exv10w17



 





Exhibit 10.17




Execution Version




SUBLEASE




          AGREEMENT OF SUBLEASE, dated as of the 5th day of December, 2007, by and between MERCER (US)
INC., f/k/a William M. Mercer, Incorporated and Mercer Human Resource Consulting, Inc., a Delaware
corporation with a usual place of business at 1166 Avenue of the Americas, New York, New York 10036
(“Sublandlord”) and SOFTBRANDS MANUFACTURING, INC., a Minnesota corporation with a usual
place of business at Two Meridian Crossings, Suite 800, Minneapolis, MN 55423
(“Subtenant”).




W I T N E S S E T H:




          WHEREAS, by a lease dated June 12, 2000, by and between EOP-LaSalle Plaza, LLC, as landlord
(hereinafter the (“Overlandlord”) and Sublandlord (said lease, as amended as of October 10,
2000 and August 9, 2002, and supplemented by a Storage Lease dated March 8, 2001, hereinafter
referred to as the “Overlease”) certain premises situated at 800 LaSalle Avenue,
Minneapolis, Minnesota (“Building”), comprised of approximately 21,068 square feet on
21st floor and approximately 7,182 square feet on 22nd floor, which premises
are more particularly described in the Overlease (hereinafter the “Leased Premises”) were
leased to Sublandlord; and




          WHEREAS, Sublandlord desires to sublease the Leased Premises to Subtenant and Subtenant
desires to sublease the Leased Premises from Sublandlord upon the terms and conditions hereinafter
set forth.




          NOW, THEREFORE, in consideration of the mutual covenants herein, Sublandlord and Subtenant do
hereby agree as follows:




          1. Leased Premises and Term; Prior Access. Sublandlord hereby leases to Subtenant, and
Subtenant hereby hires the Leased Premises from Sublandlord for a term (hereinafter the
“Term”) commencing on January 21, 2008 (hereinafter the “Commencement Date”) and
ending December 30, 2010 (hereinafter the “Expiration Date”) or on such earlier date upon
which said term may expire or be cancelled or terminated



 









 






pursuant to any of the provisions of this Sublease upon and subject to the covenants,
agreements, terms and conditions herein contained. Sublandlord warrants that neither Sublandlord
nor, to its knowledge, Overlandlord is in default of its obligations under the Overlease(including
in “defaults” events which with the giving of notice, passage of time or both may ripen into
defaults). Notwithstanding the foregoing, during any period that rent abates under the Overlease,
the rent payable by Subtenant hereunder shall likewise abate.




          From the date Overlandlord consents to this sublease to the Commencement Date, Sublandlord
shall permit Subtenant to enter the Leased Premises at all reasonable times for the purpose of
installing its equipment, furniture and furnishings and otherwise preparing the Leased Premises for
occupancy by Subtenant.




          2. Rent. Subtenant shall pay to Sublandlord rent (“Rent”) during the Term as follows:




          (i) For the period beginning on the Commencement Date through February 20, 2008, no Rent shall
be payable.




          (ii) For the period beginning on March 1, 2008, through January 31, 2009, the Rent shall be
$388,437.50 or $35,312.50 per month.




          (iii) For the period beginning on February 1, 2009, through January 31, 2010, the Rent shall
be $437,875 or $36,489.58 per month.




          (iv) For the period beginning on February 1, 2010, through December 30, 2010, the Rent shall
be $414,333 or $37,666.67 per month.




          The Rent payable by Subtenant is a gross rent and, except as maybe otherwise expressly
provided in this Sublease, Subtenant is not responsible for any costs or expenses payable by
Sublandlord under the Overlease, including, without limitation, any part of Tenant’s Pro Rata Share
of Basic Costs (as those terms are defined in the Overlease). Rent shall be paid in equal monthly
installments on the first of the month without the necessity for Landlord to send an invoice.
Until further notice, rent checks shall be drawn to the order of



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Sublandlord and mailed to Suite 1500, 462 S. 4th Street, Louisville, KY 40202.




          3. Security. Subtenant has deposited with Sublandlord the sum of $36,312.50 as a
security deposit (“Security Deposit”). The Security Deposit shall not bear interest. The Security
Deposit shall be held by Sublandlord as security for the faithful performance by Subtenant of all
the terms, covenants and conditions of this Lease to be kept and performed by Subtenant. The
Security Deposit may be applied by Sublandlord to cure any failure by Subtenant to make any payment
due or any other default by Subtenant hereunder and, in such event, Subtenant shall immediately,
upon demand by Sublandlord, deposit with Sublandlord the amount necessary to restore the Security
Deposit to its original amount. If Subtenant shall fully and faithfully perform every term,
covenant and condition to be performed by it hereunder, the Security Deposit (or any balance
thereof) shall be returned to Subtenant at the expiration of the term.




          4. Use. Subtenant shall use and occupy the Leased Premises for the Permitted Use (as
defined in the Overlease).




          5. Provisions of Overlease. Sublandlord warrants that it has delivered a true and
complete copy of the Overlease to Subtenant. Subtenant acknowledges that it is fully familiar with
the terms of the Overlease. Subject to payment by Sublandlord of Base Rental and Additional Base
Rental under the Overlease, Subtenant hereby assumes all of the responsibilities and obligations on
the part of the Sublandlord to be performed under the Overlease with respect to the entire Leased
Premises, except to the extent otherwise expressly provided in this Sublease and except for
responsibilities and obligations that by their nature or purpose are inapplicable or inappropriate
to the subleasing of the Leased Premises pursuant to this Sublease. All of the terms, provisions,
covenants and conditions contained in the Overlease that are assumed by Subtenant hereunder, and
such rights and obligations as are contained in the Overlease with respect thereto, are hereby
imposed upon the respective parties hereto, the Sublandlord being substituted for the Overlandlord
in the Overlease, with the Sublandlord having all of the rights, obligations, remedies and powers
of the Overlandlord as set forth in the Overlease, and the Subtenant being substituted for the
Tenant in the Overlease, with the



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Subtenant having all the rights, obligations remedies and powers of the Tenant as set forth in
the Overlease. It is expressly understood and agreed, however, that Sublandlord shall not be bound
by any warranties and representations made by the Overlandlord in the Overlease, nor, subject to
paragraphs 6 and 8 hereof, shall Sublandlord be obligated to perform any of the terms, covenants
and agreements in the Overlease required to be performed by the Overlandlord; and Subtenant agrees
to look solely to the Overlandlord for the performance of the same. Notwithstanding the foregoing,
during any period that rent abates under the Overlease, the rent payable by Subtenant hereunder
shall likewise abate. Subtenant further covenants and agrees not to violate any of the terms and
provisions of the Overlease applicable to the Leased Premises. Subtenant shall be bound by all of
the restrictions and limitations placed upon the Sublandlord as Tenant under the Overlease, as if
the Subtenant were the tenant thereunder, except as otherwise specifically provided herein.




          The delineation of particular obligations of Subtenant contained herein shall in no event be
construed to limit any of the obligations of Subtenant pursuant to the provisions of this paragraph
5. In the event the Overlease is terminated pursuant to its terms for any reason other than the
default of the Sublandlord as the Tenant thereunder, this Sublease shall automatically cease and
terminate as of the date upon which the Overlease is so terminated.




          The following paragraphs of the Overlease do not apply herein except as necessary to interpret
the paragraphs of the Overlease that do apply: Articles I-IV, Article VI, Article XXIV, Sections E,
F and O of Article XXXVI, Article, Exhibits A-2 through A-6, C, D, E, First Amendment; and
Subtenant is not assuming the obligations of Sublandlord thereunder. Under Article XVI of the
Overlease, the insurance which requires the naming of Overlandlord shall name Sublandlord as well.




          6. Sublandlord Not Liable for Acts of Overlandlord. Notwithstanding anything in this
Sublease contained to the contrary, Sublandlord shall not be liable for any of the obligations,
duties, responsibilities or liabilities of the Overlandlord under the Overlease or for the failure
of any delay by the Overlandlord to perform or discharge the same. Sublandlord shall not be
obligated to take any action by reason of any matter relating to the operation or maintenance,
repair,



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replacement or restoration of the Leased Premises or of any facilities or services thereof,
except that Sublandlord, at Subtenant’s exclusive cost, will enforce the Overlease against
Overlandlord at Subtenant’s request. Alternatively, Subtenant may enforce the Overlease in
Sublandlord’s name at Subtenant’s exclusive cost by counsel reasonably acceptable to Sublandlord.




          7. Condition of Premises. Except as set forth herein, neither Sublandlord nor
Sublandlord’s agents have made any representations or promises with respect to the Leased Premises
or Leased Premises or the equipment and improvements therein situated or the physical condition
thereof. Subtenant accepts the Leased Premises in “as is” condition on the date hereof subject to
their being delivered to Subtenant broom clean. Sublandlord shall be under no obligation, except as
otherwise provided herein, to make and/or pay for any alterations, additions, installations,
substitutions, improvements or decorations to the Leased Premises.




          8. Sublandlord’s Services. Subtenant shall receive from Overlandlord pursuant to the
provisions of the Overlease services to or for the benefit of the Leased Premises which are to be
provided under the Overlease without additional charge or rental and Sublandlord shall cooperate
with Subtenant in obtaining such services in accordance with paragraph 6 hereof. In accordance with
paragraph 6 hereof and subject to the performance by Sublandlord of its obligations thereunder,
Subtenant agrees to look solely to the Overlandlord for the rendition of such services and
Sublandlord shall not be liable to Subtenant for any loss, damage or expense resulting from any
failure of the Overlandlord to furnish such services unless due to the act or omission on the part
of the Sublandlord, its employees, agents or invitees.




          9. Subtenant to Perform Certain Obligations. Notwithstanding anything contained in the
Overlease or in this Sublease, Subtenant agrees that it shall be responsible to perform all repairs
and maintenance to the Leased Premises, as required of Sublandlord under the Overlease, except any
repairs or maintenance that may be required as a result of the act or omission of Sublandlord, its
employees, agents or invitees.




          10. Holding Over. Except to the extent Sublandlord is relieved of liability by
Overlandlord, if Subtenant shall



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retain possession of the Subleased Premises or any part thereof after the termination of this
Sublease, Subtenant shall pay all damages sustained by Sublandlord under the Overlease, which are
expressly agreed to include the claims of the Overlandlord against Sublandlord, to the extent
arising out of to Subtenant’s failure to surrender the entire Leased Premises. The provisions of
this paragraph shall not operate as a waiver by Sublandlord of any right of re-entry hereinabove
provided.




          11. Performance of Overlease By Sublandlord. Unless the breach or default is caused by
the acts or omissions of Subtenant, Sublandlord covenants and agrees that it will not breach any of
the terms, covenants, or conditions of the Overlease and will not cause or permit any default under
the Overlease, and Sublandlord shall take all action necessary for the continuance in full force
and effect of the Overlease. Without limiting the generality of the immediately preceding sentence,
Sublandlord agrees to perform when all of its responsibilities and obligations under the Overlease
that are not assumed by Subtenant under this Sublease, including, without limitation, the payment
when due of the Base Rent and Tenant’s Pro Rate Share of Basic Costs (as those terms are defined in
the Overlease). Sublandlord further covenants and agrees not to modify, amend or waive any of the
terms, covenants or conditions of the Overlease which would materially affect any of Subtenant’s
rights, benefits or obligations under the Overlease.




          12. Notices. Any notice to be given hereunder by either party shall be in writing and
shall be deemed to have been fully given when delivered personally or when sent by a nationally
recognized overnight courier service or United States Mail, certified or registered, return receipt
requested, postage prepaid, addressed as follows:




	 	 	 
	Sublandlord:

	 	c/o Marsh & McLennan Real Estate Advisors

121 River Street

Hoboken, New Jersey 07030






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	Subtenant:

	 	Prior to Subtenant taking occupancy of the Subleased Premises for the conduct of
its business at:
	 
	 	 
	 

	 	SoftBrands Manufacturing, Inc. 

Two Meridian Crossings, Suite 800

Minneapolis, MN 55423
	 
	 	 
	 

	 	Attention: Director, Offices and Facilities
	 
	 	 
	 

	 	and thereafter at the Subleased Premises.





Notices sent by courier shall be deemed to have been given to the party to whom it is sent on the
first business day (a Monday through Friday other than a day that is a holiday in the State of
Minnesota) after the date the same is delivered to a nationally recognized overnight courier for
next day delivery to such party at its then current address for the giving of notices. Notices
given by mail shall be deemed to have been given to the party to whom it is addressed on the first
business day that is at least three (3) days after the date the same is deposited in the United
States mail, postage prepaid. Either party hereto may change such party’s address for the service
of notice hereunder by written notice of said change to the other party hereto, in the manner above
specified ten (10) days prior to the effective date of said change.




     13. Communications from Overlandlord. Sublandlord shall promptly deliver to Subtenant
copies of all notices, requests or demands which relate to the Leased Premises and any notice of
default received by Sublandlord in its capacity as Tenant under the Overlease within three (3) days
after receipt thereof from Overlandlord. Sublandlord will ask Overlandlord to provide copies of
all such notices, requests or demands directly to Subtenant simultaneously with the delivery
thereof to Sublandlord.



     14. Indemnification. Subtenant agrees to defend with counsel reasonably approved by
Sublandlord, save harmless and indemnify Sublandlord from all claims of liability for injury, loss,
accident or damage to any person or property and from any claims, actions, proceedings and expenses
and costs in connection therewith (including, without limitation, reasonable



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counsel fees) arising from the omission, fault, wrongful act, negligence or other misconduct
of Subtenant and persons for whose conduct Subtenant is legally responsible occurring on or about
the Building and the Leased Premises, or either. In addition, Subtenant agrees to defend with
counsel reasonably approved by Sublandlord, save harmless, and indemnify Sublandlord from any
claims of liability for injury, loss, accident or damage to any person or property, and from any
claims, actions, proceedings and expenses and costs in connection therewith (including without
limitation, reasonable counsel fees), arising from any use made or thing done or occurring on the
Leased Premises not due to the omission, fault, wrongful act, negligence or other misconduct of
Sublandlord or any person for whose conduct Sublandlord is legally responsible (other than
Subtenant).




          Subtenant further indemnifies and agrees to hold harmless Sublandlord against any and all
claims, loss and damage, including without limitation reasonable attorney’s fees and disbursements,
which may at any time be asserted by Overlandlord against Sublandlord for failure of Sublandlord to
perform any of the covenants, agreements, terms, provisions or conditions contained in the
Overlease, which, by reason of the provisions of this Sublease, Subtenant is obligated to perform
and which Subtenant has failed to perform.




     Sublandlord agrees to defend with counsel reasonably approved by Subtenant, save harmless and
indemnify Subtenant from all claims of liability for injury, loss, accident or damage to any person
or property and from any claims, actions, proceedings and expenses and costs in connection
therewith (including, without limitation, reasonable counsel fees) arising from the omission,
fault, wrongful act, negligence or other misconduct of Sublandlord and persons for whose conduct
Sublandlord is legally responsible occurring on or about the Building and the Leased Premises, or
either after the date hereof. In addition, Sublandlord agrees to defend with counsel reasonably
approved by Subtenant, save harmless, and indemnify Subtenant from any claims of liability for
injury, loss, accident or damage to any person or property, and from any claims, actions,
proceedings and expenses and costs in connection therewith (including without limitation,
reasonable counsel fees), arising from any use made or thing done or occurring on the Leased
Premises after the date hereof due to the omission, fault, wrongful act, negligence or other



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misconduct of Sublandlord or any person for whose conduct Sublandlord is legally responsible (other
than Subtenant).




          Sublandlord further agrees to defend with counsel reasonably approved by Subtenant, save
harmless and indemnify Subtenant from any claim, expense, loss and damage, including without
limitation reasonable attorneys’ fees and disbursements incurred by Subtenant by reason of
Sublandlord’s breach or alleged breach of the Overlease (other than breaches of covenants,
agreements, terms, provisions or conditions which, by reason of the provisions of this Sublease,
Subtenant is obligated to perform).




          15. Brokerage. Subtenant represents and warrants that it dealt with no broker other
than NAI Welsh Commercial Real Estate Services and Cushman & Wakefield of Minnesota in this
transaction and will indemnify, defend with counsel reasonably acceptable to Sublandlord and save
Sublandlord harmless from any loss incurred because this representation and warranty is untrue.
Sublandlord also represents and warrants that it dealt with no broker other than NAI Welsh
Commercial Real Estate Services and Cushman & Wakefield of Minnesota in this transaction and will
indemnify, defend with counsel reasonably acceptable to Subtenant and save Subtenant harmless from
any loss incurred because this representation and warranty is untrue. Sublandlord will pay said
brokers under a separate agreement.




          16. Quiet Enjoyment. Sublandlord covenants that upon Subtenant’s paying the Rent and
observing, paying and performing all terms, covenants and conditions upon Subtenant’s part to be
observed, paid and performed hereunder, Subtenant may peacefully and quietly enjoy the Leased
Premises without molestation from Sublandlord or anyone claiming under Sublandlord.




          17. Furniture, Furnishings and Equipment. The Leased Premises will be broom clean on
the Commencement Date but the furniture, furnishings and equipment listed on Exhibit A
(“FF&E”) hereto will be left for Subtenant’s use during the term. On the Expiration Date
and provided Subtenant is not in default hereunder title to the FF&E will pass to Subtenant.
Sublandlord warrants that it is and on the Expiration Date will be the owner of the FF&E free and
clear of all liens and encumbrances and that it has the right and authority to convey the FF&E to
Subtenant. Until the Expiration Date, Subtenant



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will maintain the FF&E in good order and condition, reasonable wear and tear excepted, and
will insure it against loss or other casualty. Subtenant will accept the FF&E in its condition as
at the date hereof. If there is a casualty or loss to the FF&E before the Commencement Date,
Sublandlord’s obligation will be limited to substituting used furniture, furnishings and equipment
of like function and approximately equal value to that which was lost or damaged but which need not
match the lost items.




          19. Approval of Overlandlord. This Sublease is subject to the written approval of the
Overlandlord. If that approval is not given within 30 days of the date hereof, either party may
cancel this Sublease on notice to the other.




          20. Miscellaneous. This Sublease may be executed in two or more counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
Delivery of an executed counterpart of this Sublease by facsimile or email shall be deemed delivery
of the original hereof.




          Capitalized terms not otherwise defined herein shall have the meanings given them in the
Overlease.




          If it shall be necessary for either party hereto to employ an attorney to enforce any of the
terms, covenants, or conditions of this Sublease, the party in default or the party against whom
any final judgment is rendered agrees to pay all reasonable costs and attorney fees incurred by the
other party hereto in connection with the enforcement of the terms and conditions and/or covenants
of this Sublease.




          This Sublease represents the entire agreement between the parties with respect to the Premises
and there are no implied or expressed terms or conditions that are not contained herein. This
Sublease may be amended only in a writing signed by both parties.




[Signature Page Follows]




[Remainder of page intentionally left blank.]




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Signature Page to Sublease




          IN WITNESS WHEREOF, Sublandlord and Subtenant have caused this Sublease to be executed and
delivered the date first above written.




	 	 	 	 	 	 	 
	 	 	MERCER (US) INC.,

Sublandlord	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	SOFTBRANDS
MANUFACTURING, INC., 
Subtenant	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 







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LANDLORD’S CONSENT TO SUBLEASE




     The undersigned, ZELLER-LASALLE PLAZA, L.L.C., JPG-LASALLE PLAZA, L.L.C., AURORA-LASALLE
PLAZA, LLC, CYGNUS-LASALLE, LLC and HERITAGE INVESTMENT CP, LLC, each a Delaware limited liability
company (collectively, “Landlord”) under the Overlease described in the attached and foregoing
Sublease, hereby consents to the Sublease on the express condition that:



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such consent or acceptance of the Sublease shall not be construed as a consent by Landlord to any
future assignment of the Overlease or sublease of the Leased Premises:



the Sublease may not be amended without the prior written consent of Landlord;



any termination of the Overlease shall automatically terminate the Sublease unless otherwise agreed
in writing by Landlord;



the Sublease shall at all times be subject and subordinate to the terms and provisions of the
Overlease;



the execution of this Consent shall not create any obligations from Landlord to Subtenant;
Subtenant’s agreement being solely with Sublandlord and not with Landlord;



Sublandlord and Subtenant acknowledge and agree that the provisions of Sections II and III of
Exhibit E attached to the Overlease do not apply to and are not a part of the Sublease and
Sublandlord acknowledges that the Term of Overlease (if not sooner terminated as provided therein)
shall expire on December 31, 2010 with no right or option to renew the Term thereof; and



Pursuant to the provisions of Article XIII of the Overlease, Sublandlord shall reimburse Landlord
its costs and expenses incurred in reviewing and consent to the proposed Sublease in the amount of
$750.00.



Sublandlord and Subtenant execute this document to evidence their agreement to the foregoing
conditions, and Subtenant acknowledges that its rights under the Sublease are subject to the terms
of the Overlease.



[Signature Page Follows]



[Remainder of page intentionally left blank.]




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Signature Page to Landlord’s Consent to Sublease




	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	ZELLER-LASALLE PLAZA, L.L.C.	 	 
	 	 	JPG-LASALLE PLAZA, L.L.C.	 	 
	 	 	AURORA-LASALLE PLAZA, LLC	 	 
	 	 	CYGNUS-LASALLE, LLC	 	 
	 	 	HERITAGE INVESTMENT CP, LLC,

each a Delaware limited liability company	 	 
	 

	 	By:
	 	ZELLER MANAGEMENT CORPORATION,
	 	 
	 

	 	 	 	an Illinois corporation, authorized agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SUBLANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	MERCER (US) INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





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	 	 	SUBTENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	SOFTBRANDS MANUFACTURING, INC., a Minnesota corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





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Exhibit A to Sublease




Description of Furniture, Furnishings and Equipment



See attached





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