AGREEMENT OF MASTER LEASE
Exhibit
10.3
AGREEMENT OF MASTER
LEASE
THIS AGREEMENT OF MASTER LEASE (this
"Lease") is
made effective as of the 17th
day of June
, 2008, by and between
XXXXXX XXXXX LIMITED PARTNERSHIP, a
limited partnership organized and existing under the laws of the Commonwealth of
Pennsylvania, with an address of 0000 Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxxxx 00000
(“PHLP”), HARDY
MANAGEMENT COMPANY, INC., a corporation organized and existing under the laws of
the State of Nevada, with an address of 0000 Xxxxx 000, Xxxxxx Xxxx,
Xxxxxxxxxxxx 00000 (“HMC”), HARDY
CREDIT CO., a limited partnership organized and existing under the laws of the
Commonwealth of Pennsylvania, with an address of 0000 Xxxxx 000, Xxxxxx Xxxx,
Xxxxxxxxxxxx 00000 (“HCC”), HARDY
MANAGEMENT COMPANY, LLC, a limited liability company organized and existing
under the laws of the State of Nevada with an address of 0000 Xxxxx 000, Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000 (“HMCLLC”) and
XXXXX-XXXXX HOLDINGS, LLC, a limited liability company organized and existing
under the laws of the Commonwealth of Pennsylvania with an address c/o 0000
Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxxxx 00000 (“HMH”)(PHLP together with HMC, HCC,
HMCLLC and HMH being hereinafter collectively referred to as “Lessor” as their
respective interests may appear),
and,
84 LUMBER COMPANY, a limited
partnership organized and existing under the laws of the Commonwealth of
Pennsylvania, with its principal office at 0000 Xxxxx 000, Xxxxxx-Xxxx,
Xxxxxxxxxxxx 00000 (hereinafter referred to as “Tenant”).
WHEREAS, PHLP is the owner or tenant of
that certain real property set forth on Schedule “A” attached hereto and made a
part hereof; and, pursuant to that certain unrecorded Nominee Agreement dated
January 1, 1995, PHLP appointed HMC as the nominee for the real property listed
thereon. HMC joins in this Master Lease at the request of PHLP with
respect to those properties set forth on Schedule “A” which are owned by PHLP
and for which HMC is the record owner only; and
WHEREAS, HCC is the owner or tenant of
that certain real property set forth on Schedule “B” attached hereto and made a
part hereof; and
WHEREAS, HMCLLC is the owner or tenant
of that certain real property set forth on Scheduled “C” attached hereto and
made a part hereof; and
WHEREAS, HMH is the owner or tenant of
that certain real property set forth on Scheduled “D” attached hereto and made a
part hereof; and
WHEREAS, Lessor and Tenant are parties
to a certain Lease originally dated January 1, 1990 and made by Lessor's
predecessor-in-interest and Tenant's predecessor-in-interest, as amended by
Amendment to Lease dated November 13, 1990; as further amended by Amendment to
Lease dated August 2, 1994; as further amended by Assignment and Assumption
Agreement dated January 1, 1995 between Xxxxxx Xxxxx Real Estate Co., a
Pennsylvania business trust ("PHREC") and PHLP
whereby PHREC assigned its rights in said Lease to PHLP; as further amended by
Amendment to Lease dated April 1, 1998; as further amended by Amendment to Lease
dated January 1, 2000; as further amended by Amendment and Assignment of Lease
dated March 14, 2003; as further amended by Amendment and Assignment of Lease
dated November 14, 2004; as further amended by Amendment and
Assignment of Lease dated November 29, 2004; as further amended by Seventh
Amendment to Lease Agreement dated February 1, 2005; as further amended by
Eighth Amendment to Lease Agreement dated April 1, 2006; as further amended by
an Amendment to Master Lease dated April 18, 2008 as to PHLP, HMC and Tenant;
and as further amended by Amendment to Master Lease Agreement as to HCC and
Tenant dated April 18, 2008 (collectively, the “Original Lease”) with
respect to the Demised Premises and Premises (as each such term is respectively
defined in the Original Lease); and
WHEREAS, Lessor and Tenant desire to
terminate the Original Lease in its entirety and to replace it with this Lease
with respect to all of those properties described in Schedules A, B,
C and D, on all the terms and conditions set forth
below.
NOW THEREFORE, in consideration of the
foregoing recitals, incorporated herein by reference, and in consideration of
the mutual promises and undertakings of the parties as set forth herein, and for
other good and valuable consideration, receipt whereof each to the other is
hereby acknowledged, and with intent to be legally bound, Lessor and Tenant
hereby covenant and agree as follows:
PREMISES AND
TERM
1. Lessor
does hereby demise and lease unto Tenant all that certain land described in
Schedules A, B, C, and D attached hereto and made a part hereof, together with
the fixtures and other improvements therein, hereinafter referred to as the
“Demised Premises” or “Premises.” For purposes of this Lease,
“fixtures” shall be defined as personal property attached to real property and
shall specifically exclude fixtures which are not permanently attached to the
Demised Premises and are installed by Tenant.
Tenant shall have and hold the
above-referenced Premises for and during the initial term specified as follows:
the term shall commence on the date hereof and shall end on the 31st day of May,
2013, subject to the terms and conditions in Section 4 of this
Lease.
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RENTAL
2.
(a) Tenant does hereby covenant and agree to pay PHLP as
agent for Lessor, and their successors and assigns, consecutive monthly payments
in accordance with Schedule A, B, C, and D without demand, in advance, from the
beginning of the term, said rental to be payable to Lessor, its successors and
assigns, at 0000 Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxxxx 00000, or at such other
place or places as shall be designated in writing by Lessor. The
receipt of any rent by Lessor whether the same be that originally reserved or
that which may be payable under any of the covenants and agreements herein
contained or any portion thereof, shall not be deemed to operate as a waiver of
the rights of Lessor to enforce the payment of rent previously due or which may
thereafter become due or to forfeit this Lease by any of the remedies reserved
by Lessor herein, and the failure of Lessor to enforce any covenant or condition
concerning which Tenant shall be guilty or be in default shall not be deemed to
void the right of Lessor to enforce the same or any other conditions or
covenants from the occasion of any subsequent breach or default. PHLP
shall be responsible for pro-rata allocation of all rental payments by and among
PHLP, HMC, HCC, HMCLLC, and HMH.
(b) Tenant
agrees to pay in addition to the rent herein reserved any and all sums which may
become due by reason of the failure of Tenant to comply with all the covenants
of this Lease and any and all damages, costs, expenses and impositions which
Lessor may suffer and incur by reason of any default of the Tenant or failure on
its part to comply with all covenants of this Lease, and each of them, and also
any and all damages to the Demised Premises caused by any act or neglect of the
Tenant.
NET
LEASE
3. It
is the purpose and intent of Lessor and Tenant that the rental provided for in
Paragraph 2 hereof, during the term thereof, shall be absolutely net to the
Lessor, after all costs, expenses and obligations of every kind and nature
whatsoever relating to the Demised Premises, which may arise or become due
during the term of this Lease, and Lessor shall be indemnified and saved
harmless by Tenant from and against the same.
RENEWAL, CANCELLATION AND
SALE OF PREMISES
4.
(a) Tenant, shall have the option to renew the term
of this Lease as it relates to the Premises set forth on Schedules A, B, C, and
D attached hereto and made a part hereof for four (4) additional periods
of five (5) years each commencing on the date and at the time immediately
following the expiration of the term demised in Paragraph 1 of this Lease or any
subsequent five (5) year renewal period, provided that this Lease is in full
force and effect immediately prior to the date of the commencement of such
renewal term and that the Tenant is not in default under any of the provisions
herein. Such option shall be exercised automatically unless Tenant
shall cancel this Lease in accordance with the terms of Subparagraph (b)
below. Said renewal terms shall be upon the same terms, covenants,
conditions and limitations as provided in this Lease. The annual
rental during any subsequent renewal term shall be fifteen per cent (15%)
greater than the rental during the preceding five-year term. Tenant’s
option to renew the terms of this Lease as it relates to any Premises
subject to a third party lease (including any rent increases) shall be in
accordance with the renewal terms set forth in the applicable third party lease,
except that said renewals shall be automatic, rather than upon notice from
Tenant, unless this Lease is cancelled in accordance with the terms of
Subparagraph (b) below.
(b)(1) Tenant may
cancel this Lease as to any Demised Premises by providing Lessor with at least
thirty (30) days written notice. Said cancellation, depending upon
how specified by Tenant, shall be applicable to this entire Lease, specific
Schedules or any individual stores listed thereunder, including those stores set
forth on any Addenda to this Lease.
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(b)(2) Notwithstanding the foregoing,
with respect to any Demised Premises owned by HCC or
HMH, Tenant’s rights to cancel this Lease with regard to any specific
store located on a Demised Premises due to poor performance and/or closure of
such store location, shall be subject to Tenant’s obligation to continue to pay
Lessor all rental due for such Demised Premises until either i.) Lessor sells
the Demised Premises to a third party purchaser, or ii.) all indebtedness now or
hereafter owed by HCC or HMH to any lender for which the respective Demised
Premises have been pledged as security by HCC or HMH, as borrower, has been paid
in full and such lender has released all of its liens against the respective
Demised Premises owned by HCC or HMH .
(c) If
at any time during the initial term or any renewal thereof Lessor obtains a bona
fide offer from a third party to purchase any of the Demised Premises which
Lessor desires to accept not involving an assignment of this Lease to said third
party as it pertains to the applicable Demised Premises, Lessor promptly will
give Tenant written notice of such bona fide offer, including all of the
essential terms and conditions of sale (the “Offer”), and within
thirty (30) days after the date of said notice, Tenant may elect to do either of
the following at its option:
(1) advise
Lessor by notice in writing that it will purchase the Demised Premises at the
price and the terms and conditions of sale set forth in the Offer, in which
event Lessor shall accept Tenant’s offer to purchase and the transaction will be
closed within sixty (60) days after the date of Tenant’s notice; or
(2) advise
Lessor by notice in writing that it desires Lessor to acquire and construct
Substitute Premises for Tenant either:
(A) in the
same market area in which the Demised Premises are located, in which event
Lessor shall acquire, construct and make ready for Tenant’s occupancy such
Substitute Premises within nine (9) months after the date of Tenant’s notice,
and Tenant shall have the right to continue to occupy the Demised Premises under
this Lease until the date upon which the Substitute Premises are ready for
occupancy by Tenant, whereupon this Lease shall continue as though uninterrupted
at the same rent, or
(B) in
an area which is outside the market area in which the
Demised Premises is/are located, in which event Lessor shall acquire,
construct and make ready for Tenant’s occupancy such Substitute Premises within
twelve (12) months after the date of Tenant’s notice and Tenant shall vacate the
Demised Premises within sixty (60) days after the date of Tenant’s
notice.
In
addition to its obligations with respect to the Substitute Premises as provided
in Subparagraphs 2(A) and (B) above, Lessor shall pay to Tenant within thirty
(30) days after the date of Tenant’s notice a relocation fee to partially
compensate Tenant for the relocation costs it will incur under the provisions of
either Subparagraphs 2(A) or (B) above. Said relocation fee shall be
$100,000.00, subject to increase or decrease by the same percentage of increase
or decrease in the average Consumer Price Index for All Urban Consumers (CPI-U)
for the year immediately preceding the year in which said relocation occurs from
such average Consumer Price Index for the year 1989, i.e. 124.0.
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For
purposes of this paragraph 4(c), “Substitute Premises”
are defined as follows: land, building, fixtures and improvements, which are
substantially equivalent to the Demises Premises with respect to usable land
area and square footage under roof.
Lessor’s
liability for the cost of the acquisition and construction of said Substitute
Premises shall not exceed the original cost basis for the land, building,
fixtures and improvements of said Demised Premises.
MAINTENANCE AND
REPAIR
5.
(a) Tenant accepts the Demised Premises in their present
condition and state of repair and without any representations, statements or
warranties, express or implied, in respect thereof or in respect of their
condition or the use or occupancy that may be made thereof. Tenant
agrees that Lessor shall in no event be liable for any defects therein, patent
or latent. With respect to any Demised Premises which Tenant first
occupies after the date of this Lease and are added to this Lease by Addendum,
all liability for warranties and repair of defects shall be in accordance with
the terms, conditions and procedures set forth in Exhibit 1, which is
attached hereto and incorporated herein by reference. Throughout the
term of this Lease, Tenant shall, at its cost and expense, properly operate and
take good care of the Demised Premises and all structures and improvements now
or hereafter comprising same, and all fixtures, equipment and furnishings; and
suffer no waste or injury. It is understood and agreed that so long
as Tenant is not in default under the terms and conditions hereof, it may make
alterations and changes to the Demised Premises for the purpose of best serving
its business, subject only to the written consent of Lessor, which consent shall
not be unreasonably withheld.
(b) Throughout
the term of the Lease, Tenant shall make all repairs, both to the inside and
outside, which may be necessary to maintain the same in good order and
condition, including both ordinary and extraordinary and both structural and
non-structural and both foreseeable and unforeseeable repairs, and including,
but not limited to all walls, floors, roofs, vaults, approaches, sidewalks,
entrances, water and sewer connections, glass, plumbing, water, gas and electric
fixtures, pipes, wires and conduits, boilers, machinery, fixtures and
appurtenances in or connected with the Demised Premises. Tenant
agrees that all such repairs shall be in quality and class equal to the original
work and that it will replace whatever cannot be reasonably repaired so as to be
in such good order and condition.
(c) During
the term of this Lease, Tenant shall keep, afford and allow access to Lessor to
the Demised Premises at all reasonable times.
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(d) Throughout
the term of this Lease, Tenant shall, at its cost and expense, execute and
comply with all notices, rules, orders, regulations, requirements, ordinances
and laws of the Board of Fire Underwriters or similar organization, and of all
other governmental agencies and departments having jurisdiction and of all
insurance companies writing policies covering the Demised Premises to the extent
that any of such notices, rules, orders, regulations, requirements, ordinances
or laws at any time issued or in force shall be applicable to the Demised
Premises or to the use or occupation thereof and whether the same shall require
ordinary or extraordinary or structural or non-structural or foreseeable or
unforeseeable changes in the Demised Premises, and Tenant shall pay all costs,
expenses, claims, fines, penalties, and losses that may in any manner arise out
of or be imposed because of the failure to comply therewith. It is
the intention of the parties that the Tenant hereby assumes entire
responsibility for and fully relieves Lessor from all responsibility with
respect to executing and complying with such notices, rules, order, regulations,
requirements, ordinances, or laws at any time issued or in
force. With respect to any Demised Premises which Tenant first
occupies after the date of this Lease, the above shall not apply for a period of
one (1) year after Tenant has obtained a final certificate of occupancy
excepting those violations caused by Tenant’s own negligence.
(e) Lessor
covenants that any notice received by it with respect to executing and complying
with such notices, rules, order, regulations, requirements, ordinances, or laws
shall be forwarded promptly to the Legal Department of Tenant or to such other
location as Tenant, from time to time, shall direct.
(f) Tenant
covenants that Lessor shall not be liable for any failure of water supply or
electric current, nor for injury or damage which may be sustained to person or
property by Tenant or any other person, caused by or resulting from steam,
electricity, gas, water, rain, ice or snow, which may leak or flow from or into
any part of said Demised Premises, or from the breakage, leakage, obstruction or
other defect of the pipes, wiring, appliances, plumbing or lighting fixtures of
the same, or from the condition of said Demised Premises or any part
thereof. The foregoing waiver of damages and claims for damages by
Tenant is absolute and unconditional and shall not be modified, released,
abridged or lessened in any manner or to any extent and Tenant waives any right
to claim such waiver is in violation of any statute or of public
policy.
(g) Upon
the expiration of the term or the termination of this Lease, Tenant shall vacate
and deliver up the Demised Premises, including all structures and fixtures
thereof or appurtenances thereto, promptly and peaceably to Lessor, in good,
clean, sanitary condition, reasonable wear and tear excepted. Tenant
shall, if requested, execute and deliver all legal instruments if any are deemed
necessary by Lessor to vest full, complete and unimpaired title in and to all
such structures, improvements, and fixtures in Lessor. Upon the
expiration or termination of this Lease, all interest of. Tenant in
and to the Demised Premises and any fixtures attached thereto, except trade
fixtures, shall forthwith cease and terminate.
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INDEMNITY OF
LESSOR
6. (a) Tenant
agrees to defend, indemnify and save the Lessor harmless against and from any
and all liability, loss, damage, and expense (including reasonable attorneys’
fees) and from and against any and all suits, claims and demands of every kind
and nature made by or on behalf of any and all persons, firms or corporations,
arising out of or based upon any accident, injury or damage, however occurring,
which, during the term hereof shall or may happen in, on or about the Demised
Premises, entrances thereto, streets, sidewalks or curbs in front of, over or
adjacent thereto, or arising out of or based upon the condition, alteration,
use, occupation, operation or the maintenance or repair of said Demised Premises
or facilities during the term hereof, or arising out of any breach or default on
the part of the Tenant in the performance or observance of any covenant or
agreement on the part of the Tenant to be performed or observed pursuant to the
terms of this Lease.
(b) Lessor
agrees to give Tenant reasonable notice of any claims or demands against the
Lessor arising out of or based upon any of the liabilities, losses or expenses
against which Tenant is bound to defend, indemnify and save harmless the
Lessor. At its option and at its sole expense, Tenant shall have the
right to settle or defend against such claims or demands.
(c) Lessor
shall indemnify and save harmless Tenant from and against all mechanics’ liens
and notices thereof and all claims thereof on account of any materials furnished
or labor performed in, about or in connection with the Demised Premises or the
sidewalks and curbs adjacent thereto, except for those which arise from
maintenance or repairs performed by Tenant. Should any such lien be
filed, Lessor shall promptly bond or otherwise discharge the same.
UTILITIES
7. Tenant
covenants that, during the term aforesaid or any extension or renewal thereof,
at its own proper cost and charge, it will bear, pay and discharge, when due and
payable, all charges for electricity, gas, heat, telephone, water or other
utility services used on the Demised Premises or any part thereof which shall,
during the term hereby demised or any extension or renewal thereof, be laid,
levied, assessed or imposed upon or become due and payable.
TAXES AND OTHER
IMPOSITIONS
8. (a) Tenant
shall pay or cause to be paid before any fine, interest, penalty or cost may be
added thereto for the nonpayment thereof, all taxes, assessments, water and
sewer rents, rates and excises, levies, impositions or other governmental
charges of any kind and nature which may be assessed, levied, confirmed,
imposed, become due and payable in respect of, or become a lien upon the Demised
Premises during the term hereof or any renewal thereof. Receipts for
each year for payment of taxes, assessments, water and sewer rents, rates and
excises, levies, impositions or other governmental charges, shall be delivered
by Tenant to Lessor annually before January 15 of the subsequent
year.
(b) Tenant
shall have the right to challenge and contest the legality or validity of any
imposition, tax, assessment or levy conducted in good faith, provided the
Demised Premises would not by reason of such contest be in danger of being
forfeited or lost. Tenant may proceed in its own name or as agent for
and on behalf of Lessor, provided Tenant indemnifies and saves harmless Lessor
from any cost or expense in connection therewith.
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PUBLIC LIABILITY
INSURANCE
9. Unless
otherwise waived by Lessor, Tenant shall maintain, with financially sound and
reputable insurers, general liability insurance with respect to its properties
and businesses, against such liabilities, casualties and contingencies and of
such types and in such amounts as is satisfactory to Lessor.
CONDEMNATION
10. (a) Should
the whole or any part of the Premises be condemned and taken by any competent
authority for any public or quasi-public use or purpose, Lessor shall be
entitled to retain as its own property any award or amount agreed upon in
settlement thereof.
(b) If
the whole of the Premises shall be so condemned and taken, this Lease as to the
applicable Premises shall automatically terminate. If a material part
of any Premises shall be so condemned and taken, Tenant may, in its sole
discretion, cancel this Lease as to the applicable Premises.
(c) In
the event of such a public or quasi-public condemnation of the whole or of such
a part of the Premises as to render the remainder unusable or insufficient to
the needs of the Tenant, Lessor shall pay fifteen per cent (15%) of any award to
Tenant as liquidation of the damages to which Tenant will become
subject.
CASUALTY
11. (a) Should
any of the buildings of the Demised Premises be damaged by fire or other
casualty or happening, then the Demised Premises shall be restored to their
condition immediately prior to such damage or destruction with due diligence by
the Tenant. Restoration shall be completed within 180 days of the
casualty or happening; any extensions beyond the 180 days shall be subject to
written approval by the Lessor which approval shall not be unreasonably
withheld.
(b) A
just proportion of the rent hereinbefore reserved, according to the extent of
the injury or damage sustained by the Demised Premises, shall be suspended and
abated until the Demised Premises shall have been so restored and put in proper
condition for use and occupation. For purposes of this Lease, “just
proportion” shall be defined as a rent percentage equal to the percentage of the
Demised Premises that was injured or damaged.
(c) In
case of such damage or destruction as described in this clause, the parties
agree that neither party shall be liable to the other for any damages other than
the rebate or abatement of rent as described, above, unless said casualty shall
have been the results of the negligence of one of the parties.
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SUBORDINATION
12. This Lease
and Tenant’s leasehold estate and all rights of Tenant hereunder shall be
subject and subordinate at all times and in all respects to the lien of any and
all mortgages, deeds of trust, assignments of leases and rents and any other
security instruments which Lessor has made, or may make, upon any right, title
or interest of Lessor in the Demised Premises (“Security
Instruments”), and to any and all extensions and renewals of the same,
and any and all new Security Instruments made in lieu of or in replacement of
any such Security Instruments, provided that any such Security Instruments or
other appropriate recordable agreement shall provide that so long as Tenant
shall not be in default in the performance and observance of the terms,
covenants, conditions and limitation contained in this Lease to be performed and
observed by the Tenant, no foreclosure of the lien of said Security Instruments
or any other proceeding under said Security Instruments for default thereof
shall impair the right of Tenant to enjoy this interest in this Lease by any
such secured party or anyone claiming through or under such secured party under
a Security Instrument, Tenant will recognize as its Lessor such secured party or
the person claiming through or under such secured party who shall so acquire
title to the Lessor’s interest in this Lease.
ASSIGNMENT AND
SUBLETTING
13. (a) Except
as hereinafter otherwise provided, Tenant may not sell, assign, mortgage,
pledge, hypothecate or otherwise transfer this Lease or any interest herein, or
sublet all or any portion of the Demised Premises, without the prior written
consent of Lessor, such consent to be granted or denied in Lessor’s sole and
absolute discretion. All the provisions contained in this Section shall be
subject to overleases, all recorded documents and/or instruments which run with
any part of the Demised Premises, encumber any of the Demised Premises, the
stores or other facilities located thereon or otherwise bind Lessor or Tenant,
or are otherwise agreed to by Tenant (collectively, “Covenants”), any
construction, operating and reciprocal easement agreements or other easement
agreements in favor of an owner of adjoining property or to which Tenant is a
party or which is binding on Tenant or which is a matter of public record
affecting the Demised Premises or any part thereof, or any similar agreements
(hereinafter referred to as “REAs”) or any other
documents of record as of the date hereof or in any documents to which Tenant is
a party or is bound, and shall be also subject to all laws. Consent
by Lessor with respect to any sublease, sale, assignment, mortgage, pledge,
hypothecation or other transfer shall not constitute a waiver of the requirement
for such consent and compliance to any subsequent sublease, sale, assignment,
mortgage, pledge, hypothecation or other transfer. No sale,
assignment or transfer of this Lease by Tenant shall be effective until there
shall have been delivered to Lessor a duplicate original of such assignment
containing an agreement, in recordable form, executed by the assignor and the
proposed assignee whereby such assignee assumes the Lease and the assignee shall
agree, expressly for the benefit of Lessor, to keep and perform and be bound by
each and all of the covenants, conditions, restrictions and provisions in this
Lease contained on the part of Tenant, and any such sale, assignment or transfer
shall be subject to each and all of such covenants, conditions, restrictions and
provisions. Any purported sublease, sale, assignment or transfer by
Tenant which is not in conformity with the terms of this Lease shall be void and
of no force or effect whatsoever. Additionally, under no circumstance
shall any entity comprising Tenant (each a “Tenant Entity”)
permit a Change of Control of any Tenant Entity. For the purpose
hereof, a "Change of Control" shall be deemed to have occurred if there is any
change in the identity of any individual or entity or any group of individuals
or entities who have the right, by virtue of any partnership agreement, articles
of incorporation, by-laws, articles of organization, operating agreement or any
other agreement, with or without taking any formative action, to cause any
Tenant Entity to take some action or to prevent, restrict or impede any of the
entities comprising Tenant from taking some action which, in either case, such
entity could take or could refrain from taking were it not for the rights of
such individuals. "Control" with respect to any Tenant Entity, shall mean either
(i) ownership directly or indirectly of fifty-one percent (51%) or more of
all equity interests in such Tenant Entity or (ii) the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities, by
contract or otherwise.
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(b) As to those portions of the
Demised Premises where Lessor does not own fee title to such Demised Premises
and Lessor is a tenant thereon (each, a “Leasehold Property”
and collectively, the “Leasehold
Properties”), this Lease is a sublease as to each of the Leasehold
Properties. Notwithstanding anything herein to the contrary, whenever
in this Lease rights or privileges are granted to Lessor or Tenant with respect
to any matter or thing, such rights or privileges shall be exercisable insofar
as the same are not in violation or breach of the terms, covenants and
conditions of any xxxxxxxxx with respect to the same matter or thing or the
terms, rights and privileges granted to Lessor and Tenant herein; but where the
rights and privileges granted by the xxxxxxxxx to the tenant thereunder exceed
the rights and privileges granted in this Lease to Lessor or Tenant, then Lessor
or Tenant shall exercise such rights and privileges only to the extent expressly
permitted herein if the result of exercising the greater rights or privileges in
the xxxxxxxxx would be detrimental to the other party hereto. Without
limiting the foregoing, in no event shall Tenant be obligated to purchase any
Demised Premises pursuant to a “put” option or other obligation contained in any
xxxxxxxxx or otherwise be obligated to perform any obligation of the tenant
under any xxxxxxxxx beyond the obligations of Tenant set forth in this
Lease.
(c) Notwithstanding the foregoing, (i)
Tenant shall have the right to collaterally assign its interests under this
Lease to SunTrust Bank, as collateral agent (together with its successors and
assigns, "SunTrust"), as
security for that certain loan being made to Tenant pursuant to that certain
Credit Agreement dated as of April 18, 2008 between Tenant, Xxxxxx X. Xxxxx
& Associates, SunTrust, Wachovia Bank, National Association, SunTrust
Xxxxxxxx Xxxxxxxx, Wachovia Capital Markets, LLC and the lenders from time to
time party thereto (together with all renewals, modifications, replacements,
supplements, substitutions, extensions, spreaders and consolidations thereof,
the "SunTrust Loan"),
(ii) in the event SunTrust forecloses or otherwise realizes on the assignment of
Tenant’s interests under this Lease, SunTrust shall have the right to further
assign this Lease to one or more third parties without Lessor’s consent, and
(iii) neither the pledge of the direct or indirect ownership interests in Tenant
to SunTrust as security for the SunTrust Loan, the foreclosure of such pledge(s)
by SunTrust nor the transfer of such ownership interests by SunTrust to any
third party shall be deemed a Change in Control for purposes of this Lease or
otherwise prohibited by the terms of this Lease.
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ACTS OF
DEFAULT
14. Each
of the following shall be deemed a default by the Tenant and a breach of this
Lease:
(a) Failure
to pay the rent herein reserved, or any part thereof, other than additional
rent, for a period of ten (10) days after notice;
(b) Failure
to do, observe, keep and perform any of the terms, covenants, conditions,
agreements and provisions in this Lease contained on the part of the Tenant to
be done, observed, kept and performed for a period of thirty (30) days after
notice;
(c) The
abandonment of the Premises by the Tenant, the adjudication of the Tenant as a
bankrupt, the making by the Tenant of a general assignment for the benefit of
creditors, the taking by the Tenant of the benefit of any insolvency act or law,
the appointment of a permanent receiver or trustee in bankruptcy for the
Tenant’s property, the appointment of a temporary receiver which is not vacated
or set aside within thirty (30) days from the date of such appointment, and any
failure to do, observe, keep and perform any of the terms, covenants,
conditions, agreements and provisions in this Lease contained on the part of the
Tenant to be done, observed, kept and performed; and
(d) For
the purposes of Subparagraph (b) of this Paragraph 14, if the default complained
of be a default other than one which may be cured by the payment of money, no
default on the part of the Tenant in the performance of work required to be
performed or acts to be done or conditions to be met shall be deemed to exist if
steps shall have been in good faith commenced promptly by the Tenant to rectify
the same and shall be prosecuted to completion with diligence and
continuity.
LESSOR’S REMEDIES IN EVENT
OF DEFAULT
15. (a) In
the event of a default under Subparagraph (a) of Paragraph 14 by the Tenant and
at any time thereafter, the Lessor may serve a written notice upon the Tenant
that the Lessor elects to terminate this Lease upon a specified date not less
than twenty (20) days after the expiration of any notice given under said
subparagraph (a) and this Lease shall then expire on the date so specified
unless such default shall have been cured within the applicable period provided
in said notice.
(b) In
the event of a default under Subparagraph (b) of said Paragraph 14 by the Tenant
and at any time thereafter, the Lessor may serve a written notice upon the
Tenant that the Lessor elects to terminate this Lease upon a specified date not
less than sixty (60) days after the date of serving such notice and this Lease
shall then expire on the date so specified unless such default shall have been
cured within the applicable period provided in said notice.
(c) In
the event of a default under Subparagraph (c) of said Paragraph 14, and at any
time thereafter the Lessor may serve a written notice upon the Tenant that the
Lessor elects to terminate this Lease upon a specified date not less than ten
(10) days from the date of the service of such notice and this Lease shall then
expire on the date so specified unless such default shall have been cured within
the applicable period provided in said notice.
(d) No
default is waived except by instrument in writing signed by the Lessor, except
that a default or failure to perform under subparagraphs (a) and (b) of
Paragraph 14 shall be deemed waived if such default or failure is fully and
completely rectified before the expiration of the period specified in the notice
of termination of this Lease served on the Tenant.
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(e) Any
default as set forth in Paragraph 14 shall only be applicable to the individual
specific store or stores listed on the Schedules or Addendums to this Lease and
any failure by Tenant to cure any such default shall cause the expiration of
this Lease as specified above only as to that individual specific store or
stores where said default occurred and shall not act as an expiration of this
entire Lease.
(f) Notwithstanding
anything to the contrary in this Paragraph 15, HCC and HMH, and any assignee of
HCC and/or HMH rights under this Lease, particularly in the event Paragraph
4(b)(2) is triggered and in effect, HCC and/or HMH, and any such assignee(s),
shall have in addition to the rights set forth above in this Paragraph, the
right to collect all rents due hereunder and xxx for and recover all rents and
damages, including costs of litigation, accrued under this Lease, and the
provisions of Paragraph 4(b)(2) shall not be affected by anything contained in
this Paragraph 15 to the contrary.
REENTRY BY LESSOR ON
DEFAULT
16. In
the event that this Lease shall be terminated as hereinbefore in Paragraph 15
provided, or by summary proceedings or otherwise, or in the event that the
Premises, or any part thereof, shall be abandoned by the Tenant, the Lessor, or
his agents, servants or representatives may immediately or at any time
thereafter reenter and resume possession of the Premises or any part thereof,
and remove all persons and property therefrom, either by summary dispossess
proceedings or by a suitable action or proceeding at law or by force or
otherwise, without being liable for any damages therefor. No reentry
by the Lessor shall be deemed an acceptance of a surrender of this Lease or a
liquidation or satisfaction to any extent whatsoever of Tenant’s liability to
pay rent as herein provided.
LESSOR’S FAILURE TO ENFORCE
NOT A WAIVER
17. The
failure of the Lessor to enforce any term, covenant condition or agreement
hereof by reason of its breach by the Tenant after notice received shall not be
deemed to avoid or affect the right of the Lessor to enforce the same term,
covenant, condition or agreement on the occasion of a subsequent default or
breach.
EASEMENTS, LICENSES AND
ENCROACHMENTS
18. Easements,
licenses, and other such burdens on the land shall be negotiated and granted and
encroachments shall be authorized only by Lessor. However, in no case
shall Lessor so negotiate, grant or otherwise authorize such burdens upon the
leased land without first consulting with Tenant.
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MISCELLANEOUS
19. (a) The
parties hereto agree that the headings or captions contained herein are inserted
for convenience or reference only and are not to be deemed part of or to be used
in construing this Lease.
(b) If
any terms or provisions of this Lease or the application thereof to any person
or circumstances should, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.
(c) If
any terms or provisions of this Lease as to the Demised Premises shown on
Schedules A, B, C and D are inconsistent with any of the terms of any applicable
third party leases, then the terms of the applicable third party leases shall
prevail with the exception of the rental payment provisions, renewal notice
provisions and purchase rights/options.
(d) This
Lease contains the entire agreement between Lessor and Tenant.
(e) This
Lease shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania.
(f) The
liability of Lessor under this Lease shall be limited to Lessor’s interest in
the applicable Demised Property and Tenant shall not look to any other property
or assets of Lessor in seeking either to enforce Lessor’s obligations under this
Lease or to satisfy a judgment for Lessor’s failure to perform Lessor’s
obligations.
IN WITNESS WHEREOF, and intending to be
legally bound hereby, Lessor and Tenant, have caused these presents to be
executed by their duly authorized officers and their corporate seals to be
herewith affixed by like authority, all as of the day and year first above
written.
|
WITNESS:
|
Xxxxxx
Xxxxx Limited Partnership
|
||
|
By:
Xxxxx Xxx Co., its general partner
|
|||
|
/s/ Xxxxxxxxxx Xxxxxx
|
By:
|
/s/ Xxxxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxxx
X. Xxxxxxx
|
||
|
Title:
|
President
and Manager
|
||
|
WITNESS:
|
Hardy
Management Company, Inc., a Nevada
|
||
|
Corporation
|
|||
|
/s/ Xxxxxxxxxx Xxxxxx
|
By:
|
/s/ Xxxxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxxx
X. Xxxxxxx
|
||
|
Title:
|
President
and Manager
|
||
- 13
-
|
WITNESS:
|
Hardy
Management Company, LLC, a Nevada limited liability
company
|
||
|
/s/ Xxxxxxxxxx Xxxxxx
|
By:
|
/s/ Xxxxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxxx
X. Xxxxxxx
|
||
|
Title:
|
President
and Manager
|
||
|
WITNESS:
|
Hardy
Credit Co., a Pennsylvania limited partnership
|
||
|
By: 84
Lumber LADC, LLC
|
|||
|
/s/ Xxxxxxxxxx Xxxxxx
|
By:
|
/s/ Xxxxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxxx
X. Xxxxxxx
|
||
|
Title:
|
President
and Manager
|
||
|
WITNESS:
|
Xxxxx-Xxxxx
Holdings, LLC, a Pennsylvania limited
liability company
|
||
|
By: Xxxxx-Xxxxx
Family Trust
|
|||
|
/s/ Xxxxxx Xxxxxxx
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx
|
|
|
Name:
|
Xxxxxx
X. Xxxxxxxx
|
||
|
Title:
|
Trustee
of the 1997 Xxxxx-Xxxxx Family
|
||
|
Trust
under Agreement dated August 29, 1997
|
|||
|
WITNESS:
|
TENANT
|
||
|
84
Lumber Company, a Pennsylvania Limited Partnership
|
|||
|
By:
Hardy Holdings, Inc., its general partner
|
|||
|
/s/ Xxxxxxxxxx Xxxxxx
|
By:
|
/s/ Xxxxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxxx
X. Xxxxxxx
|
||
|
Title:
|
President
and Manager
|
||
- 14
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CONSENTED
TO BY
UNITED
BANK, INC.
This
Agreement of Master Lease
acknowledged
and consented to:
United
Bank, Inc.
|
By:
|
/s/ Xxxxxxx X. Xxxxxxx, EVP
|
- 15
-
CONSENTED
TO BY
SunTrust
Bank, as administrative agent and co-collateral agent under that Credit
Agreement dated April 18, 2008
This
Agreement of Master Lease
acknowledged
and consented to:
SunTrust
Bank
|
By:
|
/s/ Xxxxx X’ Xxxxxx
|
|
|
Administrative
Agent
|
||
|
and
Co-Collateral Agent
|
||
- 16
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CONSENTED
TO BY
FIFTH
THIRD BANK
This
Agreement of Master Lease
acknowledged
and consented to:
Fifth
Third Bank
|
By:
|
/s/ Xxx Xxxxxxxx
|
- 17
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Schedule
“A”
Properties
Subject to Master Lease
- 18
-
Schedule
“B”
HCC
Properties Subject to Master Lease
- 19
-
Schedule
“C”
HMC, LLC
Properties Subject to Master Lease
There
currently are no HMC, LLC properties subject to this Lease
- 20
-
Schedule
“D”
HMH
Properties Subject to Master Lease
- 21
-
