EXHIBIT 10.1
LICENSE AGREEMENT
This License Agreement (the "License") is made and entered into this 30th
day of August, 2002 (the "Effective Date"), by and between VALUE CITY DEPARTMENT
STORES, INC., an Ohio corporation, whose address is 0000 Xxxxx Xxxx, Xxxxxxxx,
Xxxx 00000 ("VCDS"), and SHONAC CORPORATION, an Ohio corporation, whose address
is 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000 ("Shonac").
RECITALS
A. Crossings at Hobart - I LLC, an Ohio limited liability company ("Master
Landlord") is the fee owner of certain real property located in the City of
Merrillville, State of Indiana, legally described on Exhibit "A" hereto (the
"Shopping Center Parcel");
B. Master Landlord is the lessor under that certain Lease ("Master Lease")
dated as of May 18th, 1994, between Master Landlord and Service Merchandise
Company, Inc. (the "Service Merchandise") for 50,000 square feet of premises in
the Shopping Center Parcel, as depicted in Exhibit "B" attached hereto and made
a part hereof ("premises"), which premises is part of the Shopping Center
Parcel;
C. Service Merchandise filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code on March 27, 1999. Pursuant to that certain order by
the United States Bankruptcy Court for TN, Service Merchandise and Jubilee
Limited Partnership, an Ohio limited partnership ("Landlord") entered into a
certain Assignment and Assumption Agreement dated July 2, 2002 (the
"Assignment") in which Service Merchandise assigned to Landlord and Landlord
assumed from Service Merchandise all of Service Merchandise's right, title and
interest as tenant under the Master Lease;
D. Landlord and VCDS entered into that certain Lease ("Lease") dated
August 30th, 2002, demising to VCDS the premises. The Lease is attached hereto
and made a part hereof as Exhibit "C" ; and
E. VCDS desires to license to Shonac and Shonac desires to license from
VCDS certain rights, title and interest of VCDS under the Lease with respect to
the premises, as provided herein.
AGREEMENTS
In consideration of the premises and other good and valuable
consideration, VCDS and Shonac agree as follows:
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ARTICLE I
PRELIMINARY MATTERS
1.1 Defined Terms. Any defined terms used herein shall have the same
meaning as set forth in the Lease.
1.2 Representations and Warranties. VCDS represents and warrants to
Shonac that:
(a) To the best of VCDS's knowledge, neither Landlord nor VCDS are
in default under the Lease;
(b) To the best of VCDS's knowledge, neither Master Landlord nor
Landlord are in default under the Master Lease;
(c) VCDS has full right, power and authority to make this License;
(d) To the best of VCDS's knowledge, there is no litigation pending
in connection with the Master Lease, the Lease, or the premises;
(e) To the best of VCDS's knowledge, the documents heretofore
provided by VCDS to Shonac represent all agreements related to
the Master Lease and Lease
ARTICLE II
LICENSE
2.1 License and Term. VCDS hereby licenses to Shonac all of VCDS's rights
and obligations under the Lease, and Shonac hereby accepts such license and
assumes such rights and obligations. The term of this License shall commence on
the Effective Date and shall expire on the day preceding the end of the term of
the Lease, as the same may be extended, unless sooner terminated in accordance
with the terms set forth herein. In the event VCDS receives notice from Shonac
of its election to extend the term of the License at least seven (7) months
prior to the expiration of the then current term and any Lease renewal options
remain, VCDS agrees to timely exercise its right to extend the term of the
Lease. VCDS agrees to deliver the premises to Shonac immediately following
receipt thereof from Landlord.
2.2 Lease. Shonac agrees to comply with all terms, provisions, and
conditions of VCD Xxxxxx the Lease. VCDS agrees to immediately deliver to Shonac
any notices it receives from Landlord regarding the Lease and/or this License.
If Shonac fails to perform any of the provisions of the Lease, then, so long as
VCDS is liable for performance of obligations under the Lease, VCDS may exercise
the rights and remedies available to Landlord under the Lease, provided that
VCDS has afforded Shonac the same notice and opportunity to cure, if any,
afforded to VCDS under the Lease. Notwithstanding the foregoing, the parties
agree that the time period for such cure shall be five (5) days less than the
time period set forth in the Lease with respect to monetary obligations and ten
(10) days less than the time period set forth in the Lease with respect to
non-monetary
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obligations. VCDS shall not be entitled to recover from Shonac any amounts
Shonac has paid to Landlord on account of VCDS's obligations under the Lease.
VCDS agrees to enforce all of the obligations of Landlord under the Lease.
If VCDS fails to enforce any of the Landlord's obligations under the Lease, then
Shonac shall have the same rights and remedies available to VCDS under the
Lease, provided that Shonac has afforded to VCDS the same notice and opportunity
to cure, if any, afforded to Landlord under the Lease. Shonac agrees to
immediately deliver to VCDS any notices it may receive from Landlord regarding
the premises and/or this License.
2.3 Rent. During the Term of this License, Shonac shall have the right to
pay all rental amounts due and payable under the Lease directly to Landlord.
VCDS agrees to deliver to Shonac, within five (5) days following receipt
thereof, any amounts paid to VCDS under the Lease by Landlord, including without
limitation, the Tenant Reimbursement set forth in Section 50 of the Lease.
2.4 Assignment of Warranties and Guaranties. During the term of this
License, to the extent assignable, VCDS hereby assigns to Shonac all guaranties
and warranties it owns related to the premises. VCDS shall execute such further
documents to evidence such transfer as are reasonably requested by Shonac either
before or after the Effective Date.
ARTICLE III
MISCELLANEOUS
3.1 Notices. Notices hereunder shall be given by United States mail,
postage prepaid, certified with return receipt requested, by hand delivery or by
a nationally recognized overnight courier (with evidence of receipt) and shall
be effective upon receipt or refusal of receipt, and shall be addressed to the
parties as follows:
(a) If intended for VCDS, to:
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: __________________________________
with a copy to:
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Legal Department
(b) If intended for Shonac, to:
0000 Xxxx Xxxxx Xxxxxx
- 0 -
Xxxxxxxx, Xxxx 00000
Attn: Real Estate
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Schottenstein, Zox & Xxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Address for service of notice may be changed by written notice to the
other party.
3.2 Amendment of Lease. VCDS agrees that it shall not enter into any
amendment or modification of the Lease that increases the rent or charges
payable under the Lease, increases VCDS's or its predecessor's liabilities or
obligations under the Lease, or increases the term of the Lease without the
prior written consent of Shonac.
3.3 Brokers. VCDS and Shonac each warrant to the other that they have not
dealt with any broker or agent in connection with the negotiation or execution
of this License. VCDS and Shonac shall each indemnify and defend the other
against all costs, expenses, attorneys' fees, and other liability for commission
or other compensation claimed by any broker or agent claiming the same by,
through, or under the indemnifying party.
3.4 Third Parties. The agreements herein are for the sole benefit of VCDS
and Shonac and no third party is intended to benefit hereby.
3.5 Counterparts. This License may be executed in any number of
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.6 Applicable Law. This License shall be governed by and construed in
accordance with the laws of the state in which the premises are located.
EXECUTED as of the day and year above written.
Signed and acknowledged
in the presence of: VCDS:
Value City Department Stores, Inc.,
an Ohio corporation
/s/ Xxxxxxx Xxxxxx BY: /s/ Xxxx X. Xxxxxxx
------------------------------ -------------------
Print Name: Xxxxxxx Xxxxxx
ITS: President & CEO
/s/ Xxxxx X. Xxxx
------------------------------
Print Name: Xxxxx X. Xxxx
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STATE OF OHIO :
: ss.
COUNTY OF FRANKLIN :
The foregoing instrument was acknowledged before me this 11 day of
September, 2002, by Xxxx X. Xxxxxxx, President & CEO of Value City Department
Stores, Inc., an Ohio corporation, for and on behalf of said corporation.
/s/ Xxxxxxx Xxxxxx
-------------------
Notary Public
XXXXXXX XXXXXX
MY COMMISSION EXPIRES ON 9/17/05
NOTARY PUBLIC - STATE OF OHIO
SHONAC:
Shonac Corporation,
an Ohio corporation
/s/ Xxxxxxx Xxxxxx BY: /s/ Xxxx X. Xxxxxxx
------------------------------- --------------------
Print Name: Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxx ITS: President & CEO
-------------------------------
Print Name: Xxxxxxx Xxxxxxxx
STATE OF OHIO :
: ss.
COUNTY OF FRANKLIN :
The foregoing instrument was acknowledged before me this 30 day of August,
2002, by Xxxx X. Xxxxxxx, President & CEO of Shonac Corporation, an Ohio
corporation, for and on behalf of said corporation.
/s/ Xxxxxxx Xxxxxx
-------------------
Notary Public
XXXXXXX XXXXXX
MY COMMISSION EXPIRES ON 9/17/05
NOTARY PUBLIC - STATE OF OHIO
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JOINDER:
Landlord hereby joins this License solely for the purpose of agreeing to
the following with respect to Shonac: (i) to recognize this License and Shonac's
rights thereunder, (ii) to simultaneously deliver to Shonac any notice delivered
to VCDS under the Lease, and (iii) to accept the performance by Shonac of any
obligations under the Lease on behalf of VCDS including the payment of rental
thereunder.
LANDLORD:
Jubilee Limited Partnership,
an Ohio limited partnership
/s/ Xxxxxx X. Xxxxx BY: /s/ Xxx X. Xxxxxxxxxxxxx
------------------------------- ------------------------
Print Name: Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxx ITS: President
-------------------------------
Print Name: Xxxxxx X. Xxxxxxx
STATE OF OHIO :
: ss.
COUNTY OF FRANKLIN :
The foregoing instrument was acknowledged before me this 3rd day of
September, 2002, by Xxx X. Xxxxxxxxxxxxx, President of Jubilee Limited
Partnership, an Ohio limited partnership, for and on behalf of said limited
partnership.
/s/ Xxxxxx X. Xxxxxxx
---------------------
Notary Public
XXXXXX X. XXXXXXX
Notary Public, State of Ohio
My Commission Expires
08-21-06
[NOTARIAL SEAL]
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EXHIBIT A
LEGAL DESCRIPTION
Parcel I: (Fee Simple)
Part of the North 1/2, Section 23, Township 35 North, Range 8 West of the 2nd
P.M., in Lake County, Indiana, described [ILLEGIBLE] Commencing at the Northwest
corner of said Section 23, thence South 02 degrees 42' 00" East along the West
line of said Section 23 a distance of 842.20 feet to the Southerly right-of-way
line of the Chesapeake and Ohio Railroad, thence South 62 degrees 42' 00" East
along said South line 1615.41 feet, thence South 27 degrees 18' 00" West, 748.26
feet, thence South 88 degrees 25' 00" West, 134.54 feet to the point of
beginning of this described parcel thence continuing South 88 degrees 25' 00"
West, 326.65 feet, thence South 01 degrees 35' 00" East, 193.56 feet to the
Northerly line of U.S. Highway 30, thence Easterly along the Northerly line of
said Highway, 309.65 feet, thence North 01 degrees 35' 00" West, 43.06 feet,
thence North 88 degrees 25' 00" East, 17.0 feet; thence North 01 degrees 35' 00"
West, 150 feet to the point of beginning. Except that part conveyed to the State
of Indiana by Warranty Dead recorded September 19, 1978 an Document No. 491229
described as follows: a part of the Northwest Quarter of Section 23, Township 35
North, Range 8 West, Lake County, Indiana, described as follows: commencing at
the Northwest corner of said section, thence south 0 degrees 01 minutes 00
seconds West 2,287.90 feet along the West line of said Section to the Southwest
corner of the owner's land, thence South 89 degrees 59 minutes 00 seconds East
350.00 feet to the corner of the owner's land, thence South 0 degrees 01 minutes
00 seconds West 196.90 feet along the West line of the owner's land to the North
boundary of U.S.R. 30, thence along the boundary of said U.S.R. 30 Easterly
463.51 feet along an arc to the right and having a radius of 53, 814.79 feet and
subtended by a long chord having a bearing of South 89 degrees 02 minutes 50
seconds East and a length of 463.51 feet to the point of beginning of this
description, thence North 1 degree 11 minutes 58 seconds East 10.00 feet, thence
South 88 degrees 46 minutes 26 seconds East 50.01 feet, thence South 1 degree 15
minutes 10 seconds West 10.00 feet to the North boundary of U.S.R. 30, thence
along the boundary of said U.S.R. 30 Westerly 50.00 feet along an arc to the
left and having a radius of 53,814.79 feet and subtended by; long chord having a
bearing of North 88 degrees 46 minutes 26 seconds West and a length of 50.00
feet to the point of beginning.
Parcel II: (Fee Simple)
Part of the North 1/2 Section 23, Township 35 North Range 8 West of the 2nd
P.M., in Lake County, Indians, described as: Commencing at the Northwest corner
of said Section 23, thence South 02 degrees 42' 00" East along the West line of
said Section 23 a distance of 842.20 feet to the Southerly right-of-way line of
the Chesapeake and Ohio Railroad, thence South 62 degrees 42' 00" East along
said Southerly right-of-way 1845.00 feet to the point of beginning of this
described parcel, thence South 27 degrees 18' 00" West, 274.33 feet; thence
South 62 degrees 42' 00" East, 4.0 feet; thence South 27 degrees 18' 00" West,
80.00 feet; thence South 62 degrees 42' 00" East, 26.41 feet; thence SOUTH 27
degrees 18' 00" West 275.00 feet; thence North 62 degrees 42' 00" West, 260.0
feet; thence South 27 degrees 18' 00" West, 339.51 feet more of less to the
Northerly line of U.S. Highway 30; thence on a curve to the right with radius of
53,817.23 feet a distance of 87.67 feet to the point of curve; thence North 88
degrees 37' 48" CONTINUED
SCHEDULE A - PAGE 2
EXHIBIT B
[FLOOR PLAN]
TOTAL P.
