such funds and made available to
Landlord shall accrue for the benefit of Tenant and may be applied by Landlord
against any other sum then or which may become due hereunder from Tenant to
Landlord; provided, however, that in the event any Mortgagee requires deposits
for Impositions, such deposits shall be made in the amount(s) and manner
required by such Mortgagee and any interest earned on such deposits shall be
allocated as any Mortgagee requires. No sum collected by Landlord or its
Mortgagee under this Section 5 shall constitute a trust fund, all of such sums
may be co-mingled with other assets of Landlord or its Mortgagee, and neither
Landlord nor any of its Mortgagees shall be required to deposit such sums in an
interest bearing account.
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6. USE
(a) Tenant shall be permitted to use the Leased Premises for any lawful
retail use, subject, however, to zoning ordinances, Laws, the orders, rules and
regulations of the Board of Fire Insurance Underwriters and any similar bodies
having or asserting jurisdiction thereof now in effect or hereafter adopted by
any governmental authority having or asserting jurisdiction, and such
conditions, Restrictions (as hereinafter defined) and other encumbrances, if
any, to which the Leased Premises, are subject at the time of execution and
delivery hereof.
(b) Tenant shall not use or occupy or permit the Leased Premises to be used
or occupied, nor do or permit anything to be done in or on the Leased Premises
or any part thereof, in a manner that would in any way violate any of the Laws
or any certificate of occupancy affecting the Leased Premises or make void or
voidable any insurance then in force with respect thereto, or that may interfere
in any way with the ability of Landlord to obtain at regular rates fire or other
insurance thereon required to be furnished hereunder by Tenant, or that will
cause or be likely to cause injury to any of the Improvements, or that will
constitute a public or private nuisance or waste. Nothing contained in this
Lease and no action or inaction by Landlord shall be deemed or construed to mean
that Landlord has granted to Tenant any right, power or permission to do any act
or to make any agreement that may create, give rise to, or be the foundation
for, any right, title, interest, lien, charge or other encumbrance upon the
estate of Landlord in the Leased Premises.
(c) Except when and to the extent the Leased Premises may be uninhabitable
by reason of damage by fire and other casualty, Tenant covenants to continuously
and uninterruptedly use, occupy and operate the Leased Premises in accordance
with, and as and to the extent required under, the provisions set forth in the
Deed (as hereinafter defined).
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7. COMPLIANCE WITH LAWS AND AGREEMENTS.
(a) Tenant shall, throughout the term of this Tenant's sole cost and
expense, promptly comply or cause compliance: (i) with all Laws, whether present
or future, foreseen or unforeseen, ordinary or extraordinary, and whether or not
the same shall be presently within the contemplation of Landlord and Tenant or
shall involve any change of governmental policy, or require structural or
extraordinary repairs, alterations, or additions and irrespective of the cost
thereof, which may be applicable to the Leased Premises, or the ownership,
occupancy as use thereof, and (ii) with any deeds, agreements, contracts,
easements and restrictions (collectively, the "Restrictions") affecting the
Leased Premises or any part thereof or the ownership, occupancy or use thereof
(x) existing on the date hereof or (y) hereafter created by Tenant, or consented
to or requested by Tenant (which Restrictions shall include, without limitation,
the covenants set forth in the Deed and the NYC Contract of Sale [with respect
to the obligations of the "purchaser" thereunder], as hereinafter defined).
(b) Except as expressly provided in subsection 12(d) of this Lease, no
abatement, diminution or reduction in Minimum Rental, additional rent or any
other charges required to be paid by Tenant pursuant hereto shall be claimed by
or allowed to Tenant for any inconvenience or interruption, cessation, or loss
of business caused directly or indirectly, by any present or future Laws, or by
priorities, rationing or curtailment of labor or materials, or by war, civil
commotion, strikes or riots, or any manner or thing resulting therefrom, or by
any other cause or causes beyond the control of Landlord or Tenant, nor shall
this Lease be affected by any such causes; and, except as expressly provided in
subsection 12(d) of this Lease, no diminution in the amount of the space used by
Tenant caused by legally required changes in the construction, equipment,
fixtures, motors, machinery, operation or use of the Leased Premises shall
entitle Tenant to any abatement, diminution or reduction of the rent or any
other charges required to be paid by Tenant pursuant to the terms of this Lease.
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8. MAINTENANCE AND REPAIR
(a) Tenant shall promptly throughout the term of this Lease at Tenant's
cost and expense, take good care of and maintain the Leased Premises and all
parking areas, roadways, sidewalks, curbs and trackage rights, if any, on,
adjacent and appurtenant thereto, in good order and repair, and shall promptly
remove all accumulated snow, ice and debris from any and all roadways, sidewalks
and curbs located upon or appurtenant to the Leased Premises and from any and
all other sidewalks and curbs adjacent to the Leased Premises.
(b) Tenant shall not commit or suffer to be committed any waste upon or
about the Leased Premises, and shall promptly at its cost and expense, make all
necessary replacements, restorations, renewals and repairs to the Leased
Premises and appurtenances thereto, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, and foreseen or unforeseen. Repairs,
restorations, renewals and replacements shall, to the extent possible, be at
least equivalent in quality to the original work or the property replaced, as
the case may be. Tenant shall not make any claim or demand upon or bring any
action against the Landlord for any loss, cost, injury, damage or other expense
caused by any failure or defect, structural or non-structural, of the Leased
Premises or any part thereof.
(c) Landlord shall not under any circumstances be required to build any
improvements on the Leased Premises, or to make repairs, replacement alterations
or renewals of any nature or description to the Leased Premises or to any of the
Improvements, whether interior or exterior, ordinary or extraordinary,
structural or non-structural, foreseen or unforeseen, or to make any expenditure
whatsoever in connection with this Lease or to inspect or maintain the Leased
Premises in any way. Tenant hereby waives the right to make repairs,
replacements, renewals or restorations at the expense of Landlord pursuant to
any Laws.
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9. INITIAL WORK CHANGES AND ALTERATIONS BY THE TENANT.
(a)
(i) Tenant shall, at its sole cost and expense (subject to contributions
from Landlord made in accordance with subsection 9 (a) (ii) below) construct and
equip the Leased Premises for occupancy and operation as a "Tops Appliance City"
store for the retail sale of appliances, electronics and other associated
merchandise (and such other products and services in which "Tops Appliance City"
stores may be engaged) (the "Initial Work"), in accordance with the Construction
Contract (as hereinafter defined) and the Initial Work Plans and Specifications
(as hereinafter defined). Tenant covenants and agrees that the construction of
the Initial Work shall be completed in accordance with this subsection 9(a)
(which construction shall not be deemed completed until the conditions set forth
in subsection 9(a) (iv) below are satisfied), and Tenant shall open for business
as a "Tops Appliance City" retail store, no later than July 1, 1999; subject to
unavoidable delays resulting from any acts of God, acts of public enemy, riot,
civil commotion, storms, fire, floods, earthquakes, strikes, lockouts, and any
other similar matter which shall be beyond the reasonable control of Tenant
(provided, however, no such delays shall extend completion of construction and
opening for business beyond the date that the occurrence of same is required
under the Deed. Tenant shall not modify the Initial Work Plans and
Specifications or the Construction Contract in any material respect, nor permit
the General Contractor (as hereinafter defined) to be replaced without
Landlord's prior written consent. Tenant represents that the Initial Work Plans
and specifications do not provide for construction of any off-site improvements
nor provide
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for any buildings or other improvements (except for parking lot
pavement, and certain improvements within such parking areas as described in the
Initial Work Plans and Specifications) to be located on any easement located on
the Leased Premises. Landlord shall be entitled, but shall not be obligated, to
inspect the construction of the Initial Work and obtain copies of construction
related documents upon request in order to monitor compliance with this Lease.
The Initial Work and the Initial Work Plans and Specifications shall be deemed
to be a "Tenant Change" and "Plans and Specifications", respectively, as such
terms are defined in subsection 9(b) below, and, except as otherwise provided in
this subsection 9(a), shall be subject to Tenant's compliance with the
provisions of subsections 9(b) (iii) and 9(b) (v) through (xiv) hereof.
(ii) Subject to the terms and conditions set forth in this subsection
9(a)(ii), Landlord shall reimburse Tenant (or pay the General Contractor, if
applicable) up to a maximum amount of $3,620,000 ("Landlord's Contribution") for
(A) direct construction costs incurred by Tenant in connection with the
construction of the Initial Work (hereinafter referred to as "Direct
Construction Costs"), as itemized in the Trade Breakdown Schedule (as
hereinafter defined), and (B) costs, other than Direct Construction Costs,
incurred by Tenant in connection with the construction of the Initial Work
(hereinafter referred to as "Other Project Costs"), as itemized in the Schedule
of Other Project Costs (as hereinafter defined). Landlord acknowledges and
agrees that certain Other Project Costs have been incurred by Tenant prior to
the date hereof and Tenant has been reimbursed for same out of disbursements of
the Landlord's Contributions made pursuant to the terms of this Section 9.
Landlord shall disburse from time to time (but not more often than once
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in any
thirty (30) day period) that portion of the Landlord's Contribution equal to the
amount set forth in Tenant's Requisition (as hereinafter defined) made in
accordance with subsections 9(b)(ix) through (xi) hereof, which Requisitions
shall each be based upon the Trade Breakdown Schedule and/or the Schedule of
Other Project Costs. Notwithstanding the terms of said subsections 9(b)(ix) and
(x), any Requisition for Direct Construction Costs may be submitted by the
General Contractor and, provided that Tenant's written approval is obtained with
respect to such Requisition and all other conditions set forth in this Section 9
to payment thereof have been complied with, payment of such Requisition shall be
made directly to the General Contractor. Advances of Landlord's Contribution for
sums payable to the General Contractor shall also be subject to the terms of the
Construction Contract (including, without limitation, any applicable holdbacks).
Notwithstanding anything set forth in this Lease to the contrary, Landlord shall
have no obligation to make advances of the Landlord's Contribution pursuant to
this subsection (ii) so long as Tenant has not complied with all of its
obligations and covenants under this Lease (including, without limitation, this
subsections 9(a)) or any representation made by Tenant hereunder remains untrue.
In the event Landlord's Contributions shall be insufficient to pay for all of
the costs incurred in connection with the construction of the Initial Work,
Tenant shall be responsible for the balance of such costs.
(ii) Intentionally omitted.
(iii) Within thirty (30) days after the completion of construction pursuant
to the Initial Work Plans and Specifications, Tenant shall deliver to Landlord,
at its sole cost and expense: (A) three (3) copies of the "as-
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built" plans and
specifications for the Leased Premises; (B) three (3) copies of an "as-built"
ALTA Survey prepared in accordance with the Minimum Standard Detail Requirements
for Land Title Surveys, including any Flood Plain designations, adopted by the
American Land Title Association and the American Congress for Surveying and
Mapping (1992) certified to Landlord, Landlord's title company and the
Mortgagee, if any, of the Leased Premises which survey shall contain an adequate
metes and bounds legal description, show the location of all improvements, all
interior lot lines, if any, the location of all easements and rights of way,
utilities, elevations, high water marks, ingress and egress to and from the
Leased Premises to public roads and showing no encroachments; (C) a copy of the
permanent and unconditional Certificate of Occupancy for the Leased Premises
permitting the use of the Leased Premises as set forth in Section 6 hereof (or,
in lieu thereof, Tenant shall provide a temporary Certificate of Occupancy
within such thirty (30) day period and such permanent Certificate of Occupancy
shall be delivered to Landlord within six (6) months of the completion of
construction Pursuant to the Initial Work Plans and Specifications [provided,
however, such permanent Certificate of Occupancy shall be delivered to Landlord
within such period of time that Landlord's Mortgagee(s) may require]) and copies
of all other permits, licenses and authorizations necessary for the maintenance
and use of the Leased Premises pursuant to Laws and any Restrictions; (D) an
architect's certificate from an architect licensed to practice in the state in
which the Leased Premises is located, certifying that the Leased Premises has
been improved in accordance with the Initial Work Plans and Specifications and
in accordance with applicable Laws and that Tenant has received all permits,
licenses, approvals including, but not limited to a Certificate of Occupancy,
required by applicable Laws to maintain and use the Leased Premises as improved
by such construction, and that all fees required to be paid in connection
therewith have been paid; (E) a certification of the costs incurred by Tenant to
construct the improvements pursuant to the Initial Work Plans and
Specifications, which certification shall include a statement that all
contractors, materialmen, engineers, architects and any other parties owed fees
in connection with the construction of the Initial Work pursuant to the Initial
Work Plans and Specifications have been paid; and (F) endorsements to Landlord's
title insurance policy affirmatively insuring Landlord against all mechanics and
materialmen's liens, to include the state of facts shown on the aforesaid
as-built Survey and updating Landlord's title insurance policy to a current
date, showing no other exceptions to title from the title policy Landlord
obtained upon at acquisition of the Leased Premises.
(b) Following the completion of the Initial Work in accordance with
subsection 9(a) (iii) hereof, Tenant, at its sole cost and expense, shall have
the right at any time and from time to time during the term of this Lease to
make changes and alterations to the building or buildings on the Leased Premises
or to construct new buildings thereon or repair or replace any building or
buildings damaged, destroyed or taken (all of the foregoing are hereinafter
collectively called "Tenant Changes" and any of the foregoing is called a
"Tenant Change"), subject, however, in all cases, to the following:
(i) Landlord's prior written consent shall be required in each instance of
any Tenant Change involving the structure of any building (which consent shall
not be unreasonably withheld; it shall not be unreasonable for Landlord to
withhold such consent if the same shall be in violation of any Mortgage or if
any Mortgagee shall not give its
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consent to the same where such Mortgagee is
entitled to give such consent by the terms of its Mortgage).
(ii) In addition to the consent required under Section 9(b) (i) above, each
Tenant Change or related Tenant Changes, in the aggregate, whether or not
structural or exterior, involving an estimated cost of more than One Hundred
Seventy-Five Thousand ($175,000.00) Dollars shall require the prior written
consent of any Mortgagee, if and as required by such Mortgagee, and the prior
written reasonable consent of Landlord.
(iii) No Tenant Change shall be undertaken until the Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction and until all
originals of which are delivered to Landlord; and, at Tenant's expense, the
Landlord shall join in application for such permits and authorizations whenever
such action is necessary.
(iv) Each Tenant Change or related Tenant Changes, in the aggregate,
involving an estimated cost of more than One Hundred Seventy-Five Thousand
($175,000.00) Dollars shall be conducted under the supervision of a licensed
architect or engineer selected by Tenant and shall be made in accordance with
detailed plans and specifications (the "Plans and Specifications") and cost
estimates prepared by such architect or engineer and approved in writing by the
Landlord, and any Mortgagee, if required.
(v) Any Tenant Change shall be made promptly and in a good workmanlike
manner and in compliance with all applicable permits and authorizations,
building and zoning laws and all Laws and Restrictions (including, without
limitation, the provisions of the Deed), and in accordance with the orders,
rules and regulations of the Board of Fire Insurance
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Underwriters and any other
body hereafter exercising similar functions having or asserting jurisdiction
over the Leased Premises.
(vi) The cost of any Tenant Change shall be paid in cash or its equivalent
by the Tenant, so that the Leased Premises shall at all times be free of liens
for labor or materials supplied or claimed to have been supplied to the Leased
Premises.
(vii) Except with respect to any Tenant's Property, any such Tenant Change
shall immediately upon incorporation into the Leased Premises be and become the
property of the Landlord, subject to the leasehold rights of the Tenant
hereunder.
(viii) Tenant shall carry all necessary Worker's Compensation Insurance and
shall furnish Landlord with evidence of such coverage.
(ix) If any Tenant Change is undertaken by Tenant pursuant to the
provisions of Section 11 or 12 of this Lease, then each request for payment
(each a "Requisition") shall be made on thirty (30) days prior notice to
Landlord and Mortgagee, which Requisition shall set forth in reasonable detail
the costs incurred by Tenant for which payment is sought (with bills or invoices
attached thereto substantiating the amounts of such costs); and shall be
accompanied by (A) evidence satisfactory to Landlord that all materials
installed and work and labor performed in connection with such work have been
paid in full (excepting therefrom, in the case of a Requisition with respect to
the Initial Work, such materials and work and labor to be paid for with the
proceeds of such Requisition), and (B) a certificate to be made by the
supervising architect or engineer, stating: (1) the portion of the work
completed as of the date of its last inspection (which inspection shall have
been made no less than ten (10) days prior to the delivery of the applicable
Requisition) has been completed in
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accordance with the Plans and Specifications
and applicable Laws; (2) that the sum requested is justly required to reimburse
the Tenant for payments by the Tenant to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other persons
rendering services or materials for the work (giving a brief description of such
services and materials), and that all persons or entities that could otherwise
claim a lien on any portion of or interest in the Leased Premises by reason of
having rendered any services or materials for such work have either been paid in
full (or, in the case of a Requisition, in connection with the Initial Work,
will be paid in full out of the sum requested) and/or have duly, effectively and
irrevocably waived and released all rights to any such liens, and that, when
added to all sums previously paid out by the Landlord, such sum does not exceed
ninety (90%) percent of the value of the work done to the date of such
certificate, with final payment of the balance of the cost of the work to be
made upon certification by the supervising architect or engineer and by the
Mortgagee's architect (the cost of Mortgagee's architect to be paid by Tenant)
as to completion in accordance with the approved Plans and Specifications (or,
with respect to the Initial Work, such final payment shall be made when due in
accordance with subsection 9(a) (iii) above); and (3) that the amount of such
proceeds remaining in the hands of the Landlord (or the undisbursed portion of
Landlord's Contribution, if applicable) will be sufficient on completion of the
work to pay for the same in full (giving in such reasonable detail, as Landlord
may require, an estimate of the cost of such completion). Prior to each advance
pursuant to any Requisition, Tenant shall, upon request of Landlord, furnish
Landlord with evidence satisfactory to Landlord, showing
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payment of all bills
and charges for which advances hereunder have been previously made with respect
to the applicable Tenant Change;
(x) If any Tenant Change or related Tenant Changes, in the aggregate,
involving an estimated cost in excess of One Hundred Seventy-Five Thousand
($175,000.00) Dollars is undertaken by Tenant pursuant to the provisions of this
Lease, then each Requisition with respect thereto shall be accompanied by
waivers of lien which shall be satisfactory to Landlord and any Mortgagee,
covering that part of the work for which payment or reimbursement is being
requested and by a search prepared by a title company or licensed abstractor or
by other evidence, satisfactory to Landlord and Mortgagee, that there has not
been filed with respect to any part of the Leased Premises any mechanics or
other lien or instrument for the retention of title in respect of any of the
work not discharged of record, and, if and as requested by, and satisfactory to,
Landlord or any Mortgagee, title policy endorsements sufficient to evidence the
foregoing and insure the priority of the requesting party's interest in the
Leased Premises;
(xi) If any Tenant Change or related Tenant Changes, in the aggregate,
involving an estimated cost in excess of One Hundred Seventy-Five Thousand
($175,000.00) Dollars is undertaken by Tenant pursuant to the provisions of this
Section 9 or of Section 11 or 12 of this Lease, then each Requisition with
respect thereto, after the work has been substantially completed, shall be
accompanied by such certificates, permits and licenses required by any Laws and
such other instruments and agreements as Landlord or any Mortgagee shall
require;
(xii) No Tenant Change shall tie-in or connect the Leased Premises or any
Improvements thereon with any property outside the Leased Premises
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without the
prior written consent of the Landlord; and
(xiii) No Tenant Change shall reduce the value of the Leased Premises or
impair the structural integrity of any building comprising a part of the Leased
Premises.
(xiv) In connection with any Tenant Change undertaken pursuant to the
provisions of this Section 9 or of Section 11 or 12 of this Lease, Landlord and
any Mortgagee may require Tenant to comply with such other conditions, as shall
be reasonably satisfactory to Landlord and satisfactory to such Mortgagee, as
the case may be, to insure the lawful, safe and expedient completion of such
Tenant Change.
(c) Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not, without Landlord's prior written approval, make any alteration
or change to the Leased Premises; excepting therefrom any such loss, cost,
injury, damage or other expense as risk arising by means of the gross negligence
or willful misconduct of Landlord (or any of its agents or employees) which
would decrease the size of or decrease the square foot floor area of any
building comprising a part of the Leased Premises; excepting therefrom any such
loss, costs, injury, damage or other expense as risk arising by means of the
gross negligence or willful misconduct of Landlord (or any of its agents or
employees)
10. INDEMNITY AND PUBLIC LIABILITY INSURANCE.
(a) Tenant shall at all times indemnify Landlord for, defend Landlord
against, and save Landlord harmless from, any liability, loss, cost, injury,
damage or other expense or risk whatsoever that may occur or be claimed by or
with respect to any person(s) or property on or about the Leased Premises and
resulting directly or indirectly from the use, misuse, occupancy, possession or
unoccupancy of the Leased Premises by Tenant or any concessionaires, subtenants
or other persons claiming through or under Tenant, or their respective agents,
employees, licensees,
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invitees, guests or other such persons, or from the
condition of the Leased Premises; excepting therefrom any such loss, cost,
injury, damage or other expense or risk arising by reason of the gross
negligence or wilful misconduct of Landlord (or any of its agents or employees)
Tenant shall, at its cost and expense, defend against any and all such actions,
claims and demands and shall indemnify Landlord for all costs, expenses, and
liabilities it may incur in connection therewith (including, without limitation,
reasonable attorneys' fees and other legal expenses). Landlord shall not in any
event whatsoever be liable for any injury or damage to the Leased Premises or to
the Tenant or to concessionaires, subtenants or other persons claiming through
or under Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons or to any property of any such persons. property of
any such persons. Tenant shall not make any claim or demand upon or institute
any action against the Landlord as result of such injury or damage.
(b) Tenant, at its cost and expense, shall obtain and maintain in force
throughout the term of this Lease, comprehensive general liability insurance
against any loss, liability or damage on, about or relating to the Leased
Premises, with limits of not less than Five Million ($5,000,000.00) Dollars for
death or injuries to one person and not less than Ten Million ($10,000,000.00)
Dollars for death or injuries to two or more persons in one occurrence, and not
less than Two Million Five Hundred Thousand ($2,500,000.00) Dollars for damage
to property (all of the foregoing being hereinafter sometimes collectively
referred to as the "Liability Insurance"). The limits of Liability Insurance may
be increased by Landlord from time to time. All such Liability Insurance
obtained and maintained by Tenant shall name Tenant as the insured party (and
both Landlord and any Mortgagee(s), if requested by Landlord, as additional
insured parties) therein and shall be obtained and maintained from and with a
reputable and financially sound insurance cornpany(ies) reasonably acceptable to
Landlord, authorized to issue such insurance in the State in which the Leased
Premises is located.
(c) The policies of insurance required under this Lease shall contain an
agreement by the insurer that it will not cancel or modify such policy except
after thirty (30) days prior written notice to Landlord and any Mortgagees by
certified mail, return receipt requested. Not
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less than thirty (30) days prior
to the expiration of any such insurance policy, Tenant shall deliver to Landlord
a certificate evidencing the replacement or renewal thereof.
(d) Tenant shall furnish Landlord with duplicate original(s) or original
certificate(s) of such insurance policies, including renewal and replacement
policies, together with written evidence that the premiums therefor have been
paid. It is understood and agreed that said policies may be blanket policies
covering other locations operated by Tenant, its affiliates or subsidiaries,
provided that such blanket policies otherwise comply with the provisions of this
Section 10, and provided further that such policies shall provide for a reserved
amount thereunder with respect to the Leased Premises so as to assure that the
amount of insurance required by the provisions of this Section 10 will be
available notwithstanding any losses with respect to other property covered by
such blanket policies.
(e) Tenant shall comply, notwithstanding any other provision, with the
reasonable requirements of any Mortgages relating to the insurance and to the
proceeds of insurance maintained and required to be maintained by Tenant
pursuant to the provisions of Sections 10 and 11 of this Lease. In the event
Landlord is required, pursuant to the terms of any Mortgage (as hereinafter
defined) to make deposits of sums sufficient to pay any insurance premiums with
respect to insurance policies required to be maintained by Tenant hereunder,
then Landlord shall have the right to require Tenant to: (i) promptly deposit
with Landlord or Landlord's Mortgagee(s) or the designee of Landlord or its
Mortgagee, funds for the payment of such insurance premiums; and (ii) also
deposit monthly one-twelfth (1/12th) of the amount which would be sufficient at
all times to any such insurance premiums thirty (30) days before such premiums
are payable, or estimated by Landlord or any Mortgagee to be payable, during the
ensuing twelve (12) months and all additional funds required for the payment of
any of such premiums shall also be deposited with Landlord or its Mortgagee on
the first day of the month during which or at the end of which such premiums are
due and payable without interest, penalty or risk of cancellation of the
applicable insurance policy, and any interest earned on such funds and made
available to Landlord shall accrue for the benefit of Tenant and may be applied
by Landlord against any other sum then
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or which may become due hereunder from
Tenant to Landlord; provided, however, that in the event any Mortgagee requires
deposits for such insurance premiums, such deposits shall be made in the
amount(s) and manner required by such Mortgagee and any interest earned on such
deposits shall be allocated as any Mortgagee requires. No sum collected by
Landlord or its Mortgagee under this subsection 10(e) shall constitute a trust
fund, all of such sums may be co-mingled with other assets of Landlord or its
Mortgagee, and neither Landlord nor any of its Mortgagees shall be required to
deposit such sums in an interest bearing account.
11. INSURANCE FOR DAMAGE OR DESTRUCTION AND WORKER'S COMPENSATION.
(a) The Tenant shall, throughout the term of this Lease, at its own cost
and expense, obtain and maintain in full force and effect and in the name of
Tenant, Landlord and, if so requested by Landlord, any Mortgagees (except that
Landlord and any Mortgagee need not be named on any Worker's Compensation
policy)
(i) all risk insurance, including but not limited to collapse, loss or
damage occasioned by fire, the perils included in the so-called extended
coverage endorsement, vandalism and malicious mischief, and water damage and
containing Replacement Cost, Agreed Amount and Demolition and Increased Cost due
to Ordinance endorsements covering the Improvements and all replacements and
additions thereto, and all fixtures, equipment and other personal property
therein; the foregoing coverage shall be provided in amounts sufficient to
provide one hundred (100%) percent of the full replacement cost of the
Improvements (exclusive of footings and foundations) and shall be determined
from time to time, but not more frequently than once in any thirty-six (36)
calendar months (unless otherwise reasonably requested by a Mortgagee), at
Tenant's expense, at the request of the Landlord, by any appraiser selected by
Tenant and approved by Landlord and the insurance carrier;
(ii) if a sprinkler system shall be located in the Leased Premises,
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sprinkler leakage insurance in amounts reasonably satisfactory to Landlord and
any Mortgagee;
(iii) such other insurance and in such amounts as may from time to time be
required by a Mortgagee;
(iv) Boiler and Machinery Broad Form policy covering explosion insurance in
respect of steam and pressure boilers and similar apparatus, if any, located on
the Leased Premises in an amount equal to one (1) hundred (100%) percent of the
full replacement cost of the Improvements;
(v) war risk insurance as and when such insurance is obtainable from the
United States Government or any agency or instrumentality thereof, and a state
of war or national or public emergency exists or threatens, and in an amount not
less than the full insurable value of the Leased Premises;
(vi) the Liability Insurance as provided in Section 10 of this Lease;
(vii) Worker's Compensation insurance subject to statutory limits or better
in respect of any work or other operations on or about the Leased Premises;
(viii) such other insurance with respect to the Leased Premises and in such
amounts as Landlord from time to time may reasonably request against such other
insurable hazards which at the time in question are commonly insured against in
the case of property similar to the Leased Premises;
(ix) during the performance of any construction, broad form Builder's
All-Risk insurance;
(x) rent insurance on the "All Risks of Physical Loss" basis in an amount
equal to two (2) years' of the then current Minimum Rental and Impositions; and
(xi) in the event that any portion of the Premises is located within any
flood plain, mud slide, flood hazard or fault area, as designated on any map
prepared or issued for such purpose by any Governmental Authority, a policy
insuring against such risks.
(b) All such insurance described in subsection of this Section 11 shall:
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(i) be obtained from and maintained with reputable and financially sound
insurance company(ies) reasonably acceptable to Landlord and any Mortgagees,
authorized to issue such insurance in the State in which the Leased Premises are
located;
(ii) be on and/or contain such terms and conditions as shall be
satisfactory to Landlord and to any Mortgagees;
(iii) provide that the proceeds of any loss shall be payable to Landlord
(but to be held in escrow by any recognized financial institution selected by
Landlord), or, if Landlord so requests, to any Mortgagee(s) in accordance with
this Lease;
(iv) contain an agreement by the insurer that it will not cancel or modify
such policy except after thirty (30) days' prior written notice to Landlord and
any Mortgagee(s) by certified mail, return receipt requested; and
(v) contain an agreement that any loss otherwise payable thereunder shall
be payable notwithstanding any act or negligence of Landlord or Tenant which
might, absent such agreement, result in a forfeiture of all or part of the
payment of such loss.
(c) Not less than thirty (30) days prior to the expiration of any such
insurance policy, Tenant shall deliver to Landlord (and any Mortgagees, to the
extent requested by Landlord) a certificate evidencing the replacement or
renewal thereof.
(d) The Tenant shall furnish Landlord and any Mortgagees with duplicate
original(s) or original certificate(s) together with true copy(ies) of all
insurance policies described in subsection (a) of this Section 11, including
renewal and replacement policy(ies), together with written evidence that the
premiums therefore (the "Premiums") have been paid. It is understood and agreed
that said policies may be blanket policies covering other locations operated by
Tenant, its affiliates or subsidiaries, provided that such blanket policies
otherwise comply with the provisions of this Section 11, and provided further
that such policies shall provide for a reserved amount thereunder with respect
to the Leased Premises so as to assure that the amount of insurance required by
the provisions of this Section 11 will be available notwithstanding any losses
with respect to other property covered by such blanket policies.
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(e) If any portion of the Leased Premises is damaged or destroyed by fire
or other casualty, Tenant shall promptly give notice thereof to Landlord and any
and all Mortgagees, file prompt proof of loss to the relevant insurance
company(ies), and, at Tenant's sole cost and expense, forthwith repair, restore,
rebuild or replace the damaged or destroyed Improvements, fixtures or equipment,
and complete the same as soon as reasonably possible, to the condition they were
in prior to such damage or destruction (except for such changes in design or
materials as may then be required by Law). The Landlord, in such event, shall,
to the extent and at the times the insurer and any Mortgagees make the proceeds
of the insurance available, reimburse the Tenant for the costs of making such
repairs, restoration, rebuilding and replacements, provided further that said
reimbursements need be made only under such conditions that the Landlord and any
Mortgagees are assured that at all times the Leased Premises shall be free of
liens or claims of liens by reason of such work, and provided further that the
portion of the proceeds paid out at any time shall not exceed the value of the
actual work and materials incorporated in the repaired, restored, rebuilt or
replaced Leased Premises and that the conditions described in Section 9 are
complied with. To the extent, if any, that the proceeds of insurance made
available as aforesaid are insufficient to pay the entire cost of making such
repairs, restoration, rebuilding and replacements, and notwithstanding the
expiration or termination of the term of this Lease, the Tenant shall pay the
amount by which such costs exceed the insurance proceeds made available as
aforesaid and shall deposit same in escrow if required by any Mortgagee in such
manner and at such time as any Mortgagee may require. Any surplus of insurance
proceeds over the cost of restoration, net of all expenses incurred by Landlord
in connection with the administration thereof, shall be promptly paid over to
the Landlord. Notwithstanding any provisions to the contrary set forth herein,
in the event the Leased Premises is damaged or destroyed by fire or other
casualty during the last two (2) years of the Initial Term or any Extended Term,
then Landlord may, at its option, terminate this Lease, provided, however, that
if Tenant has the right to extend the Term, then upon notice from Tenant that
Tenant elects to extend the term within 15 days of its notice of termination,
then Landlord shall make the proceeds of insurance available for restoration as
set forth herein.
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(f) The obligation to pay the rent provided for herein and to otherwise
perform Tenant's obligations hereunder shall continue unabated by reason of such
damage or destruction; that is, there shall be no abatement or diminution of
rent or release for any of Tenant's obligations hereunder by reason of such
damage or destruction regardless of the period of time, if any, during which the
Leased Premises or any part thereof remain untenantable, any Laws to the
contrary notwithstanding, except to the extent Landlord or any Mortgagee shall
actually receive the proceeds of rent insurance as its sole property.
(g) The provisions and requirements of all of Section 9 shall apply with
respect to any repairing, restoring, rebuilding or replacing made pursuant to
Section 11; and same shall be made in accordance with the applicable Plans and
Specifications to the extent required hereunder.
(h) As to any loss or damage which may occur upon the property of a party
hereto and be collected under any insurance policy(ies), such party hereby
releases the other from any and all liability for such loss or damage to the
extent of such amounts collected.
(i) Tenant shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be furnished by Tenant
under Sections 10 and 11 of this Lease, unless Landlord, and with respect to the
insurance described in Section 11, any Mortgagees designated by Landlord, are
included therein as named insured, with loss payable as in said Sections
provided. Tenant shall immediately notify Landlord whenever any such separate
insurance is taken out and shall deliver to Landlord duplicate original(s)
thereof, or original certificate(s) evidencing the same with true copies
thereof, as provided in this Lease.
12. CONDEMNATION AND REJECTABLE OFFER.
(a) In the event that at any time during the term of this Lease, title to
the whole or materially all of the Leased Premises shall be taken by the
exercise of the right of condemnation or eminent domain or by agreement between
the Landlord and those authorized to
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exercise such right, this Lease shall
terminate and expire on the date of such taking (herein called the "Taking
Date") and the rent provided to be paid by the Tenant shall be apportioned and
paid to the Taking Date.
(b) Except in the event of a taking described in the Deed, if (i) any
portion of any building on the Leased Premises shall be taken, or (ii)
twenty-five (25%) percent or more of the parking accommodations shall be taken,
or (iii) substantially all reasonable means of ingress and egress to and from
the Leased Premises are permanently eliminated by reason of such a taking, then
and in any of such events, Landlord and Tenant shall each have the right to
terminate this Lease on the next day for payment of Minimum Rental occurring at
least one hundred twenty (120) days after notice to the other given within
ninety (90) days after the Taking Date; provided, however, that Tenant may not
terminate this Lease by reason of any such reduction of the parking
accommodations or means of ingress and egress if prior to the actual reduction
Landlord shall have provided, as the case may be (i) substitute parking areas
adjacent to or in the immediate vicinity of the Leased Premises, which, together
with the remaining parking accommodations, are sufficient to produce
accommodations equal to seventy-five (75%) percent of the accommodations
existing prior to such taking, or such greater percentage as may be necessary to
bring such accommodations into compliance with all then applicable zoning
requirements, or (ii) substitute means of ingress and egress as shall be in
compliance with all then applicable zoning requirements.
(c) If and when it shall be established that this Lease shall terminate
pursuant to the provisions of subsection (a) or (b) of this Section 12, Tenant
may make a claim, at its sole cost and expense, for the value of its leasehold
estate hereunder, provided, however, if the Landlord's Net Award (as hereinafter
defined) for such taking (the entire award payable to Landlord less all of
Landlord's expenses related thereto being herein called the "Landlord's Net
Award") does not equal or exceed Seven Million ($7,000,000.00) Dollars, Landlord
shall be entitled to such portion of the award payable to Tenant for the value
of its leasehold estate as is necessary for Landlord to be paid such deficiency
in the Landlord's Net Award. Notwithstanding anything contained in this Lease to
the contrary, if this Lease is terminated pursuant to the
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provisions of this
Section 12 after the expiration of the Initial Term of this Lease, then Landlord
shall be entitled to all awards, damages, consequential damages and compensation
payable in connection with such taking.
(d) In the event of any taking of the Leased Premises and if this Lease
shall not terminate as provided in subsection 12(a) and 12(b) above, then this
Lease shall continue unaffected (except as hereinafter specifically otherwise
provided) and the Landlord shall be entitled to all awards, damages,
consequential damages and compensation for such taking and the Tenant shall not
be entitled to share in any such award or have any claim against Landlord for
any part thereof, provided: (i) Landlord shall to the extent the net award (the
entire award less all of Landlord's expenses related thereto being herein called
the "Net Award") paid for the Improvements on the Leased Premises is made
available to Landlord, reimburse Tenant for its cost of demolition, repair,
rebuilding and restoration, to return the Improvements to a tenantable
condition, as and when expended, and paid in like manner and subject to the
provisions and conditions contained in Section 9 above, which provisions and
conditions shall be deemed to apply to such demolition, repair, rebuilding and
restoration; and (ii) the Minimum Rental payable by Tenant to Landlord under
Section 3 hereof, from and after the date of restoration of the Leased Premises,
shall be reduced by an amount equal to the product obtained by multiplying the
amount of the Net Award retained by Landlord, if any, after restoration of the
Leased Premises by Tenant, as provided herein, by two (2%) percentage points
less than the Prime Rate (as hereinafter defined); provided, however, that in no
event shall the aggregate amount of such rental reduction exceed the Net Award.
In the event of any taking which does not result in a termination of this Lease,
Tenant shall promptly make such demolition, repair, rebuilding and restoration
as are necessary to return the Leased Premises to a tenantable condition (in
accordance with the applicable Plans and Specifications), and in the event that
the cost of such demolition, repair, rebuilding and restoration shall exceed the
Net Award collected by the Landlord, Tenant shall pay the deficiency.
(e) In the event Landlord is advised of an impending condemnation,
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the
Landlord shall give notice of such fact to the Tenant and the Tenant, at its
election, shall be entitled to participate in any negotiations or litigation
with the condemning authority.
(f) Notwithstanding the foregoing, Tenant, at its cost and expense, shall
be entitled to separately claim, in any condemnation proceeding, any damages
payable for movable trade fixtures paid for and installed by Tenant (or any
persons claiming under Tenant) without any contribution or reimbursement
therefor by Landlord, and for Tenant's loss of business, and for Tenant's
relocation costs; provided Landlord's award is not reduced or otherwise
adversely affected thereby.
13. REMOVAL OF TENANT'S PROPERTY.
Provided the Tenant is not then in default hereunder, the Tenant shall have
the right, at any time during the term of this Lease, to remove "Tenant's
Property", consisting of machinery, trade equipment, business and trade
fixtures, and other trade equipment placed, installed, supplied or made by it in
or on the Leased Premises at Tenant's cost and expense (without any contribution
or reimbursement therefore by Landlord), and which may be removed without
material injury to the Leased Premises; provided, however, that any damage to
the Leased Premises or any part thereof occasioned by such removal shall be
repaired by the Tenant at Tenant's cost and expense. As used herein and
hereafter, the term "Tenant's Property" shall not include or be deemed to
include any item now or hereafter installed in or on the Leased Premises that is
an integral part of the building(s) thereof, including, without limiting the
generality of the foregoing, heating, ventilating, and air conditioning plants
and systems, electrical and plumbing fixtures and systems and other like
equipment and fixtures, if any. In connection with any financings undertaken by
Tenant, provided the Tenant is not in default in any of its obligations
hereunder, if requested by the lender thereof, and upon Tenant's request
therefor, Landlord will waive any statutory rights it may have for liens against
Tenant's Property and will execute any reasonable instrument requested by such
lender confirming same.
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14. SUBORDINATION. NON-DISTURBANCE. NOTICE TO LESSORS AND MORTGAGEES.
(a) This Lease, and all rights of Tenant hereunder, are and shall be
subject and subordinate in all respects to all ground and underlying leases of
all or any portions of the Leased Premises, now or hereafter existing, and to
all Mortgages which may now or hereafter affect all or any portions of the
Leased Premises and/or any of such leases, to each and every advance made or
hereafter to be made under such Mortgages, and to all renewals, modifications,
replacements and extensions of such leases and Mortgages and spreaders and
consolidations of such Mortgages; provided, that, as to any such leases and/or
Mortgages that become liens of record after the date of this Lease, the
foregoing subordination shall be ineffective unless and until the lessors and/or
Mortgagees hereunder shall each enter into a non-disturbance agreement, in favor
of Tenant, to provide that in the event its said Mortgage shall be foreclosed or
its said lease shall be terminated, as the case may be, and provided that there
has not occurred an Event of Default hereunder, this Lease: shall not terminate
on account thereof so long as the Tenant continues to pay rents reserved in this
Lease and otherwise performs and observes all of the terms, covenants,
conditions and provisions of this Lease to be performed and observed by or on
behalf of Tenant hereunder, and which non-disturbance agreement shall be in a
form and contain such other terms as are reasonably required by the applicable
lessor or Mortgagee (as the case may be). The lien of any Mortgages shall not
cover any trade fixtures or other personal property which is not affixed or
attached to the Leased Premises paid for and installed in the Leased Premises by
Tenant (or any persons claiming under Tenant) without any contribution or
reimbursement therefor by Landlord (unless such personal property is a
replacement of personal property owned by Landlord). The provisions of this
subsection (a) shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall promptly execute and deliver any instruments that Landlord, the lessor of
any such lease or the holder of any Mortgage, or any of their respective
successors in interest, may reasonably request to evidence such subordinations.
If
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any Superior Lease (as hereinafter defined), or a memorandum thereof, or any
Mortgage shall not be recorded, the subordination provided for in this Section
shall not be effective unless and until Tenant shall have received notice from
Landlord or from the Superior Lessors (as hereinafter defined) or the Mortgagees
thereunder (as the case may be) of the existence of such Superior Lease or
Mortgage (as the case may be). If any Mortgagees shall, from time to time, so
require, this Lease shall be prior in lien to the lien of its or their
respective Mortgages.
(b) In the event of any act or omission of Landlord which would give Tenant
the right, immediately or after lapse of a period of time, to cancel or
terminate this Lease, or to claim a partial or total eviction, Tenant shall not
exercise such right (i) until it has given written notice of such act or
omission to each Mortgagee and each Superior Lessor whose name and address shall
previously have been furnished to Tenant in writing, and (ii) unless such act or
omission shall be one which is not capable of being remedied by Landlord or any
Mortgagee or Superior Lessor within a reasonable period of time, until a
reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice and following the time when all such
Mortgagees and Superior Lessors shall have become entitled under such Mortgages
or Superior Leases, as the case may be, to remedy the same (which reasonable
period shall in no event be less than the period to which Landlord would be
entitled under this Lease or otherwise, after similar notice to effect such
remedy), provided any such Mortgagee or Superior Lessor shall with due diligence
give Tenant written notice of its intention to and shall commence and continue
to remedy such act or omission, but nothing herein contained shall obligate any
Mortgagee or Superior Lessor to do so unless it so elects.
(c) If a Superior Lessor or a Mortgagee shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed, then at the request of such party so succeeding
to Landlord's rights (herein sometimes called "Successor Landlord") and upon
such Successor Landlord's written agreement to accept Tenant's attornment which
such Successor Landlord shall agree to accept if so requested by Tenant provided
Tenant is not in default under this Lease, Tenant shall attorn to and recognize
such Successor
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Landlord as Tenant's Landlord under this Lease, and shall
promptly execute and deliver any instrument that such Successor Landlord may
reasonably request to evidence such attornment. Upon such attornment this Lease
shall continue in full force and effect as, and as if it were, a direct lease
between the Successor Landlord and Tenant upon all of the terms, covenants and
conditions set forth in this Lease, and all such terms, covenants and conditions
shall be applicable after such attornment except that the Successor Landlord
shall:
(i) not be liable for any previous act or omission of Landlord under this
Lease,
(ii) not be subject to any offset, not expressly provided for in this
Lease, which shall have theretofore accrued or which may thereafter accrue to
Tenant against Landlord, and
(iii) not be bound by any previous modification of this Lease, not
expressly provided for in this Lease, other than a modification of this Lease
executed by Landlord and Tenant prior to the execution of any Superior Lease or
Mortgage, or by any previous prepayment of more than one month's Minimum Rental,
unless such modification or prepayment shall have been expressly approved in
writing by the Superior Lessor(s) or the Mortgagee(s) through or by reason of
which the Successor Landlord shall have succeeded to the rights of Landlord
under this Lease.
15. NON-WAIVER
Neither a failure by the Landlord to exercise any of its options hereunder,
nor failure to enforce its rights or seek its remedies upon any default, nor the
acceptance by the Landlord of any rent accruing before or after any default,
shall effect or constitute a waiver of the Landlord's right to exercise such
option, to enforce such right, or to seek such remedy with respect to that
default or to any prior or subsequent default The remedies provided in this
Lease shall be cumulative and shall not in any way abridge, modify or preclude
any other rights or remedies to which the Landlord may
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be entitled either at law
or in equity.
16. QUIET ENJOYMENT.
If the Tenant pays rent it is obligated hereunder to pay, and observes all
other terms, covenants and conditions hereof, it. may peaceably and quietly
have, hold and enjoy the Leased Premises during the term of this Lease, subject,
however, to all the terms of this Lease. No failure by Landlord to comply with
the foregoing covenant shall give Tenant any right to cancel or terminate this
Lease or to abate, reduce or make any deduction from or offset against any rent
or any other sum payable under this Lease, or to fail to perform any other
obligations of Tenant hereunder.
17. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not sublet the Leased Premises, nor any part thereof, nor
assign, or otherwise dispose of this Lease or any interest therein, or any part
thereof, without Landlord's prior written consent in each of the foregoing.
cases, which consent, however, to an assignment of this Lease, or subletting of
the Leased Premises, shall not be unreasonably withheld, provided the following
conditions are complied with:
(i) Tenant shall give written notice of its intention to assign this Lease
or sublet all or a portion of the Leased Premises sixty (60) days or more before
the effective date of such proposed assignment or subletting, which notice shall
contain (A) the name and address of the proposed assignee or subtenant, (B) the
terms of the proposed assignment or subletting and (C) a copy of the proposed
assignee's or subtenant's most recent financial statement.
(ii) Any assignment shall transfer to the assignee all of the Tenant's
rights in, and interest under, this Lease.
(iii) At the time of any assignment and/or subletting, this Lease must
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be
in full force and effect without any breach or default hereunder on the part of
the Tenant and without the existence of any condition, matter or state of fact
which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default hereunder.
(iv) Any assignee shall assume, by written, recordable instrument, in form
and content satisfactory to Landlord, the due performance of all of Tenant's
obligations under this Lease including any accrued obligations at the time of
the assignment. A copy of the assignment and assumption agreement, both in form
and content satisfactory to Landlord, fully executed and acknowledged by the
assignee, together with a certified copy of a properly executed corporate
resolution (if the assignee be a corporation) or its equivalent for any other
entity authorizing such assumption agreement, shall be sent to Landlord within
ten (10) days from the effective date of such assignment.
(v) A copy of any sublease fully executed and acknowledged by the Tenant
and the sublessee, shall be mailed to Landlord within ten (10) days from
effective date of such subletting.
(vi) Such assignment and/or subletting: shall be subject to all the
provisions, terms, covenants and conditions of this Lease and the
Tenant-assignor (and any guarantor(s) of this Lease) and such assignee(s) shall
continue to be and remain liable hereunder, it being expressly understood and
agreed that no assignment or subletting of the Leased Premises shall, in any
way, relieve Tenant or any subsequent assignee(s) from the performance of any of
the agreements, terms, covenants and conditions of this Lease.
(vii) Each sublease permitted under this Section shall contain provisions
to the effect that (A) such sublease is only for the actual use and occupancy by
the sublessee, and (B) such sublease is subject and subordinate to all of the
terms, covenants and. conditions of this Lease and to all of the rights of
Landlord thereunder, and (C) in the event this Lease shall terminate before the
expiration of such sublease, the subtenant thereunder will, at Landlord's
option, attorn to Landlord and waive any rights the subtenant may have to
terminate the sublease or to surrender possession thereunder, as a result of the
termination of this Lease.
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(b) With respect to an assignment or sublet subsection 17(a) above, if
Landlord shall give its any assignment of this Lease or to any sublease, in
consideration thereof pay to Landlord, promptly of such sums by Tenant, as
additional rent:
(i) In the case of an assignment, an amount equal to fifty percent (50%) of
all sums and other consideration paid to Tenant by the assignee for or by reason
of such assignment (including, but not limited to, sums paid for Tenant's
Property). In the event such an assignment is made in connection with the sale
of other assets by Tenant, the amount of all sums and other consideration paid
to Tenant in connection with such sale shall be reasonably allocated between
this Lease (including, without limitation, sums paid for Tenant's Property) and
such other assets.
(ii) In the case of a sublease, fifty percent (50%) of any rents,
additional charges or other consideration payable under the sublease to Tenant
by the subtenant which is in excess of the Minimum Rental and additional rent
accruing from time to time during the term of the sublease in respect of the
subleased space (to be calculated by Landlord at the time of the sublease in
landlord's reasonable judgment subject to Tenant's approval, not to be
unreasonably withheld or delayed) pursuant to the terms hereof (including, but
not limited to, sums paid for Tenant's Property or the sale or rental of
Tenant's Property). The sums payable under this subsection (b) (ii) shall be
paid to Landlord as and when paid by the subtenant to Tenant.
(c) Notwithstanding anything contained in this Lease to the contrary and
notwithstanding any consent by Landlord to any sublease of the Leased Premises
or to any assignment of this Lease, no subtenant shall assign its sublease nor
further sublease the Leased Premises, or any portion thereof, and no assignee
shall further assign its interest in this Lease nor sublease the Leased
Premises, or any portion thereof, without Landlord's prior written consent in
each of such cases.
(d) Notwithstanding anything contained in this Lease to the contrary,
should Tenant desire to assign this Lease or sublet more than twenty-five (25)
percent of the net rental square footage of the main building or any other
portion of the Leased Premises, it shall give
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written notice of its intention to
do so to Landlord sixty (60) days or more before the effective date of such
proposed subletting or assignment and Landlord may, at any time within thirty
(30) days after the receipt of such notice from Tenant, cancel this Lease by
giving Tenant written notice of its intention to do so, in which event such
cancellation shall become effective upon the date specified by Landlord, but not
less than thirty (30) days or more than ninety (90) days after its receipt by
Tenant, with the same force and effect as if said cancellation date were the
date originally set forth as the expiration date of the term of this Lease.
Landlord may enter into a direct lease with the proposed subtenant or assignee
or with any other persons as Landlord may desire. Landlord acknowledges that any
transaction described in and completed in accordance with subsection 17(g) below
shall not be subject to the terms of this subsection 17(d).
(e) Tenant's failure to comply with all of the provisions and conditions of
this Section 17 and all of the subsections hereof shall (whether or not
Landlord's consent is required under this Section), at Landlord's option, render
any purported assignment or subletting null and void. and of no force or effect.
(f) Tenant may not mortgage, pledge or otherwise encumber its leasehold
estate hereunder, and any attempt to mortgage, pledge or otherwise encumber such
estate shall be null and void and of no force and effect.
(g) The Tenant may consolidate with or merge into any other corporation,
convey or transfer all or a substantial amount of its assets to any other
corporation, or permit any other corporation to consolidate with or merge into
it upon condition that:
(i) The corporation which results from such consolidation or merger or the
transferee to which such sale shall have been made (the "Surviving Corporation")
is a corporation organized under the laws under any State of the United States,
and the Surviving Corporation shall have a net worth, computed in accordance
with generally accepted accounting principles, consistently applied at least
equal to the greater of the net worth of Tenant on (x) the day immediately
preceding such consolidation, merger or transfer, or (y) the date of this Lease
(as certified to Landlord by independent auditors who are among the nationally
recognized "Big Five"
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accounting firms, or an accounting firm otherwise agreed
to by the Landlord, and delivered to the Landlord at least twenty (20) business
days prior to the proposed assignment); and
(ii) The Surviving Corporation shall expressly and unconditionally assume
by written agreement in recordable form to perform all such obligations of the
Tenant hereunder and shall be obligated to perform all such obligations of the
Tenant hereunder to the same extent as if the Surviving corporation had
originally executed and delivered this Lease; and
(iii) no rights of Landlord under this Lease shall be affected or reduced
by such consolidation, merger, conveyance or transfer.
Tenant covenants that it will not merge or consolidate or sell or otherwise
dispose of all or a substantial amount of its assets unless there shall be
compliance with all of the foregoing provisions of subsection 17 (g) of this
Lease and unless the instrument referred to in subsection 17(g) (ii) above shall
have been delivered to Landlord. Provided Tenant has complied with all of the
terms of this Section 17(g), Tenant shall be released from all obligations and
liabilities under this Lease accruing from and after such merger, consolidation,
sale or other disposition of all or a substantial amount of Tenant's assets.
(h) Notwithstanding the terms of this Section 17 to the contrary, Tenant
may sublet, in the aggregate, no more than twenty-five (25%) percent of the net
rental square footage of the main building at the Leased Premises without the
prior consent of Landlord being required; provided, however, that, (i) to the
extent that the aggregate of the net rental square footage of all such sublets
exceeds fifteen percent (15%) of the net rental square footage of the main
building at the Leased Premises, such subletting activities are consistent with
the national business practices of "Tops City Appliance" retail stores, (ii) any
such subletting would not violate the provisions of the Deed and (iii) the terms
of subsections 17(a) (i), (iii), (v), (vi) and (vii) shall apply to each such
sublet
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18. ENTRY BY LANDLORD
Landlord, any Superior Lessor(s) and any Mortgagee(s), and their respective
duly authorized representatives shall have the right to enter the Leased
Premises at all reasonable times and upon reasonable prior notice for the
purposes of:
(a) inspecting the condition of same, and making such repairs, alterations,
additions, or improvements thereto as may be necessary or desirable if Tenant
fails to do so as required hereunder (but the Landlord shall have no duty
whatsoever to make any such inspections, repairs, alterations, additions, or
improvements); and
(b) exhibiting the same to persons who may wish to purchase or lease the
same, and, during the last twelve (12) months of the term of this Lease (as
extended, if applicable) placing a notice of reasonable size on the Leased
Premises offering the same or any part thereof for sale or for rent.
19. TENANT'S DEFAULT
The following shall be defined and deemed as an "Event of Default": (a) if
Tenant shall default in the payment of the Minimum Rental shall fail to cure
said default within five (5) days after same is due; or (b) if Tenant shall
default in the payment of any additional rent or any other sum due hereunder
(other than Minimum Rental) and shall fail to cure said default within five (5)
days of written notice of such default; or (c) if Tenant shall default in the
performance or observance of any term, obligation, covenant or condition to be
performed or observed by Tenant under this Section 19 or under any of Sections
6(b), 10 (other than subsection 10(d)), 11 (other than subsection 11(d)), 17 or
27(a) of this Lease; or (d) if Tenant shall default in the performance or
observance of any term, obligation, covenant or condition to be performed or
observed by Tenant under subsection 7 (a) (ii), and, provided that such default
does not relate to any covenant contained in the Deed, Tenant shall fail to cure
said default prior to the expiration of any grace or cure period, if any,
provided in the Restriction; or (e) if Tenant shall default in the performance
or observance of any
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other term, obligation, covenant or condition to be
performed or observed by Tenant under this Lease and if Tenant shall fail to
cure said default within thirty (30) days of written notice of said default from
Landlord, or if said default shall reasonably require longer than thirty (30)
days to cure, if Tenant shall fail to commence to cure said default within
thirty (30) days after notice thereof and continuously prosecute the curing of
the same to completion with due diligence; or (f) if Tenant shall make an
assignment of its property for the benefit of creditors or shall institute any
proceedings relating to it or its property under any bankruptcy or insolvency
laws of any jurisdiction or shall petition to any court for, or consent to, the
appointment of a receiver, trustee or assignee of it or any part of its
property; or (g) if an order for relief under any provisions of the Bankruptcy
Reform Act of 1978, as same may be amended, shall be entered against Tenant; or
(h) if Tenant shall be declared bankrupt or insolvent according to law; (i) if
any bankruptcy or insolvency proceedings shall be commenced against Tenant shall
not be dismissedd within sixty (60) days thereafter; (j) if a receiver, trustee,
or assignee shall be appointed without the consent of Tenant in any bankruptcy
or insolvency proceedings of Tenant or the property of Tenant and shall not be
discharged within ninety (90) days thereafter; (k) if Tenant shall be liquidated
or dissolved, or shall begin proceedings toward its liquidation or dissolution,
or shall, in any manner, permit the divestiture of substantially all of its
assets; or (l) if, as a result of any failure observe any of the terms,
obligations, covenants, or conditions to be performed or observed by it under
this Lease, a breach or default shall have occurred and be continuing under any
Superior Lease or Mortgage, and Tenant fails to cure such breach or default
within a period time equal to one-half of the minimum time allowed under all
Superior Leases and Mortgages; or (m) a breach or default shall have occurred
under the Guarantee. The word "Tenant" as used in subsections (f), (g), (h),
(i), (j), (k) and (1) of this Section 19 shall mean the Tenant named herein, the
then holder of the Tenant's interest in this Lease hereunder, any Guarantor(s)
and/or other persons who or which are liable for Tenant's obligations under this
Lease. The words "Landlord" and "Tenant" as used in subsections (c), (d), (e),
and (f) of this Section 19 shall mean any person, firm or entity controlled by,
under common control with, or controlling the Landlord or the "Tenant" (as
defined in the preceding
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sentence) under this Lease, respectively; and for the
purpose of interpreting this sentence the word "control" shall be deemed to mean
capable of directing the business activities and direction of such person, firm
or entity. Any defaults in Tenant's liabilities or obligations under this Lease
occasioned by any acts or failures to act by any persons having or claiming any
right, title and interest in or to the Leased Premises by, through or under
Tenant, shall be deemed the default of Tenant hereunder. If this lease is
terminated pursuant to this Section 19, Tenant waives the benefit of any Laws
exempting property from liability for rent or for debt.
In case of the occurrence of any Event of Default hereinbefore provided,
the Landlord shall have the immediate right of reentry and may remove all
persons and property from the Leased Premises by summary proceedings, lawful
force or other-wise. In addition, in the event of the occurrence of any Event of
Default (whether or not Landlord shall elect to reenter or to take possession
pursuant to legal proceedings or pursuant to any notice provided for by Laws)
Landlord shall have the right, at its option, to terminate this Lease on not
less than two (2:) days. written notice to Tenant and upon the giving of said
notice, this Lease and the term hereof shall cease and expire on the date set
forth in said notice as if the date were the expiration date originally set
forth herein and/or it may from time to time, whether or not this Lease be
terminated, make such alterations and repairs as may be reasonably necessary in
order to and/or may relet the Leased Premises or any part(s) thereof for such
term or terms (which may extend beyond the term of this Lease) and at such
rental(s) and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable; upon each such reletting all rentals received by
the Landlord from such reletting shall be applied, first, to the payment of any
indebtedness (other than rents due hereunder) of Tenant to Landlord, second, to
the payment of any costs and expenses of such reletting, including, without
limitation, brokerage fees (at no greater than customary rates in the area in
which the Leased Premises is located) and reasonable attorneys' fees and of the
cost of such alterations and repairs, third, to the payment of rents due and
unpaid hereunder; and the residue, if any, shall be held by Landlord and applied
in payment of future rents and other payments required to be made by Tenant
hereunder as the same may become due and payable hereunder, with the right
reserved to Landlord
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to bring such action(s) or proceedings(s) for the recovery
of any deficits remaining unpaid without being obliged to await the end of the
term for a final determination of Tenant's account; and the commencement or
maintenance of any one or more actions shall not bar Landlord from bringing
other or subsequent actions for further accruals pursuant to the provisions of
this Section. If such rentals received from such reletting during any month be
less than that to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord Such deficiency shall by calculated and paid
monthly subject to Landlord's right of action(s) or proceeding(s) as aforesaid.
No such reentry or taking possession of the Leased Premises by Landlord shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Tenant or unless the termination thereof be
decreed by a court of competent jurisdiction Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate this
Lease for such previous breach. Should Landlord at any time terminate this Lease
for any breach, it may recover from Tenant all damages it may incur by reason of
such breach as damages for loss of the bargain and not as a penalty, including
the cost of recovering the Leased Premises, reasonable attorneys' fees, and
including a sum which at the time of such termination of this Lease is equal the
aggregate amount of all of the rental and charges reserved in this Lease for the
remainder of the then term of this Lease (discounted using a six percent (6%)
factor), all of which shall be immediately due and payable from Tenant to
Landlord. If any Laws shall validly limit the amount of the damages provided for
in the immediately preceding sentence to less than the amount above agreed upon,
Landlord shall be entitled to the maximum amount allowable under such Laws. In
the event the Tenant does not comply with its obligations under this Lease,
Landlord shall also have the right to appropriate injunctive relief. The rights
and remedies whether herein or anywhere else in this Lease provided shall be
cumulative, and the exercise of any one right or remedy shall not preclude the
exercise of or act as a waiver of any other right or remedy of Landlord
hereunder, or which may be existing at law, or in equity or by statute or
otherwise. In addition to the foregoing, Tenant, and its successors and assigns,
shall at all times indemnify Landlord for, defend Landlord against and save
Landlord harmless from any liability, loss, cost,
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injury, damage or other
expense or risk whatsoever, directly or indirectly, arising out of, resulting
from or otherwise in connection with (i) the failure for any reason on the part
of Tenant to perform, observe or comply with any of the covenants, conditions
and obligations under this Lease to be performed, observed or complied with by
Tenant, and/or (ii) the failure for any reason of any representation, warranty
or covenant given by Tenant in connection with the execution of this Lease by
Landlord to be materially true, complete and accurate, including, without
limitation, any representation, warranty or covenant given or made by Tenant
under that certain Agreement to Assign, executed by and between Landlord or its
predecessor-in-interest, as purchaser, and Tenant or its
predecessor-in-interest, as seller, respecting the acquisition of the Leased
Premises by Landlord and contemporaneously with the consummation of which this
Lease was executed, all of which representations, warranties and covenants are
hereby incorporated by reference herein this Lease.
20. TAX APPEALS AND CONTESTS.
(a) Tenant shall have the right, at its cost and expense, to contest the
amount or validity, in whole or in part, of any Imposition of any kind by
appropriate proceedings diligently conducted in good faith, but no such contest
shall be carried on or maintained by Tenant after the time limit for the payment
of any Imposition unless the Tenant, at its option: (i) shall pay the amount
involved under protest; or (ii) shall procure and maintain a stay of all
proceedings to enforce any collection of any Imposition, together with all
penalties, interest, costs and expenses, by a deposit of a sufficient sum of
money, or by such undertaking, as may be required or permitted by law to
accomplish such stay; or (iii) shall deposit with Landlord or any Superior
Lessor or Mortgagee, as security for the performance by the Tenant of its
obligations hereunder with respect to such Impositions, such security in amounts
equal to such contested amount and such other security as may be demanded by the
Landlord or any Superior Lessor or Mortgagee to insure payment of such contested
Imposition and all penalties, interest, costs and expenses which may accrue
during the period of the contest. Upon the termination of any such proceedings,
it shall be the obligation of Tenant to pay
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the amount of such Imposition or
part thereof, as finally determined in such proceedings, the payment of which
may have been deferred during the prosecution of such proceedings, together with
any costs, fees (including counsel fees) interest, penalties or other
liabilities in connection therewith, whereupon the Landlord shall arrange to
have returned to the Tenant, with any interest (less an administrative fee of
one (1%) percent per annum) earned thereon and made available for such return,
all amounts, if any, held by or on behalf of Landlord which were deposited by
the Tenant in accordance with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense, to seek a
reduction in the valuation of the Leased Premises as assessed for tax purposes
and to prosecute any action or proceeding in connection therewith. Provided
Tenant is not in default hereunder, Tenant shall be authorized to collect any
tax refund of any tax paid by Tenant obtained by reason thereof and to retain
the same.
(c) Landlord agrees that whenever Landlord's cooperation is required in any
of the proceedings brought by Tenant as aforesaid, Landlord will reasonably
cooperate therein, provided same shall not entail any cost, liability or expense
to Landlord and Tenant will pay, indemnify and save Landlord harmless of and
from, any and all liabilities, losses, judgments, decrees, costs and expenses
(including all reasonable attorneys' fees and expenses) in connection with any
such contest and will, promptly after the final settlement, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, and Tenant shall
perform and observe all acts and obligations, the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject Landlord
or any Superior Lessor or Mortgagee to the risk of any material civil liability
or the risk of any criminal liability, and Tenant shall give such reasonable
indemnity or security to Landlord, any Superior Lessor and any Mortgagee as may
reasonably be demanded by any of them to insure compliance with the foregoing
provisions of this Section 20.
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21. SIGNS.
Tenant may, during the term of this Lease, upon obtaining any and all
necessary permits from governmental authorities, paint or erect and maintain, at
its cost and expense, signs of such dimensions and materials as it may
reasonably deem appropriate in or about the Leased Premises. Such signs shall be
removed by Tenant upon the termination of its occupancy of the Leased Premises.
22. SURRENDER OF PREMISES.
Except in the case of condemnation described in subsection 12(a) (or
subsection 12(b), if this Lease is terminated in accordance with this Lease, at
the expiration or sooner termination of the term of this Lease, Tenant shall
surrender the Leased Premises in the same condition as the Leased Premises were
in upon delivery of possession thereto under this Lease, reasonable wear and
tear excepted, and shall surrender all keys for the Leased Premises to Landlord
at the place then fixed for the payment of rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any, in the Leased Premises. Tenant
shall at such time remove all Tenant's Property, as well as any alterations or
improvements, if requested to do so by Landlord, and shall repair any damage to
the Leased Premises caused thereby, and any or all of such property not so
removed shall, at Landlord's option, become the exclusive property of Landlord
or be disposed of by Landlord, at Tenant's cost and expense, without further
notice to or demand upon Tenant. If the Leased Premises be not surrendered as
and when aforesaid, Tenant shall indemnify Landlord against loss or liability
resulting from the delay by Tenant in so surrendering the Leased Premises
including, without limitation, any claims made by any succeeding occupant
founded on such delay. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of the term of this Lease.
23. INTENTIONALLY OMITTED.
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24. "LANDLORD" DEFINED.
(a) The term "Landlord" as used in this Lease means only the owner of the
Leased Premises, or the Mortgagee in possession of the Leased Premises, for the
time being, so that in the event of any sale or other transfer of the Leased
Premises, Landlord shall be and hereby is entirely freed and relieved of all
liabilities and obligations of Landlord hereunder, and it shall be deemed
without further agreement between the parties and any successor of Landlord,
that such successor has assumed and agreed to perform and observe all
liabilities and obligations of Landlord hereunder.
(b) Notwithstanding anything contained herein to the contrary, it is
specifically understood and agreed that there shall be no personal liability on
Landlord in respect of any of the terms, covenants, conditions or provisions of
this Lease, and in the event of a breach or default by Landlord of any of its
liabilities and obligations under this Lease, Tenant and any persons claiming
by, through or under Tenant shall look solely to the equity of the Landlord in
the Leased Premises for the satisfaction of Tenant's and such persons' remedies
and claims for damages.
25. TENANT'S PAYMENTS.
Each and every payment and expenditure, other than Minimum Rental and other
than costs for any additions, alterations, repairs, replacements and
improvements to the Improvements, which are required to be paid by Tenant under
this Lease shall be deemed to be additional rent here; under, whether or not the
provisions requiring payment of such amounts specifically so state, and shall be
payable, unless otherwise provided in this Lease, on demand by Landlord and in
the case of the non-payment of any such amount, Landlord shall have, in addition
to all of its other rights and remedies, all of the rights and remedies
available to Landlord hereunder or by Laws in the case of
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non-payment of Minimum
Rental. Unless expressly otherwise provided in this Lease, the performance and
observance by Tenant of all the terms, covenants and conditions of this Lease to
be performed and observed by Tenant hereunder shall be performed and observed by
Tenant at Tenant's sole cost and expense. Tenant agrees to pay or reimburse
Landlord, on demand, for any reasonable costs and expenses that may be incurred
by Landlord after the date hereof in connection with its review of any
instrument or documents requested by Tenant pursuant to this Lease or relating
to the Leased Premises, including, but not limited to, the costs and expenses of
making such investigations as the Landlord shall deem appropriate and the
reasonable legal fees and disbursements of Landlord's counsel. All payments of
Minimum Rental hereunder shall be made to Landlord by check, as Landlord may
direct, at the address set forth in the beginning hereof (unless otherwise
provided herein), or at such other address as may be designated by Landlord or
by wire transfer of federal funds to an account or accounts designated by
Landlord.
26. RIGHT TO CURE DEFAULTS
If Tenant shall fail to fully comply with any of its liabilities or
obligations under this Lease (including, without limitation, its obligation to
complete the Initial Construction, make repairs, maintain various policies of
insurance, comply with all Laws and pay all Impositions and bills for
utilities), then three (3) days after the giving of written notice of such
breach to Tenant (except that prior written notice shall not be required in the
event of an emergency) Landlord shall have the right, at its option, to cure
such breach at Tenant's cost and expense. Tenant agrees to reimburse Landlord
(as additional rent) for all losses, costs, damages and expenses resulting
therefrom or incurred in connection therewith, together with interest thereon at
a rate equal to the Maximum Rate (as hereinafter defined), promptly upon demand.
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27. COVENANT AGAINST LIENS.
(a) If, because of any act or omission (or alleged act or omission) of
Tenant, any mechanic's or other lien, charge or order for the payment of money
or other encumbrances shall be filed or imposed against Landlord, any Superior
Lessor, any Mortgagee and/or any portion of the Leased Premises (whether or not
such lien, charge, order or encumbrance is valid or enforceable as such), Tenant
shall, at its cost and expense, cause same to be discharged of record or bonded
within ten (10) days after notice to Tenant of the filing or imposition thereof;
and Tenant shall indemnify and defend Landlord against and save Landlord
harmless from all losses, costs, damages, expenses, liabilities, suits
penalties, claims, demands and obligations, including, without limitation,
reasonable counsel fees, resulting therefrom. If Tenant fails to comply with the
foregoing provisions, Landlord shall have the option of discharging or bonding
any such lien, charge, order or encumbrance, and Tenant agrees to reimburse
Landlord (as additional rent) for all losses, costs, damages and expenses
resulting therefrom or incurred in connection therewith, together with interest
thereon at a rate equal to the Maximum Rate, promptly upon demand.
(b) All materialmen, contractors, artisans, mechanics, laborers and any
other persons now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to any portion of the Leased
Premises, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for same. Notice is hereby given that the Landlord
shall not be liable for any labor, services, materials, supplies or equipment
furnished or to be furnished to the Tenant upon credit, and that no mechanic's
or other lien for any such labor, services, materials, supplies or equipment
shall attach to or affect the estate or interest of the Landlord in and to the
Leased Premises.
28. WAIVER OF REDEMPTION.
It being clearly understood by Tenant that Landlord is unwilling to enter
into any lease of the Leased Premises for a term of more than five (5) years
unless the statutory
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rights of redemption after a dispossess proceeding and to a
second further trial after an action in ejectment shall be waived by Tenant
(unless such second or further trial results from an Appellate Court decision
reversing the decision of the first trial) and Tenant being willing to waive all
such rights of redemption conferred by statute in order that it may secure a
lease of more than five (5) years, Tenant covenants and agrees that in the event
of an action for ejectment or any other action or proceeding to dispossess,
terminating this Lease, the right of redemption provided or permitted by any
Laws and the right to any second or further trial provided or permitted by any
laws, shall be and hereby are expressly waived (unless such second or further
trial results from an Appellate Court decision reversing the decision of the
first trial). Tenant hereby expressly waives the service of any notice in
writing of intention to reenter as provided for or may be provided for in and by
the laws of the State in which the Leased Premises is located, as the same may
from time to time exist.
29. LANDLORD'S AND TENANT'S CERTIFICATES.
Landlord and Tenant shall, each without charge at any time and from time to
time, within ten (10) days. after request by the other party, certify by written
instrument, duly executed, acknowledged and delivered to any ground lessor,
Mortgagee, assignee of any Mortgagee or purchaser, or any proposed Mortgagee, or
proposed assignee or sub-tenant of Tenant or any other person, firm or
corporation specified by Landlord or Tenant:
(a) That this Lease and all Guarantees (hereinafter defined) are unmodified
and in full force and effect (or, if there has been modification, that the same
is in full force and effect as modified and stating the modifications);
(b) Whether or not there are then existing any breaches or defaults by the
other party under any of the terms of this Lease and specifying such breach or
default or any set offs or defenses against the enforcement of any of the
agreements, terms, covenant or conditions of this Lease or of any Guarantees
upon the part of the Landlord or Tenant or any said Guarantors, as the case may
be, to be performed or complied with (and, if so, specifying the same and the
steps
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being taken to remedy the same); and
(c) The dates, if any, to which the rental(s) and other charges under this
Lease have been paid in advance.
Within ten (10) days of landlord's request, Tenant shall complete, execute
and deliver the form of certificate annexed hereto as Schedule "C" or such other
form as a purchaser or Mortgagee may require. Tenant shall cause any and all of
its said certifications which refer to any Guarantors or Guarantees to be
executed and acknowledged by the relevant Guarantors.
30. WAIVER OF TRIAL BY JURY AND WAIVERS BY GUARANTORS.
Landlord and Tenant do hereby waive trial by jury in any action, proceeding
or counterclaim brought by either against the other, upon any matters whatsoever
arising out of or in any way connected with this Lease, Tenant's use or
occupancy of the Leased Premises, and/or any claim of injury or damage. It is
further mutually agreed that in the event Landlord commences any summary
proceeding for non-payment of Minimum Rental or additional rent, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding. Each and every Guarantor if any, shall with respect to the
liabilities and obligations under its Guarantee, be deemed to have agreed to
waive, with respect to its Guarantee and this Lease, all rights which are waived
by Tenant under this Lease.
31. NET LEASE: NON-TERMINABILITY.
This is an absolutely net lease, and, except as otherwise specifically
provided in Section 12 hereof, this Lease shall not terminate nor shall Tenant
have any right to terminate this Lease; nor shall Tenant be entitled to any
abatement,: deduction, deferment, suspension or reduction of, or setoff, defense
or counterclaim against, any rentals, charges, or other sums payable by Tenant
under this
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Lease; nor shall the respective obligations of Landlord and Tenant be
otherwise affected by reason of damage to or destruction of the Leased Premises
from whatever cause, any taking by condemnation, eminent domain or by agreement
between Landlord and those authorized to exercise such rights, the lawful or
unlawful prohibition of Tenant's use of the Leased Premises, the interference
with such use by any persons, corporations or other entities, or by reason of
any eviction by paramount title, or by reason of Tenant's acquisition of
ownership of the Leased Premises otherwise than pursuant to an express provision
of this Lease, or by reason of any default or breach of any warranty by Landlord
under this Lease or any other agreement between Landlord and Tenant, or to which
Landlord and Tenant are parties, or for any other cause whether similar or
dissimilar to the foregoing, any Laws to the contrary notwithstanding; it being
the intention that the obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and that the Minimum Rental,
additional rent and all other charges and sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease; and Tenant
covenants and agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
cancel, rescind or void this Lease, notwithstanding the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Landlord or any assignee of or successor to,
Landlord, and notwithstanding. any action with respect to this Lease that may be
taken by a trustee or receiver of Landlord or any assignee of, or successor to,
Landlord or by any court in any such proceeding.
32. MISCELLANEOUS PROVISIONS.
(a) NOTICES. Any notice, exercise of option or election, communication,
request or other document or demand required or permitted under this Lease shall
be in writing and shall be given to Landlord or Tenant by (i) Federal Express or
other similar
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national, reputable, overnight courier which provides proof of
delivery, or (ii) registered or certified mail, return receipt requested,
postage prepaid, to the parties at the address listed below:
(i) to the Landlord as follows:
AM Coney Island LLC
C/o Vista Realty Partners, LLC
5 East 37th Street, 10th Floor
New York, New York 10016
Attention: Mr. Marc Esrig
And Copy to:
Marvin Levine, Esq.
Wachtel & Masyr, LLP
110 East 59th Street
New York, NY 10022
(ii) to the Tenant as follows:
Tops Appliance City, Inc.
45 Brunswick Avenue
Edison, New Jersey 08818
Attention: Mr. Thomas Zambelli
And Copy To:
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Sheldon Lobel, Esq.
Sheldon Lobel, P.C.
9 East 40th Street, 14th Floor
New York, NY 10016
And Copy to:
Joseph Oriolo, Esq.
Greenbaum, Rowe, Smith,
Davis & Himmel LLP
99 Wood Avenue South
Iselin, New Jersey 00880-2712
Either party may, from time to time, change the address at which such written
notices, exercise of options or elections, communications, requests, or other
documents or demands are to be mailed, by giving the other party(ies) written
notice of such changed address, pursuant to the terms hereinabove set forth. At
Landlord's option, which may be exercised at any time hereafter, Tenant shall
send copies of any and all said notices and other communications designated by
Landlord, to any Mortgagees and Superior Lessors designated by Landlord in the
same manner as notices are required to be sent to Landlord, and at such
address(es) as Landlord may from time to time designate by notice to Tenant.
(b) RELATIONSHIP OF THE PARTIES. It is the intention of the parties hereto
to create the relationship of Landlord and Tenant, and no other relationship
whatsoever, and unless expressly otherwise provided herein, nothing herein shall
be construed to make the parties hereto liable for any of the debts, liabilities
or obligations of the other party.
(c) APPLICABILITY. Whenever a provision in this Lease is stated to apply to
the term of this Lease, or words of similar import, the same shall be deemed to
mean and
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include any Extended Terms as well, unless specific reference is made
to such provisions as having applicability only to all or any portions of the
Initial Term and/or any Extended Term or Extended Terms.
(d) GOVERNING LAWS. This Lease shall be governed exclusively by the
provisions hereof and by the laws of the State in which the Leased Premises is
located as the same may from time to time exist.
(e) INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby and each term and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
(f) WAIVER. Failure on the part of either party to complain of any action
or non-action on the part of the other party, no matter how long the same may
continue, shall never be deemed to be a waiver by either party of any of its
rights hereunder. Acceptance by Landlord of Minimum Rental, additional rent or
any other charges paid by Tenant hereunder shall not be or be deemed to be a
waiver by Landlord of any default by Tenant whether or not Landlord knows of
such default. No waiver at any time of any of the provisions hereof by either
party shall be construed as a waiver of any of the other provisions hereunder
and a waiver at any time of any of the provisions hereof shall not be construed
as a waiver at any subsequent time of the same provisions.
(g) COUNTERPARTS. This Lease may be executed in several counterparts, each
of which shall be deemed an original, and such counterparts shall constitute but
one and the same instrument.
(h) SOLE AGREEMENT. This Lease sets forth all the promises, inducements,
agreements, conditions and understandings between Landlord and Tenant relative
to the demise of the Leased Premises, and there are no promises, agreements,
conditions or
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understandings, either oral or written, express or implied between
them, other than as herein incorporated or set forth with respect to such
demise. Except as herein otherwise provided, no subsequent alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant, unless reduced to writing and signed by the party(ies) to be charged
therewith.
(i) SHORT FORM OF LEASE. A short form of Lease for recording purposes only,
in form satisfactory to Landlord's counsel, shall, simultaneously with the
execution hereof, and at any time hereafter upon the request of either Landlord
or Tenant, be executed by Landlord and Tenant in recordable form.
(j) CAPTIONS. The captions of the several Sections and subsections of this
Lease and table of contents are not a part of the context hereof and shall be
ignored in construing this Lease. They are intended only as aids in locating
various provisions hereof.
(k) SUCCESSORS AND ASSIGNS. Except as may be expressly otherwise provided
herein, the terms, covenants and conditions hereof shall inure to the benefit of
and shall be binding upon Landlord and its successors and assigns and the terms,
covenants and conditions hereof shall inure to the benefit of and shall be
binding upon Tenant and its successors and permitted assigns.
(l) NO MERGER. There shall be no merger of this Lease, or the leasehold
estate created by this Lease, with any other estate or interest in the Leased
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(i) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (ii) any such other estate or
interest in the Leased Premises or any part thereof; and no such merger shall
occur unless and until all persons, corporations, firms and other entities
having an interest (including a security interest) in (i) this Lease or the
leasehold estate created by this Lease; and (ii) any such other estate or
interest in the Leased Premises or any part thereof, shall join in a written
instrument effecting such merger and shall duly record the same.
(m) RIGHTS OF SUPERIOR LESSOR. Any rights provided herein for
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the benefit
of any Mortgagees shall apply with equal force and effect for the benefit of any
Superior Lessors as if expressly so stated in each instance.
(n) REPORTS. Tenant agrees to furnish to Landlord its Annual Report on Form
10-K, with reasonable promptness following the filing thereof with the
Securities and Exchange Commission. In addition to the foregoing, Tenant shall
obtain and deliver to Landlord: (a) with reasonable promptness, such other
information respecting the operation of the Leased Premises or the financial
condition and affairs of Tenant or any Guarantors, as Landlord may from time to
time reasonably request, including, without limitation, in the event Tenant or
any successor to its interest hereunder is not subject to all financial
disclosures required under the Securities Exchange Act of 1934, financial
statements of Tenant and each Guarantor (including, but not limited to, annual
balance sheets, income statements and surplus statements, certified by
independent certified public accountants); and (b) an Officer's Certificate of
Tenant and such Guarantor stating that to the best of the signer's knowledge and
belief after making due inquiry, neither Tenant nor such Guarantor is in default
in the performance or observance of any of the agreements, terms, covenants or
conditions of this Lease or the Guarantee upon the part of Tenant or the
Guarantor, as the case may be, to be performed or observed (or, if so,
specifying the same and the steps being taken to remedy the same).
(o) OWNERSHIP OF LEASED PREMISES. Tenant acknowledges that the Leased
Premises are the Property of Landlord and that Tenant has only the right to the
possession and use thereof upon the terms, covenants and conditions set forth in
this Lease.
(p) ENCROACHMENTS, RESTRICTIONS, ETC. If any of the Improvements shall, at
any time, encroach upon any property, street or right of way adjoining or
adjacent to the Leased Premises, or shall violate the agreements or conditions
contained in any restrictive covenant or other agreement affecting the Leased
Premises, or any part thereof, or shall hinder or obstruct any easement or
right-of-way to which the Leased Premises are subject, or shall impair the
rights of others under such easement or right-of-way, then promptly upon the
request of the Landlord at the behest of any persons affected by any such
encroachment, violation,
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hinderance, obstruction or impairment, Tenant shall, at
its cost and expense, either (i) obtain valid and effective waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, hinderance, obstruction or impairment, whether the same
shall affect Landlord or Tenant, or (ii) make such changes in the Improvements
and take such other actions as shall be necessary to remove such encroachments,
hindrances or obstructions and to end such violations or impairments, including,
if necessary, but only with Landlord's prior written consent, the alteration or
removal of any of the Improvements. Any such alteration or removal consented to
by Landlord shall be made by Tenant in accordance with the requirements of
Section 9, above. Tenant's obligations under this subsection 32(p) shall survive
the expiration or sooner termination of this Lease.
(q) ACCEPTANCE OF SURRENDER. No surrender to Landlord of this Lease or of
the Leased Premises, or any part thereof, or of any interest therein, shall be
valid or effective unless agreed to and accepted in writing by Landlord and
consented to in writing by any and all Mortgagees and Superior Lessors, and no
act or omission by Landlord or any representative or agent of Landlord, other
than such a written acceptance by Landlord, consented to as aforesaid, shall
constitute an acceptance of any such surrender.
(r) CONSENT BY LANDLORD. Whenever in this Lease Landlord agrees not to
unreasonably withhold its consent or approval, or words of like import, Tenant
agrees that it shall not be unreasonable for Landlord to withhold such consent
or approval (i) if by granting such consent or approval Landlord shall be in
violation of any Mortgage, or (ii) if any Mortgagee shall not give its consent
or approval thereto where its consent or approval is required or where any
Mortgagee is entitled to give its consent or approval by the terms of its
Mortgage. In the event that a claim or adjudication is made that Landlord has
acted unreasonably or unreasonably delayed acting in any case where by law or
under this Lease it. has an obligation to act reasonably or promptly, Landlord
shall. not be liable for any monetary damages, and Tenant's remedies shall be
limited to injunctive relief or declaratory judgment (except that Landlord shall
be liable for reasonable attorneys' fees and other legal expenses incurred by
Tenant in connection with
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such claim or adjudication, in the event that Tenant
prevails thereon).
(s) BROKER. Landlord and Tenant represent and warrant that they have dealt
with no Broker in this transaction, and agree to defend, indemnify and hold the
other harmless from and against any and all loss, liability and expense,
including reasonable attorney's fees and disbursements, such indemnified party
may incur arising by reason of the above representation being false. The
provisions of this paragraph shall survive execution of this Lease Agreement.
(t) INTENTIONALLY OMITTED.
(u) HOLDOVER. If Tenant should remain in occupancy of the Leased Premises
after the expiration of the lease term, as same may be extended, Tenant shall
(i) pay Minimum Rental equal to two hundred (200%) percent of the Minimum Rental
payable hereunder for the last year of the lease term, prorated for the period
that Tenant remains in occupancy, (ii) pay all additional rent required
hereunder, and (iii) comply with the terms of this Lease. Nothing herein is
intended to grant Tenant the option to remain in occupancy at. such rental or
limit Landlord's remedies in such event.
(v) CONTINUING AGREEMENT OF INDEMNITY. At Landlord's request, Tenant shall
execute that certain Continuing Agreement of Indemnity Miscelleous Surety Bonds
attached as Exhibit G hereto.
33. BANKRUPTCY OR INSOLVENCY.
The Landlord and Tenant acknowledge and agree that the provisions of this
Section 33 shall control notwithstanding anything to the contrary contained
herein.
(a) In the event that Tenant shall become a debtor under Chapter 7 of the
Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq. ("Bankruptcy Code") and
Tenant's trustee or Tenant shall elect to assume this Lease for the purpose of
assigning the same or otherwise, such election and assignment may be made only
if the provisions of this Section 33 are satisfied. If Tenant or Tenant's
trustee
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shall fail to assume this Lease within 60 days after the entry of an
order for relief, this Lease shall be deemed to have been rejected. Immediately
thereupon Landlord shall be entitled to possession of the Leased Premises
without further obligation to Tenant or Tenant's trustee and this Lease, upon
the election of Landlord, shall terminate, but Landlord's right to be
compensated for damages (including, without limitation, liquidated damages
pursuant to Section 19 or the exercise of any other remedies in any such
proceeding) shall survive, whether or not this Lease shall be terminated.
(b) In the event that a voluntary petition for reorganization is filed by
Tenant, or an involuntary petition is filed against Tenant under Chapter 11 of
the Bankruptcy Code, or in the event of the entry of an order for relief under
Chapter 7 in a case which is then transferred to Chapter 11, Tenant's trustee or
Tenant, as debtor-in-possession, must elect to assume this Lease within 60 days
from the date of the filing of the petition under Chapter 11 or the transfer
thereto, or Tenant's trustee or the debtor-in-possession shall be deemed to have
rejected this Lease. Immediately thereupon Landlord shall be entitled to
possession of the Leased Premises without further obligation to Tenant or
Tenant's trustee and this Lease, upon the election of Landlord, shall terminate,
but Landlord's right to be compensated for damages (including, without
limitation, liquidated damages pursuant to Section 19 or the exercise of any
other remedies in any such proceeding) shall survive, whether or not this Lease
shall be terminated.
(c) No election by Tenant's trustee or the debtor-in-possession to assume
this Lease, whether under Chapter 7 or Chapter 11, shall be effective unless
each of the following conditions has been satisfied:
(i) Tenant's trustee or the debtor-in-possession has cured all defaults
under this Lease, or has provided Landlord with evidence satisfactory to
Landlord that it will cure all defaults susceptible of being cured by the
payment of money within 10 days from the date of such assumption and that it
will cure all other defaults under this Lease which are susceptible of being
cured by the performance of any act within 30 days after the date of such
assumption.
(ii) Tenant's trustee or the debtor-in-possession has
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compensated, or has
provided Landlord with evidence satisfactory to Landlord that, within 10 days
from the date of such assumption, it will compensate landlord for any actual
pecuniary loss incurred by Landlord arising from the default of Tenant, Tenant's
trustee, or the debtor-in-possession as indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession (A) has provided
Landlord with Assurance (as hereinbelow defined) of the future performance of
each of the obligations under this Lease of Tenant, Tenant's trustee or the
debtor-in-possession and (B) shall, in addition to any other security deposits
held by Landlord, deposit with Landlord, as security for the timely payment of
Minimum Rental and for the performance of all other obligations of Tenant under
this Lease, an amount equal to 3 monthly installments of Minimum Rental (at the
rate then payable), and (C) pay in advance to Landlord on the date each
installment of Minimum Rent is due and payable, one-twelfth of Tenant's annual
obligations for Impositions and insurance premiums to be made by Tenant pursuant
to this Lease. The obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 33 shall continue with respect to Tenant or
any assignee of this Lease, after the conclusion of proceedings under the
Bankruptcy Code.
(iv) Such assumption will not breach or cause a default under any provision
of any other lease, Mortgage, financing agreement or other agreement by which
Landlord or the Superior Lessor is bound, relating to Leased Premises or any
larger development of which the Leased Premises is a part.
(d) For purposes of subsection (c) (iii) of this Section 33, Landlord and
Tenant acknowledge that "Assurance" shall mean no less than: (i) Tenant's
trustee or the debtor-in-possession has and will continue to have sufficient
unencumbered assets after the payment of all secured obligations and
administrative expenses to assure Landlord that sufficient funds will be
available to fulfill the obligations of Tenant under this Lease and (ii) to
secure to Landlord the obligations of Tenant, Tenant's trustee or the
debtor-in-possession to cure the defaults under this Lease, monetary and/or
non-monetary, there shall have been: (A) sufficient cash deposited with
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Landlord, or (B) the Bankruptcy Court shall have entered an order segregating
sufficient cash payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and perfected first
lien and security interest and/or mortgage in property of Tenant, Tenant's
trustee or the debtor-in-possession, acceptable as to value and kind to
Landlord.
(e) In the event that this Lease is assumed in accordance with subsection
(b) of this Section 33 and thereafter Tenant is liquidated or files, or has
filed against it, a subsequent petition under any provision of the Bankruptcy
Code or any similar statute for relief of debtors, Landlord may, at its option,
terminate this Lease and all rights of Tenant hereunder, by giving Tenant notice
of its election to so terminate within 30 days after the occurrence of either of
such events.
(f) If Tenant's trustee or the debtor-in-possession has assumed this lease
pursuant to the terms and provisions of this Section 33 for the purpose of
assigning (or elects to assign) this Lease this Lease may be so assigned only if
the proposed assignee has provided adequate assurance of future performance of
all of the terms, covenants and conditions of this Lease to be performed by
Tenant. Landlord shall be entitled to receive all consideration for such
assignment, whether cash or otherwise. As used in this subsection (f) of this
Section 33 "adequate assurance of future performance" shall mean at that clauses
(B) and (C) of subsection (c) (iii) of Section 33 and each of the following
conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord with a current financial
statement audited by a certified public accountant determined in accordance with
generally accepted accounting principles consistently applied indicating a
credit rating, net worth and working capital in amounts which Landlord
reasonably determines to be sufficient to assure the future performance of such
assignee of Tenant's obligations under this Lease, but in no event indicating a
net worth less than the net worth of the Tenant and any Guarantors of this
Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a default under any provision
of any other lease, Mortgage, financing agreement or other agreement by which
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Landlord or the Superior Lessor is bound, relating to the Leased Premises or any
larger development of which the Leased Premises is a part.
(iii) The proposed assignment will not release or impair any Guarantee
under this Lease.
(g) When, pursuant to the Bankruptcy code, Tenant's trustee or the
debtor-in-possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Leased Premises, such charges shall not be less than
the Minimum Rental and all additional rent payable by Tenant under this Lease
and shall be paid at the times and when due as though such charges were Minimum
Rental and additional rent.
(h) Anything in this Lease to the contrary notwithstanding, neither the
whole nor any portion of Tenant's interest in this Lease or its estate in the
Leased Premises shall pass to any trustee, receiver, assignee for the benefit of
creditors, or any other similar person or entity, or otherwise by operation of
law under the Bankruptcy Code or similar federal statute now or hereinafter
enacted, or under the laws of any state having competent jurisdiction of the
person or property of Tenant unless Landlord shall have consented to such
transfer in writing. No acceptance by Landlord of rent or any other payments
from any such trustee, receiver, assignee, person or other entity shall be
deemed to constitute such consent by Landlord nor shall it be deemed a waiver of
Landlord's right to terminate this Lease for any transfer of Tenant's interest
under this Lease without such consent.
(i) Anything in this Lease to the contrary notwithstanding, Tenant
covenants and agrees that this Lease is an extension of financial benefits and
accommodations to Tenant which are uniquely personal in nature and such
financial benefits and accommodations are a material inducement for Landlord's
execution and delivery of this Lease and are an integral part of the
consideration for this Lease.
(j) In the event of an assumption or assignment, or both, of Tenant's
interests pursuant to this Section 33, the right to extend the term of this
Lease for any Extended Term shall be extinguished.
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34. LATE CHARGES.
(a) Tenant hereby acknowledges that late payment by Tenant to Landlord of
rent and other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
it charges, and late charges which may be imposed on Landlord by the terms of
any Mortgage. Accordingly, if any installment of Minimum Rent shall be received
by Landlord or Landlord's designee within five (5) days after the date on which
such sum is due or if any additional rent or other charge due hereunder shall
not be received by Landlord or Landlord's designee within ten (10) days after
the date on which such sum is due, Tenant shall pay to Landlord a late charge
equal to the greater of 4% of such overdue amount or the late charge, penalty or
interest imposed on Landlord by its Mortgagee as a result of any late payment
made to such Mortgagee. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
(b) Any amount due Landlord not paid within ten (10) days after the date on
which such amount is due shall bear interest at the Maximum Rate from the due
date of such amount. Payment of such interest shall not excuse or cure any
default by Tenant under this Lease. Such interest shall be in addition to the
late charge set forth in Section 34 (a).
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35. DEFINITIONS.
For the purposes of this Lease, the following definitions shall be
applicable:
Assurance - as defined in Section 33(c).
Bankruptcy Code - as defined in Section 33 (a).
Broker - as defined in Section 32(s).
Construction Contract - The general construction contract described on
Schedule "F" annexed hereto.
Control - as defined in Section 19.
Deed - That certain deed dated the date of this Lease, delivered by New
York City Economic Development Corporation to Landlord or Tenant as the case may
be. With respect to that portion of the Leased Premises identified as Block
6997, Lot 117 of the Tax Map for the Borough of Brooklyn.
Direct Construction Costs - as defined in Section 9(a).
Environmental Laws - as defined in Section 36.
Event of Default - as defined in Section 19.
First, Second, etc. - Extended Terms - as defined in Section 2(b).
General Contractor - the general contractor under the Construction
Contract.
Guarantee - any agreement or undertaking, written or otherwise, by virtue
of which any Guarantor guarantees the performance or observance of any or all of
the terms, covenants or conditions to be performed or observed by Tenant under
this Lease.
Guarantor - any person, firm or entity who or which, by written agreement,
guaranty the performance or observance of any or all of the terms, covenants or
conditions to be performed or observed by Tenant under this Lease.
Impositions - as defined in Section 5 (b)
Improvements - as defined in Section 1.
Initial Term- as defined in Section 2 (a).
Initial Work- as defined in Section 9(a).
Initial Work Plans and Specifications- The Plans and Specifications
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described on Schedule "F" annexed hereto.
Land- as defined in Section 1.
Landlord - as defined in Section 24.
Landlord's Net Award - as defined in Section 12(c).
Laws- as defined in Section 2(a).
Lease Year - as defined in schedule B hereof.
Leased Premises - as defined in Section 1.
Liability Insurance - as defined in Section 10(b).
NYC Contract of Sale - That certain Contract of Sale dated December 19,
1995, between New York City Economic Development Corporation, as seller, and
Tenant, as purchaser, relating to that portion of the Leased Premises identified
as Block 6997, Lot 117 of the Tax Map for the Borough of Brooklyn, as such
Contract of Sale may have been amended.
Maximum Rate - an annual rate of interest equal to the Prime Rate plus two
(2%) percent, but in no event in excess of the maximum lawful rate permitted to
be charged by a Landlord against a Tenant for monies advanced by reason of a
Tenant's default.
Minimum Rental - as defined in Section 3.
Mortgage - any mortgage, deed of trust or other security interest now
existing or hereafter created on all or any portion of Landlord's interest in
this Lease and/or the Leased Premises, provided such mortgage, deed of trust or
other security interest shall comply with the provisions of Section 14 hereof.
Mortgagee - the holder of any Mortgage.
Net Award - as defined in Section 12 (d).
Other Project Costs - as defined in Section 9 (a).
Person-persons - any individual(s), partnership(s), firm(s),
corporation(s), business trust(s), estate(s), legal representative(s) or other
entities of any nature or description whatsoever.
Plans and Specifications - as defined in Section 9(b).
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Premiums - as defined in Section 11 (a).
Prime Rate - the rate being charged at the time in question by The Chase
Manhattan Bank (or successor by merger or otherwise) for short-term ninety (90)
day unsecured loans made to its preferred customers.
Rent Commencement Date - on which any portion of the Leased Premises is
open for Tenant's business, but no later than July 1, 1999.
Requisition - as defined in Section 9(b).
Restrictions - as defined in Section 7(a).
Schedule of Other Project Costs - the agreed upon costs incurred or to be
incurred by Tenant in connection with the Construction of the Initial Work, as
itemized on Schedule "E-1" annexed hereto.
Successor Landlord - as defined in Section 14 (c).
Superior Lease - any lease of all or any portions of the Leased Premises
made by and between any persons, firms, or entities, as lessor, and any Landlord
hereunder, as lessee.
Superior Lessor - the Lessor under any Superior Lease.
Surviving Corporation - as defined in Section 17(g).
Taking Date - as defined in Section 12 (a).
Tenant's Change(s) - as defined in Section 9(b).
Tenant's Property - as defined in Section 13.
Trade Breakdown Schedule - the agreed upon direct construction costs to be
incurred by Tenant in connection with the construction of the Improvements, as
itemized on Schedule "E-2" annexed hereto.
36. ENVIRONMENTAL LAWS.
Tenant represents and warrants that: to the best of its knowledge, the
Leased Premises are
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in compliance with all Environmental Laws; to the best of
its knowledge, there are no conditions existing currently which would subject
the Landlord or Tenant to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws or assertions thereof, or which require or are
likely to require cleanup, removal, remedial action or other response pursuant
to Environmental Laws by the Landlord or Tenant; Tenant is not a party to any
litigation or administrative proceeding, nor is any litigation or administrative
proceeding threatened against it which asserts or alleges the Tenant or Landlord
has violated or is violating Environmental Laws or that Tenant is required to
cleanup, remove or take remedial or other responsive action due to the disposal,
depositing, discharge leaking or other release of any hazardous substance or
materials; neither the Leased Premises nor the Tenant or Landlord is subject to
any judgment, decree, order or citation related to or arising out of
Environmental Laws and has not been named or listed as a potential responsible
party by any governmental body or agency in a matter arising under any
Environmental Laws; no permits, licenses or approvals are required under
Environmental Laws relative to the Leased Premises and there are not now
materials stored, deposited, treated, recycled or disposed of on, under or at
the Leased Premises (or tanks or other facilities thereon containing such
materials), which materials or contained materials if known to be present on the
Leased Premises or present in soils or ground water, would require cleanup,
removal or some other remedial action under Environmental Laws.
The term "Environmental Laws" shall mean all federal, state and local laws,
now or at any time hereafter in effect, including statutes, regulations,
ordinances, codes, rules and other governmental restrictions and requirements
relating to the discharge of air pollutants, water pollutants or process waste
water or otherwise relating to the environment or hazardous substances
including, but not limited to, the Federal Solid Waste Disposal Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976 ("RCRA"), the Federal Comprehensive Environmental
Responses Compensation and Liability Act of 1980 ("CERCLA"), regulations of the
Environmental Protection Agency, regulations of the Nuclear Regulatory Agency,
and regulations of any federal or state department of natural resources
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or
environmental protection agency.
Tenant covenants and agrees to: comply with all applicable Environmental
Laws; provide to the Landlord, immediately upon receipt, copies of any
correspondence notice, pleading, citation, indictment, complaint, order, decree,
or other document from any source asserting or alleging a circumstance or
condition which requires or may require a financial contribution by Tenant or
Landlord or a cleanup, removal, remedial action, or other response by or on the
part of the Tenant or Landlord under Environmental Laws or which seeks damages
or civil, criminal or punitive penalties from Tenant or Landlord for an alleged
violation of Environmental Laws; and advise the Landlord in writing as soon as
Tenant becomes aware of any condition or circumstance which makes the
environmental warranties contained in this Lease incomplete or inaccurate. In
the event of any such circumstance, Tenant agrees, at its expense and at the
request of Landlord, to permit an environmental audit solely for the benefit of
Landlord or its Mortgagee to be conducted by the Landlord or its Mortgagee or an
independent agent selected by the Landlord or its Mortgagee and which may not be
relied upon by the Tenant for any purpose. This provisions shall not relieve the
Tenant from conducting its own environmental audits or taking any other steps
necessary to comply with Environmental Laws. If in the opinion of the Landlord
or its Mortgagee there exists any uncorrected violation by the Tenant of an
Environmental Law or any condition which requires, or may require, a cleanup,
removal or other remedial action by the Tenant under any Environmental Laws, and
such cleanup, removal or other remedial action is not completed within ninety
(90) days from the date of written notice from Landlord to Tenant, the same
shall at the option of the Landlord constitute a default hereunder (unless such
cleanup, removal or other remedial action can not be reasonably completed within
said ninety (90) day period, in which event same shall not constitute a default
hereunder as long as the Tenant promptly commences such cure within said ninety
(90) day period and diligently prosecutes such cure to completion thereafter);
provided, however, that such cure right in no event exceed the permitted time
period to cure same under any Mortgage (and the terms of subsection 19(k) shall
govern same).
In addition in the event any soils or groundwaters are found to contain
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compounds or substances at levels which require special handling, transportation
and/or disposal. or which otherwise render them regulated pursuant to
Environmental Laws. then Tenant shall be responsible at its sole cost and
expense to arrange for the handling, transportation and disposal of such soils
and or qroundwaters in accordance with all Environmental Laws. Tenant shall
assume all responsibilities as the "generator" (as defined in applicable
Environmental Laws) of any and all such soils and groundwaters.
Tenant shall indemnify and hold Landlord and any Mortgagee harmless from
and against, and the Tenant hereby agrees to reimburse Landlord with respect to,
any and all claims, demands, causes of action, losses, damages, liabilities,
costs and expenses (including attorneys' fees and court costs) of any and every
kind or character, known or unknown, fixed or contingent, asserted against,
incurred by or required to be paid by Landlord at any time and from time to time
by reason of or arising out of (i) the existence of any hazardous substance or
solid waste (as such terms are hereinafter defined) at the Leased Premises, (ii)
the release or disposal (as such terms are hereinafter defined) of any hazardous
substances or solid waste from the Leased Premises, or (iii) the ownership,
construction, occupancy, operation, use or maintenance of the Leased Premises
resulting in or giving rise to a breach or violation of any Environmental Laws.
This indemnity applies, without limitation, to any violation of any
Environmental Law and any and all matters arising out of any act, omissions,
event or circumstance existing or occurring (including without limitation, the
presence on the Premises or release from the Premises of hazardous substances or
solid waste disposed of or otherwise released), regardless of whether the act,
omission, event or circumstance constituted a violation of any Environmental Law
at the time of its existence or occurrence. The terms "hazardous substance" and
"release" shall have the meanings specified in CERCIA and the terms "solid
waste" and "disposed" or "disposal" shall have the meanings specified in RCRA.
However, in the event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of the amendment and provided further, to the extent that
the laws of the State of New York establish a meaning for "hazardous substance",
"release", "solid waste", or "disposed"
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which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply.
Tenant and any Guarantor(s) agree to execute and deliver to any Mortgagee
an indemnity agreement in the form annexed hereto as Schedule "D" or any other
certifications, affidavits and indemnity agreements regarding hazardous
substances or materials as any Mortgagee may require.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed the day and year first above written.
TENANT:
TOPS APPLIANCE CITY, INC.
By: /s/ Thomas L. Zambelli
----------------------------------------
Name: Thomas L. Zambelli
Title: Executive Vice-President
Chief Financial Officer
LANDLORD:
AM CONEY ISLAND, LLC
its managing member
AM CONEY ISLAND, INC.
By: /s/ Marc Esrig
----------------------------------------
Name: Marc Esrig
Title: President
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK)
On the day of May 24, 1999, before me personally came Thomas L. Zambelli to
me known to be the individual who executed the foregoing instrument, and who,
being duly sworn by me, did depose and say that he has an address at 45
Brunswick Avenue, Edison, New Jersey, that he is the Executive Vice President of
TOPS APPLIANCE CITY, INC., a New Jersey corporation, the corporation described
in and which executed the foregoing instrument; and that he signed his name to
the foregoing instrument by order or authority of the Board of Directors of said
corporation.
/s/ Vincent L. Petraro
------------------------------------------
Notary Public
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
On the 24th day of May, 1999, before me personally came Marc Esrig to me
known to be the individual who executed the foregoing instrument, and who, being
duly sworn by me, did depose and say that he is the President of AM Coney
Island, Inc. the managing member of AM Coney Island, LLC, a New York limited
liability company, and that he has the authority to sign the same, and
acknowledged that he executed the same as the act and deed of said limited
liability company.
/s/ Vincent L. Petraro
------------------------------------------
Notary Public
<PAGE>
SCHEDULE A
Property Description
[Intentionally omitted]
<PAGE>
SCHEDULE B
Minimum Rental
1. For the purposes of this Lease, the first "Lease Year" shall commence on
the date of this Lease and shall end on the first anniversary of such date, plus
the number of days, if any, required to have the period end at the expiration of
a calendar month, and each succeeding "Lease Year" shall run concurrently with
each succeeding period of twelve calendar months.
2. Tenant covenants to pay Landlord, without previous demand therefore and
without setoff or deduction whatsoever, a Minimum Rental at the following annual
rates:
a) If Tenant occupies Thirty One Percent (31%) or more of the Leased
Premises on the Rent Commencement Date, Nine Hundred Twenty-One Thousand
Two Hundred Fifty and 00/100 ($921,250.00) Dollars per annum for the period
commencing on the Rent Commencement Date and ending on the day immediately
preceding the commencement of the second Lease year, both dates inclusive;
if the Rent Commencement Date is prior to July 1, 1999 and on the Rent
Commencement Date, Tenant occupies Thirty Percent (30%) or less of the
Leased Premises, the Minimum Rental due shall be the percentage of the
Leased Premises occupied by Tenant multiplied by Nine Hundred Twenty-One
Thousand Two Hundred Fifty and 00/100 ($921,250.00) Dollars per annum (the
"Prorated Minimum
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Rental"). The Prorated Minimum Rental shall be due until
the earlier of (i) July 1, 1999 or (ii) Tenant occupies Thirty One Percent
(31%) or more of the Leased Premises (the "Step Up Date"). From the Step Up
Date until the end of the first Lease Year the Minimum Rental shall be Nine
Hundred Twenty-One Thousand Two Hundred Fifty and 00/100 ($921,250.00)
Dollars per annum for the remainder of the first Lease Year;
b) Nine Hundred Forty-Three Thousand Five Hundred and 00/100
($943,500.00) Dollars per annum for the period commencing on the
commencement of the second Lease Year and ending on the day immediately
preceding the commencement of the third Lease Year, both dates inclusive;
c) Nine Hundred Sixty-Six Thousand Three Hundred Six and 00/100
($966,306.00) Dollars per annum for the period commencing on the
commencement of the third Lease Year and ending on the day immediately
preceding the commencement of the fourth Lease Year, both dates inclusive;
d) Nine Hundred Eighty-Nine Thousand Six Hundred Eighty-Three and
00/100 ($989,683.00) Dollars per annum for the period commencing on the
commencement of the fourth Lease Year and ending on the day immediately
preceding the commencement of the fifth Lease Year, both dates inclusive;
e) One Million Thirteen Thousand Six Hundred Forty-Three and 00/100
($1,013,643.00) Dollars per annum for the period commencing on the
commencement of the fifth Lease Year and ending on the day immediately
preceding the commencement of the sixth Lease Year, both dates inclusive;
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f) One Million Thirty-Eight Thousand Two Hundred Three and 00/100
($1,038,203.00) Dollars per annum for the period commencing on the
commencement of the sixth Lease Year and ending on the day immediately
preceding the commencement of the seventh Lease Year, both dates inclusive;
g) One Million Sixty-Three Thousand Three Hundred Seventy-Seven and
00/100 ($1,063,377.00) Dollars per annum for the period commencing on the
commencement of the seventh Lease Year and ending on the day immediately
preceding the commencement of the eighth Lease Year, both dates inclusive;
h) One Million Eighty-Nine Thousand One Hundred Eighty and 00/100
($1,089,180.00) Dollars per annum for the period commencing on the
commencement of the eighth Lease Year and ending on the day immediately
preceding the commencement of the ninth Lease Year, both dates inclusive;
i) One Million Eighty-Four Thousand Three Hundred Seventy-Nine and
00/100 ($1,084,379.00) Dollars per annum for the period commencing on the
commencement of the ninth Lease Year and ending on the day immediately
preceding the commencement of the tenth Lease Year, both dates inclusive;
j) One Million One Hundred Eleven Thousand Four Hundred Eighty-Eight
and 00/100 ($1,111,488.00) Dollars per annum for the period commencing on
the commencement of the tenth Lease Year and ending on the day immediately
preceding the commencement of the eleventh Lease Year, both dates
inclusive;
k) One Million One Hundred Thirty-Nine Thousand Two Hundred
Seventy-Five and 00/100 ($1,139,275.00) Dollars per annum for
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the period
commencing on the commencement of the eleventh Lease Year and ending on the
day immediately preceding the commencement of the twelfth Lease Year, both
dates inclusive;
l) One Million One Hundred Sixty-Seven Thousand Seven Hundred
Fifty-Seven and 00/100 ($1,167,757.00) Dollars per annum for the period
commencing on the commencement of the twelfth Lease Year and ending on the
day immediately preceding the commencement of the thirteenth Lease Year,
both dates inclusive;
m) One Million One Hundred Ninety-Six Thousand Nine Hundred Fifty-One
and 00/100 ($1,196,951.00) Dollars per annum for the period commencing on
the commencement of the thirteenth Lease Year and ending on the day
immediately preceding the commencement of the fourteenth Lease Year, both
dates inclusive;
n) One Million Two Hundred Twenty-Six Thousand Eight Hundred
Seventy-Five and 00/100 ($1,226,875.00) Dollars per annum for the period
commencing on the commencement of the fourteenth Lease Year and ending on
the day immediately preceding the commencement of the fifteenth Lease Year,
both dates inclusive;
o) One Million Two Hundred Fifty-Seven Thousand Five Hundred
Forty-Seven and 00/100 ($1,257,547.00) Dollars per annum for the period
commencing on the commencement of the fifteenth Lease Year and ending on
the day immediately preceding the commencement of the sixteenth Lease Year,
both dates inclusive;
p) One Million Two Hundred Eighty-Eight Thousand Nine Hundred
Eighty-Five and 00/100 ($1,288,985.00) Dollars per annum for
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the period
commencing on the commencement of the sixteenth Lease Year and ending on
the day immediately preceding the commencement of the seventeenth Lease
Year, both dates inclusive;
q) One Million Three Hundred Twenty-One Thousand Two Hundred Ten and
00/100 ($1,321,210.00) Dollars per annum for the period commencing on the
commencement of the seventeenth Lease Year and ending on the day
immediately preceding the commencement of the eighteenth Lease Year both
dates inclusive;
r) One Million Three Hundred Fifty-Four Thousand Two Hundred Forty and
00/100 ($1,354,240.00) Dollars per annum for the period commencing on the
commencement of the eighteenth Lease Year and ending on the day immediately
preceding the commencement of the nineteenth Lease Year, both dates
inclusive;
s) One Million Three Hundred Eighty-Eight Thousand Ninety-Six and
00/100 ($1,388,096.00) Dollars per annum for the period commencing on the
commencement of the nineteenth Lease Year and ending on the day immediately
preceding the commencement of the twentieth Lease Year, both dates
inclusive;
t) One Million Four Hundred Twenty-Two Thousand Seven Hundred
Ninety-Nine and 00/100 ($1,422,799.00) Dollars per annum for the period
commencing on the commencement of the twentieth Lease Year and ending on
the day immediately preceding the commencement of the twenty-first Lease
Year, both dates inclusive;
u) One Million Four Hundred Fifty-Eight Thousand Three Hundred
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Sixty-Nine and 00/100 ($1,458,369.00) Dollars per annum for the period
commencing on the commencement of the twenty-first Lease Year and ending on
the day immediately preceding the commencement of the twenty-second Lease
Year, both dates inclusive;
v) One Million Four Hundred Ninety-Four Thousand Eight Hundred
Twenty-Eight and 00/100 ($1,494,828.00) Dollars per annum for the period
commencing on the commencement of the twenty-second Lease Year and ending
on the day immediately preceding the commencement of the twenty-third Lease
Year, both dates inclusive;
w) One Million Five Hundred Thirty-Two Thousand One Hundred
Ninety-Nine and 00/100 ($1,532,199.00) Dollars per annum for the period
commencing on the commencement of the twenty-third Lease Year and ending on
the day immediately preceding the commencement of the twenty-fourth Lease
Year, both dates inclusive;
x) One Million Five Hundred Seventy Thousand Five Hundred Four and
00/100 ($1,570,504.00) Dollars per annum for the period commencing on the
commencement of the twenty-fourth Lease Year and ending on the day
immediately preceding the commencement of the twenty-fifth Lease Year, both
dates inclusive;
y) One Million Six Hundred Nine Thousand Seven Hundred Sixty-Six
($1,609,766.00) Dollars per annum for the period commencing on the
commencement of the twenty-fifth Lease Year and ending on the day
immediately preceding the
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commencement of the twenty-sixth Lease Year (End
of Base Lease Term), both dates inclusive;
z) One Million Six Hundred Fifty Thousand Ten and 00/100
($1,650,010.00) Dollars per annum for the period commencing on the
commencement of the twenty-sixth Lease Year and ending on the day
immediately preceding commencement of the twenty-seventh Lease Year, both
dates inclusive;
aa) One Million Six Hundred Ninety-One Thousand Two Hundred Sixty-One
and 00/100 ($1,691,261.00) Dollars per annum for the period commencing on
the commencement of the twenty-seventh Lease Year and ending on the day
immediately preceding commencement of the twenty-eighth Lease Year, both
dates inclusive;
bb) One Million Seven Hundred Thirty-Three Thousand Five Hundred
Forty-Two and 00/100 ($1,733,542.00) Dollars per annum for the period
commencing on the commencement of the twenty-eighth Lease Year and ending
on the day immediately preceding the commencement of the twenty-ninth Lease
Year, both dates inclusive;
cc) One Million Seven Hundred Seventy-Six Thousand Eight Hundred
Eighty-One and 00/100 ($1,776,881.00) Dollars per annum for the period
commencing on the commencement of the twenty-ninth Lease Year and ending on
the day immediately preceding the commencement of the thirtieth Lease Year,
both dates inclusive;
dd) One Million Eight Hundred Twenty-One Thousand Three Hundred Three
and 00/100 ($1,821,303.00) Dollars per annum for
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the period commencing on
the commencement of the thirtieth Lease Year and ending on the day
immediately preceding the commencement of the thirty-first Lease Year, both
dates inclusive;
ee) One Million Eight Hundred Sixty-Six Thousand Eight Hundred
Thirty-Five and 00/100 ($1,866,835.00) Dollars per annum for the period
commencing on the commencement of the thirty-first Lease Year and ending on
the day immediately preceding the commencement of the thirty-second Lease
Year, both dates inclusive;
ff) One Million Nine Hundred Thirteen Thousand Five Hundred Six and
00/100 ($1,913,506.00) Dollars per annum for the period commencing on the
commencement of the thirty-second Lease Year and ending on the day
immediately preceding the commencement of the thirty-third Lease Year, both
dates inclusive;
gg) One Million Nine Hundred Sixty-One Thousand Three Hundred
Forty-Four and 00/100 ($1,961,344.00) Dollars per annum for the period
commencing on the commencement of the thirty-third Lease Year and ending on
the day immediately preceding the commencement of the thirty-fourth Lease
Year, both dates inclusive;
hh) Two Million Ten Thousand Three Hundred Seventy-Seven and 00/100
($2,010,377.00) Dollars per annum for the period commencing on the
commencement of the thirty-fourth Lease Year and ending on the day
immediately preceding the commencement of the thirty-fifth Lease Year, both
dates
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inclusive;
ii) Two Million Sixty Thousand Six Hundred Thirty-Seven and 00/100
($2,060,637.00) Dollars per annum for the period commencing on the
commencement of the thirty-fifth Lease Year and ending on the day
immediately preceding the commencement of the thirty-sixth Lease Year, both
dates inclusive;
jj) Two Million One Hundred Twelve Thousand One Hundred Fifty-Three
and 00/100 ($2,112,153.00) Dollars per annum for the period commencing on
the commencement of the thirty-sixth Lease Year and ending on the day
immediately preceding the commencement of the thirty-seventh Lease Year,
both dates inclusive;
kk) Two Million One Hundred Sixty-Four Thousand Nine Hundred Fifty-Six
($2,164,956.00) Dollars per annum for the period commencing on the
commencement of the thirty-seventh Lease Year and ending on the day
immediately preceding the commencement of the thirty-eighth Lease Year,
both dates inclusive;
ll) Two Million Two Hundred Nineteen Thousand Eighty and 00/100
($2,219,080.00) Dollars per annum for the period commencing on the
commencement of the thirty-eighth Lease Year and ending on the day
immediately preceding the commencement of the thirty-ninth Lease Year, both
dates inclusive;
mm) Two Million Two Hundred Seventy-Four Thousand Five Hundred
Fifty-Seven and 00/100 ($2,274,557.00) Dollars per annum for the period
commencing on the commencement of the thirty-ninth Lease Year and ending on
the day immediately
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preceding the commencement of the fortieth Lease Year,
both dates inclusive;
nn) Two Million Three Hundred Thirty-One Four Hundred Twenty-One and
00/100 ($2,331,421.00) Dollars per annum for the period commencing on the
commencement of the fortieth Lease Year and ending on the day immediately
preceding the commencement of the forty-first Lease Year, both dates
inclusive;
oo) Two Million Three Hundred Eighty-Nine Thousand Seven Hundred Seven
and 00/100 ($2,389,707.00) Dollars per annum for the period commencing on
the commencement of the forty-first Lease Year and ending on the day
immediately preceding the commencement of the forty-second Lease Year, both
dates inclusive;
pp) Two Million Four Hundred Forty-Nine Thousand Four Hundred
Forty-Nine and 00/100 ($2,449,449.00) Dollars per annum for the period
commencing on the commencement of the forty-second Lease Year and ending on
the day immediately preceding the commencement of the forty-third Lease
Year, both dates inclusive;
qq) Two Million Five Hundred Ten Thousand Six Hundred Eighty-Six and
00/100 ($2,510,686.00) Dollars per annum for the period commencing on the
commencement of the forty-third Lease Year and ending on the day
immediately preceding the commencement of the forty-fourth Lease Year, both
dates inclusive;
rr) Two Million Five Hundred Seventy-Three Thousand Four Hundred
Fifty-Three and 00/100 ($2,573,453.00) Dollars per annum for the period
commencing on the commencement of the
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forty-fourth Lease Year and ending on
the day immediately preceding the commencement of the forty-fifth Lease
Year, both dates inclusive; and
ss) Two Million Six Hundred Thirty-Seven Thousand Seven Hundred
Eighty-Nine and 00/100 ($2,637,789.00) Dollars per annum for the period
commencing on the commencement of the forty-fifth Lease Year and ending on
the day immediately preceding one year to the day from the beginning of
that forty-fifth Lease Year, both dates inclusive.
3. Omit
4. Notwithstanding the terms of Section 2 of this Schedule B to the
contrary, in the event Tenant, on or before July 1, 1999, has not (i) completed
construction of the Initial Work in accordance with subsection 9(a) of this
Lease and (ii) opened the Leased Premises for business as a "Tops Appliance
City" retail store on a permanent basis, then each of the annual rates of
Minimum Rental set forth in said Section 2 of this Schedule shall be deemed
automatically increased by twenty-five percent (25%). (e.g., the annual rental
rate for the period commencing on the Rent Commencement Date and ending on the
day immediately preceding the commencement of the first Lease Year both dates
inclusive, shall be deemed to be One Million One Hundred Forty Three Thousand
Seven Hundred Fifty and 00/100 ($1,143,750.00) Dollars per annum) and such
increased annual rates of Minimum Rental shall not be subject to any further
adjustment pursuant to Section 3 of this Schedule.
<PAGE>
SCHEDULE C
FORM OF ESTOPPEL CERTIFICATE
The undersigned, TOPS APPLIANCE CITY, INC., ("Tenant"), in consideration of
One Dollar ($1.00) and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, hereby certifies to AM Coney Island, LLC
("Landlord"), the holder of any mortgage covering the property (the "Mortgagee")
and the vendee under any contract of sale with respect to the Property (the
"Purchaser") as follows:
1. Tenant executed and exchanged with Landlord a certain lease (the
"Lease') dated May ____, 1999, covering the premises known as 3035 Cropsey
Avenue, Brooklyn, New York (the "Demised Premises"), for a term to commence on
May ____, 1999, and to expire on May _____, 2024.
2. The Lease is in full force and effect and has not been modified,
changed, altered or amended in any respect.
3. Tenant and Landlord have not entered into any Lease concessions oral or
written, direct or indirect, or in any nature whatsoever, except as set forth in
the Lease between Tenant and Landlord.
4. Tenant has accepted and is now in possession of the Demised Premises and
is paying the full rental under the Lease.
5. The current fixed minimum annual rent payable under this Lease is
$_________ . The fixed minimum annual rent and all additional rent and other
charges required to be paid under the Lease have been paid for the period up to
and including ____________, 19__.
6. No rent under the Lease has been paid for more than thirty (30) days in
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advance of its due date.
7. There are no defaults existing under the Lease on the part of either
Landlord or Tenant.
8. There is no existing basis for Tenant to cancel or terminate the Lease.
9. As of the date hereof, there exists no valid defenses, offsets, credits,
deductions in rent or claims against the enforcement of any of the agreements,
terms, covenants or conditions of the Lease.
10. Tenant affirms that any disputes with Landlord giving rise to a claim
against Landlord is a claim under the Lease only and is subordinate to the
rights of the holder of any superior mortgage or ground lease and shall be
subject to all the terms, conditions and provisions thereof. Any such claims are
not offsets to or defenses against enforcement of the Lease.
11. Tenant affirms that any dispute with Landlord giving rise to a claim
against Landlord is a claim under the Lease only and is subordinate to the
rights of the Purchaser pursuant to any contract of sale. Any such claims are
not offsets to or defense against enforcement of the Lease.
12. There are no actions, whether voluntary or otherwise, pending against
the Tenant under the Bankruptcy Laws of the United States or any state thereof.
13. There has been no material adverse change in the Tenant's financial
condition between the date hereof and the date of the execution and delivery of
the Lease.
14. [Tenant acknowledges that Landlord has informed Tenant that an
assignment of Landlord's interest in the Lease has been or will be made to the
Mortgagee and that no modification, revision, or cancellation of the Lease or
amendments thereto shall be effective unless a written consent thereto of the
Mortgagee is first obtained, and that until further notice from the Mortgagee,
payments under the Lease may continue as heretofore Upon any such notice from
the Mortgagee, Tenant will make payments under this Lease in accordance with
said notice.]
15. [Tenant acknowledges that Landlord has informed Tenant that Landlord
has entered into a contract to sell the property to Purchaser and that no
modification,
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revision or cancellation of the Lease or amendments thereto shall
be effective unless a written consent thereto of the Purchaser has been
obtained.]
16. This certification is made to induce Purchaser to consummate a purchase
of the Property and/or to induce Mortgagee to make and maintain a mortgage loan
secured by the Property, as the case may be, knowing that said Purchaser and/or
Mortgagee as applicable, rely upon the truth of this certification in making
and/or maintaining such purchase or mortgage, as applicable.
17. Except as modified herein, all other provisions of the Lease are hereby
ratified and confirmed.
Date:
TOPS APPLIANCE CITY, INC.
By:
-------------------------------------
Name:
Title:
<PAGE>
SCHEDULE D
FORM OF INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made and entered into effective
as of the _____ day of ____________ 19__, by and between
_______________________, a ________________ corporation which is hereinafter
referred to as the "Indemnitor", and ______________________________________
which is herein referred to as the "Indemnitee". The Indemnitor and the
Indemnitee are hereinafter collectively referred to as the "Parties".
WHEREAS, Indemnitor and Indemnitee have entered into a lease (the "Lease")
for certain real property located in ___________________________________ as more
particularly described on Exhibit A annexed hereto (the "Premises"); and
WHEREAS, the Indemnitee, as a condition to the aforesaid Lease has required
the execution of this Agreement by the Indemnitor;
NOW, THEREFORE, in consideration of the above and foregoing recitals and
Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. The above and foregoing recitals are true and correct and constitute the
basis for this Agreement.
2. Indemnitor shall indemnify and hold Indemnitee harmless from and
against, and the Indemnitor hereby agrees to reimburse Indemnitee with respect
to, any and all claims, demands, causes of action, losses, damages, liabilities,
costs and expenses (including attorneys' fees and court costs) of any and every
kind or character, known or unknown, fixed or contingent, asserted against,
incurred
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by or required to be paid by Indemnitee at any time and from time to
time by reason of or arising out of the ownership, construction, occupancy,
operation, use or maintenance of the Premises resulting in or giving rise to a
breach or violation of any applicable laws pertaining to health or the
environment (hereinafter referred to individually as an "Applicable
Environmental Law" and collectively as the "Applicable Environmental Laws"),
including but not limited to the Federal Solid Waste Disposal Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976 ("RCRA"), the Federal Comprehensive Environmental
Responses Compensation and Liability Act of 1980 ("CERCLA"), regulations of the
Environmental Protection Agency. regulations of the Nuclear Regulatory Agency,
and regulations of any federal or state department of natural resources or
environmental protection agency now or at any time hereafter in effect.
3. The indemnity contained in paragraph (2) of this Agreement applies,
without limitation, to any violation of any Applicable Environmental Law and any
and all matters arising out of any act, omissions, event or circumstance
existing or occurring (including without limitation, the presence on the
Premises or release from the Premises of hazardous substances or solid waste
disposed of or otherwise released, regardless of whether the act, omission,
event or circumstance constituted a violation of any Applicable Environmental
Law at the time of its existence or occurrence (the foregoing shall hereinafter
be referred to as "Environmental Acts") . The terms "hazardous substance" and
"release" shall have the meanings specified in CERCLA and the terms "solid
waste" and "disposed" shall have the meanings specified in RCRA. However, in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby such broader meaning shall apply subsequent to the effective
date of the amendment and provided further, to the extent that the laws of the
State of New York establish a meaning for "hazardous substance", "release",
"solid waste", or "disposed" which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.
4. This Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective officers, employees, agents successors and
assigns.
5. Notwithstanding the foregoing, it is understood and agreed that
Indemnitee, may in its sole
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discretion, control the defense of any suit or claim
brought against it by virtue of an alleged breach of one or more of the
Applicable Environmental Laws indemnified herein, including but not limited to,
the retention of counsel of the Indemnitee's choosing. It is further understood
and agreed that, if in the opinion of Indemnitee, the cost or expense with
respect to a suit or claim arising from an alleged breach of one or more of the
Applicable Environmental Laws would exceed the cost of settlement thereof, then
in such instance, Indemnitee may settle said suit or claim and be indemnified
therefor by the Indemnitor.
6. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York (except where preempted by
applicable federal law), excluding any conflicts-of-law rule or principal of New
York law that might refer the governance, construction or interpretation of this
Agreement to the laws of another state.
7. This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute one and the same instrument. Any signature page
to any counterpart may be detached from such counterpart without impairing the
legal effect of the signatures thereon and thereafter attached to another
counterpart identical thereto except having attached to it additional signature
pages.
IN WITNESS WHEREOF, the Indemnitor has executed this Indemnity Agreement
effective as of the date first written above.
INDEMNITOR:
BY:
NAME:
TITLE:
IN WITNESS WHEREOF, the Indemnitee has executed this Indemnity Agreement
effective as of the date first written above.
INDEMNITEE:
BY:
NAME:
TITLE:
<PAGE>
SCHEDULE E-1
Trade Breakdown Schedule
[Intentionally omitted]
<PAGE>
SCHEDULE E-2
Schedule of Other Project Costs
[Intentionally omitted]
<PAGE>
SCHEDULE F
Description of Construction Contract And
Initial Work Plans And specifications
[Intentionally omitted]
<PAGE>
SCHEDULE G
Continuing Agreement of Indemnity
[Intentionally omitted]