The Chefs’ Warehouse, Inc. 8-K [chef-8k_063015.htm]

Exhibit 10.3

 

--------------------------------------------------------------------------------

 

 

LEASE AGREEMENT

  

Dated as of June 30, 2015

 

between

CW LV REAL ESTATE LLC, THE CHEFS’ WAREHOUSE, INC., CHEFS’ WAREHOUSE
PARENT, LLC and THE CHEFS’ WAREHOUSE WEST COAST, LLC,
jointly and severally as the Tenant

 

and

 

CW NEVADA LANDLORD, LLC,
as the Landlord

 

--------------------------------------------------------------------------------

 

 

 

 

 

TABLE OF CONTENTS

 

1. Certain Definitions 1       2. Demise of Leased Premises 1       3. Title and
Condition 1       4. Use of Leased Premises; Quiet Enjoyment 2       5. Term 3  
    6. Rent 4       7. Net Lease; Non-Terminability 5       8. Payment of
Impositions; Compliance with Legal Requirements and Insurance Requirements 6    
  9. Liens; Recording and Title 7       10. Indemnification 8       11.
Maintenance and Repair 9       12. Alterations 11       13. Condemnation 13    
  14. Insurance 14       15. Restoration 18       16. Subordination to Financing
19       17. Assignment, Subleasing 20       18. Permitted Contests 21       19.
Conditional Limitations; Default Provisions 22       20. Additional Rights of
Landlord and Tenant 24       21. Notices 25       22. Estoppel Certificates 26  
    23. Surrender and Holding Over 26       24. No Merger of Title 27       25.
Definition of Landlord 27       26. Hazardous Substances 28      

 

 

i

 

 

 

 

27. Entry by Landlord 28       28. No Usury 28       29. Withholdings 28      
30. Financial Statements. 29       31. Separability 29       32. Right of First
Refusal. 29       33. Miscellaneous 30

 

 

EXHIBIT A Legal Description
EXHIBIT B Basic Rent

SCHEDULE A Purchase Procedure

APPENDIX A Definitions

 

 

ii

 

 

 

LEASE

THIS LEASE (as amended, supplemented or otherwise modified from time to time,
this “Lease”) made as of June 30, 2015, by and among CW NEVADA LANDLORD, LLC, a
Delaware limited liability company, as landlord, having an office at c/o
SunTrust Equity Funding, LLC, 3333 Peachtree Road, NE, 10th Floor, Atlanta
Georgia 30326, and CW LV REAL ESTATE LLC, a Delaware limited liability company,
THE CHEFS’ WAREHOUSE, INC., a Delaware corporation, CHEFS’ WAREHOUSE PARENT,
LLC, a Delaware limited liability company, and THE CHEFS’ WAREHOUSE WEST COAST,
LLC, a Delaware limited liability company, jointly and severally, as tenant,
having an office at 100 East Ridge Road, Ridgefield, CT 06877.

In consideration of the rents and provisions herein stipulated to be paid and
performed, Landlord and Tenant, intending to be legally bound, hereby covenant
and agree as follows:

1.                   Certain Definitions. All capitalized terms, unless
otherwise defined herein, shall have the respective meanings ascribed to such
terms in Appendix A annexed hereto and by this reference incorporated herein.

2.                   Demise of Leased Premise. Landlord hereby demises and lets
to Tenant and Tenant hereby takes and leases from Landlord, for the term and
upon the provisions hereinafter specified, the Leased Premises.

3.                   Title and Condition.

(a)                 The Leased Premises are demised and let subject to (i) the
Permitted Encumbrances and (ii) the condition of the Leased Premises as of the
Closing Date, without representation or warranty by Landlord; it being
understood and agreed, however, that the recital of the Permitted Encumbrances
herein shall not be construed as a revival of any thereof which for any reason
may have expired.

(b)                 LANDLORD HAS NOT MADE AND WILL NOT MAKE ANY INSPECTION OF
ANY OF THE LEASED PREMISES, AND LANDLORD LEASES AND WILL LEASE AND TENANT TAKES
AND WILL TAKE THE LEASED PREMISES “AS IS”, AND TENANT ACKNOWLEDGES THAT LANDLORD
(WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND
WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
INCLUDING ANY WARRANTY OR REPRESENTATION AS TO ITS FITNESS FOR USE OR DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO THE QUALITY OF THE MATERIAL
OR WORKMANSHIP THEREIN, LATENT OR PATENT, AS TO LANDLORD’S TITLE THERETO, OR AS
TO VALUE, COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE, CONDITION,
MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR OPERATION, IT BEING AGREED
THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. Tenant acknowledges
that the Leased Premises are of its selection and to its specifications, and
that the Leased Premises have been inspected by Tenant and are satisfactory to
it. In the event of any defect or deficiency in any of the Leased Premises of
any nature, whether patent or latent, Landlord shall not have any responsibility
or liability with respect thereto or for any incidental or consequential damages
(including strict liability in tort). The provisions of this Paragraph 3(b) have
been negotiated, and the foregoing provisions are intended to be a complete
exclusion and negation of any warranties by Landlord, express or implied, with
respect to any of the Leased Premises, arising pursuant to the Uniform
Commercial Code or any other law now or hereafter in effect or otherwise.

 

1

 

 

(c)                 Tenant acknowledges and agrees that Tenant has examined the
title to the Leased Premises prior to the execution and delivery of this Lease
and has found such title to be satisfactory for the purposes contemplated by
this Lease as of the date hereof.

(d)                 Landlord hereby assigns, without recourse or warranty
whatsoever, to Tenant, all Guaranties. Such assignment shall remain in effect
until the termination of this Lease, provided that Landlord shall retain the
right to enforce the Guaranties in the name of Tenant during the continuance of
an Event of Default. Landlord hereby agrees to execute and deliver, at Tenant’s
expense, such further documents, including powers of attorney, as Tenant may
reasonably request in order that Tenant may have the full benefit of the
assignment effected by this Paragraph 3(d) and the ability to enforce the
Guaranties during the Term hereof. Upon the termination of this Lease, the
Guaranties shall automatically revert to Landlord. The foregoing provision of
reversion shall be self-operative and no further instrument of reassignment
shall be required, provided that, in confirmation of such reassignment, Tenant
shall promptly execute and deliver any instrument which Landlord may reasonably
request.

(e)                 Landlord agrees to enter into, at Tenant’s expense, such
Record Agreements as reasonably requested by Tenant, subject to Landlord’s
approval of the form thereof, not to be unreasonably withheld, delayed, or
conditioned; provided, however, that no such Record Agreement shall result in
any material diminution in the value or utility of the Leased Premises for use
as a Facility and, further provided, that no such Record Agreement shall render
the use of the Leased Premises dependent upon any other property or condition or
affect Tenant’s obligations under this Lease, each of which Tenant shall certify
and affirm to Landlord in writing delivered with Tenant’s request with respect
to such Record Agreement.

4.                   Use of Leased Premises; Quiet Enjoyment.

(a)                 Tenant may use the Leased Premises as a Facility or for any
other lawful purpose, so long as such other lawful purpose would not (i) in
Landlord’s reasonable determination, have a material adverse effect on the value
of the Leased Premises, (ii) materially increase (when compared to use as a
Facility) the likelihood that Tenant or Landlord would incur material liability
under any provisions of any Environmental Laws, or (iii) subject Landlord to any
burdensome regulation. In no event shall the Leased Premises be used for any
purpose or in any manner which shall violate any of the provisions of any
Permitted Encumbrance or any Record Agreement. Tenant shall, at its expense,
timely observe, perform, comply with, make any payments required under, and
carry out the provisions of, each Permitted Encumbrance and Record Agreement
required therein to be observed and performed by the owner, operator or occupant
of the Leased Premises during the Term, including, without limitation, paying
any and all assessments for common area maintenance costs.

 

2

 

 

(b)                 Tenant shall not permit any unlawful occupation, business or
trade to be conducted on the Leased Premises or any use to be made thereof
contrary to applicable Legal Requirements or Insurance Requirements. Tenant
shall not use, occupy or permit any of the Leased Premises to be used or
occupied, nor do or permit anything to be done in or on any of the Leased
Premises, in a manner that would (i) make void or voidable any insurance that
Tenant is required hereunder to maintain in force, (ii) prevent Tenant from
obtaining any insurance which Tenant is required to furnish hereunder, or (iii)
cause any injury or damage to any of the Improvements (other than ordinary wear
and tear reasonably expected in connection with the use of the Improvements as a
Facility), except in connection with Alterations permitted under Paragraph 12.

(c)                 Subject to all of the provisions of this Lease, including
the Landlord’s right to exercise its remedies under Section 19 hereof after the
occurrence and during the continuance of an Event of Default hereunder, Landlord
covenants that neither Landlord, nor any Person claiming by, through or under
Landlord, shall do any act to disturb the peaceful and quiet occupation and
enjoyment of the Leased Premises by Tenant.

5.                   Term.

(a)                 Subject to the provisions hereof, Tenant shall have and hold
the Leased Premises for an initial term commencing on the date hereof and ending
at 11:59 p.m. at the Leased Premises on the Expiration Date.

(b)                 Provided (i) this Lease shall not have been terminated
pursuant to the provisions of Paragraph 13(b) or 19 and (ii) no Material Event
of Default has occurred and remains uncured, in each case on the date of its
Renewal Option Notice and on the Expiration Date (or the expiration date of the
then expiring Renewal Term, as applicable), Tenant shall have four (4)
consecutive options to extend the term of this Lease for a Renewal Term,
commencing upon the day after the Expiration Date (or the expiration date of the
then expiring Renewal Term, as applicable). If Tenant elects to exercise any one
or more of said renewal options, it shall do so by giving a Renewal Option
Notice to Landlord at any time during the Term (or the then Renewal Term, as
applicable) but, in any event, on or before that date which is twelve (12)
months prior to the commencement of the Renewal Term for which such election is
exercised (the “Outside Notice Date”). If Tenant has not provided the Renewal
Option Notice for the exercise of a Renewal Term on or before the applicable
Outside Notice Date and has not otherwise expressly provided Landlord notice in
writing that it would not be exercising such renewal option, then Tenant’s
option to exercise such renewal option shall continue until the date that is
three (3) Business Days after receipt by Tenant of a written notice from
Landlord expressly advising Tenant that Tenant has failed to timely send notice
of its exercise of an available Renewal Term so long as Tenant notifies Landlord
in writing within such three (3) Business Days of the date of receipt of such
notice that Tenant is so exercising such available renewal option, which notice
shall constitute a Renewal Option Notice; and if Tenant has not so provided the
Renewal Option Notice within the time frame set forth in the previous sentences,
then Tenant shall forever waive its right to exercise any renewal option. If
Tenant shall elect to exercise any such renewal option, the term of this Lease
shall be automatically extended for five (5) years without the need for
execution of an extension or renewal lease. Any Renewal Term shall be subject to
all of the provisions of this Lease, including, but not limited to, the Basic
Rent provisions for such Renewal Term set forth on Exhibit B attached hereto,
and all such provisions shall continue in full force and effect. Within ten (10)
days after request by either Landlord or Tenant, Landlord and Tenant shall
execute, acknowledge and deliver to each other an instrument confirming that
such option has been effectively exercised and confirming the extended
expiration date of this Lease and the then applicable Basic Rent.

 

3

 

 

6.                   Rent.

(a)                 Tenant shall pay to Landlord, as rent for the Leased
Premises during the Term, the Basic Rent in advance, on the Closing Date and on
each Basic Rent Payment Date occurring after the Closing Date, and shall pay the
same (at Tenant’s Option) by ACH or wire transfer in immediately available
federal funds by 3:00 p.m., New York time, on the date due, to such account in
such bank as Landlord shall designate from time to time. In the event that the
Closing Date is a date other than the first Business Day of a calendar month,
the Basic Rent due on the Closing Date shall be an amount equal to the amount of
Basic Rent set forth on Exhibit B hereto for the first Basic Rent Payment Date,
times 1/30, times the number of days from and including the Closing Date to and
excluding the first day of the following calendar month, and the Basic Rent due
on the first Business Day of the month following the month in which the Closing
Date occurs shall be the amount set forth on Exhibit B for the first Basic Rent
Payment Date.

(b)                 Tenant shall pay and discharge, as Additional Rent, all
other amounts and obligations which Tenant assumes or agrees to pay or discharge
pursuant to this Lease, together with every fine, penalty, interest and cost
which may be added by the party to whom such payment is due for nonpayment or
late payment thereof. All payments of Additional Rent that are payable to
Landlord shall be paid by Tenant (at Tenant’s option) by ACH or wire transfer in
immediately available federal funds to such account in such bank as Landlord
shall designate from time to time.

(c)                 If any installment of Basic Rent or Additional Rent is not
paid when the same is due, Tenant shall pay to Landlord, on demand, as
Additional Rent, interest on such installment from the date such installment was
due to the date such installment is paid at the Default Rate. In addition to the
interest payable pursuant to the foregoing sentence, any payment not received by
the applicable due date shall incur a late charge in the amount of one percent
(1%) of such late payment amount (except to the extent such late charge is
prohibited by applicable law), provided, however, that with respect to the first
two (2) late payments of all or any portion of any installment of Basic Rent in
any calendar year, such late charge shall not be due and payable unless the
Basic Rent has not been paid within five (5) days following the due date
thereof, and provided, further that if any payment is received by the applicable
due date solely as a result of a force majeure event, then no late charge shall
be payable with respect thereto. Tenant and Landlord agree that this late charge
represents a reasonable sum (considering all of the circumstances existing on
the date of the execution of this Lease) and a fair and reasonable estimate of
the costs that Landlord will incur by reason of Tenant’s failure to pay such
amounts on time. Tenant and Landlord further agree that proof of actual damages
would be costly and inconvenient. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue Basic Rent or
Additional Rent payment and shall not prevent Landlord from exercising any of
the other rights available hereunder.

 

4

 

 

(d)                 Landlord and Tenant agree that this Lease is a true lease
and does not represent a financing arrangement. Each party shall reflect the
transactions represented by this Lease in all applicable books, records and
reports (including, without limitation, income tax filings) in a manner
consistent with “true lease” treatment rather than “financing” treatment.

7.                   Net Lease; Non-Terminability.

(a)                 Except as otherwise expressly provided in this Lease, this
Lease shall not terminate and Tenant shall not have any right to terminate this
Lease during the Term. This is a net lease and, except as otherwise expressly
provided in this Lease (including Paragraphs 13 and 14 hereof), Tenant shall not
be entitled to any setoff, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction, reduction or defense of or to Basic Rent or
Additional Rent, and the obligations of Tenant under this Lease shall not be
affected by any circumstance or event, or for any reason, including but not
limited to the following: (i) any damage to or destruction of any of the Leased
Premises by any cause whatsoever, (ii) any Condemnation, (iii) the prohibition,
limitation or restriction of, or interference with, Tenant’s use of any of the
Leased Premises, (iv) any eviction by paramount title, constructive eviction or
otherwise, (v) Tenant’s acquisition of ownership of any of the Leased Premises
other than pursuant to an express provision of this Lease, (vi) any default on
the part of Landlord under this Lease or under any other agreement, (vii) any
latent or other defect in, or any theft or loss of, any of the Leased Premises,
(viii) the breach of any warranty of any seller or manufacturer of any of the
Equipment, or (ix) any other cause, whether similar or dissimilar to the
foregoing, any present or future Applicable Law to the contrary notwithstanding.
It is the intention of the parties hereto that the obligations of Tenant under
this Lease shall be separate and independent covenants and agreements, and that
Basic Rent and Additional Rent shall continue to be payable in all events (or,
in lieu thereof, Tenant shall pay amounts equal thereto), and that the
obligations of Tenant under this Lease shall continue unaffected, unless
expressly provided in this Lease to the contrary or unless this Lease shall have
been terminated pursuant to an express provision of this Lease. Notwithstanding
the foregoing, Tenant shall have the right to pursue a cause of action against
Landlord for actual damages resulting from Landlord’s default under this Lease,
it being understood that Tenant shall have no right to set off any such damages
against the Basic Rent or Additional Rent payable under this Lease.

(b)                 Tenant agrees that it shall remain obligated under this
Lease in accordance with its provisions and that, except as otherwise expressly
provided herein, it shall not take any action to terminate, rescind or avoid
this Lease, notwithstanding (i) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding-up or other
proceeding affecting Landlord, (ii) the exercise of any remedy, including
foreclosure, under any Mortgage (subject to the terms of Paragraph 16 and any
SNDA), or (iii) any action with respect to this Lease (including the
disaffirmance hereof) which may be taken by Landlord under the Federal
Bankruptcy Code or by any trustee, receiver or liquidator of Landlord or by any
court under the Federal Bankruptcy Code or otherwise, provided that if no Event
of Default has occurred and is continuing, this Lease is terminated by Landlord
under the Federal Bankruptcy Code or such trustee, receiver or liquidator or by
any court under the Federal Bankruptcy Code and Tenant is dispossessed of the
Leased Premises, Tenant shall have no obligation to pay Basic Rent or any other
obligation under this Lease that accrues after such termination and
dispossession so long as Tenant has returned the Leased Premises in accordance
with the terms of this Lease. 

 

5

 

 

(c)                 This Lease is the absolute and unconditional obligation of
Tenant. Tenant waives all rights that are not expressly stated or reserved in
this Lease but that may now or hereafter otherwise be conferred by law (i) to
quit, terminate or surrender this Lease or any of the Leased Premises, (ii) to
any setoff, counterclaim, recoupment, abatement, suspension, deferment,
diminution, deduction, reduction or defense of or to Basic Rent or any
Additional Rent, and (iii) for any statutory Lien.

8.                   Payment of Impositions; Compliance with Legal Requirements
and Insurance Requirements.

(a)                

(i)                 Tenant shall, before interest or penalties are due thereon,
pay directly to the applicable third party and discharge all Impositions. If
received by Landlord, Landlord shall, within thirty (30) days of Landlord’s
receipt thereof, but in any event at least five (5) Business Days prior to the
due date for the related Imposition (provided that Landlord has received such
bill or invoice prior to five (5) Business Days preceding such due date),
deliver to Tenant any bill or invoice with respect to any Imposition. To the
extent permitted by Applicable Law, Tenant shall request the appropriate taxing
authorities to send all invoices for property taxes directly to Tenant during
the Term.

(ii)

In the event that any assessment against any of the Leased Premises may be paid
in installments, Tenant shall have the option to pay such assessment in
installments; and in such event, Tenant shall be liable only for those
installments, or portions thereof, that are for assessments that accrue during
the Term. Tenant shall prepare and file all tax reports required by Governmental
Authorities which relate to the Impositions. Tenant shall deliver to Landlord,
within ten (10) days after payment by Tenant, reasonable evidence of the payment
of all property taxes related to the Leased Premises. In addition, Tenant shall
deliver to Landlord, within twenty (20) days after Landlord’s written request
therefor, copies of all settlements and notices pertaining to the Impositions
which may be issued by any Governmental Authority and receipts for payments of
all other Impositions made during each calendar year of the Term.

(b)                 Tenant shall promptly comply with and conform to all of the
Legal Requirements and Insurance Requirements.

(c)                 Any payments required to be made by Tenant pursuant to this
Paragraph 8 that are not allowed to be paid directly to the appropriate
Governmental Authority or such other Person to whom such payment is due shall be
made directly to Landlord.

(d)                 If any report, return or statement (a “Filing”) is required
to be filed with respect to any Imposition payable by Tenant hereunder, Tenant
shall, if permitted by Applicable Laws to do so, timely file or cause to be
filed such Filing with respect to such Imposition and shall promptly provide
notice of such Filing to Landlord (except for any such Filing that Landlord has
notified Tenant in writing that Landlord intends to file) and will (if ownership
of the Leased Premises or any part thereof or interest therein is required to be
shown on such Filing) show the ownership of the Leased Premises in the name of
Landlord and send a copy of such Filing to Landlord. If Tenant is not permitted
by Applicable Laws to file any such Filing, Tenant will promptly notify Landlord
of such requirement and prepare and deliver to Landlord a proposed form of such
Filing and such information as is within Tenant’s reasonable control or access
with respect to such Filing within a reasonable time, and in all events at least
twenty (20) days, prior to the time such Filing is required to be filed. Tenant
shall hold Landlord harmless from and against any liabilities, including, but
not limited to penalties, additions to tax, fines and interest, arising out of
any insufficiency or inaccuracy in any such Filing, if such insufficiency or
inaccuracy is attributable to Tenant, it being understood that Tenant shall have
no liability hereunder with respect to any failure of Landlord to timely file
any Filing that Tenant has provided to Landlord pursuant to the second sentence
of this subparagraph (d) or for any insufficiency or inaccuracy in any Filing if
such insufficiency or inaccuracy is attributable to Landlord.

 

6

 

 

(e)                  Notwithstanding anything herein to the contrary, subject to
Paragraph 8(a)(ii), any obligations of Tenant under the provisions of this
Paragraph 8 that accrue with respect to periods prior to the expiration or
earlier termination of this Lease shall survive such expiration or earlier the
termination of this Lease.

9.                   Liens; Recording and Title.

(a)                 Subject to the Tenant’s right to contest as set forth in
Paragraph 18, Tenant shall not, directly or indirectly, create or permit to be
created or to remain, and shall promptly discharge, any Lien on the Leased
Premises, the Basic Rent or any Additional Rent, other than the Permitted
Encumbrances and any mortgage, Lien or other charge created by or resulting from
any act of Landlord or those claiming by, through or under Landlord (except
Tenant). Notice is hereby given that Landlord shall not be liable for any labor,
services or materials furnished or to be furnished to Tenant, or to anyone
holding any of the Leased Premises through or under Tenant, and that no
mechanic’s or other Liens for any such labor, services or materials shall attach
to or affect the interest of Landlord in and to any of the Leased Premises.

(b)                 Each of Landlord and Tenant shall execute, acknowledge and
deliver to the other a written Memorandum of this Lease to be recorded in the
appropriate land records of the jurisdiction in which the Leased Premises is
located, in order to give public notice and protect the validity of this Lease.
In the event of any discrepancy between the provisions of such recorded
Memorandum of this Lease and the provisions of this Lease, the provisions of
this Lease shall prevail.

(c)                 Nothing 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 which may
create, give rise to, or be the foundation for, any right, title, interest or
Lien in or upon the estate of Landlord in any of the Leased Premises, other than
an assignment or a sublease, in either case, as permitted under the provisions
of Paragraph 17.

 

7

 

 

10.                Indemnification.

(a)                 Tenant agrees to assume liability for, and to indemnify,
protect, defend, save and keep harmless each Indemnitee from and against any and
all Claims, whether asserted prior to, during or after the Term, that may be
suffered, imposed on or asserted against any Indemnitee (including any Claims
resulting from any Indemnitee’s ordinary negligence) arising out of (i) the
leasing by Landlord of the Leased Premises to Tenant, subleasing of the Leased
Premises by Tenant, assignment by Tenant of its interest in this Lease, or sale
of the Leased Premises by Landlord to Tenant, renewal of this Lease, or the
operation, possession, use, non-use, maintenance, modification, alteration,
construction, reconstruction, restoration, condition, design or replacement of
the Leased Premises (or any portion thereof), any Record Agreement or from the
granting by Landlord at Tenant’s request of any Record Agreement, licenses, or
any rights with respect to all or any part of the Leased Premises, (ii) patent,
trademark or copyright infringement and latent or other defects, whether or not
discoverable, (iii) the non-compliance of the Leased Premises with Applicable
Laws and any other liability under Applicable Laws related to the Leased
Premises or this Lease (including, without limitation, any Claims arising
directly or indirectly out of any actual or alleged violation, now or hereafter
existing, of any Environmental Laws), (iv) this Lease or any modification,
amendment or supplement hereto, (v) any default by Tenant under this Lease, (vi)
the business and activities of Tenant or of any other Person on or about the
Leased Premises (whether as an invitee, subtenant, licensee or otherwise), and
(vii) any Claims arising, directly or indirectly, out of the actual or alleged
presence, use, storage, generation or Release of any Hazardous Materials on,
under, from, to or at the Leased Premises or any portion thereof (or any
surrounding areas for which Tenant or Landlord has any legal liability or
obligation as a result of its interest in the Leased Premises), in each case
whether prior to or during the Term, including the cost of assessment,
containment and/or removal of any such Hazardous Materials, the cost of any
actions taken in response to a Release of any such Hazardous Materials so that
it does not migrate or otherwise cause or threaten danger to present or future
public health, safety, welfare or the environment, and costs incurred to comply
with Environmental Laws in connection with all or any portion of the Leased
Premises, or the operation thereof (or any surrounding areas for which Tenant or
Landlord has any legal liability or obligation as a result of its interest in
the Leased Premises). Notwithstanding the foregoing, nothing herein shall be
construed to obligate Tenant to indemnify, defend and hold harmless any
Indemnitee from and against any Claims imposed on or incurred by such Indemnitee
to the extent such Claims arise by reason of (i) any Indemnitee’s willful
misconduct or gross negligence, (ii) any Liens and liabilities created by
Landlord on the Leased Premises or that arise from Landlord’s failure to timely
pay any Taxes, in each case for which Tenant is not responsible under this
Lease, or (iii) events or circumstances that occur after the expiration or
termination of this Lease or the dispossession of Tenant therefrom by Landlord
(whether or not the Lease is terminated) and the return of the Leased Premises
in accordance with this Lease.

(b)                 In case any Claim shall be made or brought against any
Indemnitee, such Indemnitee shall give prompt notice thereof to Tenant; provided
that failure to so notify Tenant shall not reduce Tenant’s obligations to
indemnify any Indemnitee hereunder except to the extent such failure adversely
affects Tenant’s rights to defend such Claim. Tenant shall be entitled, at its
expense, acting through counsel selected by Tenant (and reasonably satisfactory
to such Indemnitee), to participate in or to assume and control (if it promptly
so elects upon notice of the Claim), the negotiation, litigation and/or
settlement of any such Claim. Such Indemnitee may (but shall not be obligated
to) participate at its own expense and with its own counsel in any proceeding
conducted by Tenant in accordance with the foregoing, in which case Tenant shall
keep such Indemnitee and its counsel fully informed of all proceedings and
filings. Notwithstanding the foregoing, Tenant shall not be entitled to assume
and control the defense of any Claim if (i) an Event of Default has occurred and
is continuing, (ii) the proceeding involves the possible imposition of any
criminal liability or penalty or the reasonable likelihood of any unindemnified
civil penalty on such Indemnitee, (iii) the proceeding involves the granting of
injunctive relief against the Indemnitee not related to this Lease, (iv) a
significant counterclaim is available to the Indemnitee that would not be
available to and cannot be asserted by Tenant of (v) Tenant has not acknowledged
to such Indemnitee in writing that such Claim is fully covered by Tenant’s
indemnity set forth herein.

 

8

 

 

(c)                 Upon payment in full of any Claim by Tenant pursuant to this
Paragraph 10 to or on behalf of an Indemnitee, Tenant, without any further
action, shall be subrogated to any and all Claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense or claims against another Indemnitee for
which Tenant would have indemnity obligations hereunder) to the extent of such
payment, and such Indemnitee shall execute such instruments of assignment and
conveyance, evidence of Claims and payment and such other documents, instruments
and agreements as may be necessary to preserve any such Claims and otherwise
reasonably cooperate with Tenant to enable Tenant to pursue such Claims. In no
event shall Tenant settle or compromise any Claim against any Indemnitee if such
settlement or compromise does not contain a full release of such Indemnitee or
admits culpability on the part of such Indemnitee, unless such Indemnitee
otherwise consents in writing.

(d)                 The obligations of Tenant under this Paragraph 10 shall
survive any termination or expiration of this Lease.

11.                Maintenance and Repair.

(a)                 Tenant shall at all times from and after the Closing Date,
put, keep and maintain the Leased Premises (including, without limitation, the
roof, landscaping, walls, footings, foundations and structural components of the
Leased Premises) in substantially the same (or better) condition and order of
repair as exists as of the Closing Date (or, with respect to Alterations or an
Expansion, as exists on the date such Alteration or Expansion is completed),
except for ordinary wear and tear and subject to removal of Obsolete Equipment,
and shall promptly make all repairs and replacements of every kind and nature,
whether foreseen or unforeseen, which may be required to be made upon or in
connection with the Leased Premises in order to keep and maintain the Leased
Premises in the order and condition required by this Paragraph 11(a). Tenant
shall do or cause others to do all shoring of the Leased Premises or of
foundations and walls of the Improvements and every other act necessary or
appropriate for preservation and safety thereof, by reason of or in connection
with any excavation or other building operation upon any of the Leased Premises,
whether or not Landlord shall, by reason of any Legal Requirements or Insurance
Requirements, be required to take such action or be liable for failure to do so.
LANDLORD SHALL NOT BE REQUIRED TO MAKE ANY REPAIR, WHETHER FORESEEN OR
UNFORESEEN, OR TO MAINTAIN ANY OF THE LEASED PREMISES OR ADJOINING PROPERTY IN
ANY WAY, AND TENANT HEREBY EXPRESSLY WAIVES THE RIGHT TO MAKE REPAIRS AT THE
EXPENSE OF THE LANDLORD, WHICH RIGHT MAY BE PROVIDED FOR IN ANY LAW NOW OR
HEREAFTER IN EFFECT. Nothing in the preceding sentence shall be deemed to
preclude Tenant from being entitled to insurance proceeds or condemnation awards
for Restoration pursuant to Paragraphs 13(c) and 14(g). Tenant shall, in all
events, make all repairs for which it is responsible hereunder promptly, but in
any event shall commence such repairs within thirty (30) days, subject to delays
as a result of force majeure and receipt of any long lead time items, of the
date Tenant becomes aware that such repairs are necessary, or, in the event of a
Restoration pursuant to Paragraph 13(c) or 14(g), within thirty (30) days
(subject to delays as a result of force majeure and receipt of any long lead
time items) of the date insurance proceeds or a condemnation award has been paid
to the Trustee (it being understood that Tenant shall take such steps as are
reasonably necessary to protect and preserve the integrity and safety of the
Leased Premises pending such payment) and shall diligently pursue such repairs
to completion), and all repairs shall be made in a good, proper and workmanlike
manner.

 

9

 

 

(b)                 In the event that any Improvement shall violate any Legal
Requirements or Insurance Requirements, then Tenant, at the request of Landlord,
shall either (i) obtain valid and effective variances, waivers or settlements of
all claims, liabilities and damages resulting from each such violation, whether
the same shall affect Landlord, Tenant or both (or in the case of a violation of
Insurance Requirements, obtain new coverage where there is no violation of any
Insurance Requirements), or (ii) take such action as shall be necessary to
remove such violation, including, if necessary, the making of an Alteration. Any
such repair or Alteration shall be made in conformity with the provisions of
Paragraph 12.

(c)                 If Tenant shall be in default beyond the expiration of any
applicable notice and cure period under any of the provisions of this Paragraph
11, Landlord may, thirty (30) days after Tenant’s receipt of written notice of
default and failure of Tenant to commence to cure during such period or to
diligently pursue such cure to completion (subject to delays as a result of
force majeure and receipt of any long lead time items), but with only such
notice as may be reasonably practicable in the event of an emergency, do
whatever is necessary to cure such default as may be appropriate under the
circumstances for the account of, and at the expense of, Tenant. In the event of
an emergency Landlord shall notify Tenant of the situation by phone or other
available communication and shall give Tenant as much time as is reasonably
practicable under the circumstances (not to exceed thirty (30) days) before
acting independently to cure such default. All reasonable sums so paid by
Landlord and all reasonable costs and expenses (including, without limitation,
attorneys’ fees and expenses) so incurred, together with interest thereon at the
Default Rate from the date of payment or incurring the expense, shall constitute
Additional Rent payable by Tenant under this Lease on demand.

(d)                 Tenant shall from time to time replace with Replacement
Equipment any of the Equipment that shall have become worn out or unusable for
the purpose for which it is intended, been taken by a Condemnation as provided
in Paragraph 13, or been lost, stolen, damaged or destroyed as provided in
Paragraph 14; provided that Tenant shall have no obligation to replace any of
such Equipment or Replacement Equipment that has become Obsolete Equipment. In
the event that Tenant sells or otherwise receives value in excess of $15,000.00
in any calendar year for any Obsolete Equipment that is not replaced, then
Tenant shall pay the net proceeds from such Obsolete Equipment to Landlord
within five (5) Business Days of receipt. Tenant shall repair at its sole cost
and expense all damage to the Leased Premises caused by the removal of Equipment
or other personal property of Tenant or the installation of Replacement
Equipment. All Replacement Equipment (except for Trade Fixtures) shall become
the property of Landlord, shall be free and clear of all Liens and rights of
others and shall become a part of the Equipment as if originally demised herein.

 

10

 

 

(e)                 Notwithstanding anything to the contrary set forth above or
elsewhere in this Lease, in the event that either Tenant or Landlord, in the
exercise of its reasonable business judgment, which shall be supported by a
report from a reputable, independent engineer or contractor if requested by the
other party, determines at any time during the last two (2) years of the then
Term that, in light of Tenant’s repair and maintenance obligations under the
Lease, a Capital Repair is necessary, then, at Landlord’s option, either (i)
Tenant, at Tenant’s expense, shall undertake only such repairs as shall be
necessary and possible to minimize any damage to the Leased Premises, keep the
Leased Premises in compliance with all Legal Requirements and Insurance
Requirements and maintain the Leased Premises as a functional Facility, or (ii)
Tenant shall promptly and diligently undertake such Capital Repair. In the event
that Landlord exercises the option described in the foregoing clause (ii),
Landlord and Tenant shall cooperate to determine the appropriate Replacement
Equipment, the scope of the work for the related Capital Repair, the
contractor(s) to perform the Capital Repair and the cost of the Capital Repair,
as applicable, provided that if the parties cannot agree on any such matter
within forty five (45) days of the date that Landlord or Tenant notified the
other of the need for such Capital Repair, then the parties shall resolve the
dispute by referring the matter to a single arbitrator reasonably selected by
Landlord through the American Arbitration Association and reasonably acceptable
to Tenant, and who shall resolve the dispute using the Commercial Arbitration
Rules and Expedited Procedures provisions thereof. The arbitrator when selected
shall propose three (3) arbitration dates (each of which shall be a Business
Day) over the course of at least ten (10) days that are acceptable to Landlord,
and Tenant may choose the arbitration date from these proposed dates. The
arbitration dates shall be proposed as soon as reasonably possible following
Landlord’s or Tenant’s demand for arbitration, it being the intent of the
parties that the disputes submitted to arbitration pursuant to this paragraph be
resolved as quickly as possible (preferably within ten (10) days of demand by
either party). The demand by Landlord or Tenant shall state the nature of the
claim or dispute with reasonable specificity, and the parties will grant the
arbitrator access to such records of the parties as are reasonably necessary for
the arbitrator to make his or her decision. In addition, each party shall have
the right to select one reputable engineer or construction professional with at
least 10 years’ experience with similar facilities and matters similar to that
in dispute, who shall be entitled to appear before and present oral and/or
written evidence to the arbitrator. The award or decision rendered by the
arbitrator shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof. All filing fees
and costs associated with the arbitration itself shall be shared equally by
Tenant and Landlord.

12.                Alterations.

(a)                 Upon prior written notice to Landlord, Tenant shall have the
right to make any Alteration(s) to the Leased Premises, that are not Structural
Alterations and the cost of which does not exceed the Threshold Amount, in the
aggregate, in any calendar year; provided, that, Tenant complies with clause (c)
of this Paragraph 12.

 

11

 

 

(b)                 Upon at least 30 days’ prior written notice to Landlord,
Tenant shall have the right to make any Alteration(s) to the Leased Premises
that are (i) Structural Alterations or (ii) the cost of which, either
individually or as to a series of related non-structural Alterations, exceeds
during the course of any calendar year, in the aggregate, the Threshold Amount;
provided, that, (i) no Event of Default has occurred and is then continuing,
(ii) Tenant complies with clause (c) of this Paragraph 12, and (iii) prior to
making any such Alteration(s), Tenant shall provide Landlord with the plans and
specifications, estimated budget and proposed schedule of construction with
respect thereto and Landlord shall have consented to such Alterations, which
consent shall not be unreasonably withheld, delayed or conditioned. In the event
that Landlord does not respond to Tenant’s request for consent pursuant to the
foregoing sentence within twenty five (25) days from the date Tenant has
delivered to Landlord the items Tenant is required to provide to Landlord
pursuant to such sentence, Tenant may provide Landlord with a second request for
consent, which request shall state in bold capital letters on the face of the
envelope that failure to respond thereto within five (5) Business Days shall be
deemed to be consent to the requested Alterations, and if Landlord fails to
respond to Tenant within such five (5) Business Days, Landlord shall be deemed
to have consented to such Alteration.

(c)                 In connection with any Alteration: (i) the value and utility
of the Leased Premises shall not be materially lessened after the completion of
any such Alteration, or its structural integrity impaired; (ii) all such
Alterations shall be performed in a good and workmanlike manner, and shall be
expeditiously completed in compliance with all Legal Requirements (including,
without limitation, in the case of an Expansion or a Structural Alteration, all
minimum parking space, setback and other zoning requirements) and Insurance
Requirements; (iii) no such Alteration shall result in a use of the Leased
Premises that is not permitted pursuant to Paragraph 4, (iv) Tenant shall
promptly pay all costs and expenses of any such Alteration and shall discharge
all Liens filed against any of the Leased Premises arising out of the same; (v)
Tenant shall procure and pay for all permits and licenses required in connection
with any such Alteration; (vi) subject to Tenant’s contest rights set forth in
Paragraph 18, Tenant shall not incur any debt with respect to such Alteration
that results in any mortgage or other encumbrance on the Leased Premises or any
part thereof (but in no event shall the foregoing preclude any borrowing by
Tenant that does not result in any such mortgage or other encumbrance on the
Leased Premises or any part thereof), and (vii) in the case of any Alteration
the estimated cost of which in any one instance exceeds the Threshold Amount,
such Alterations shall be made under the supervision of an architect or engineer
selected by Tenant in the exercise of its reasonable business judgment and in
accordance with plans and specifications which shall be submitted to Landlord
prior to the commencement of the Alterations.

(d)                 In the event that Tenant desires to undertake an Expansion,
Tenant shall give Landlord written notice thereof, which notice shall include a
description of the desired Expansion in reasonable detail and a preliminary
budget and schedule therefor; in no event shall the reasonably expected
completion date for any Expansion extend beyond the then applicable Term
(including any exercised Renewal Term). Within forty-five (45) days of
Landlord’s receipt of such notice, Landlord shall notify Tenant of whether
Landlord is willing to fund the costs of such Expansion and, if so, the economic
terms and other material economic and non-economic conditions with respect
thereto; among other things, Landlord may require the delivery of an appraisal
showing that the fair market value of the Leased Premises, after giving effect
to the Expansion, shall increase by at least the expected cost of such
Expansion. If Landlord is unwilling to fund such Expansion, Tenant may fund such
Expansion itself (including by utilizing borrowed funds that do not result in
any mortgage or other encumbrance on the Leased Premises or any part thereof).
Any Expansion shall be done in accordance with the standards applicable to
Alterations in Paragraph 12(c) above, provided that if Landlord is funding the
Expansion, Tenant shall not be obligated to pay the costs thereof pursuant to
clause (iv) of Paragraph 12(c) above.

 

12

 

 

(e)                 All Alterations and Expansions shall, upon the expiration or
earlier termination of this Lease (other than as a result of Tenant’s purchase
of the Leased Premises in accordance with this Lease), become the property of
Landlord, without any further act. To the extent permitted by the Code and by
any applicable state tax laws and regulations, Tenant shall be entitled to the
tax benefits, if any, with respect to any Alterations and Expansions made by
Tenant at Tenant’s expense until such time as such Alterations or Expansions, as
the case may be, become the property of Landlord pursuant to the foregoing
sentence.

13.                Condemnation.

(a)                 Each of Landlord and Tenant, promptly upon obtaining
knowledge of the institution of any proceeding for Condemnation, shall notify
the other party thereof and each of Landlord and Tenant shall be entitled, at
its sole cost and expense, to participate in any Condemnation proceeding.
Subject to the provisions of this Paragraph 13 and Paragraph 15, Tenant hereby
irrevocably assigns to Landlord any award or payment in respect of any
Condemnation of the Leased Premises or any part thereof, except that (except as
hereinafter provided) nothing in this Lease shall be deemed to assign to
Landlord any Tenant’s Award to the extent Tenant shall have a right to make a
separate claim therefor against the condemnor, it being agreed, however, that
Tenant shall in no event be entitled to any payment that reduces the award to
which Landlord is or would be entitled for the condemnation of Landlord’s
interest in the Leased Premises.

(b)                 If (I) the entire Leased Premises, (II) a material portion
of the Land or the Improvements or any means of ingress, egress or access to the
Leased Premises, including loss of legally sufficient parking or truck
turnaround areas or loading dock access, the loss of which, even after giving
effect to such restoration as is reasonably practicable within the remaining
Leased Premises, would, in Tenant’s reasonable business judgment, be
substantially and materially adverse to the business operations of Tenant at the
Leased Premises, or (III) any means of ingress, egress or access to the Leased
Premises which does not result in at least one method of ingress and egress to
and from the Leased Premises remaining that is sufficient for Tenant’s use
thereof and that meets all existing Legal Requirements, as determined by Tenant
in its reasonable discretion, shall be subject of a Taking by a duly constituted
authority or agency having jurisdiction, then, in either case, Tenant may, not
later than ninety (90) days after such Taking has occurred, serve a Tenant’s
Termination Notice upon Landlord, in which case this Lease shall terminate on
the applicable Termination Date and Landlord shall be entitled to receive and
retain the entire Award.

(c)                 (i)                 In the event of a Condemnation of any
part of the Leased Premises which does not result in a termination of this
Lease, promptly after the Net Award with respect to such Condemnation has been
paid by the related authority to the Trustee (or Landlord if no Loan is then
outstanding), Tenant, to the extent Restoration of the Leased Premises is
practicable, shall promptly (subject to Tenant’s receipt of the Net Award
therefor in accordance with the terms of Paragraph 15), commence and diligently
continue to completion such Restoration.

 

 

13

 

 

(ii)

Upon the payment to Landlord or Trustee of the Net Award of a Taking which falls
within the provisions of this Paragraph 13(c), Landlord and Lender shall, to the
extent received, make the Net Award available to Tenant for Restoration in
accordance with the provisions of Paragraph 15. The proceeds remaining after the
completion of, and payment for, the Restoration, if any, shall be retained by
Landlord. In the event of any such partial Condemnation, all Basic Rent and
Additional Rent shall continue unabated and unreduced.

(iii)

In the event of a Requisition of the Leased Premises, Landlord shall apply the
Net Award of such Requisition received by Landlord to the installments of Basic
Rent or Additional Rent thereafter payable and Tenant shall pay any balance
remaining thereafter. Upon the expiration of the Term, any portion of such Net
Award which shall not have been previously credited to Tenant on account of the
Basic Rent and Additional Rent shall be retained by Landlord.

(d)                 No agreement with any condemnor in settlement of or under
threat of any Condemnation shall be made by either Landlord or Tenant without
the written consent of the other, and of the Lender, if the Leased Premises are
then subject to a Mortgage, which consent shall not be unreasonably withheld,
delayed, or conditioned; provided that if an Event of Default has occurred and
is then continuing or Tenant has served a Tenant’s Termination Notice, then
Tenant’s consent shall not be required.

14.                Insurance.

(a)                 From and after the Closing Date, Tenant shall maintain,
during the Term at its sole cost and expense, the following insurance on the
Leased Premises:

(i)

Insurance against loss of or damage to the Improvements and the Equipment under
an ISO special form or broader coverage insurance policy, which shall include
coverage against all risks of direct physical loss or damage (which shall
include flood insurance if the Leased Premises is located within either a
Special Flood Hazard Area or a Non-Special Flood Hazard Area as determined by
FEMA flood zone ratings of A or V, earthquake insurance and windstorm
insurance). Such insurance shall also include (A) ordinance and law coverage
(hazards A, B and C, with limits for A of not less than replacement cost and
limits for B and C not less than $1,000,000 in the aggregate) and (B) a
condition that permits the insured to elect to rebuild on another site, provided
that such rebuilding does not increase the amount of loss or damage that would
otherwise be payable to rebuild at the original site (it being understood that
Tenant may not rebuild at another site without Landlord’s prior written
approval, which approval shall not be unreasonably withheld, but which may be
conditioned, among other things, on the fulfillment of certain reasonable
conditions precedent). Such insurance shall be in amounts sufficient to prevent
Landlord or Tenant from becoming a co-insurer under the applicable policies, and
in any event in amounts not less than the actual replacement cost of the
Improvements and Equipment (excluding footings and foundations and other parts
of the Improvements which are not insurable). Such insurance policies may
contain reasonable exclusions and deductible amounts, all in accordance with
industry standards.

 

14

 

 

(ii)

Commercial general liability insurance against claims for bodily injury, death
or property damage occurring on, in or about the Leased Premises, which
insurance shall (A) be written on an “Occurrence Basis”, and shall provide
minimum protection with a combined single limit in an amount not less than the
greater of (x) $5,000,000 or (y) the aggregate amount of such insurance carried
by prudent owners or operators of similar commercial properties, for bodily
injury, death and property damage in any one occurrence and (B) include premises
and operations liability coverage, products and completed operations liability
coverage, and blanket contractual liability coverage. In addition, Tenant shall
maintain auto liability insurance in an amount not less than $1,000,000.

(iii)

Workers’ compensation insurance covering all persons employed by Tenant on the
Leased Premises in connection with any work done on or about any of the Leased
Premises for which claims for death or bodily injury could be asserted against
Landlord, Tenant or the Leased Premises.

(iv)

Boiler and machinery coverage on a comprehensive form in an amount not less than
the actual replacement cost of the Improvements and Equipment (excluding
footings and foundations and other parts of the Improvements which are not
insurable).

(v)

Business interruption insurance (A) covering all risks required to be covered by
the insurance provided for in subparagraph (i) above for a period commencing at
the time of loss for such length of time as it takes to repair or replace with
the exercise of due diligence, (B) containing an indemnity coverage extension
which provides that after the physical loss to the Leased Premises has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss or the expiration of
twelve months, whichever occurs first, and (C) in an amount not less than the
amount carried by prudent owners or operators of similar properties.

(vi)

Whenever Tenant shall be engaged in making any Alteration, Expansion, repairs or
construction work of any kind (collectively, “Work”) for which the estimated
cost exceeds the Threshold Amount, completed value builder’s risk insurance and
worker’s compensation insurance or other adequate insurance coverage covering
all persons employed in connection with the Work, whether by Tenant, its
contractors or subcontractors and with respect to whom death or bodily injury
claims could be asserted against Landlord.

(vii)

Such additional and/or other insurance with respect to the Leased Premises and
in such amounts as are reasonably requested by Landlord or a Lender; provided
same are consistent as to types of coverages and limits with those generally
being required by prudent owners and institutional lenders with respect to
similar properties similarly located.

(b)                 The insurance required by Paragraph 14(a) shall be written
by companies having a claims paying ability rating by Standard & Poor’s (or
equivalent ratings agency) of not less than A, and an A.M. Best Insurance
Reports rating of not less than “A” and a financial size category of at least
“VIII”, and all such companies shall be authorized to do an insurance business
in the State, or otherwise agreed to by Landlord. The insurance policies shall
be in amounts sufficient at all times to satisfy any coinsurance requirements
thereof. The general liability insurance shall name Landlord, Tenant, and, if a
Mortgage is then in effect, the Trustee and each Lender as additional insured
parties, as their respective interests may appear; the casualty insurance shall
name Landlord (or, if directed by Landlord to Tenant, the Trustee) as loss
payee. If such insurance or any part thereof shall expire, be withdrawn, become
void by breach of any condition thereof by Tenant or become void or unsafe by
reason of the failure or impairment of the capital of any insurer, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to
Landlord and, if a Mortgage is then in place, the Lenders.

 

15

 

 

(c)                 Each insurance policy referred to in clauses (i), (iv) and
(vi) of Paragraph 14(a), shall contain standard non-contributory mortgagee
clauses in favor of each Lender and the Trustee. Each of the policies required
by Paragraph 14(a) shall state that if at any time the policies are to be
cancelled, or their coverage is to be reduced (by any party including the
insured), the insurer will endeavor to mail thirty (30) days’ (10 days’ in the
event of non-payment of the premium) written notice to the additional insureds
and/or loss payee named in such policies. Each policy shall also provide that
any losses otherwise payable thereunder shall be payable notwithstanding (i) any
act, omission or neglect of Landlord, Tenant or any other Person which might,
absent such provision, result in a forfeiture of all or a part of such insurance
payment, or (ii) the occupation or use of any of the Leased Premises for
purposes more hazardous than permitted by the provisions of such policy. Tenant
hereby waives any and every claim for recovery from the Lenders and Landlord,
and Landlord hereby waives any and every claim for recovery from Tenant, for any
and all loss or damage covered by any of the insurance policies to be maintained
under this Lease to the extent that such loss or damage is recovered by Tenant,
Lenders or Landlord, respectively, under any such policy. If the foregoing
waiver will preclude the assignment of any such claim to the extent of such
recovery, by subrogation (or otherwise), to an insurance company (or other
person), Tenant (or other appropriate party) shall give written notice of the
terms of such waiver to each insurance company which has issued, or which may
issue in the future, any such policy of insurance (if such notice is required by
the insurance policy) and shall cause each such insurance policy to be properly
endorsed by the issuer thereof to, or to otherwise contain one or more
provisions that, prevent the invalidation of the insurance coverage provided
thereby by reason of such waiver.

(d)                 Tenant shall pay as they become due all premiums for the
insurance required by this Paragraph 14, shall renew or replace each policy, and
shall deliver to Landlord and Lenders a certificate or other evidence (on an
ACORD 28 (2003/10) form, in the case of property insurance, and otherwise
reasonably satisfactory to Landlord) of the existing policy and such renewal or
replacement policy prior to the Insurance Expiration Date of each policy. In the
event of Tenant’s failure to comply with any of the foregoing requirements of
this Paragraph 14 within three (3) Business Days of the giving of written notice
by Landlord to Tenant, Landlord shall be entitled to procure such insurance upon
concurrent notice to Tenant (which notice may be by email). Any sums expended by
Landlord in procuring such insurance shall be Additional Rent and shall be
repaid by Tenant, together with interest thereon at the Default Rate, from the
time of payment by Landlord until fully paid by Tenant, immediately upon written
demand therefor by Landlord.

(e)             Anything in this Paragraph 14 to the contrary notwithstanding,
any insurance which Tenant is required to obtain pursuant to Paragraph 14(a) may
be carried under a “blanket” policy or policies covering other properties or
liabilities of Tenant, provided that such “blanket” policy or policies otherwise
comply with the provisions of this Paragraph 14. In the event any such insurance
is carried under a blanket policy, Tenant shall deliver to Landlord and Lenders
evidence of the issuance and effectiveness of the policy, the amount and
character of the coverage with respect to the Leased Premises and the presence
in the policy of provisions of the character required in the above sections of
this Paragraph 14.

 

16

 

 

(f)                  In the event of any property loss exceeding the Threshold
Amount, Tenant shall give Landlord immediate notice thereof. Tenant shall
adjust, collect and compromise any and all claims, with the consent of Landlord,
not to be unreasonably withheld, delayed, or conditioned, and Landlord shall
have the right, at its sole expense, to join with Tenant therein (except with
respect to any property loss of the Threshold Amount or less, in which case no
consent of Landlord shall be required). If the estimated cost of Restoration or
repair shall be an amount equal to the Threshold Amount or less, all proceeds of
any insurance required under clauses (i), (iv) and (v) of Paragraph 14(a) shall
be payable to Tenant. Each insurer is hereby authorized and directed to make
payment under the property insurance policies (i) for all property losses of the
Threshold Amount or less, directly to Tenant and (ii) for all other property
losses, directly to the Trustee, instead of to Landlord and Tenant jointly; and
Tenant and Landlord each hereby appoints such Trustee as its attorney-in-fact to
endorse any draft therefor for the purposes set forth in this Lease. Except as
expressly set forth below, in the event of any casualty (whether or not insured
against) resulting in damage to the Leased Premises or any part thereof, the
Term shall nevertheless continue and there shall be no abatement or reduction of
Basic Rent or Additional Rent. The Net Proceeds of all insurance payments for
property losses exceeding the Threshold Amount shall be paid to the Trustee, and
the Trustee shall make the Net Proceeds available to Tenant for restoration in
accordance with the provisions of Paragraph 15. Subject to Paragraph 14(g),
Tenant shall, whether or not the Net Proceeds are sufficient for the purpose,
promptly and diligently repair or replace the Improvements and Equipment in
accordance with the provisions of Paragraph 11(a). In the event that any damage
or destruction shall occur at such time as Tenant shall not have maintained
third-party insurance in accordance with Paragraph 14(a)(i),(iv) and (vi),
Tenant shall pay to the Trustee Tenant’s Insurance Payment. Notwithstanding
anything herein to the contrary, all proceeds of any business interruption
insurance maintained by Tenant shall be payable directly to Tenant.

(g)                 If a casualty occurs during the last two years of the
Initial Term or during any Renewal Term and the cost of Restoration with respect
thereto either (i) exceeds fifty percent (50%) or more of the replacement cost
of the Leased Premises or (ii) in Tenant’s reasonable estimation (supported by a
report of a reputable engineer or general contractor), the restoration would
take in excess of six (6) months to complete and Tenant’s normal conduct of its
business operations at the Leased Premises after such casualty is economically,
physically or legally impracticable or prohibited as a result of such casualty,
then Tenant may, at Tenant’s option, not later than ninety (90) days after such
casualty has occurred, serve a Tenant’s Termination Notice upon Landlord, in
which case this Lease and the Term hereof shall terminate on the Termination
Date specified in the Termination Notice; and in such event Tenant shall have no
obligation to commence or complete the Restoration and all of the insurance
proceeds payable in connection with the casualty (other than Tenant’s business
interruption insurance proceeds) shall be paid to, and Tenant shall pay the
amount of any applicable deductible with respect to such casualty insurance to,
the Trustee or, if no Loan is then outstanding, to Landlord.

17

 

 

15.                Restoration. The Restoration Fund shall be disbursed by the
Trustee in accordance with the following conditions:

(a)                 Whether or not the cost of Restoration will exceed the
Threshold Amount, prior to commencement of the Restoration, funds may be
disbursed to Tenant up to the Threshold Amount to be used to mitigate any
further damage to the Lease Premises or nuisance or potential liability from
unsafe or hazardous conditions, including performing temporary repairs, shoring
boarding up, or fencing upon receipt by Trustee of a written request therefor
from Tenant, which request shall include a description of such costs, in
reasonable detail.

(b)                   If the cost of Restoration will exceed the Threshold
Amount, prior to commencement of the Restoration the architects, general
contractor(s), plans and specifications for the Restoration shall be approved by
Landlord, which approval shall not be unreasonably withheld or delayed, and
which approval shall be granted to the extent that the plans and specifications
depict a Restoration which is substantially similar to the Improvements and
Equipment which existed prior to the occurrence of the casualty or Taking,
whichever is applicable. Landlord will not withhold its consent for variations
to the Improvements (i) required as a result of current zoning and building code
requirements or (ii) to provide for then current equipment or best practices in
Tenant’s industry, provided such variations described in this clause (ii) shall
not adversely affect the value of the Leased Premises. In the event that
Landlord does not respond to Tenant’s request for approval pursuant to the first
sentence of this subparagraph (b) within twenty five (25) days from the date
Tenant has delivered to Landlord the request for such approval, Tenant may
provide Landlord with a second request for approval, which request shall state
in bold capital letters on the face of the envelope that failure to respond
thereto within five (5) Business Days shall be deemed to be approval, and if
Landlord fails to respond to Tenant within such five (5) Business Days, Landlord
shall be deemed to have approved the architect, general contractor, plans or
specifications that are the subject of such request for approval.

(c)                  At the time of any disbursement, no Event of Default shall
exist and no mechanics’ or materialmen’s Liens shall have been filed and remain
undischarged or unbonded or otherwise removed of record, or for which Tenant
shall fail to provide affirmative title insurance coverage.

(d)                 Disbursements shall be made from time to time in an amount
not exceeding the hard and soft cost of the work and costs incurred since the
last disbursement upon receipt of (1) satisfactory evidence, including
architects’ certificates of the stage of completion, of the estimated cost of
completion and of performance of the work to date in a good and workmanlike
manner in accordance with the contracts and the plans and specifications, (2)
partial releases of Liens or conditional Lien waivers, and (3) other reasonable
evidence of cost and payment so that Landlord can verify that the amounts
disbursed from time to time are represented by work that is completed in place
or delivered to the site and free and clear of mechanics’ Lien claims.

(e)                   Each request for disbursement shall be sent by Tenant to
Landlord and to the Trustee, accompanied by a certificate of Tenant describing
the work, materials or other costs or expenses, for which payment is requested
and stating (i) the cost incurred in connection therewith, (ii) that no Event of
Default exists and no mechanics’ or materialmen’s Liens shall have been filed
and remain undischarged or unbonded, and (iii) that Tenant has not previously
received payment for such work or expense; the certificate to be delivered by
Tenant upon completion of the work shall, in addition, state that the work that
is the subject of the request for disbursement has been substantially completed
and complies with the applicable requirements of this Lease. The Trustee shall
release funds from the Restoration Fund at Tenant’s written direction in
accordance with this Paragraph 15; provided however, the Trustee shall not
release such funds if Landlord objects to such release within ten (10) days’ of
receiving Tenant’s notice as provided herein. Landlord’s failure to respond to
Tenant’s request for a release of any such funds from the Restoration Fund
within 10 days’ after written notice thereof shall be deemed to constitute
Landlord’s consent to the requested release and Trustee shall be entitled to
rely on Landlord’s failure to respond as deemed consent and approval to release
such funds to Tenant.

18

 

 

(f)                 The Trustee shall retain a commercially reasonable retainage
amount (but in no event less than 5% of the expected repair cost, other than
general conditions, until the Restoration is 50% complete).

(g)                 The Restoration Fund shall be held by the Trustee and shall
be invested as reasonably and prudently directed by Landlord, in light of the
intended use and timing of release of such funds, and reasonably approved by
Tenant and Lenders, if applicable. All interest shall become a part of the
Restoration Fund.

(h)                  At all times the undisbursed balance of the Restoration
Fund held by the Trustee, plus any funds contributed thereto by Tenant, at its
option, shall be not less than the cost of completing the Restoration (as
reasonably estimated by Tenant, provided that Tenant shall provide to Landlord
the basis for such estimate, in reasonable detail, promptly after Landlord’s
request therefor), free and clear of all mechanics’ and similar Liens.

(i)                    In addition, prior to commencement of Restoration and at
any time during Restoration, if the estimated remaining cost of Restoration, as
reasonably determined by a contractor or architect mutually selected by Landlord
and Tenant, exceeds the amount of the remaining Net Proceeds or the Net Award,
as applicable, and Tenant Insurance Payment available for such Restoration,
either, at Tenant’s option and determination, the amount of such excess shall be
paid by Tenant to the Trustee to be added to the Restoration Fund or Tenant
shall fund at its own expense the costs of such Restoration until the remaining
Restoration Fund is sufficient for the completion of the Restoration. Any sum in
the Restoration Fund which remains in the Restoration Fund upon the completion
of Restoration with respect to a casualty shall be paid to Tenant; any portion
of a Net Award remaining after completion of Restoration with respect to a
Taking shall be paid to Landlord.

16.                Subordination to Financing.

(a)                 (i)                 Subject to the provisions of Paragraph
16(a)(ii), Tenant agrees that this Lease shall at all times be subject and
subordinate to the Lien of the Mortgage, if any, and Tenant agrees, upon demand,
to execute instruments as may be required to further effectuate or confirm such
subordination, provided such instruments are reasonably acceptable to Tenant.

 

 

 

 

 

 

 

 

19

 

 

 

 

 

(ii)

Except as expressly provided in this Lease by reason of the occurrence of an
Event of Default, and as a condition to the subordination described in Paragraph
16(a)(i) above, Tenant’s tenancy and Tenant’s rights under this Lease shall not
be disturbed, terminated or otherwise adversely affected, nor shall this Lease
be affected, by the existence of, or any default under, a Mortgage, and in the
event of a foreclosure or other enforcement of a Mortgage, or sale in lieu
thereof, the purchaser at such foreclosure sale shall be bound to Tenant for the
Term of this Lease, the rights of Tenant under this Lease shall expressly
survive, and this Lease shall in all respects continue in full force and effect
so long as no Event of Default has occurred and is continuing. Tenant shall not
be named as a party defendant in any such foreclosure suit, except as may be
required by law. Any Mortgage to which this Lease is now or hereafter
subordinate shall provide, in effect, that during the time this Lease is in
force and no Event of Default has occurred and is then continuing hereunder,
insurance proceeds and any condemnation award shall be disbursed pursuant to the
provisions of this Lease.

(b)                    Notwithstanding the provisions of Paragraph 16(a), the
holder of the Mortgage to which this Lease is subject and subordinate shall have
the right, at its sole option, at any time, to subordinate and subject the
Mortgage, in whole or in part, to this Lease by recording a unilateral
declaration to such effect.

(c)                   At any time prior to the expiration of the Term, Tenant
agrees, at the election and upon demand of any owner of the Leased Premises, or
of a Lender who has granted non-disturbance to Tenant pursuant to Paragraph
16(a) above, to attorn, from time to time, to any such owner or Lender, upon the
terms and conditions of this Lease, for the remainder of the Term. The
provisions of this Paragraph 16(c) shall inure to the benefit of any such owner
or Lender, shall apply notwithstanding that, as a matter of law, this Lease may
terminate upon the foreclosure of the Mortgage, shall be self-operative upon any
such demand, and no further instrument shall be required to give effect to said
provisions.

(d)                    Each of Tenant and Landlord agrees that, if requested by
the other or by any Lender, each shall (and Landlord shall cause each Lender),
without charge, enter into a Subordination, Non-Disturbance and Attornment
Agreement (“SNDA”), in the form reasonably requested by a Lender and reasonably
acceptable to Landlord and Tenant, provided such agreement contains provisions
relating to non-disturbance in accordance with the provisions of Paragraph
16(a).

17.                Assignment, Subleasing.

(a)                   With the exception of a tenant that would render the
Leased Premises or a portion thereof a “tax-exempt use property” within the
meaning of Section 168(h) of the Code, Tenant may assign its interest in this
Lease and may sublet the Leased Premises in whole or in part, from time to time,
to any Person that is not the subject of a bankruptcy, insolvency or similar
proceeding at the time of such assignment or sublease, without the consent of
Landlord. Tenant shall have no rights to mortgage or otherwise hypothecate its
leasehold interest under this Lease.

(b)             Each sublease of the Leased Premises or any part thereof shall
be subject and subordinate to the provisions of this Lease. No assignment or
sublease shall affect or reduce any of the obligations of Tenant hereunder, and
all such obligations shall continue in full force and  effect as obligations of
a principal and not as obligations of a guarantor, as if no assignment or
sublease had been made, except as otherwise agreed by Landlord and the Lenders,
in their sole discretion. Notwithstanding any assignment or subletting, Tenant
shall continue to remain primarily liable and responsible for the payment of the
Basic Rent and Additional Rent and the performance of all its other obligations
under this Lease. No assignment or sublease shall impose any obligations on
Landlord under this Lease except as otherwise provided in this Lease. Tenant
agrees that in the case of an assignment of this Lease, Tenant shall, within
fifteen (15) days after the execution and delivery of any such assignment,
deliver to Landlord (i) a duplicate original of such assignment in recordable
form and (ii) an agreement executed and acknowledged by the assignee in
recordable form wherein the assignee shall agree to assume and agree to observe
and perform all of the terms and provisions of this Lease on the part of the
Tenant to be observed and performed from and after the date of such assignment.
In the case of a sublease, Tenant shall, within fifteen (15) days after the
execution and delivery of such sublease, deliver to Landlord a duplicate
original of such sublease.

20

 

 

(c)                 Subject to the rights of any Tenant lender under any credit
facility, upon the occurrence of an Event of Default and during the continuance
under this Lease, Landlord shall have the right to collect and enjoy all rents
and other sums of money payable under any sublease of any of the Leased
Premises, which rents and other sums shall be applied to Tenant’s outstanding
obligations under this Lease (and any excess shall be paid to Tenant unless and
until this Lease is terminated), and Tenant hereby assigns such rents and money
to Landlord, which assignment may be exercised only upon and after (but not
before) the occurrence and during the continuance of an Event of Default. At
such time, if any, as the Event of Default is cured, Landlord’s right to collect
such rents and other sums pursuant to the foregoing sentence shall terminate
until such time, if any, as another Event of Default occurs and so long as it is
continuing.

18.                Permitted Contests.

(a)                   So long as no Event of Default has occurred and is
continuing, after prior written notice to Landlord, Tenant shall not be required
to (i) pay any Imposition, (ii) comply with any Legal Requirement, (iii)
discharge or remove any Lien referred to in Paragraph 9 or 12, or (iv) take any
action with respect to any violation referred to in Paragraph 11(b) so long as
Tenant shall contest, in good faith and at its expense, the existence, the
amount or the validity thereof, the amount of the damages caused thereby, or the
extent of its or Landlord’s liability therefor, by appropriate proceedings which
shall operate during the pendency thereof to prevent (A) the collection of, or
other realization upon, the Imposition or Lien so contested, (B) the sale,
forfeiture or loss of any of the Leased Premises, any Basic Rent or any
Additional Rent to satisfy the same or to pay any damages caused by the
violation of any such Legal Requirement or by any such violation, (C) any
interference with the use or occupancy of any of the Leased Premises, (D) any
interference with the payment of any Basic Rent or any Additional Rent, and (E)
the cancellation of any insurance policy. Landlord shall reasonably cooperate
with Tenant in connection with any such contest at Tenant’s sole cost and
expense.

(b)                   In no event shall Tenant pursue any contest with respect
to any Imposition, Legal Requirement, Lien, or violation, referred to above in
such manner that exposes Landlord to (i) criminal liability, penalty or
sanction, (ii) any civil liability, penalty or sanction for which Tenant has not
made provisions reasonably acceptable to Landlord (which may include the
requirement to post a bond or letter of credit therefor) or (iii) defeasance of
its interest (including the subordination of the Lien of the Mortgage to a Lien
to which such Mortgage is not otherwise subordinate prior to such contest) in
the Leased Premises.

 

21

 

 

(c)                    Tenant agrees that each such contest shall be promptly
and diligently prosecuted to a final conclusion, except that Tenant shall have
the right to attempt to settle or compromise such contest through negotiations.
If requested by Landlord, Tenant shall deliver a bond, cash collateral or other
surety in an amount sufficient to discharge any Lien of record related to such
contest during the pendency thereof. Tenant shall pay and save each Indemnitee
harmless against any and all losses, judgments, decrees and costs (including all
reasonable attorneys’ fees and expenses) in connection with any such contest and
shall, promptly after the final determination of such contest, 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, together with all
penalties, fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof.

19.                Conditional Limitations; Default Provisions.

(a)                    If any Event of Default shall have occurred, Landlord
shall have the right at its option, then or at any time thereafter while such
Event of Default is continuing, to do any one or more of the following without
demand upon or notice to Tenant (except as provided below or required by
applicable law):

  (i)

Landlord may give Tenant notice of Landlord’s intention to terminate this Lease
on a date specified in such notice (which date shall be no sooner than ten (10)
Business Days after the date of the notice). Provided that Tenant has not cured
all Events of Default prior to the date specified in Landlord’s notice, the Term
and the estate hereby granted and all rights of Tenant hereunder shall expire
and terminate as if such date were the date hereinabove fixed for the expiration
of the Term, but Tenant shall remain liable for all its obligations hereunder
through the date hereinabove fixed for the expiration of the Term, including its
liability for Basic Rent and Additional Rent as hereinafter provided in
Paragraphs 19(b) and (c).

  (ii)

Landlord may, whether or not the Term of this Lease shall have been terminated
pursuant to clause (i) above give Tenant notice to surrender the Leased Premises
to Landlord on a date specified in such notice (which date shall be no sooner
than ten (10) Business Days after the date of the notice), at which time Tenant
shall surrender and deliver possession of the Leased Premises to Landlord. Upon
or at any time after taking possession of the Leased Premises, Landlord may
remove any persons or property therefrom. Landlord shall be under no liability
for or by reason of any such entry, repossession or removal (other than for its
gross negligence or willful misconduct). No such entry or repossession shall be
construed as an election by Landlord to terminate this Lease unless Landlord
gives a written notice of such intention to Tenant pursuant to clause (i) above.

 

22

 

 

  (iii)

After repossession of the Leased Premises pursuant to clause (ii) above, whether
or not this Lease shall have been terminated pursuant to clause (i) above,
Landlord may relet the Leased Premises or any part thereof to such tenant or
tenants for such term or terms (which may be greater or less than the period
which would otherwise have constituted the balance of the Term) for such rent,
on such conditions (which may include concessions or free rent) and for such
uses as Landlord, in its reasonable discretion, may determine; and Landlord
shall collect and receive any rents payable by reason of such reletting. The
rents received on such reletting shall be applied (A) first to the reasonable
and actual expenses of such reletting and collection, including without
limitation necessary renovation and alterations of the Leased Premises,
reasonable and actual attorneys’ fees and any reasonable and actual real estate
commissions paid, and (B) thereafter toward payment of all sums due or to become
due Landlord hereunder. If a sufficient amount to pay such expenses and sums
shall not be realized or secured, then Tenant shall pay Landlord any such
deficiency monthly, and Landlord may bring an action therefor as such monthly
deficiency shall arise. Landlord shall not, in any event, be required to pay
Tenant any sums received by Landlord on a reletting of the Leased Premises in
excess of the rent provided in this Lease, but such excess shall reduce any
accrued present or future obligations of Tenant hereunder. Landlord’s re-entry
and reletting of the Leased Premises without termination of this Lease shall not
preclude Landlord from subsequently terminating this Lease as set forth above.
Landlord may make such Alterations as Landlord in its reasonable discretion may
deem advisable. Tenant agrees to pay Landlord, as Additional Rent, immediately
upon demand, all reasonable expenses incurred by Landlord in obtaining
possession, in performing Alterations and in reletting any of the Leased
Premises, including fees and commissions of attorneys, architects, agents and
brokers.

  (iv)

Landlord may exercise any other right or remedy now or hereafter existing by law
or in equity.

(b)                   In the event of any expiration or termination of this
Lease or repossession of any of the Leased Premises by reason of the occurrence
of an Event of Default, Tenant shall pay to Landlord Basic Rent and all
Additional Rent required to be paid by Tenant to and including the date of such
expiration, termination or repossession and, thereafter, Tenant shall, until the
end of what would have been the Term in the absence of such expiration,
termination or repossession, and whether or not any of the Leased Premises shall
have been relet, be liable to Landlord for and shall pay to Landlord as
liquidated and agreed current damages: (i) Basic Rent and Additional Rent which
would be payable under this Lease by Tenant in the absence of such expiration,
termination or repossession from time to time as such Basic Rent and Additional
Rent become due, less (ii) the net proceeds, if any, of any reletting pursuant
to Paragraph 19(a)(iii), after deducting from such proceeds all of Landlord’s
reasonable expenses in connection with such reletting (including all reasonable
repossession costs, brokerage commissions, legal expenses, attorneys’ fees,
employees’ expenses, costs of Alteration and expenses of preparation for
reletting), plus (iii) all Additional Payments paid or payable by Landlord.
Tenant hereby agrees to be and remain liable for all sums aforesaid and Landlord
may recover such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of such damages.
Nothing herein contained shall be deemed to require Landlord to wait to begin
such action or other legal proceedings until the date when the Term would have
expired by limitation had there been no such Event of Default. If Tenant has
paid the amount of damages due pursuant to Paragraph 19(c), Landlord shall not
be entitled to claim any further amounts pursuant to this Paragraph 19(b).

 

23

 

 

(c)                    At any time after such expiration or sooner termination
of this Lease by Landlord pursuant to Paragraph 19 or pursuant to law or if
Landlord shall have reentered the Leased Premises, as the case may be, whether
or not Landlord shall have recovered any amounts under Paragraph 19(a)(iii) or
19(b), Landlord shall be entitled to recover from Tenant and Tenant shall pay to
Landlord, on demand, as and for liquidated and agreed final damages for Tenant’s
default, the Basic Rent reserved hereunder for the unexpired portion of the Term
demised herein as if this Lease had not expired or been terminated, discounted
to present worth at the annual rate of six percent (6%), minus the net proceeds,
if any, of any reletting pursuant to Paragraph 19(a)(iii) received by Landlord
prior to the date of payment of such damages, minus the rent reserved for the
unexpired portion of the Term demised herein as if this Lease had not expired or
been terminated in any lease entered into by Landlord for the Leased Premises or
any portion thereof pursuant to Paragraph 19(a)(iii), discounted to present
worth at the annual rate of six percent (6%), plus any Additional Payments paid
or payable by Landlord. If any statute or rule of law governing a proceeding in
which such liquidated final damages provided for in this Paragraph 19(c) are to
be proved shall validly limit the amount thereof to an amount less than the
amount above agreed upon, Landlord shall be entitled to the maximum amount
allowable under such statute or rule of law.

20.                Additional Rights of Landlord and Tenant.

(a)                    Except as may be specifically provided herein, no right
or remedy conferred upon or reserved to Landlord in this Lease is intended to be
exclusive of any other right or remedy; and each and every right and remedy
shall be cumulative and in addition to any other right or remedy contained in
this Lease. No delay or failure by Landlord or Tenant to enforce its rights
under this Lease shall be construed as a waiver, modification or relinquishment
thereof. In addition to the other remedies provided in this Lease, Landlord or
Tenant shall be entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation or attempted or threatened violation
of any of the provisions of this Lease, or to specific performance of any of the
provisions of this Lease.

(b)                   Tenant hereby waives and surrenders for itself and all
those claiming under it, including creditors of all kinds, any right and
privilege which it or any of them may have under any present or future law to
redeem any of the Leased Premises or to have a continuance of this Lease after
termination of this Lease or of Tenant’s right of occupancy or possession
pursuant to any court order or any provision hereof.

(c)                    Landlord hereby waives any right to distrain or levy upon
Trade Fixtures or any property of Tenant and any Landlord’s Lien or similar Lien
upon Trade Fixtures and any other property of Tenant. Landlord agrees at the
request and expense of Tenant, to execute, and to cause its Lenders to execute,
a waiver of any Landlord’s or similar Lien for the benefit of any present or
future holder of a security interest in or lessor of any of Trade Fixtures or
any other personal property of Tenant. Landlord agrees to review (and cause its
Lenders to review, if applicable) any requested form of waiver provided by
Tenant within ten (10) Business Days of receipt thereof.

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

(d)                  (i)                Tenant agrees to pay to Landlord any and
all reasonable costs and expenses incurred by Landlord in connection with any
litigation or other action instituted by Landlord to enforce the obligations of
Tenant under this Lease, to the extent that Landlord has prevailed in any such
litigation or other action. Any amount payable by Tenant to Landlord pursuant to
this Paragraph 20(d)(i) shall be due and payable by Tenant to Landlord as
Additional Rent within thirty (30) days after a final, non-appealable judgment
or decision is rendered in favor of Landlord in such litigation or other action.

 

  (ii)

Landlord agrees to pay to Tenant any and all reasonable costs and expenses
incurred by Tenant in connection with any litigation or other action instituted
by Tenant to enforce the obligations of Landlord under this Lease, to the extent
that Tenant has prevailed in any such litigation or other action. Any amount
payable by Landlord to Tenant pursuant to this Paragraph 20(d)(ii) shall be due
and payable within thirty (30) days after a final, non-appealable judgment or
decision is rendered in favor of Tenant in such litigation or other action.

(e)                    Notwithstanding anything in this Lease to the contrary,
in no event shall Landlord or Tenant be liable to each other for any punitive
damages or, except as set forth in Paragraph 23, consequential damages.

21.                Notices. All notices, demands, requests and approvals
pursuant to this Lease shall be in writing and shall be deemed to have been
given for all purposes on the earlier of actual receipt and (i) four (4) days
after having been sent by United States mail, by registered or certified mail,
return receipt requested, postage prepaid, addressed to the other party at its
address as stated below, (ii) one (1) Business Day after having been sent for
overnight delivery by a nationally recognized air courier service, (iii) on the
day delivered, if personally delivered on a Business Day during business hours
or (iv) for purposes of Paragraph 6(c) only, on the day sent by electronic mail,
if sent during business hours on a Business Day (or if not sent during such
time, on the next Business Day) so long as receipt thereof is confirmed
electronically and the same written notice is also sent by nationally recognized
air courier service or messenger.

To the Addresses stated below:

If to Landlord:

CW Nevada Landlord, LLC
c/o SunTrust Equity Funding, LLC
3333 Peachtree Road, NE, 10th Floor
Atlanta, Georgia 30326
Attention: Lachlan Carlyle
Email: lachlan.carlyle@suntrust.com 

If to Tenant:

c/o The Chef’s Warehouse, Inc.
100 East Ridge Road,
Ridgefield, Connecticut 06877
Attention: Alexandros Aldous
Email: aaldous@chefswarehouse.com

 

25

 

 

With a copy to:

 Reed Smith LLP
599 Lexington Avenue
22nd Floor
New York, New York 10022

Attention: Joseph M. Marger, Esq.
Email: jmarger@reedsmith.com

If any Lender shall have advised Tenant by notice in the manner aforesaid that
it is the holder of a Mortgage and states in said notice its address for the
receipt of notices, then simultaneously with the giving of any notice by Tenant
to Landlord, Tenant shall send a copy of such Notice to Lender in the manner
aforesaid. For the purposes of this Paragraph 21, any party may substitute its
address by giving fifteen (15) days’ notice to the other party in the manner
provided above. Any notice, demand and request may be given on behalf of any
party by its counsel.

22.                Estoppel Certificates. Landlord and Tenant shall at any time
and from time to time, upon not less than ten (10) Business Days’ prior written
request by the other, execute, acknowledge and deliver to the other a statement
in writing, certifying (i) that this Lease is unmodified and in full effect (or,
if there have been modifications, that this Lease is in full effect as modified,
setting forth such modifications), (ii) the dates to which Basic Rent payable
hereunder has been paid, (iii) that no default by such Person exists hereunder
and, to the knowledge of the signer of such certificate, no default by the other
party hereto exists hereunder or, in either case, specifying each such default
of which the signer may have knowledge, (iv) the remaining Term hereof, and (v)
such other matters as may reasonably be requested by the party requesting the
certificate. It is intended that any such statements may be relied upon by
Lenders or potential Lenders, by the recipient of such statements or their
assignees and/or by any prospective purchaser, assignee or subtenant of the
Leased Premises or of the membership interests in Landlord.

23.                Surrender and Holding Over

(a)                   Upon the expiration or earlier termination of this Lease,
Tenant shall peaceably leave and surrender the Leased Premises to Landlord. Upon
such surrender, the Leased Premises shall be in the condition required after
giving effect to the maintenance standards set forth in Paragraph 11 of this
Lease and to the other provisions of this Lease, it being understood that in no
event shall Tenant be required to return the Leased Premises in “as new”
condition; the condition of the Leased Premises may reflect the ordinary wear
and tear that would be reasonably expected in connection with the use of the
Leased Premises as a Facility for the period of time from the date of this Lease
to the date of such surrender. Tenant shall remove from the Leased Premises on
or prior to such expiration or earlier termination the Trade Fixtures which are
owned by Tenant or third parties other than Landlord, and Tenant at its expense
shall, on or prior to such expiration or earlier termination, repair any damage
caused by such removal. Trade Fixtures and personal property not so removed at
the expiration of the Term or within thirty (30) days after the earlier
termination of the Term for any reason whatsoever shall become the property of
Landlord, and Landlord may thereafter cause such property to be removed from the
Leased Premises and disposed of as Landlord deems appropriate. The cost of
removing and disposing of such property (but not storage charges) and repairing
any damage to any of the Leased Premises caused by such removal shall be borne
by Tenant. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any property which becomes the property of Landlord as a
result of such expiration or earlier termination.

26

 

 

(b)                   Any holding over by Tenant of the Leased Premises after
the expiration or earlier termination of the term of this Lease or any
extensions thereof, with the consent of Landlord, shall operate and be construed
as tenancy from month to month only, at (i) the Basic Rent then payable under
this Lease for the first thirty (30) days of such holdover and (ii) thereafter,
one hundred twenty-five percent (125%) of the Basic Rent reserved herein, and
upon the same terms and conditions as contained in this Lease. In addition to
the holdover rent payable pursuant to the preceding sentence, in the event that
Landlord has entered into any agreement to lease or sell the Leased Premises
and, as a result of a holdover beyond thirty (30) days, Landlord suffers any
damages, including any consequential damages, related thereto as a result of any
holding over by Tenant, then Tenant shall pay such damages to Landlord upon
demand. Notwithstanding the foregoing, any holding over without Landlord’s
consent shall entitle Landlord, in addition to collecting Basic Rent at the rate
set forth in the previous sentence, to exercise all rights and remedies provided
by law or in equity, including the remedies of Paragraph 19(b).

24.                No Merger of Title. There shall be no merger of this Lease
nor of the leasehold estate created by this Lease with the fee estate in or
ownership of any of the Leased Premises by reason of the fact that the same
person, corporation, firm or other entity may acquire or hold or own, directly
or indirectly, (a) this Lease or the leasehold estate created by this Lease or
any interest in this Lease or in such leasehold estate and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such fee estate or
ownership. No such merger shall occur unless and until all persons,
corporations, firms and other entities having any interest in (i) this Lease or
the leasehold estate created by this Lease and (ii) the fee estate in or
ownership of the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly record the
same.

25.                Definition of Landlord

(a)                   Anything contained herein to the contrary notwithstanding,
any claim based on or in respect of any liability of Landlord under this Lease
shall be enforced only against the Landlord’s interest in the Leased Premises or
condemnation, property insurance or sale proceeds related thereto, and shall not
be enforced against the Landlord individually or personally, or against any
member or other Affiliate of Landlord.

(b)                   The term “Landlord” as used in this Lease so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or owners of the Leased Premises or holder of
the Mortgage in possession at the time in question of the Leased Premises and in
the event of any transfer or transfers of the title of the Leased Premises, the
Landlord herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer and conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed (but shall remain liable with respect to
all such liability arising from events or circumstances existing prior to the
date of such transfer), provided, and upon condition, that such transference of
title has assumed in writing all such obligations and liabilities of Landlord
under this Lease.

 

27

 

 

26.                Hazardous Substances

(a)                   Tenant agrees that it will not on, about, or under the
Leased Premises, make, release, treat, generate, store or dispose of any
Hazardous Materials; except in the ordinary course of business of Tenant and in
accordance with all Applicable Laws. Tenant covenants that it will at all times
comply with CERCLA and each other applicable Environmental Law.

(b)                   Tenant shall, at its expense, timely take any and all
actions required by CERCLA and/or any other Environmental Laws, with respect to
any Hazardous Materials, whether now or hereafter existing, on the Leased
Premises and whether or not arising out of or in any manner connected with
Tenant’s occupancy of the Leased Premises during the Term.

(c)                   The Tenant agrees that it will not install any underground
storage tank at the Leased Premises without specific, prior written approval
from Landlord.

27.                Entry by Landord. Subject to Tenant’s reasonable security
requirements and, if requested by Tenant, accompaniment by a representative of
Tenant, Landlord and its authorized representatives shall have the right upon
reasonable advance notice (which shall be not less than two (2) Business Days
except in the case of emergency) to enter the Leased Premises at all reasonable
business hours (and at any necessary time in the event of an emergency): (a) for
the purpose of inspecting the same or for the purpose of doing any work under
Paragraph 11(c), and may take all such action thereon as may be necessary or
appropriate for any such purpose (but nothing contained in this Lease or
otherwise shall create or imply any duty upon the part of Landlord to make any
such inspection or do any such work), and (b) for the purpose of showing the
Leased Premises to prospective purchasers, lenders and mortgagees and, at any
time within twelve (12) months prior to the expiration of the Term of this
Lease, for the purpose of showing the same to prospective tenants. No such entry
shall constitute an eviction of Tenant, but any such entry shall be done by
Landlord in such reasonable manner as to minimize any disruption of Tenant’s
business operation.

28.                No Usury. If and to the extent that any usury laws are
applicable to any provision of this Lease, then it is the intention of the
parties being to conform strictly to such applicable usury laws; accordingly,
whenever any provision herein provides for payment by Tenant to Landlord of
interest at a rate in excess of the legal rate permitted to be charged, such
rate herein provided to be paid shall be deemed reduced to such legal rate.

29.                Withholdings

(a)                 Notwithstanding anything herein to the contrary, Tenant
agrees that each payment of Basic Rent and Additional Rent shall be free and
clear of, and without deduction for any withholdings of any nature whatsoever,
unless required by Applicable Law. If any deduction or withholding is required
with respect to a payment of Basic Rent and/or Additional Rent by Tenant, Tenant
shall pay an additional amount such that the net amount actually received by the
Tax Indemnitee, after deduction or withholding, will be equal, on an after-tax
basis, to all such amounts that would be received by the Tax Indemnitee if no
such deduction or withholding had been required.

 

28

 

 

(b)                 Notwithstanding anything herein to the contrary, the
provisions of this Paragraph 29 shall survive the earlier termination of this
Lease.

30.            Financial Statements. Tenant shall submit to Landlord and
Lenders, either in print or in electronic form, the following financial
statements, all of which shall be prepared in accordance with generally accepted
accounting principles consistently applied: (i) quarterly financial statements
for CW Parent, within forty-five (45) days after the end of each fiscal quarter
of CW Parent, and (ii) annual financial statements for CW Parent, audited by an
independent certified public accountant, within one hundred twenty (120) days
after the end of each fiscal year of CW Parent. For as long as CW Parent shall
be a publicly listed company and is required to file quarterly and annual
statements with the SEC, then Tenant shall submit to Landlord and Lenders (in
satisfaction of the requirements set forth in the preceding sentence), when
filed with the SEC, copies of CW Parent’s forms 10Q and 10K, provided that to
the extent such forms are available through EDGAR or a similar internet site, no
such submission shall be required.

31.            Separability. Each and every covenant and agreement contained in
this Lease is, and shall be construed to be, a separate and independent covenant
and agreement, and the breach of any such covenant or agreement by Landlord
shall not discharge or relieve Tenant from its obligation to perform the same.
If any term or provision of this Lease or the application thereof to any
provision of this Lease or the application thereof to any person or
circumstances shall to any extent be invalid and unenforceable, the remainder of
this Lease, or the application of such term or provision to person or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term and provision of this Lease shall be
valid and shall be enforced to the extent permitted by law.

32.                 Right of First Refusal.

(a)

If at any time during the Term of this Lease Landlord shall receive a bona fide
offer from a third person for the purchase of Landlord’s right, title and
interest in and to the Leased Premises, which offer Landlord shall desire to
accept, Landlord shall promptly convey to Tenant the terms of such offer, Tenant
shall have an irrevocable, ongoing right of first refusal and may, within
fifteen (15) Business Days thereafter, TIME BEING OF THE ESSENCE, elect to
purchase Landlord’s right, title and interest in and to the Leased Premises from
Landlord on the same terms as those set forth in such offer; provided, however,
that (i) if the terms of such offer relate to Landlord’s right, title and
interest in and to the Leased Premises and other property of Landlord, Tenant’s
right to purchase shall be limited to Landlord’s right, title and interest in
and to the Leased Premises only and, accordingly, the purchase price shall be
prorated equitably to reflect that it only relates to Landlord’s right, title
and interest in and to the Leased Premises, (ii) Tenant shall close its purchase
within sixty (60) days of the date of its notice to Landlord electing to
purchase Landlord’s right, title and interest in and to the Leased Premises,
(iii) the Purchase Procedure shall apply to the conveyance of Landlord’s right,
title and interest in and to the Leased Premises to Tenant herein and (iv)
Tenant shall have no right of first refusal pursuant to this Paragraph 32 during
any period that any Material Event of Default has occurred and is continuing. If
Tenant shall not accept such offer within the time herein specified therefor,
said right of first refusal shall cease to exist with respect to the offer in
question and any other subsequent third party offer which offer price is at
least ninety-eight percent (98%) of the offer previously submitted to Tenant and
which new offer is submitted within twelve (12) months and closed within
eighteen (18) months after Tenant’s rejection of the previously submitted offer,
but this Lease shall continue otherwise on all the other terms, covenants and
conditions in this Lease set forth. The right of first refusal as set forth in
this Paragraph 32 shall be reinstated with respect to any subsequent offer that
is not described in the foregoing sentence.

29

 

 (b)

Notwithstanding anything to the contrary herein, the provisions of this
Paragraph 32 shall not apply to (i) any sale or conveyance of the Leased
Premises in foreclosure sale (or similar proceeding) of a bona-fide mortgage or
deed of trust or to any conveyance in lieu of foreclosure of such a mortgage or
deed of trust, or (ii) or any transfer, sale or other disposition of the Leased
Premises to SunTrust Banks, Inc. or any Affiliate thereof. Notwithstanding
anything to the contrary contained this Lease, so long as this Lease is in
effect, Landlord shall not sell, assign, or otherwise transfer or convey its
interest in this Lease to a Competitor of Tenant.

33.                Miscellaneous.

 (a)                 The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.

 (b)                 As used in this Lease the singular shall include the plural
as the context requires and the following words and phrases shall have the
following meanings: (i) “including” shall mean “including but not limited to”;
(ii) “provisions” shall mean “provisions, terms, agreements, covenants and/or
conditions”; and (iii) “obligation” shall mean “obligation, duty, agreement,
liability, covenant or condition”.

 (c)                 Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Any act which Tenant is required to
perform under this Lease shall be performed at Tenant’s sole cost and expense.

 (d)                 This Lease may be modified, amended, discharged or waived
only by an agreement in writing signed by the party against whom enforcement of
any such modification, amendment, discharge or waiver is sought. This Lease
embodies the entire agreement and understanding between Tenant and Landlord with
respect to the transactions contemplated hereby and supersede all other
agreements and understandings between Tenant and Landlord with respect to the
subject matter thereof. This Lease represents the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of Tenant and Landlord or any coursed of prior
dealings. There are no unwritten oral agreements between the parties.

 (e)                 The covenants of this Lease shall run with the Land and
bind Tenant, the successors and assigns of Tenant and all present and subsequent
encumbrances and subtenants of any of the Leased Premises, and shall inure to
the benefit of and bind Landlord, its successors and assigns.

 

30

 

 

 (f)                  This Lease will be simultaneously executed in several
counterparts, each of which when so executed and delivered shall constitute an
original, fully enforceable counterpart for all purposes.

 (g)                 This Lease shall be governed by and construed according to
the laws of the State in which the Leased Premises is located.

 (h)                 TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAWS, LANDLORD
AND TENANT IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND ANY COUNTERCLAIM THEREUNDER.

 (i)                   There are multiple tenants under this Lease and the term
“Tenant” shall refer to all such parties, jointly and severally, notwithstanding
the fact that such term is singular. Any notice to Tenant hereunder shall be
effective if delivered only to The Chef’s Warehouse, Inc. as provided in the
Notices provisions hereof, and any consent, amendment or waiver executed by The
Chef’s Warehouse, Inc. shall be effective to bind each of the other tenants.

(j)                  Tenant hereby represents and warrants that neither Tenant
nor any of its Affiliates is in violation of (i) any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, (ii) Executive Order No. 13,224, 66 Fed Reg 49,079 (2001),
issued by the President of the United States (Executive Order Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or
Support Terrorism) or (iii) the anti-money laundering provisions of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the
“USA Patriot Act”) amending the Bank Secrecy Act, 31 U.S.C. Section 5311 et seq
and any other laws relating to terrorism or money laundering.

 

31

 

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be
executed under seal as of the day and year first above written.

  LANDLORD:       CW NEVADA LANDLORD, LLC,
a Delaware limited liability company       By:  STEF NLIP, LLC, its sole member
      By:    SunTrust Equity Funding, LLC, its sole member         By: /s/
Allison McLeod   Name: Allison McLeod   Title: Manager

 

 

S-1

 

 

  TENANT       CW LV REAL ESTATE LLC               By:  /s/ Alexandros Aldous  
Name: Alexandros Aldous   Title: General Counsel

 

  THE CHEFS’ WAREHOUSE, INC.               By:  /s/ Alexandros Aldous   Name:
Alexandros Aldous   Title: General Counsel

 

  THE CHEFS’ WAREHOUSE WEST COAST, LLC               By:  /s/ Alexandros Aldous
  Name: Alexandros Aldous   Title: General Counsel

 

  CHEFS’ WAREHOUSE PARENT, LLC       By:  /s/ Alexandros Aldous   Name:
Alexandros Aldous   Title: General Counsel

 

S-2

 

 

EXHIBIT A

Legal Description

Lot 1 as shown by map thereof in File 120 of Parcel Maps, Page 1 in the Office
of the County Recorder, Clark County, Nevada.

 

 

 

 

 

 

 

 

A-1

 

 

EXHIBIT B

BASIC RENT

Basic Rent is due commencing on the Closing Date on each Basic Rent Payment Date
during the Term in an amount equal to the amount for such Basic Rent Payment
Date set forth on Schedule I attached hereto.

 

During each Renewal Term, the Basic Rent payable on each Basic Rent Payment Date
during Renewal Term shall be amount set forth for such Renewal Term on Schedule
I attached hereto.

 

 

 

 

 

 

 

 

B-1

 

 

SCHEDULE I

Basic Rent

 

Rent Payment # Payment Date Payment 1 06/30/15 $2,652.26 2 07/01/15 $79,567.78 3
08/01/15 $79,567.78 4 09/01/15 $79,567.78 5 10/01/15 $79,567.78 6 11/01/15
$79,567.78 7 12/01/15 $79,567.78 8 01/01/16 $79,567.78 9 02/01/16 $79,567.78 10
03/01/16 $79,567.78 11 04/01/16 $79,567.78 12 05/01/16 $79,567.78 13 06/01/16
$79,567.78 14 07/01/16 $81,119.35 15 08/01/16 $81,119.35 16 09/01/16 $81,119.35
17 10/01/16 $81,119.35 18 11/01/16 $81,119.35 19 12/01/16 $81,119.35 20 01/01/17
$81,119.35 21 02/01/17 $81,119.35 22 03/01/17 $81,119.35 23 04/01/17 $81,119.35
24 05/01/17 $81,119.35 25 06/01/17 $81,119.35 26 07/01/17 $82,701.18 27 08/01/17
$82,701.18 28 09/01/17 $82,701.18 29 10/01/17 $82,701.18 30 11/01/17 $82,701.18
31 12/01/17 $82,701.18 32 01/01/18 $82,701.18 33 02/01/18 $82,701.18 34 03/01/18
$82,701.18 35 04/01/18 $82,701.18

 

Sch A-1

 

 

 

36 05/01/18 $82,701.18 37 06/01/18 $82,701.18 38 07/01/18 $84,313.85 39 08/01/18
$84,313.85 40 09/01/18 $84,313.85 41 10/01/18 $84,313.85 42 11/01/18 $84,313.85
43 12/01/18 $84,313.85 44 01/01/19 $84,313.85 45 02/01/19 $84,313.85 46 03/01/19
$84,313.85 47 04/01/19 $84,313.85 48 05/01/19 $84,313.85 49 06/01/19 $84,313.85
50 07/01/19 $85,957.97 51 08/01/19 $85,957.97 52 09/01/19 $85,957.97 53 10/01/19
$85,957.97 54 11/01/19 $85,957.97 55 12/01/19 $85,957.97 56 01/01/20 $85,957.97
57 02/01/20 $85,957.97 58 03/01/20 $85,957.97 59 04/01/20 $85,957.97 60 05/01/20
$85,957.97 61 06/01/20 $85,957.97 62 07/01/20 $87,634.15 63 08/01/20 $87,634.15
64 09/01/20 $87,634.15 65 10/01/20 $87,634.15 66 11/01/20 $87,634.15 67 12/01/20
$87,634.15 68 01/01/21 $87,634.15 69 02/01/21 $87,634.15 70 03/01/21 $87,634.15
71 04/01/21 $87,634.15 72 05/01/21 $87,634.15 73 06/01/21 $87,634.15 74 07/01/21
$89,343.02 75 08/01/21 $89,343.02 76 09/01/21 $89,343.02 77 10/01/21 $89,343.02
78 11/01/21 $89,343.02

 

Sch A-2

 

 

 

79 12/01/21 $89,343.02 80 01/01/22 $89,343.02 81 02/01/22 $89,343.02 82 03/01/22
$89,343.02 83 04/01/22 $89,343.02 84 05/01/22 $89,343.02 85 06/01/22 $89,343.02
86 07/01/22 $91,085.21 87 08/01/22 $91,085.21 88 09/01/22 $91,085.21 89 10/01/22
$91,085.21 90 11/01/22 $91,085.21 91 12/01/22 $91,085.21 92 01/01/23 $91,085.21
93 02/01/23 $91,085.21 94 03/01/23 $91,085.21 95 04/01/23 $91,085.21 96 05/01/23
$91,085.21 97 06/01/23 $91,085.21 98 07/01/23 $92,861.37 99 08/01/23 $92,861.37
100 09/01/23 $92,861.37 101 10/01/23 $92,861.37 102 11/01/23 $92,861.37 103
12/01/23 $92,861.37 104 01/01/24 $92,861.37 105 02/01/24 $92,861.37 106 03/01/24
$92,861.37 107 04/01/24 $92,861.37 108 05/01/24 $92,861.37 109 06/01/24
$92,861.37 110 07/01/24 $94,672.17 111 08/01/24 $94,672.17 112 09/01/24
$94,672.17 113 10/01/24 $94,672.17 114 11/01/24 $94,672.17 115 12/01/24
$94,672.17 116 01/01/25 $94,672.17 117 02/01/25 $94,672.17 118 03/01/25
$94,672.17 119 04/01/25 $94,672.17 120 05/01/25 $94,672.17 121 06/01/25
$94,672.17

 

Sch A-3

 

 

 

122 07/01/25 $96,518.27 123 08/01/25 $96,518.27 124 09/01/25 $96,518.27 125
10/01/25 $96,518.27 126 11/01/25 $96,518.27 127 12/01/25 $96,518.27 128 01/01/26
$96,518.27 129 02/01/26 $96,518.27 130 03/01/26 $96,518.27 131 04/01/26
$96,518.27 132 05/01/26 $96,518.27 133 06/01/26 $96,518.27 134 07/01/26
$98,400.38 135 08/01/26 $98,400.38 136 09/01/26 $98,400.38 137 10/01/26
$98,400.38 138 11/01/26 $98,400.38 139 12/01/26 $98,400.38 140 01/01/27
$98,400.38 141 02/01/27 $98,400.38 142 03/01/27 $98,400.38 143 04/01/27
$98,400.38 144 05/01/27 $98,400.38 145 06/01/27 $98,400.38 146 07/01/27
$100,319.19 147 08/01/27 $100,319.19 148 09/01/27 $100,319.19 149 10/01/27
$100,319.19 150 11/01/27 $100,319.19 151 12/01/27 $100,319.19 152 01/01/28
$100,319.19 153 02/01/28 $100,319.19 154 03/01/28 $100,319.19 155 04/01/28
$100,319.19 156 05/01/28 $100,319.19 157 06/01/28 $100,319.19 158 07/01/28
$102,275.41 159 08/01/28 $102,275.41 160 09/01/28 $102,275.41 161 10/01/28
$102,275.41 162 11/01/28 $102,275.41 163 12/01/28 $102,275.41 164 01/01/29
$102,275.41

 

Sch A-4

 

 

 

165 02/01/29 $102,275.41 166 03/01/29 $102,275.41 167 04/01/29 $102,275.41 168
05/01/29 $102,275.41 169 06/01/29 $102,275.41 170 07/01/29 $104,269.78 171
08/01/29 $104,269.78 172 09/01/29 $104,269.78 173 10/01/29 $104,269.78 174
11/01/29 $104,269.78 175 12/01/29 $104,269.78 176 01/01/30 $104,269.78 177
02/01/30 $104,269.78 178 03/01/30 $104,269.78 179 04/01/30 $104,269.78 180
05/01/30 $104,269.78 181 06/01/30 $104,269.78 182 07/01/30 $106,303.04 183
08/01/30 $106,303.04 184 09/01/30 $106,303.04 185 10/01/30 $106,303.04 186
11/01/30 $106,303.04 187 12/01/30 $106,303.04 188 01/01/31 $106,303.04 189
02/01/31 $106,303.04 190 03/01/31 $106,303.04 191 04/01/31 $106,303.04 192
05/01/31 $106,303.04 193 06/01/31 $106,303.04 194 07/01/31 $108,375.95 195
08/01/31 $108,375.95 196 09/01/31 $108,375.95 197 10/01/31 $108,375.95 198
11/01/31 $108,375.95 199 12/01/31 $108,375.95 200 01/01/32 $108,375.95 201
02/01/32 $108,375.95 202 03/01/32 $108,375.95 203 04/01/32 $108,375.95 204
05/01/32 $108,375.95 205 06/01/32 $108,375.95 206 07/01/32 $110,489.28 207
08/01/32 $110,489.28

 

Sch A-5

 

 

 

208 09/01/32 $110,489.28 209 10/01/32 $110,489.28 210 11/01/32 $110,489.28 211
12/01/32 $110,489.28 212 01/01/33 $110,489.28 213 02/01/33 $110,489.28 214
03/01/33 $110,489.28 215 04/01/33 $110,489.28 216 05/01/33 $110,489.28 217
06/01/33 $110,489.28 218 07/01/33 $112,643.82 219 08/01/33 $112,643.82 220
09/01/33 $112,643.82 221 10/01/33 $112,643.82 222 11/01/33 $112,643.82 223
12/01/33 $112,643.82 224 01/01/34 $112,643.82 225 02/01/34 $112,643.82 226
03/01/34 $112,643.82 227 04/01/34 $112,643.82 228 05/01/34 $112,643.82 229
06/01/34 $112,643.82 230 07/01/34 $114,840.38 231 08/01/34 $114,840.38 232
09/01/34 $114,840.38 233 10/01/34 $114,840.38 234 11/01/34 $114,840.38 235
12/01/34 $114,840.38 236 01/01/35 $114,840.38 237 02/01/35 $114,840.38 238
03/01/35 $114,840.38 239 04/01/35 $114,840.38 240 05/01/35 $114,840.38 241
06/01/35 $114,840.38      

 

Sch A-6

 

 

Renewal Periods Rent Payment #  Payment Date Payment  1 07/01/35 $117,079.77 2
08/01/35 $117,079.77 3 09/01/35 $117,079.77 4 10/01/35 $117,079.77 5 11/01/35
$117,079.77 6 12/01/35 $117,079.77 7 01/01/36 $117,079.77 8 02/01/36 $117,079.77
9 03/01/36 $117,079.77 10 04/01/36 $117,079.77 11 05/01/36 $117,079.77 12
06/01/36 $117,079.77 13 07/01/36 $119,362.82 14 08/01/36 $119,362.82 15 09/01/36
$119,362.82 16 10/01/36 $119,362.82 17 11/01/36 $119,362.82 18 12/01/36
$119,362.82 19 01/01/37 $119,362.82 20 02/01/37 $119,362.82 21 03/01/37
$119,362.82 22 04/01/37 $119,362.82 23 05/01/37 $119,362.82 24 06/01/37
$119,362.82 25 07/01/37 $121,690.40 26 08/01/37 $121,690.40 27 09/01/37
$121,690.40 28 10/01/37 $121,690.40 29 11/01/37 $121,690.40 30 12/01/37
$121,690.40 31 01/01/38 $121,690.40 32 02/01/38 $121,690.40 33 03/01/38
$121,690.40 34 04/01/38 $121,690.40 35 05/01/38 $121,690.40 36 06/01/38
$121,690.40 37 07/01/38 $124,063.36 38 08/01/38 $124,063.36 39 09/01/38
$124,063.36 40 10/01/38 $124,063.36 41 11/01/38 $124,063.36 42 12/01/38
$124,063.36 43 01/01/39 $124,063.36 44 02/01/39 $124,063.36

 

Sch A-7

 

 

 

45 03/01/39 $124,063.36 46 04/01/39 $124,063.36 47 05/01/39 $124,063.36 48
06/01/39 $124,063.36 49 07/01/39 $126,482.59 50 08/01/39 $126,482.59 51 09/01/39
$126,482.59 52 10/01/39 $126,482.59 53 11/01/39 $126,482.59 54 12/01/39
$126,482.59 55 01/01/40 $126,482.59 56 02/01/40 $126,482.59 57 03/01/40
$126,482.59 58 04/01/40 $126,482.59 59 05/01/40 $126,482.59 60 06/01/40
$126,482.59 61 07/01/40 $128,949.00 62 08/01/40 $128,949.00 63 09/01/40
$128,949.00 64 10/01/40 $128,949.00 65 11/01/40 $128,949.00 66 12/01/40
$128,949.00 67 01/01/41 $128,949.00 68 02/01/41 $128,949.00 69 03/01/41
$128,949.00 70 04/01/41 $128,949.00 71 05/01/41 $128,949.00 72 06/01/41
$128,949.00 73 07/01/41 $131,463.51 74 08/01/41 $131,463.51 75 09/01/41
$131,463.51 76 10/01/41 $131,463.51 77 11/01/41 $131,463.51 78 12/01/41
$131,463.51 79 01/01/42 $131,463.51 80 02/01/42 $131,463.51 81 03/01/42
$131,463.51 82 04/01/42 $131,463.51 83 05/01/42 $131,463.51 84 06/01/42
$131,463.51 85 07/01/42 $134,027.05 86 08/01/42 $134,027.05 87 09/01/42
$134,027.05

 

Sch A-8

 

 

 

88 10/01/42 $134,027.05 89 11/01/42 $134,027.05 90 12/01/42 $134,027.05 91
01/01/43 $134,027.05 92 02/01/43 $134,027.05 93 03/01/43 $134,027.05 94 04/01/43
$134,027.05 95 05/01/43 $134,027.05 96 06/01/43 $134,027.05 97 07/01/43
$136,640.58 98 08/01/43 $136,640.58 99 09/01/43 $136,640.58 100 10/01/43
$136,640.58 101 11/01/43 $136,640.58 102 12/01/43 $136,640.58 103 01/01/44
$136,640.58 104 02/01/44 $136,640.58 105 03/01/44 $136,640.58 106 04/01/44
$136,640.58 107 05/01/44 $136,640.58 108 06/01/44 $136,640.58 109 07/01/44
$139,305.07 110 08/01/44 $139,305.07 111 09/01/44 $139,305.07 112 10/01/44
$139,305.07 113 11/01/44 $139,305.07 114 12/01/44 $139,305.07 115 01/01/45
$139,305.07 116 02/01/45 $139,305.07 117 03/01/45 $139,305.07 118 04/01/45
$139,305.07 119 05/01/45 $139,305.07 120 06/01/45 $139,305.07 121 07/01/45
$142,021.52 122 08/01/45 $142,021.52 123 09/01/45 $142,021.52 124 10/01/45
$142,021.52 125 11/01/45 $142,021.52 126 12/01/45 $142,021.52 127 01/01/46
$142,021.52 128 02/01/46 $142,021.52 129 03/01/46 $142,021.52 130 04/01/46
$142,021.52

 

Sch A-9

 

 

 

131 05/01/46 $142,021.52 132 06/01/46 $142,021.52 133 07/01/46 $144,790.94 134
08/01/46 $144,790.94 135 09/01/46 $144,790.94 136 10/01/46 $144,790.94 137
11/01/46 $144,790.94 138 12/01/46 $144,790.94 139 01/01/47 $144,790.94 140
02/01/47 $144,790.94 141 03/01/47 $144,790.94 142 04/01/47 $144,790.94 143
05/01/47 $144,790.94 144 06/01/47 $144,790.94 145 07/01/47 $147,614.36 146
08/01/47 $147,614.36 147 09/01/47 $147,614.36 148 10/01/47 $147,614.36 149
11/01/47 $147,614.36 150 12/01/47 $147,614.36 151 01/01/48 $147,614.36 152
02/01/48 $147,614.36 153 03/01/48 $147,614.36 154 04/01/48 $147,614.36 155
05/01/48 $147,614.36 156 06/01/48 $147,614.36 157 07/01/48 $150,492.84 158
08/01/48 $150,492.84 159 09/01/48 $150,492.84 160 10/01/48 $150,492.84 161
11/01/48 $150,492.84 162 12/01/48 $150,492.84 163 01/01/49 $150,492.84 164
02/01/49 $150,492.84 165 03/01/49 $150,492.84 166 04/01/49 $150,492.84 167
05/01/49 $150,492.84 168 06/01/49 $150,492.84 169 07/01/49 $153,427.45 170
08/01/49 $153,427.45 171 09/01/49 $153,427.45 172 10/01/49 $153,427.45 173
11/01/49 $153,427.45

 

Sch A-10

 

 

 

174 12/01/49 $153,427.45 175 01/01/50 $153,427.45 176 02/01/50 $153,427.45 177
03/01/50 $153,427.45 178 04/01/50 $153,427.45 179 05/01/50 $153,427.45 180
06/01/50 $153,427.45 181 07/01/50 $156,419.28 182 08/01/50 $156,419.28 183
09/01/50 $156,419.28 184 10/01/50 $156,419.28 185 11/01/50 $156,419.28 186
12/01/50 $156,419.28 187 01/01/51 $156,419.28 188 02/01/51 $156,419.28 189
03/01/51 $156,419.28 190 04/01/51 $156,419.28 191 05/01/51 $156,419.28 192
06/01/51 $156,419.28 193 07/01/51 $159,469.46 194 08/01/51 $159,469.46 195
09/01/51 $159,469.46 196 10/01/51 $159,469.46 197 11/01/51 $159,469.46 198
12/01/51 $159,469.46 199 01/01/52 $159,469.46 200 02/01/52 $159,469.46 201
03/01/52 $159,469.46 202 04/01/52 $159,469.46 203 05/01/52 $159,469.46 204
06/01/52 $159,469.46 205 07/01/52 $162,579.12 206 08/01/52 $162,579.12 207
09/01/52 $162,579.12 208 10/01/52 $162,579.12 209 11/01/52 $162,579.12 210
12/01/52 $162,579.12 211 01/01/53 $162,579.12 212 02/01/53 $162,579.12 213
03/01/53 $162,579.12 214 04/01/53 $162,579.12 215 05/01/53 $162,579.12 216
06/01/53 $162,579.12

 

Sch A-11

 

 

 

217 07/01/53 $165,749.41 218 08/01/53 $165,749.41 219 09/01/53 $165,749.41 220
10/01/53 $165,749.41 221 11/01/53 $165,749.41 222 12/01/53 $165,749.41 223
01/01/54 $165,749.41 224 02/01/54 $165,749.41 225 03/01/54 $165,749.41 226
04/01/54 $165,749.41 227 05/01/54 $165,749.41 228 06/01/54 $165,749.41 229
07/01/54 $168,981.52 230 08/01/54 $168,981.52 231 09/01/54 $168,981.52 232
10/01/54 $168,981.52 233 11/01/54 $168,981.52 234 12/01/54 $168,981.52 235
01/01/55 $168,981.52 236 02/01/55 $168,981.52 237 03/01/55 $168,981.52 238
04/01/55 $168,981.52 239 05/01/55 $168,981.52 240 06/01/55 $168,981.52

 

 

Sch A-12

 

 

SCHEDULE A

Purchase Procedure

In the event Tenant purchases the Leased Premises pursuant to Paragraph 32,
title shall close on the Sale Closing Date, at noon at the Chicago office of
First American Title Insurance Company, or at such other time and place or
manner (including via escrow) as the parties hereto may agree upon in writing,
and this Lease shall be automatically extended to and including the Sale Closing
Date and Tenant shall pay the Purchase Price by transferring immediate funds to
such account or accounts and in such bank or banks as the Trustee or, if no Loan
is then outstanding, Landlord, shall designate, upon delivery of a special
warranty deed (or local equivalent) conveying the Leased Premises and all other
required documents, including a certificate of non-foreign status, a title
insurance policy with respect to the Leased Premises in Tenant’s name as owner
in the amount of the Purchase Price showing no Liens or encumbrances except
those permitted by the following sentence (the cost of which policy shall be
paid by Tenant) and any sales disclosure or similar form required by law. The
special warranty deed (or local equivalent) shall convey title, free from
encumbrances other than (A) Permitted Encumbrances, (B) Liens created or
suffered by Tenant or arising by reason of the failure of Tenant to observe or
perform any of the terms, covenants or agreements herein provided to be observed
and performed by Tenant, or that otherwise are the responsibility of Tenant
hereunder, (C) any installments of Impositions then affecting the Leased
Premises and (D) if such sale is to be subject to a Mortgage (at Tenant’s
option), the Mortgage (in which case, Tenant shall assume the Mortgage and the
related Loan on a full recourse basis). The Purchase Price payable as
hereinabove provided shall be charged or credited, as the case may be, on the
Sale Closing Date, to reflect adjustments of Basic Rent paid or payable to the
Sale Closing Date, apportioned as of the day prior to the Sale Closing Date.
Tenant shall pay all conveyance, transfer, sales and like taxes required in
connection with the purchase, regardless of who is required to pay such taxes
under State or local law or custom (and Tenant shall also pay to Landlord any
amount necessary to yield to Landlord the entire Purchase Price if as a matter
of the law of the State or locality such tax cannot be paid directly by Tenant).
Upon payment by Tenant of the Purchase Price, this Lease shall terminate on the
Sale Closing Date.

 

 

 

 

 

 

Sch A-1

 

 

APPENDIX A

“Additional Payments” shall mean all amounts (i) that are out-of-pocket costs
incurred or payable by Landlord in connection with the transfer of the Leased
Premises to Tenant, and (ii) that are out-of-pocket costs, expenses, charges or
penalties, if any, incurred by Landlord as a result of the prepayment or
defeasance of a Note(s) as the result of the occurrence of an Event of Default.
Notwithstanding anything to the contrary set forth in this Lease, in no event
shall Tenant be responsible for the payment of any Additional Payments that are
payable by Landlord to a Lender as a result of a default by Landlord pursuant to
the Note or Mortgage, which default is not the result of a default by Tenant
hereunder.

“Additional Rent” shall mean all amounts, costs, expenses, liabilities,
indemnities and obligations (including Tenant’s obligation to pay any Default
Rate interest hereunder) which Tenant is required to pay pursuant to the terms
of this Lease, other than Basic Rent.

“Affiliate” of any Person shall mean any other Person directly or indirectly
controlling, controlled by or under common control with, such Person and shall
include, if such Person is an individual, members of the immediate family of
such Person, and trusts for the benefit of such individual. For the purposes of
this definition, the term “control” (including the correlative meanings of the
terms “controlling”, “controlled by” and “under common control with”), as used
with respect to any Person, shall mean (i) the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, or (ii) direct or indirect ownership of more than fifty
percent (50%) of the interest of such Person whether through the ownership of
voting securities, equity, or by contract or otherwise.

“Alteration” or “Alterations” shall mean any or all changes, additions (whether
or not adjacent to or abutting any then existing buildings), Expansions (whether
or not adjacent to or abutting any then existing buildings), improvements,
reconstructions, removals or replacements of any of the Improvements or
Equipment, both interior or exterior, and ordinary and extraordinary, it being
understood that Alterations shall not include repairs or ordinary maintenance or
replacement.

“Applicable Laws” shall mean all existing and future applicable laws (including
common laws), rules, regulations, statutes, treaties, codes, ordinances,
permits, certificates, orders and licenses of any Governmental Authorities, and
applicable judgments, decrees, injunctions, writs, orders or like action of any
court, arbitrator or other administrative, judicial or quasi-judicial tribunal
or agency of competent jurisdiction (including those pertaining to the
environment and those pertaining to the construction, use or occupancy of the
Leased Premises). Applicable Laws shall include Environmental Laws.

“Basic Rent” shall mean the amounts set forth on Exhibit B annexed to this
Lease.

“Basic Rent Payment Dates” shall mean the Closing Date and the first Business
Day of each month thereafter during the Term.

“Business Day” means any day other than a Saturday or a Sunday or other day on
which commercial banks in the State of Georgia, Nevada or New York are required
or are authorized to be closed.

 

 

 

“Capital Repair” means the replacement of Equipment (or series of related
Equipment) with Replacement Equipment that is reasonably estimated to cost, in
aggregate, in excess of $750,000 or the replacement of any structural element or
related elements of the Leased Premises, such as the roof, that is reasonably
estimated to cost in excess of $750,000.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. §§ 9601-9657.

“Claims” shall mean Liens (including, without limitation, Lien removal and
bonding costs), liabilities, obligations, damages, losses, demands, penalties,
assessments, payments, fines, claims, actions, suits, judgments, settlements,
costs, expenses and disbursements (including, without limitation, reasonable
legal fees and expenses and costs of investigation and enforcement) of any kind
and nature whatsoever.

“Closing Date” shall mean June 30, 2015.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Competitor” shall mean (a) any Person who operates (or has operated during the
immediately preceding two (2) calendar years), one or more cold storage
facilities with a use or uses similar to the Leased Premises, (b) any Person, or
their Affiliate or Subsidiary, that is a specialty food purveyor, chocolatier,
meat, fish or poultry company or any so-called broad line food purveyor or
distributer (any of the foregoing, a “Food Distributor”), (c) any Person who is
a customer (or has been a customer during the immediately preceding two (2)
calendar years) of the business operated by Tenant at the Leased Premises or (d)
any Person that is an Affiliate or Subsidiary of any Person under clause (a) or
(b); provided that, notwithstanding the foregoing, a “Competitor” shall not
include an institutional holder (such as a REIT, private equity or hedge fund,
or other investment vehicle) that owns (but does not operate), directly or
indirectly, cold storage facilities or equity interests in any Person who
operates cold storage facilities or who is a Food Distributor as a portion of a
real estate holding, net lease business or investment portfolio and such
ownership is not a part of a plan to operate facilities and compete in the cold
storage or food supply or distribution business. Notwithstanding the foregoing,
the companies listed on Exhibit B attached hereto shall each be deemed a
“Competitor”.

“Condemnation” shall mean a Taking and/or a Requisition.

“Default Rate” shall mean the greater of (i) 9.00% per annum and (ii) the then
current Prime Rate plus 3% per annum.

“Environmental Laws” shall mean and include the Resource Conservation and
Recovery Act of 1976 (RCRA), 42 U.S.C. §§ 6901-6987, as amended by the Hazardous
and Solid Waste Amendments of 1984, CERCLA, the Hazardous Materials
Transportation Act of 1975, 49 U.S.C. §§ 1801-1812, the Toxic Substances Control
Act, 15 U.S.C. §§ 2601-2671, the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq and
all other federal, state and local laws, ordinances, rules, orders, statutes,
codes and regulations applicable to the Leased Premises or the operations
thereon or use thereof and (i) relating to the environment, human health or
natural resources, (ii) regulating, controlling or imposing liability or
standards of conduct concerning Hazardous Materials, or (iii) regulating the
clean-up or other remediation of the Leased Premises or any portion thereof, as
any of the foregoing may have been amended, supplemented or supplanted from time
to time.

 

A-2

 

 

“Equipment” shall mean, collectively, the Racking and machinery and equipment
which is attached to the Improvements in such a manner as to become fixtures
under Applicable Law, together with all additions and accessions thereto,
substitutions therefor and replacements thereof, but excepting therefrom any and
all Trade Fixtures.

“Event of Default” shall mean the occurrence of any one or more of the following
events under this Lease: (i) a failure by Tenant to make (regardless of the
pendency of any bankruptcy, reorganization, receivership, insolvency or other
proceedings, in law, in equity or before any administrative tribunal which had
or might have the effect of preventing Tenant from complying with the provisions
of this Lease): (x) any payment of Basic Rent when due and payable and the
continuance of such failure for three (3) Business Days after written notice
thereof to Tenant thereof (which three (3) Business Day grace period may be
commenced upon the giving of notice to Tenant by confirmed email, so long as
such email notice is also provided by overnight delivery or by messenger or
other hand delivery), provided that such written notice shall only be required
for the first two instances of late payment of Basic Rent in any calendar year;
thereafter the failure to pay Basic Rent when due and payable and the
continuance thereof for three (3) Business Days shall constitute an Event of
Default, or (y) any payment of any other sum herein required to be paid by
Tenant which continues unremedied for a period of ten (10) Business Days after
written notice thereof to Tenant; (ii) failure by Tenant to perform and observe,
or a violation or breach of, any other provision in this Lease and, in any such
case, such default shall continue for a period of thirty (30) days after written
notice thereof is given by Landlord, the Trustee or a Lender to Tenant, or if
such default is of such a nature that it cannot reasonably be cured within such
period of thirty (30) days, such period shall be extended for such longer time
as is reasonably necessary (not to exceed 360 days), provided that Tenant has
commenced to cure such default within said period of thirty (30) days and is
actively, diligently and in good faith proceeding with continuity to remedy such
default; (iii) Tenant shall (A) voluntarily be adjudicated a bankrupt or
insolvent, (B) voluntarily consent to the appointment of a receiver or trustee
for itself or for any of the Leased Premises, (C) voluntarily file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, (D) voluntarily file a general assignment for the
benefit of creditors or (E) be the subject of an involuntary case or proceeding
against Tenant of the nature referred to in the foregoing subclauses of this
clause (iii) which remains undismissed for more than ninety (90) days; (iv) a
court shall enter an order, judgment or decree appointing a receiver or trustee
for Tenant or for the Leased Premises or approving a petition filed against
Tenant which seeks relief under the bankruptcy or other similar laws of the
United States or any State or otherwise entering an order for relief in any such
proceeding, and such order, judgment or decree shall remain in force,
undischarged or unstayed, ninety (90) days after it is entered; (v) Tenant shall
in any insolvency proceedings be liquidated or dissolved or shall voluntarily
commence proceedings towards its liquidation or dissolution; (vi) the estate or
interest of Tenant in the Leased Premises shall be levied upon or attached in
any proceeding and such estate or interest is about to be sold or transferred or
such process shall not be vacated or discharged within ninety (90) days after
such levy or attachment.

 

A-3

 

 

“Expansion” shall mean any addition to the Leased Premises, whether such
addition is attached to the existing Leased Premises or done as one or more
additional buildings or structures, which increases the square footage of the
Leased Premises by more than an immaterial amount and is reasonably expected to
cost in excess of the Threshold Amount to complete.

“Expiration Date” shall mean the last day of the month in which the twentieth
(20th) anniversary of the Closing Date occurs.

“Facility” shall mean a storage, handling, packaging, repackaging, processing
and distribution facility for quality fresh and prepared foods of all kinds,
beverages and cooking products, including frozen and cold storage of varying
temperatures for, without limitation, such items as meats, fish, dairy products,
produce, fruits, condiments, spices, oils, sauces, chocolates, desserts,
pastries and delicacies and for the equipment or products related to the
preparation of any of the foregoing; with ancillary office space and uses
incidental thereto.

“GAAP” shall mean generally accepted accounting principles, uniformly applied,
as in effect from time to time in the United States of America.

“Governmental Authority” shall mean any federal, state, county, municipal,
foreign or other governmental or regulatory authority, agency, board, body,
instrumentality, court or quasi governmental authority (or private entity in
lieu thereof).

“Guaranties” shall mean all warranties, guaranties and indemnities, express or
implied, and similar rights which Landlord may have against any manufacturer,
seller, engineer, contractor or builder in respect of any of the Leased
Premises, including, but not limited to, any rights and remedies existing under
contract or pursuant to the Uniform Commercial Code.

“Hazardous Materials” shall mean all chemicals, petroleum, crude oil or any
fraction thereof, hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
asbestos-containing materials and/or products, urea formaldehyde, or any
substances which are classified as “hazardous” or “toxic” under CERCLA;
hazardous waste as defined under the Solid Waste Disposal Act, as amended 42
U.S.C. § 6901; air pollutants regulated under the Clean Air Act, as amended, 42
U.S.C. § 7401, et seq.; pollutants as defined under the Clean Water Act, as
amended, 33 U.S.C. § 1251, et seq., any pesticide as defined by Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. § 136, et
seq., any hazardous chemical substance or mixture or imminently hazardous
substance or mixture regulated by the Toxic Substances Control Act, as amended,
15 U.S.C. § 2601, et seq., any substance listed in the United States Department
of Transportation Table at 45 CFR 172.101; any chemicals included in regulations
promulgated under the above listed statutes or any similar federal or state
statutes relating to the environment, human health or natural resources; any
explosives, radioactive material, and any chemical regulated by state statutes
similar to the federal statutes listed above and regulations promulgated under
such state statutes.

 

A-4

 

 

“Imposition” or “Impositions” shall mean, collectively, all Taxes of every kind
and nature on or with respect to the Leased Premises, or the use, lease,
ownership or operation thereof; all charges, fees, expenses and/or taxes for or
under any Permitted Encumbrance or Record Agreement or other agreement
maintained for the benefit of the Leased Premises; all general and special
assessments, levies, permits, inspection and license fees on or with respect to
the Leased Premises; all water and sewer rents and other utility charges on or
with respect to the Leased Premises; all ground rents on or with respect to the
Leased Premises, if any; all common area maintenance fees, if any, applicable to
the Leased Premises, and all other public charges and/or taxes whether of a like
or different nature, even if unforeseen or extraordinary, imposed or assessed
upon or with respect to the Leased Premises, prior to or during the Term,
against Landlord, Tenant or any of the Leased Premises as a result of or arising
in respect of the occupancy, leasing, use, maintenance, operation, management,
repair or possession thereof, or any activity conducted on the Leased Premises,
or the Basic Rent or Additional Rent, including without limitation, any sales
tax, occupancy tax or excise tax levied by any governmental body on or with
respect to such Basic Rent or Additional Rent; all payments required to be made
to a governmental or quasi-governmental authority (or private entity in lieu
thereof) that are in lieu of any of the foregoing, whether or not expressly so
designated; and any penalties, fines, additions or interest thereon or additions
thereto, provided that the term “Impositions” shall exclude any federal, state
or local (A) transfer taxes as the result of a conveyance by (or suffered by)
Landlord to any Person other than (1) Tenant or a person designated by Tenant or
(2) as a result of an Event of Default, (B) franchise, capital stock, gross
income taxes that are in the nature of franchise or capital stock taxes or
similar taxes, if any, of Landlord, except to the extent such franchise, capital
stock or similar taxes would not have been payable by Landlord but for the
ownership by Landlord of the Leased Premises, (C) income, excess profits or
other taxes, if any, of Landlord, determined on the basis of or measured by its
net income, (D) estate, inheritance, succession, gift, capital levy or similar
taxes of Landlord, or (E) Tax that would not have been imposed but for the
failure of an Indemnitee to comply with certification, information,
documentation or other reporting requirements applicable to such Indemnitee and
for which Tenant is not responsible under this Lease, if compliance with such
requirements is required by statute or regulation of the relevant taxing
authority as a precondition to relief or exemption from such Tax.

“Improvements” shall mean, collectively, the buildings, structures and other
improvements on the Land.

“Indemnitee” shall mean Landlord, each Lender, the Trustee, any trustee under a
Mortgage which is a deed of trust, each of their assignees or other transferees
and each of their Affiliates and their respective officers, directors,
employees, shareholders, members or other equity owners.

“Initial Term” shall mean the period of time commencing on the Closing Date and
terminating on the Expiration Date.

“Insurance Expiration Date” shall mean, with respect to an insurance policy, the
date that such insurance policy will expire.

“Insurance Requirements” shall mean, as the case may be, any one or more of the
terms of each insurance policy required to be carried by Tenant under this Lease
and the requirements of the issuer of such policy.

 

A-5

 

 

“Land” shall mean the lot(s) or parcel(s) of land described in Exhibit A
attached to this Lease and made a part hereof, together with the easements,
rights and appurtenances thereunto belonging or appertaining.

“Landlord” shall mean CW Nevada Landlord, LLC, a Delaware limited liability
company.

“Leased Premises” shall mean, collectively, the Land, the Improvements and the
Equipment, together with any and all other property and interest in property
conveyed to Landlord pursuant to the deeds, bills of sale or other documents
executed in connection with the purchase of the Land, the Improvements and the
Equipment by Landlord.

“Legal Requirement” or “Legal Requirements” shall mean, as the case may be, any
one or more of all present and future laws, codes, ordinances, orders,
judgments, decrees, injunctions, rules, regulations and requirements, even if
unforeseen or extraordinary, of every duly constituted governmental authority or
agency and all covenants, restrictions and conditions now of record which may be
applicable to Tenant, Landlord (with respect to the Leased Premises) or to all
or any part of or interest in the Leased Premises, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Leased Premises, even if compliance therewith (i)
necessitates structural changes or improvements (including changes required to
comply with the Americans with Disabilities Act) or results in interference with
the use or enjoyment of the Leased Premises or (ii) requires Tenant to carry
insurance other than as specifically required by the provisions of this Lease.

“Lender” or “Lenders” shall mean, collectively, the Trustee and each financial
institution or other Person that makes a Loan to Landlord, secured, directly or
indirectly, by a Mortgage and evidenced by a Note or which is the holder of the
Mortgage and a Note, or an interest therein, as a result of an assignment
thereof or otherwise.

“Lien” or “Liens” shall mean any lien, mortgage, pledge, charge, security
interest or encumbrance of any kind, or any type of preferential arrangement
that has the practical effect of creating a security interest, including,
without limitation, any thereof arising under any conditional sale agreement,
capital lease or other title retention agreement.

“Loan” shall mean a loan made by a Lender to Landlord secured by a Mortgage and
evidenced by a Note.

“Material Event of Default” means (i) an Event of Default described in clause
(i), (iii), (iv), (v) and (vi) of the definition thereof or (ii) an Event of
Default described in clause (ii) of the definition thereof if the effect thereof
has resulted, or is reasonably likely to result, in a material adverse effect on
the value or utility of the Leased Premises or on Landlord’s title in the Leased
Premises or in the Basic Rent or Additional Rent, or in any material liability
on the part of Landlord, or in the unavailability of any insurance coverage
required under this Lease.

“Monthly Allocated Capital Repair Cost” with respect to any Capital Repair means
an amount equal to (i) the cost of such Capital Repair divided by (ii) the
useful life of such Capital Repair, as determined by a qualified engineer,
construction professional or appraiser as described above and reasonably
acceptable to Landlord, expressed in months; provided same is consistent with
useful life schedules under GAAP and the Code if such related Equipment has a
specified useful life under GAAP and the Code, it being understood that if the
Capital Repair is for a structural element of the Building, such as the roof,
the useful life shall be determined by such engineer, construction professional
or appraisal.

 

A-6

 

 

“Mortgage” shall mean a first priority mortgage, deed of trust or similar
security instrument hereafter executed covering the Leased Premises from
Landlord to secure the repayment of a Loan.

“Net Award” shall mean the entire award payable to Landlord or the Trustee by
reason of a Condemnation, less any reasonable expenses incurred by Landlord or
the Trustee in collecting such award.

“Net Proceeds” shall mean the entire proceeds of any insurance required under
clause (i), (iv), or (vi) of Paragraph 14(a) of this Lease, less any actual and
reasonable expenses incurred by Tenant, Landlord or Trustee in collecting such
proceeds.

“Note” or “Notes” shall mean a promissory note or notes executed from Landlord
to a Lender, which note or notes is secured by a Mortgage.

“Obsolete Equipment” means (1) Equipment (i) that is no longer necessary for the
operation of Tenant’s business at the Leased Premises or for the compliance of
the Leased Premises with all Legal Requirements and Insurance Requirements (and
does not need to be replaced with updated equipment to bring the Leased Premises
in compliance with all Legal Requirements and Insurance Requirements) and (ii)
the removal of which from the Leased Premises does not materially adversely
affect the value or utility of the Leased Premises as a Facility or (2) Racking
that is no longer necessary for the operation of Tenant’s business at the Leased
Premises.

“Permitted Encumbrances” shall mean those covenants, restrictions, reservations,
Liens, conditions, encroachments, easements and other matters of title that
affect the Leased Premises as of the date of Landlord’s acquisition thereof.

“Person” shall mean an individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
non-incorporated organization or government or any agency or political
subdivision thereof.

“Prime Rate” shall mean the prime rate of interest published in The Wall Street
Journal or its successor, from time to time.

“Racking” shall mean the pallet racking (including any related decking and/or
shelving) installed in the Leased Premises as of the date of this Lease and any
replacements thereof.

“Record Agreement” shall mean an easement agreement, restrictive covenant,
declaration, right-of-way or any other agreement or document of record now or
hereafter affecting the Leased Premises.

 

A-7

 

 

“Release” shall mean the release or the threatened release of any Hazardous
Materials into or upon any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, escaping, emptying, placement and the like.

“Renewal Option Notice” shall mean a written notice from Tenant to Landlord of
its election to extend the Term (or any then Renewal Term) of this Lease
pursuant to Paragraph 5 of this Lease.

“Renewal Term” shall mean an additional Lease term of five (5) years.

“Replaced Equipment” shall mean Equipment that has been replaced by Tenant with
Replacement Equipment.

“Replacement Equipment” shall mean operational equipment or other parts used by
Tenant to replace any of the Equipment.

“Requisition” shall mean any temporary condemnation or confiscation of the use
or occupancy of the Leased Premises by any Governmental Authority, civil or
military, whether pursuant to an agreement with such Governmental Authority in
settlement of or under threat of any such requisition or confiscation, or
otherwise.

“Restoration” shall mean, following a casualty or Condemnation, the restoration
of the Leased Premises to as nearly as possible its value, condition and
character immediately prior to such casualty or Condemnation, in accordance with
the provisions of this Lease, including but not limited to the provisions of
Paragraphs 11(a), 12 and 15.

“Restoration Award” shall mean that portion of the Net Award equal to the cost
of Restoration.

“Restoration Fund” shall mean, collectively, the Net Proceeds, Restoration Award
and Tenant’s Insurance Payment.

“Sale Closing Date” shall mean the date on which Tenant purchases the Leased
Premises pursuant to its right of first refusal as set forth in Paragraph 32.

“SEC” means the Securities and Exchange Commission.

“Specialty Equipment” shall mean any additional machinery, apparatus or
equipment (or any component parts thereof), whether or not capital, installed by
Tenant after the date hereof to service the needs of one or more particular
customers or subtenants of Tenant or types of customers or subtenants that is
(i) not intended to be permanently affixed to the Leased Premises and (ii) is
not a replacement of, or accession to, any then-existing Equipment or any
Racking.

“State” shall mean the State or Commonwealth in which the Leased Premises is
situated.

“Structural Alteration” shall mean an Alteration that (i) will result in a
change in the footprint of the Improvements, (ii) involves the addition of one
or more floors to the Improvements, (iii) affects the structural elements or any
exterior walls of the Improvements, or (iv) decreases the rentable square
footage of the Leased Premises other than to a de minimis extent.

 

A-8

 

 

“Subsidiary” means a direct or indirect wholly-owned subsidiary of a Person.

“Taking” shall mean any taking of the Leased Premises, or any portion thereof,
in or by condemnation or other eminent domain proceedings pursuant to any law,
general or special, or by reason of any agreement with any condemnor in
settlement of or under threat of any such condemnation or other eminent domain
proceedings or by any other means, or any de facto condemnation.

“Tax” or “Taxes” shall mean the following present and future taxes, including
income (gross or net), gross or net receipts, sales, use, leasing, value added,
franchise, doing business, transfer, capital, property (tangible or intangible),
ad valorem, municipal assessments, excise and stamp taxes, levies, imposts,
duties, charges, assessments or withholding, together with any penalties, fines,
additions or interest thereon or additions thereto (any of the forgoing being
referred to herein individually as a “Tax”), imposed by any Governmental
Authority. Taxes shall include the costs of any contest or appeal pursued which
reduces the Taxes (or attempts to do so), including reasonable attorneys’ fees
and costs incident thereto. Without limiting the foregoing, if at any time
during the term of this Lease the methods of taxation prevailing at the
execution hereof shall be changed or altered so that in lieu of or as a
supplement or addition to or a substitute for the whole or any part of the real
estate taxes or assessments now or from time to time thereafter levied, assessed
or imposed by applicable taxing authorities for the funding of governmental
services, there shall be imposed (i) a tax, assessment, levy, imposition or
charge, wholly or partially as a capital levy or otherwise, on the gross rents
received or otherwise attributable to the Leased Premises, or (ii) a tax,
assessment, levy (including but not limited to any municipal, state or federal
levy), imposition or charge measured by or based in whole or in part upon the
Leased Premises or this Lease, and imposed on the Landlord under this Lease or
any portion thereof, or (iii) a license fee or other fee or tax measured by the
gross rent payable under this Lease, or (iv) any other tax, assessment, levy,
charge, fee or the like payable with respect to the Leased Premises, the rents,
issues and profits thereof, then all such taxes, assessments, levies,
impositions and/or charges, or the part thereof so measured or based, shall be
deemed to be Taxes.

“Tax Indemnitee” shall mean Landlord, each Lender, the Trustee, any trustee
under a Mortgage which is a deed of trust, each of their assignees or other
transferees and each of their Affiliates and their respective officers,
directors, employees, shareholders, members or other equity owners.

“Tenant” shall mean CW LV Real Estate LLC, a Delaware limited liability company,
The Chefs’ Warehouse, Inc., a Delaware corporation, The Chefs’ Warehouse West
Coast, LLC, a Delaware limited liability company, and Chefs’ Warehouse Parent,
LLC, a Delaware limited liability company, collectively, and on a joint and
several basis.

“Tenant’s Award” shall mean, to the extent Tenant shall have a right to make a
separate claim therefor against the condemnor, any award or payment (in
connection with a Condemnation) for Tenant’s leasehold interest hereunder,
relocation assistance available to Tenant under federal or state law including,
but not limited to, on account of Trade Fixtures, Tenant’s moving expenses and
Tenant’s out-of-pocket expenses incidental to the move, if available.

 

A-9

 

 

“Tenant’s Insurance Payment” shall mean, in the event of damage or destruction,
the amount of the proceeds that would have been payable under the third-party
insurance required to be maintained pursuant to Paragraph 14(a)(i), (iv) or (vi)
had such insurance program been in effect.

“Tenant’s Termination Notice” shall mean a written notice from Tenant to
Landlord of Tenant’s intention to terminate this Lease in accordance with
Paragraph 13 or 14 of this Lease, which notice shall set forth the Termination
Date.

“Term” shall mean the Initial Term, together with any Renewal Term.

“Termination Date” shall mean the date for the termination of this Lease
pursuant to Tenant’s Termination Notice, which date shall be on a Basic Rent
Payment Date occurring no sooner than thirty (30) days after the date of such
Tenant’s Termination Notice.

“Threshold Amount” shall mean $750,000.

“Trade Fixtures” shall mean all furniture, furnishings, trade fixtures,
equipment and other personal property of Tenant or any sublessee under a
sublease, which includes, without limitation, any Specialty Equipment, and all
inventory, shelving, cabling, antennae, machinery, communication equipment, data
cabinets, hoist equipment, pallet jacks, scissor lifts, clamp trucks, wrapping
machines, plug-in light fixtures, propane tanks, trash compactors, signs, desks,
tables, movable partitions, vending machines, computer stations, printers,
computer software and hardware, forklifts, and all other removable trade
fixtures, furnishings and equipment, as now or may hereafter exist in or on any
of the Improvements and which are owned by Tenant or other sublessee or occupant
and used in the conduct of their respective businesses, it being understood that
the term “Trade Fixtures” shall not include Racking.

“Trustee” shall mean any trustee for the benefit of lenders providing financing
to Landlord in connection with the Leased Premises, and any successor thereto.
If no Notes are outstanding as of any date of determination, each reference to
the Trustee in this Lease shall be inapplicable, and any payments to be made, or
notices to be given, to the Trustee shall be paid or given, as the case may be,
to Landlord.

 

 

A-10

 

 

EXHIBIT B

COMPETITOR LIST – LAS VEGAS

 

 

GROCERY
Shetakis
Sysco
US Foods
Nicholas & Company

 

BAKERY & CHOCOLATE
Bake Mark
AUI
Swiss Chalet
Feldkin
Euro Gourmet
Le Chef Bakery

 

SEAFOOD
Supreme Lobster
Santa Monica
Pacific Seafood
Kwan Yet Long

 

SPECIALTY
Michaels Gourmet Pantry
Artisanal Foods
Gourmet Imports
LA Specialty
Sienna Foods Las Vegas
Foods in Season
Finale Foods
Get Fresh
Specialty Produce

 

BEEF
Desert Meats
Desert Gold
Out West Meats

 

CHAINS
PFG -GFS
ROMA
AFS
NATIONAL FOODS