Exhibit 2.4
MASTER SUBLEASE
This Master Sublease (this "Sublease") dated as of August 16, 2001 by and
between THE LIMITED, INC., a Delaware corporation ("Lessor"), and LANE XXXXXX,
INC., a Delaware corporation ("Lessee").
RECITALS:
A. Lessor is currently the tenant under leases (as amended, modified or
supplemented from time to time, collectively, the "Prime Leases" and each a
"Prime Lease") for certain premises described on Exhibit A attached hereto
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(collectively, the "Properties" and each a "Property", as the context herein may
require).
X. Xxxxxx is currently the guarantor under a guaranty agreement
(collectively, the "Guarantees" and each a "Guaranty") with respect to the
obligations arising under each Prime Lease.
X. Xxxxxx desires to sublet to Lessee, and Lessee desires to hire and
sublease from Lessor, the Properties, on the terms and subject to the conditions
contained in this Sublease.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter contained and for other good and valuable consideration, the receipt
and sufficiency of which are hereby mutually acknowledged, the parties hereto
hereby agree as follows:
1. Demise.
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Pursuant to the terms and subject to the conditions of this Sublease,
Lessor does hereby demise and sublease to Lessee, and Lessee does hereby
sublease from Lessor, the Properties. Lessee has inspected each of the
Properties and is acquainted with its condition and agrees to take the same "as
is", except and to the extent of disclosures, agreements, representations and
warranties inconsistent therewith as set forth in the Purchase Agreement (as
defined below).
2. Subordination; Incorporation of Prime Lease by Reference.
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(a) Lessee acknowledges that Lessor has provided and/or Lessee has
received and reviewed a copy of each of the Prime Leases (together with all
amendments, modifications, supplements and material correspondence related
thereto). This Sublease, with respect to each Property, is subject and
subordinate in all respects to the Prime Lease with respect to such Property.
Each of Lessor and Lessee agrees that it shall not take any action or fail to
take any action in connection with any Property which is a violation of or
default under any of the provisions of the Prime Lease with respect to such
Property. Lessee hereby assumes and shall fully perform and discharge, with
respect to each Property, all the obligations of Lessor as "Tenant" under the
Prime Lease with respect to such Property during the Term (as defined below) and
shall abide by and adhere to all restrictions contained in, and all other terms,
covenants and conditions of, each Prime Lease, and, except as otherwise provided
herein, Lessee acknowledges that Lessor shall have no duty to take any action to
comply with the obligations of Lessor as "Tenant" under each Prime Lease.
Lessor represents and warrants that the transactions contemplated by this
Sublease and the Master Assignment and Assumption Agreement dated as of the date
hereof between Lessor and Lessee (the "Master Assignment") are, with respect to
each Property, (i) permitted under the terms of the respective Prime Lease for
such Property without the respective Prime Landlord's consent thereunder or (ii)
if such Prime Lease requires the Prime Landlord's consent thereunder, such
consent has been obtained (or, subject to Section 21(a) of this Sublease, will
be obtained) by Lessor at Lessor's sole cost and expense, and Lessor agrees to
indemnify, defend and hold harmless Lessee with respect to any Losses (as
defined below) incurred by Lessee in connection with the assignment of each
Prime Lease to Lessor under the Master Assignment and the subsequent subletting
of each Property to Lessee under this Sublease; provided, however, Lessor shall
have no obligation and shall not be liable in any manner to Lessee with respect
to any Losses that arise by reason of the sale, directly or indirectly, of the
stock of Lessee and/or the change of control of Lessee, except as otherwise
provided in the Purchase Agreement. Lessor's foregoing indemnification, defense
and hold harmless obligations shall survive the expiration or termination of
this Sublease.
(b) Except to the extent expressly set forth herein to the contrary,
all of the terms, provisions, covenants and conditions of the Prime Lease with
respect to each Property are hereby incorporated by reference in and made part
of this Sublease with respect to such Property with the same force and effect,
and binding upon and enforceable between Lessor and Lessee, as though set forth
in full herein. For purposes of such incorporation, (i) the term "Owner",
"Landlord" or "Lessor" (or words of similar import) in any Prime Lease shall
refer to Lessor under this Sublease, its successors and assigns; (ii) the term
"Tenant" or "Lessee" (or words of similar import) in any Prime Lease shall refer
to Lessee under this Sublease, its successors and assigns; (iii) the term "this
Lease" or "this Agreement" (or words of similar import) in each Prime Lease
shall refer to this
Sublease; (iv) the term "the term of this Lease" (or words of similar import) in
each Prime Lease shall refer to the Term of this Sublease with respect to the
applicable Property; (v) the terms "Commencement Date", "Expiration Date" and
"Rent" (or words of similar import) in each Prime Lease shall each refer to the
respective definitions of such terms as are set forth in this Sublease; (vi)
references to rules, regulations, requirements and similar terms promulgated or
prescribed by Landlord shall refer to those of Prime Landlord, not of Lessor;
and (vii) notwithstanding anything herein to the contrary, Lessor assumes no
responsibility for any representation, warranty, covenant or obligation made by
Prime Landlord under any Prime Lease. The obligations of Lessee hereunder which
are to be performed during the Term with respect to each Property shall survive
and extend beyond the termination of this Sublease with respect to such Property
to the extent such survival is contemplated in this Sublease or in the
applicable Prime Lease. If there is any inconsistency or conflict between the
provisions of the respective Prime Lease and this Sublease with respect to each
Property, the provisions of this Sublease shall control.
3. Term.
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(a) The term of this Sublease with respect to any Property (the
"Term") shall commence as of the date hereof (the "Commencement Date") and shall
expire (except with respect to any renewal or extension of the Store #915 Prime
Lease as provided below) on the day preceding (the "Expiration Date") the day of
expiration of the current term of the Prime Lease with respect to such Property
(the "Prime Lease Term"), unless sooner terminated as provided herein. Lessee
acknowledges that the Prime Lease Term with respect to any Property shall not
include renewal or extension options (or, if the Prime Lease Term with respect
to any Property is currently under a renewal or extension option, any additional
renewal or extension options) available under the Prime Lease with respect to
such Property. Lessee agrees that Lessee shall have no right to exercise, or to
cause Lessor to exercise, any renewal or extension terms under the Prime Lease
with respect to any Property, except with respect to Store #915 located in
Houston, Texas, Lessee shall have the right, at Lessee's request and sole cost
and expense, to cause Lessor to exercise the next available renewal/extension
option under the Store #915 Prime Lease.
(b) Except as otherwise expressly provided herein, and subject to
Section 13 of this Sublease, Lessor agrees to cooperate (at Lessee's request)
with Lessee, and Lessee, at Lessee's sole cost and expense, shall have the right
and power to control all courses of action, in connection with the exercise or
the election not to exercise any and all rights of the "Tenant" under a Prime
Lease, including, without limitation, the right to terminate such Prime Lease
(including, without limitation, any (i) "kick-out" or "co-tenancy" rights, (ii)
rights to terminate such Prime Lease in the event of a casualty or condemnation
or (iii) rights to terminate such Prime Lease in the event of a default under
such Prime Lease by the Prime Landlord thereunder (except for any termination
proceedings
that result from a default by Lessee under this Sublease or under such Prime
Lease), provided Lessee agrees to (x) deliver to Lessee a copy of any
termination notice delivered pursuant to clauses (i) and (ii) above to a Prime
Landlord under the respective Prime Lease and (y) notify Lessor at least 10
Business Days prior to its intention to deliver a termination notice pursuant to
clause (iii) above to a Prime Landlord under the respective Prime Lease). Each
party agrees to deliver copies to the other of all notices and material
correspondence received or delivered by such party in connection with the
matters described above. In addition, Lessee agrees to deliver to Congress
Financial Corporation ("CFC") copies of all notices or correspondence required
to be delivered to CFC under Section 8 of the Access and Waiver Agreement dated
as of the date hereof by Lessor in favor of CFC.
(c) Wherever in this Sublease Lessor agrees to cooperate with Lessee,
at Lessee's request, with respect to matters arising under a Prime Lease, Lessor
agrees that Lessor shall not charge Lessee any fees or other expenses, including
administrative fees or otherwise, in connection with such cooperation; provided,
however, Lessee agrees that all courses of action (as described in subsection
(b) above, or otherwise as provided in this Sublease) undertaken at Lessee's
direction shall be at Lessee's sole cost and expense with respect to any amounts
charged to Lessee by any Person other than Lessor (or incurred or otherwise
payable by Lessee to such other Person).
4. Rent.
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(a) Subject to subsection (c) below, commencing on and after the
Commencement Date, Lessee shall pay Lessor all monetary obligations of Lessor
under each Prime Lease for its respective Property (including, without
limitation, base, fixed or minimum rent, percentage rent, additional rent,
common area maintenance charges, real estate taxes and assessments, insurance
charges, waste removal charges, merchants association dues, marketing,
advertising and other promotional fund contributions, utility charges, HVAC and
chilled water charges) (collectively, the "Property Rent").
(b) Commencing on and after the Commencement Date, Lessee shall pay
directly to Lessor, at Lessor's office at the address designated for notices to
Lessor in Section 11(a) hereof, all other amounts payable by Lessee that arise
as an independent obligation under this Sublease (the "Additional Rent",
together with the Property Rent, the "Rent").
(c) Lessor and Lessee agree to cooperate, and to take all reasonably
necessary or desirable actions possible, to arrange for all payments by Lessee
of the Property Rent with respect to each Property directly to Prime Landlord
with respect to such Property, and, with respect to each Property, to otherwise
establish a direct relationship between Prime Landlord and Lessee with respect
to all matters arising under the Prime Lease with respect to such Property and
this
Sublease with respect to such Property. All Property Rent with respect to any
Property shall be paid in lawful money of the United States to Prime Landlord
with respect to such Property (or, if such Prime Landlord will not agree to such
arrangement, then to Lessor at Lessor's office at the address designated for
notices to Lessor in Section 11(a) hereof in immediately available funds at
least two (2) Business Days prior to the date when such Property Rent is due and
payable under such Prime Lease), or at such other place as either Prime Landlord
or Lessor may designate, as the case may be, by notice to Lessee. Lessor and
Lessee agree that it is the intention of Lessor and Lessee to pass all of
Lessor's obligations for Property Rent incurred under the Prime Lease with
respect to each Property to Lessee, and Lessee agrees to pay or otherwise
reimburse Lessor for all of Lessor's obligations for Property Rent incurred with
respect to each Prime Leases and each Property. If a Prime Landlord will not
accept a direct payment from Lessee of Property Rent under the respective Prime
Lease, then, provided Lessee shall have delivered such Property Rent payment to
Lessor within the time and in the manner specified in this subsection (c),
Lessor shall deliver such payment of Property Rent to such Prime Landlord on or
prior to the date when such Property Rent is due and payable under such Prime
Lease and in such manner as provided under the respective Prime Lease.
(d) All obligations of Lessee and Lessor under this Section 4 shall
survive the termination of the Prime Leases or this Sublease.
5. Alterations.
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Lessee shall not make any alterations or additions to any Property
without first complying with the applicable provisions of the applicable Prime
Lease.
6. Brokers.
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Each party represents and warrants to the other that it dealt with no
broker (or other person who may claim a commission or similar compensation) in
connection with this Sublease, and each party shall defend, indemnify and hold
the other harmless from any liability or loss, including, without limitation,
reasonable attorneys' fees and expenses, based upon an alleged breach of said
representation and warranty.
7. Assignment, Subletting; Subordination.
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(a) Except as otherwise set forth herein, Lessee shall not assign
this Sublease or sublet any Property without the prior written consent of
Lessor. If Lessee shall at any time or times during the Term of this Sublease
with respect to any Property desire to assign this Sublease or sublet all or
part of any Property, Lessee shall give notice thereof to Lessor, which notice
shall be accompanied by all documents or information (if any) otherwise required
under the applicable
Prime Lease. Subject to the provisions of Section 13 of this Sublease, (i)
Lessor agrees to cooperate with Lessee (at Lessee's request) in connection with
obtaining the applicable Prime Landlord's consent, if required, under the
applicable Prime Lease and (ii) if a Prime Landlord's consent is not required
under the respective Prime Lease for an assignment, subletting or other transfer
by the "Tenant" under such Prime Lease, then Lessor's consent shall not be
required hereunder for such transaction by Lessee.
(b) (i) Lessee acknowledges that any such subletting or assignment
shall be, in each instance, conditional and subject to the requirements of the
applicable Prime Lease (including, without limitation, the payment by Lessee of
the applicable Prime Landlord's fees and expenses in connection with any
assignment or subletting, if such payment is required under such Prime Lease)
and to obtaining the written consent of the applicable Prime Landlord under the
applicable Prime Lease, if required thereunder. Subject to Section 13 of this
Sublease, to the extent that any such required consent of any Prime Landlord is
obtained under the applicable Prime Lease, or if no such consent of the
applicable Prime Landlord is required under the applicable Prime Lease, then
Lessor's consent shall not be required for any such assignment or subletting of
this Sublease. Each assignment or subletting pursuant to this Section 7 shall
be subject to all of the covenants, agreements, terms, provisions and conditions
contained in this Sublease.
(ii) Notwithstanding any assignment or subletting contemplated under
this Section 7, or acceptance of rent or additional rent by Lessor from any
subtenant or assignee, Lessee shall and will remain fully liable for the payment
of the Rent due and to become due hereunder and for the performance of all the
covenants, agreements, terms, provisions and conditions contained in this
Sublease on the part of Lessee to be performed during the Term hereof and all
acts and omissions of any subtenant or assignee or anyone claiming under or
through any subtenant or assignee which shall be in violation of any of the
obligations of this Sublease, and any such violation shall be deemed to be a
violation by Lessee. Lessee further agrees that notwithstanding any such
subletting or assignment, no other and further subletting or assignment by
Lessee or any person claiming through or under Lessee shall or will be made
except upon compliance with and subject to the provisions of this Section 7.
(c) With respect to each and every permitted sublease or subletting
under the provisions of this Sublease, it is further agreed:
(i) No subletting with respect to any Property shall be for a term
ending later than one day prior to the Expiration Date with respect to such
Property, or the earlier termination of this Sublease with respect to such
Property; and
(ii) Each sublease shall expressly provide that it is subject and
subordinate to this Sublease and to the matters to which this Sublease is
or shall be subordinate and that, in the event of termination, re-entry or
dispossession by Lessor under this Sublease, Lessor may, at its option,
take over all of the right, title and interest of Lessee, as sublessor,
under such sublease; provided, so long as such subtenant is not in default
under the terms of such sublease or this Sublease, Lessor agrees that
Lessor shall not disturb such subtenant's use, occupancy and enjoyment of
such Property, and Lessor agrees to execute and deliver to such subtenant a
non-disturbance agreement in a form reasonable acceptable to Lessor within
20 days of submission to Lessor of such non-disturbance agreement by such
subtenant; in addition, such subtenant shall, at Lessor's option, attorn to
Lessor pursuant to the then executory provisions of such sublease, except
that Lessor shall not (x) be liable for any previous act or omission of
Lessee under such sublease, (y) be subject to any offset which theretofore
accrued to such subtenant against Lessee, or (z) be bound by any previous
modification of such sublease not consented to by Lessor (if such consent
is required under Section 13 of this Sublease) or by any advance payment of
more than one month's rent.
(d) The parties hereto hereby acknowledge that, pursuant to the Prime
Lease with respect to any Property, this Sublease is subject and subordinate to
such Prime Lease, and that in the event of termination, re-entry or
dispossession by any Prime Landlord under the Prime Lease, such Prime Landlord
may, at its option, take over all of the right, title and interest of Lessor, as
sublessor, under this Sublease with respect to the applicable Property, and
Lessee shall, at such Prime Landlord's option, attorn to such Prime Landlord
pursuant to the then executory provisions of this Sublease with respect to such
Property, except that such Prime Landlord shall not (i) be liable for any
previous act or omission of Lessor under this Sublease; (ii) be subject to any
offset which theretofore accrued to Lessee against Lessor; or (iii) be bound by
any previous modification of this Sublease not previously approved by such Prime
Landlord or by any advance payment of more than one month's rent. In addition,
the parties hereto hereby acknowledge that if Lessor defaults in paying any
Property Rents with respect to any Property, the applicable Prime Landlord is
authorized to collect any Property Rents due or accruing from Lessee (or any
other occupant of the applicable Property) and to apply the amounts collected to
such Property Rents, and that any Prime Landlord's receipt or acceptance of any
payments from Lessee (or any other occupant of the applicable Property) shall
not be deemed or construed as releasing Lessor from Lessor's obligations under
the applicable Prime Lease.
8. Services; Right to Cure Defaults; Remedies; Consents.
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(a) Notwithstanding anything to the contrary set forth in this
Sublease, Lessor shall have no obligation (and the incorporation by reference of
each Prime Lease into this Sublease with respect to each respective Property
shall not include any obligation) to render any work, labor, services (including
elevator facilities, HVAC, water, cleaning or security services), repairs or
restorations to Lessee of any nature whatsoever or to expend any monies for the
preservation, maintenance, restoration or repair of the Properties or any
portion thereof, and Lessee shall look solely to the applicable Prime Landlord
for the furnishing of any services, maintenance, restoration or repairs with
respect to any Property to which Lessee may be entitled. Lessor shall in no
event be liable to Lessee nor shall the obligations of Lessee hereunder be
impaired or the performance thereof excused because of any failure or delay on
the applicable Prime Landlord's part in furnishing services with respect thereto
(except and to the extent the same obligation of Lessor, as "Tenant" under such
Prime Lease, would be so impaired or excused). If any Prime Landlord shall
default in any of its obligations to Lessor with respect to any Property, Lessee
shall have the right to exercise in its own name and that of Lessor (as Lessor's
attorney-in-fact, coupled with an interest) all the rights to enforce compliance
on the part of such Prime Landlord as are available to Lessor with respect to
such Property. Lessor hereby agrees to cooperate with (including, at Lessee's
request and at Lessee's sole expense, exercising reasonable commercial efforts
to enforce any Prime Landlord's obligations to Lessor under any Prime Lease) and
execute, all at Lessee's expense, all instruments reasonably required by Lessee
to enforce such compliance, and Lessee hereby agrees to indemnify, defend and
hold Lessor harmless of and from any and all damages, liabilities, obligations,
costs, claims, losses, demands, expenses and injuries, including reasonable
attorney's fees and expenses, which may be incurred by Lessor in connection with
or as a result of such cooperation and execution, except and to the extent of
Lessor's gross negligence or willful misconduct. Any amount of recovery
resulting from such enforcement obtained by either Lessee or Lessor shall be the
property of Lessee.
(b) If Lessee fails to perform any of its obligations under this
Sublease with respect to a Property and its applicable Prime Lease, Lessor may
cure such default, after the giving of notice and the expiration of any
applicable grace period (as the same may be extended), when such a period is
specified in such Prime Lease, and within a reasonable period where no grace
period is specified in this Sublease or in such Prime Lease, and Lessee shall
pay Lessor the cost of such cure, including reasonable attorneys' fees and
expenses, as Additional Rent, within five (5) Business Days after receiving
Lessor's statement therefor. Lessor shall have the right (but shall not be
obligated) to enter the Properties, at reasonable times and upon reasonable
notice, and following a default by Lessee at any time, to inspect the Properties
or to cure any defaults by Lessee, provided Lessor shall conduct such entries in
a manner which does not unreasonably interfere with the operation of Lessee's
business on such Property. Except for any defaults by Lessee with respect to
the payment of Rent, Lessor agrees not to cure any non-monetary defaults that
arise under a Prime Lease unless the respective Prime Landlord has notified
either Lessor or Lessee of such non-monetary default under such Prime Lease and
of such Prime Landlord's
election to exercise a remedy as a result thereof, it being the intention of the
parties hereto that Lessor shall not exercise any rights under this Sublease
with respect to non-monetary defaults under a Prime Lease unless the respective
Prime Landlord intends to exercise concomitant rights under such Prime Lease
because of the same act or omission.
(c) If any actions to be taken by Lessee with respect to any Property
require the consent of Lessor hereunder and the applicable Prime Landlord under
the Prime Lease, and such Prime Landlord should refuse such consent, Lessor
shall be released of any obligation to grant its consent. Lessor shall not have
any duty or responsibility with respect to obtaining any consent of any Prime
Landlord except that Lessor agrees to cooperate in good faith with Lessee (at
Lessee's request) in attempting to secure the consent of any Prime Landlord if
such cooperation is required. If, however, a Prime Landlord's consent under the
respective Prime Lease is required and obtained, Lessor shall be deemed to have
consented to the same action or matter, except as otherwise provided in Section
13 of this Sublease. All consents or approvals, whether of any Prime Landlord,
Lessor or Lessee, referred to in or contemplated by this Sublease, shall be in
writing.
9. Insurance.
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(a) Lessee shall maintain, at its sole cost and expense throughout
the Term of this Sublease with respect to each Property, insurance in the types
and amounts, and subject to the conditions, as are required pursuant to the
applicable Prime Lease, as incorporated herein by reference. All such policies
shall name Lessor and the applicable Prime Landlord, and any other persons
required pursuant to the applicable Prime Lease, as additional insured parties
and shall be endorsed to provide that they shall not be canceled without thirty
(30) days' prior written notice (or, with respect to each Property, such lesser
period time as is customary in the jurisdiction where such Property is located,
provided such lesser time period shall not be less than the period set forth in
the respective Prime Lease) to Lessor and the applicable Prime Landlord. Lessee
shall furnish said policies (or certificates evidencing the required coverage)
to Lessor, together with such evidence as Lessor shall reasonably deem
satisfactory of the payment of premiums thereon, promptly following the
execution of this Sublease.
(b) Lessor and Lessee each hereby waive any and all right that they
may have to recover from the other damages for any loss occurring to them by
reason of any act or omission of the other, but only to the extent that the
waiving party is actually compensated therefor by insurance; provided that this
waiver shall be effective only with respect to loss or damage occurring during
such time as the waiving party's coverage under the appropriate policy of
insurance is not adversely affected by this waiver. If, in order to avoid such
adverse effect, an endorsement must be added to any insurance policy required
hereunder, Lessor and Lessee shall cause such endorsement immediately to be
added and thereafter maintained throughout the Term of this Sublease.
10. Quiet Enjoyment.
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Pursuant to the incorporation by reference of each Prime Lease and the
following provision, Lessor acknowledges and agrees that Lessee, upon Lessee
paying the Rent and observing and performing all the terms, covenants and
conditions to be observed and performed by Lessee under this Sublease with
respect to each Property and each Prime Lease with respect to such Property, is
entitled to the quiet enjoyment of each Property during the Term of this
Sublease applicable thereto.
11. Notices.
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(a) All consents, approvals, requests, notices, copies or other
communication (collectively "Notices") required or desired to be delivered under
this Sublease shall be in writing, and transmitted by facsimile machine or
inter-connected computer systems, with a copy to be delivered promptly
thereafter by reputable overnight courier, addressed to the parties at the
addresses first above written. Notice shall be deemed given on the date of
receipt by the addressee, if received on a Business Day, or the first Business
Day following receipt, if received on a non-Business Day. Addresses for Notice
are as follows:
Lessee: Lane Xxxxxx, Inc.
------ 000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department
Facsimile: ___________________
copy to: Lane Xxxxxx, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxx 00000
Attention: Chief Financial Officer
Facsimile: ____________________
Lessor: The Limited, Inc.
------- Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Real Estate Department/Managing Real
Estate Attorney
Facsimile: (000) 000-0000
copy to The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, Xxxx 00000
Attention: Lease Administration Department
Facsimile: (000) 000-0000
Lessor and Lessee each agree to deliver to each other (i) copies of
any and all notices delivered to a Prime Landlord by such party or received by
such party from such Prime Landlord and (ii) other material correspondence to or
from a Prime Landlord and such party.
(b) Either party may, by Notice pursuant to Section 11(a), change the
address, person or officer, and include additional Notice recipients, to which
all Notices are to be sent thereafter.
(c) Solely for the purpose of this Sublease, wherever in the Prime
Lease with respect to any Property a time is specified for the giving of any
notice or the making of any demand by Lessee thereunder, such time is hereby
changed (for the purpose of this Sublease with respect to such Property only) by
adding three (3) Business Days thereto, and wherever in the Prime Lease with
respect to such Property a time is specified for the giving of any notice or the
making of any demand by Lessor thereunder, such time is hereby changed (for the
purpose of this Sublease with respect to such Property only) by subtracting
three (3) Business Days therefrom. Wherever in the Prime Lease with respect to
any Property a time is specified within which Lessee thereunder must give
notice, perform or make a demand following an event, or within which Lessee must
perform or respond to any notice, request or demand previously given or made by
Lessor thereunder, or to comply with any obligation on Lessee's part thereunder,
such time is hereby changed (for the purpose of this Sublease with respect to
such Property only) by subtracting three (3) Business Days therefrom. Wherever
in the Prime Lease with respect to any Property a time is specified within which
Lessor thereunder must give notice, perform or make a demand following an
event, or within which Lessor must respond to any notice, request or demand
previously given or made by Lessee thereunder, or to comply with any obligation
on Lessor's part thereunder, such time is hereby changed (for the purpose of
this Sublease with respect to such Property only) by adding three (3) Business
Days thereto. It is the purpose and intent of the foregoing provisions to
provide Lessor with time within which to transmit to any Prime Landlord any
notices or demands received from Lessee, and to transmit to Lessee any notices
or demands received from any Prime Landlord. Notwithstanding anything to the
contrary contained herein, the provisions of this Section 11(c) shall not apply
to any Notices or demands made by Lessor or Lessee that arise solely under this
Sublease and do not require delivery to or from a Prime Landlord under the
respective Prime Lease.
12. Indemnity.
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(a) Lessee shall defend, indemnify and hold harmless Lessor and its
employees, officers, directors, partners and agents against and from any and all
losses, damages, claims, liabilities, demands, fines, suits, actions,
proceedings, orders, decrees and judgments (collectively, "Losses") of any kind
or nature by, or in favor of, anyone whomsoever, and against and from any and
all costs, damages and expenses, including attorneys' fees, resulting from, or
in connection with (i) loss of life, bodily or personal injury or property
damage arising, directly or indirectly, out of, or from, or on account of any
accident or other occurrence in, upon or from the Properties during the Term
hereof (including any holdover periods by Lessee); (ii) a breach by Lessee of
this Sublease or any Prime Lease (following the expiration of applicable notice
and cure periods), except and to the extent any breach by Lessee of a Prime
Lease results solely from Lessor's breach of such Prime Lease; or (iii) the use
and occupancy of the Properties or any construction, repair, alterations or
improvements therein or appurtenances thereto by or on behalf of Lessee or
anyone holding by, through or under Lessee or its employees, agents or invitees,
and except as otherwise provided in subsection (b) below, except and only to the
extent such Losses result from the gross negligence or willful misconduct of
Lessor, its employees, agents, or invitees. Lessee agrees that Losses shall
include any damages, costs and expenses incurred or suffered by Lessor which are
caused by Lessee's holdover of any Property beyond the Term of this Sublease
with respect to such Property.
(b) Lessor shall defend, indemnify and hold harmless Lessee and its
employees, officers, directors, partners and agents against and from any and all
Losses of any kind or nature by, or in favor of, anyone whomsoever, and against
and from any and all costs, damages and expenses, including attorneys' fees,
resulting from, or in connection with (i) loss of life, bodily or personal
injury or property damage arising, directly or indirectly, out of, or from, or
on account of any accident or other occurrence in, upon or from the Properties
during the Term hereof; (ii) a breach by Lessor of this Sublease or any Prime
Lease (following the expiration of applicable notice and cure periods), except
and to the extent any breach by Lessor of a Prime Lease results solely from
Lessee's breach of such Prime Lease; or (iii) the use and occupancy of the
Properties or any construction, repair, alterations or improvements therein or
appurtenances thereto by or on behalf of Lessor, and, with respect to
subsections (b)(i) and (b)(iii) (but not subsection (b)(ii)), only to the extent
such Losses result from the gross negligence or willful misconduct of Lessor,
its employees, agents, or invitees.
13. Amendments to Prime Lease/Sublease.
----------------------------------
(a) Lessee shall not amend, modify, supplement or otherwise alter in
any manner the provisions of any Prime Lease, this Sublease or any other
agreement with respect to any Property without in each instance the prior
written consent of Lessor; provided, however, Lessee shall have the right,
without the consent of Lessor, but upon at least 20 days' prior written notice
to Lessor (which notice shall be accompanied by a copy of the proposed amendment
or modification and other information as Lessor may reasonably require), to
amend, modify, supplement or otherwise alter a Prime Lease, this Sublease or any
other agreement with respect to any Property, provided such amendment,
modification, supplement or alteration does not (i) except with respect to Store
#915 (and as otherwise provided in Section 3(a) of this Sublease), extend or
renew the Term hereof with respect to any Property or the Prime Lease Term with
respect to such Property, (ii) increase the obligations of Lessor under the
Prime Leases, individually or in the aggregate, by more than $5 million, (iii)
increase the aggregate discounted value (using a discount rate of the seven-year
Treasury rate plus 1.5%) of the remaining obligations under the Prime Leases
above such aggregate discounted value (using a discount rate of the seven-year
Treasury rate plus 1.5%) as of the Commencement Date and (iv) otherwise, in the
reasonable judgment of Lessor, materially adversely effect Lessor; provided, if
any amendment or modification to this Sublease or any Prime Lease does not meet
the
requirements set forth in clauses (i)-(iv) above, then Lessor's consent shall be
required, and such consent may be granted or withheld in Lessor's sole and
absolute discretion.
(b) Lessor shall have no obligation to provide any guarantee or other
assurance for any lease or sublease entered into, modified or amended by Lessee
after the Commencement Date, without Lessor's consent, beyond any Guaranty or
assurance in existence as of the date hereof; provided, Lessor shall reaffirm a
Guaranty of its respective Prime Lease, if expressly required by such Prime
Landlord, in connection with an amendment or modification of such Prime Lease,
provided the requirements of Section 13(a)(i)-(iv) above are satisfied in full.
14. Successors.
----------
Subject to Section 7 and Section 23, the covenants and agreements
herein contained shall bind and inure to the benefit of Lessor and Lessee and
their respective permitted successors and assigns.
15. Captions.
--------
The captions or headings of paragraphs in this Sublease are inserted
for convenience only, and shall not be considered in construing the provisions
hereof if any question of intent should arise.
16. Severability.
------------
If any provisions of this Sublease shall be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this Sublease shall not be affected thereby.
17. Governing Law.
-------------
With respect to each Property, this Sublease shall be construed in
accordance with, and governed by, the laws of the state in which such Property
is located.
18. Further Assurances/ Reasonableness and Good Faith.
--------------------------------------------------
Lessor and Lessee shall execute, acknowledge and deliver such
instruments and take such other action as may be necessary to carry out their
rights and obligations under this Sublease, including the execution of any
agreement or instrument required by any Prime Landlord under any Prime Lease.
In addition to the provisions of Section 4(c) of this Sublease, Lessor and
Lessee agree to cooperate and to take all reasonably necessary or desirable
actions in order to establish a direct relationship between the applicable Prime
Landlord and
Lessee with respect to all matters related to each Property. Whenever this
Sublease grants Lessor or Lessee the right to take action, exercise discretion
or make other determinations regarding a Property or this Sublease, each party
agrees to act reasonably, timely and in good faith unless a different standard
is specified herein.
19. Sublease Subject to Purchase Agreement.
---------------------------------------
This Sublease is being entered into in connection with the
transactions contemplated by that certain Stock Purchase Agreement dated as of
July 9, 2001 among Lessor, LFAS, Inc. Venice Acquisition Corporation and
Charming Shoppes, Inc.(the "Purchase Agreement"). Lessor and Lessee agree that
this Sublease shall be subject to the terms of the Purchase Agreement and, if
there is any conflict or inconsistency between the terms of this Sublease and
the terms of the Purchase Agreement, the terms of the Purchase Agreement shall
control; provided, however, Lessor and Lessee agree that this Section 19 shall
not be applicable to the provisions of Section 23 of this Sublease.
20 Waiver of Lien.
---------------
Lessor hereby waives and relinquishes any landlord's lien, right of
levy or distraint, claim, security interest or other interest Lessor may now or
hereafter have in or with respect to any of the Personal Property of Lessee.
For purposes of this Sublease, Lessee's "Personal Property" shall include all of
Lessee's personal property, including inventory and equipment, but shall not
include plumbing and electrical fixtures, heating, ventilation and air
conditioning, wall and floor coverings, walls or ceilings and other fixtures not
constituting trade fixtures. Lessor agrees to execute and deliver the Access
and Waiver Agreement substantially in the form of Exhibit F attached to the
---------
Purchase Agreement.
21. Recission of this Sublease; Termination Pursuant to the Covenant
----------------------------------------------------------------
Agreement.
---------
(a) Lessor and Lessee agree that, with respect to each Property and
its respective Prime Lease, if the respective Prime Landlord challenges the
assignment of such Prime Lease pursuant to the Master Assignment and the
subsequent subletting of such Property to Lessee pursuant to this Sublease, or
otherwise makes any allegations that such transactions do not comply with the
provisions of the respective Prime Lease, then Lessor shall have the right (to
be exercised or not exercised in Lessor's sole discretion) to deem the Master
Assignment and this Sublease rescinded and declared null and void as of the date
hereof with respect to such Property; provided, Lessor shall indemnify, defend
and hold harmless Lessee from any Losses arising in connection with such
rescission in accordance with Section 2(a) of this Sublease, and such obligation
shall survive the termination or expiration of this Sublease.
(b) Lessor and Lessee agree that, pursuant to Section 4 of the
Covenant Agreement dated as of the date hereof between Lessor and Charming
Shoppes, Inc. (the "Covenant Agreement"), from time to time with respect to one
or more Properties, this Sublease may be terminated with respect to such
Property or Properties and/or the respective Prime Lease or Prime Leases may be
assigned from Lessor to Lessee. All such actions described in the preceding
sentence shall be governed by the provisions of Section 4 of the Covenant
Agreement, which by this reference are incorporated into this Sublease.
22. Lessor Non-Competition Covenant for Renewal Prime Leases.
---------------------------------------------------------
Lessor agrees that, with respect to each Property with a respective
Prime Lease which contains, as the date hereof, a right of "Tenant" thereunder
to renew or otherwise extend the Prime Lease Term (each a "Renewal Prime
Lease"), Lessor agrees that Lessor shall not negotiate, or enter into any lease
or other similar agreement, with such Prime Landlord with respect to the
Property subject to such Renewal Prime Lease. Lessee agrees that this Section
22 shall apply only to Renewal Prime Leases, and shall not be applicable to or
enforceable in any manner with respect to any Property with a respective Prime
Lease which does not contain a right of renewal or extension upon the expiration
of Prime Lease Term. Lessor's covenant under this Section 22 shall survive,
with respect to each Renewal Prime Lease, for a period of two (2) years from the
date of expiration of the Prime Lease Term under such Renewal Prime Lease, and
thereafter shall expire and be of no further and effect.
23. Restrictions on Assignment by Lessor.
------------------------------------
Lessor shall not assign or otherwise transfer this Sublease or the
Master Assignment (or any interest therein) without in each instance the prior
written consent of Lessee, which consent may be granted or withheld in Lessee's
sole and absolute discretion; provided, however, Lessee shall not unreasonably
withhold, condition or delay such consent for any assignment or other transfer
by Lessor to a wholly-owned (directly or indirectly) subsidiary of Lessor,
provided (i) such transferee shall assume in full the punctual performance of
all of Lessor's obligations (and Lessor shall remain directly, primarily,
absolutely and unconditionally liable for and otherwise guarantee such
transferee's performance of such obligations as guarantor and surety) under this
Sublease, the Master Assignment and the Covenant Agreement (and the transactions
contemplated thereby); (ii) the rights of Lessee under this Sublease, the Master
Assignment and the Covenant Agreement (and the transactions contemplated
thereby) shall not be impaired or otherwise adversely affected by such
assignment or other transfer by Lessor hereunder; and (iii) Lessor shall, as a
condition precedent to such assignment or transfer, execute and deliver to
Lessee a guaranty and suretyship agreement, in form and substance reasonably
acceptable to Lessee, reaffirming Lessor's obligations and undertakings set
forth herein.
24. Charming Shoppes, Inc. Guaranty.
--------------------------------
(a) Charming Shoppes, Inc. (the "Guarantor"), for itself and its
successors and assigns, hereby unconditionally guarantees the full and punctual
payment and performance of the obligations of Lessee under this Sublease
(including, without limitation, interest accruing during the pendency of any
bankruptcy or insolvency proceeding, whether or not allowed or allowable
thereunder). Upon failure by Lessee to pay punctually any such amount or perform
such obligation, Guarantor shall forthwith on demand pay the amount not so paid
and/or otherwise perform such obligation at the place and in the manner
specified in this Sublease.
(b) The obligations of the Guarantor hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) Any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of Lessee under this Sublease, by
operation of law or otherwise;
(ii) Any modification or amendment of or supplement to this
Sublease;
(iii) Any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of Lessee under this
Sublease;
(iv) Any change in the corporate existence, structure or
ownership of Lessee, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Lessee or its assets or any resulting release
or discharge of any obligation of Lessee contained in this Sublease;
(v) The existence of any claim, set-off or other rights which
the Guarantor may have at any time against Lessee, or any other Person,
whether in connection with this Sublease or any unrelated transaction,
provided that nothing herein shall prevent the assertion of any such claim
by separate suit or compulsory counterclaim;
(vi) Any invalidity or unenforceability relating to or against
Lessee for any reason of this Sublease, or any provision of applicable law
or regulation purporting to prohibit the payment by Lessee of any amount
payable by Lessee under this Sublease; or
(vii) Any other act or omission to act or delay of any kind by
Lessee or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to the Guarantor's obligations hereunder.
(c) The Guarantor's obligations hereunder shall remain in full force and
effect until all amounts payable and obligations to be performed by Lessee under
this Sublease shall have been paid and performed in full. If at any time any
amount payable by Lessee under this Sublease is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of Lessee
or otherwise, the Guarantor's obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
(d) The Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against Lessee or
any other Person.
(e) Upon making full payment with respect to any obligation of Lessee, the
Guarantor shall be subrogated to the rights of the payee against Lessee with
respect to such obligation; provided that the Guarantor shall not enforce any
payment by way of subrogation so long as any amount payable by Lessee hereunder
remains unpaid.
(f) If acceleration of the time for payment of any amount payable by
Lessee under this Sublease is stayed upon the insolvency, bankruptcy or
reorganization of Lessee, all such amounts otherwise subject to acceleration
under the terms of this Sublease shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by Lessor.
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WITNESS, the hands and seals of the parties hereto as of the day and year
first above written.
Lessor: THE LIMITED, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President - Real Estate
Lessee: LANE XXXXXX, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President - Real Estate
Executing solely for the purposes set
forth in Section 24 of this Sublease:
CHARMING SHOPPES, INC.
By: /s/ Xxxxx Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
