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Case: 1:18-cv-00680-TSB Doc #: 22 Filed: 08/27/20 Page: 1 of 2 PAGEID #: 192
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
LAFAYETTE LIFE INSURANCE : Case No. 1:18-cv-680
COMPANY, :
: Judge Timothy S. Black
Plaintiff, :
:
vs. :
:
EUGENE PRESTON GIVENS, JR, et :
al., :
:
Defendants. :
ORDER
This civil action is before the Court on the motion of Defendants Tchacona
Chermease Bell, Eric Christopher Givens, Sr., Carolyn Renee Givens, Great Grace
Church, and Varice Oletha Smallwood (the “Requesting Defendants”) for default
judgment against Defendants Eugene Preston Givens, Jr. and Angela Marie Givens (the
“Defaulting Defendants”). (Doc. 21). Rule 55(b)(1) allows a party to request that the
clerk enter default judgment against a defendant who has defaulted if the claim is for a
sum certain. Fed. R. Civ. P. 55(b)(1)
The Clerk properly entered default against the Defaulting Defendants on August
12, 2020 pursuant to Rule 55(a). (Doc. 20). Requesting Defendants have shown that
they are requesting a sum certain of $322,826.59, plus all accrued interest is due.
Requesting Defendants have submitted the Affidavit of Michelle D. Rhett, Esq. to show
how the funds shall be distributed. (Doc. 16 at 37).
The Court finds that Requesting Defendants have satisfied the requirements of
Case: 1:18-cv-00680-TSB Doc #: 22 Filed: 08/27/20 Page: 2 of 2 PAGEID #: 193
Rule 55(b)(1) and their motion for default judgment and disbursement of funds (Doc. 21)
is GRANTED.
Accordingly,
1) The Clerk SHALL enter default judgment against Defendants Eugene
Preston Givens, Jr. and Angela Marie Givens.
2) The Clerk SHALL disburse the money deposited with the Clerk by Plaintiff
Lafayette Life Insurance Company on May 23, 2019, in the amount of
$322,826.59, plus all accrued interest, via one check made payable to
Boonswang Law Firm and shall be mailed to Michael A. Wentz, Esq.,
Boonswang Law Firm, 1500 Sansom Street, Suite 200, Philadelphia, PA
19102-2800.
3) Upon Mr. Wentz’s receipt of the disbursement check, he SHALL ensure that
it is timely deposited into his firm’s trust account and that the proceeds thereof
are timely disbursed to each of the Defendants in the following percentages of
the funds: Great Grace Church: 20%; Eric Christopher Givens, Sr.: 13.33%;
Tchacona Chermease Bell: 13.33%; Carolyn Renee Givens: 13.33%; Varice
Oletha Smallwood: 13.33%; Angela Marie Givens: 13.33%; and Eugene
Preston Givens, Jr.: 13.33%, plus any cents that may remain due to rounding.
4) The Clerk shall enter judgment accordingly, whereupon this case is
TERMINATED on the docket of this Court.
IT IS SO ORDERED.
Date: 8/27/2020 /s/ Timothy S. Black
Timothy S. Black
United States District Judge
2
|
677 N.W.2d 578 (2004)
2004 SD 34
In the Interest of D.M., Minor Child, and
Concerning, The Department of Social Services, Appellees, and
Faye and Kelly Degen, Appellants.
No. 22700.
Supreme Court of South Dakota.
Argued October 6, 2003.
Decided March 10, 2004.
*579 Lawrence E. Long, Attorney General, Ann M. Holzhauser, Assistant Attorney General, Department of Social Services, Pierre, South Dakota, Attorneys for appellee DSS.
Todd A. Schweiger, Rapid City, South Dakota, Attorney for appellee Child.
Debra D. Watson of Watson, Roetzel & McGowan, Rapid City, South Dakota, Attorneys for appellants.
MEIERHENRY, Justice.
[¶ 1.] The child D.M. became eligible for adoption through the Department of Social Services (DSS) after the parental rights to the child were involuntarily terminated by the trial court. DSS began the process of finding an adoptive placement. *580 Accordingly, DSS approved three adoptive families, two of the families were relatives of D.M., the other was a non-related foster family.
[¶ 2.] DSS rejected both of the family placements, selecting the foster family for D.M.'s adoption. Faye and Kelly Degen, a great aunt and uncle, were one of the family placements. After the termination of the parental rights in the Abuse and Neglect (A & N) action and subsequent to DSS selecting the adoptive placement of the child, Degens filed a Motion to Intervene for the purpose of challenging DSS's selection and seeking placement of the child with them. DSS claimed that Degens were prohibited from intervening.
[¶ 3.] The trial court determined that Degens could not intervene as a matter of right, but could intervene if permitted by the court. Nonetheless, after a motion hearing, the trial court denied intervention because it would unduly delay D.M.'s adoption. We affirm. On appeal, Degens raise the following issue:
Whether Degens, as relatives of D.M., have the right to intervene in the A & N proceeding for the purpose of seeking adoptive placement of the child D.M. after they were approved but not selected by DSS.
[¶ 4.] The issue in this case involves statutory interpretation which "is a question of law, which we review de novo." See Coble v. Hanson, 2001 SD 8, ¶ 5, 620 N.W.2d 772, 773 (citation omitted).
DECISION
[¶ 5.] Degens argue that they should be allowed to intervene as a matter of right under SDCL 15-6-24(a). To permit intervention, a court must determine if the requirements of the statute are satisfied. The statute provides:
Upon timely application anyone shall be permitted to intervene in an action:
(1) When a statute of the state confers an unconditional right to intervene; or
(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
Id. (emphasis added). In applying SDCL 15-6-24(a), we have said "[t]he purpose of intervention is to obviate delay and the multiplicity of suits by creating an opportunity to persons directly interested in the subject matter to join in an action or proceeding already instituted." Mergen v. Northern States Power Co., 2001 SD 14, ¶5, 621 N.W.2d 620, 622.
[¶ 6.] Initially, it should be noted that SDCL 15-6-24(a) is a rule of civil procedure which only applies to certain proceedings in the Child Abuse and Neglect Statutes. SDCL Ch 26-7A. The law provides that only adjudicatory hearings are "conducted in accordance with rules of civil procedure." SDCL 26-7A-34(1). An adjudicatory hearing is "a hearing to determine whether the allegations of a petition alleging that a child is abused or neglected are supported by clear and convincing evidence or whether the allegations of a petition alleging a child to be in need of supervision or a delinquent are supported by evidence beyond a reasonable doubt." SDCL 26-7A-1(2). The Degens did not seek to intervene at the adjudicatory phase of the proceeding but instead sought to intervene in the post-dispositional phase of the case. The rules of civil procedure do not apply to "dispositional hearings and all other hearings ... [which] shall be conducted and designed to inform the court fully of the exact status of the child and to ascertain the history, environment *581 and past and present physical, mental and moral condition of the child and the child's parents, guardian or custodian." SDCL 26-7A-34(2). Since this was a review hearing following the court's decision to terminate parental rights, the rules of civil procedure do not apply. Consequently, SDCL 15-6-24(a)(1) does not provide Degens a right to intervene as a matter of law.
[¶ 7.] Neither do the A & N statutes give Degens the right to intervene. The law is silent as to intervention by a family member seeking to adopt. Adoptive placement responsibilities are delegated to DSS without further directive or guidance. The law provides:
Upon the entry of the final decree of disposition terminating the parental rights of both parents or of the surviving parent, the court shall vest the Department of Social Services with the custody and guardianship of the person of the child for the purpose of placing the child for adoption and authorizing appropriate personnel of the department to consent to adoption of the child without need for any notice or consent of any parent of the child.
SDCL 26-8A-27.
[¶ 8.] In the 2002 legislative session, the South Dakota Legislature did expand the right to intervene in other (non-A & N) child custody cases and in certain circumstances gave non-related primary caretakers the right to intervene.[1] SDCL 25-5-29. The law specifies a parent's presumptive right to the custody of his or her child but allows that presumption to be rebutted by a non-relative intervenor. However, the legislature specifically excluded the right to intervene in A & N proceedings.
[¶ 9.] Degens, pointing to the adoption statutes, argue that the adoption statutes contemplate possible challenges to adoptions and, in effect, support their right to intervene. The adoption statute provides that when an order of adoption is challenged, the court is required to "give due consideration to the interests of the parties." SDCL 25-6-2. Degens contend if a third party is not allowed to intervene and challenge the adoption, why would the statute specifically require the court to consider the "interests of the parties." The statute provides:
In an adoption proceeding or in any proceeding that challenges an order of adoption or order terminating parental rights, the court shall give due consideration to the interests of the parties to the proceedings, but shall give paramount consideration to the best interests of the child.
*582 Id. The proceeding in this case, however, was not an adoption proceeding, it was an A & N proceeding. Whether Degens have a right to intervene in a subsequent adoption proceeding is not the issue in this case nor was it raised or briefed by the parties.
[¶ 10.] Degens rely on an Iowa Court of Appeals case to support their right to intervene. The Iowa court held that a couple wishing to adopt had the right to intervene in an A & N proceeding as "interested persons" under a rule of civil procedure similar to SDCL 15-6-24(a)(2). In the Interest of C.L.C. and A.M.B. Children, S.A.B. and M.D.B. Husband and Wife, Appellants, 479 N.W.2d 340 (Iowa App.1991). The Iowa court relied on specific language of an Iowa statute that allowed the court to transfer guardianship and custody of a child to "a relative or other suitable person" following termination of parental rights. IA ST § 232.117(3).[2] The Iowa court determined that as suitable persons the couple had a legal right to intervene. In contrast, South Dakota statutes do not give the "relatives or other suitable persons" the right to be considered as guardians. South Dakota law directs that "the court shall vest the Department of Social Services with the custody and guardianship of the person of the child." SDCL 26-8A-27. (emphasis added). Our analysis must rely on the language of the South Dakota statute which is clearly distinguishable from the statute relied upon by the Iowa court.
[¶ 11.] The trial court here considered permitting Degens to intervene but ultimately determined that it was not in D.M.'s best interests to unduly delay the proceedings. Although the trial court did consider Degens' request to intervene, the court ultimately denied it for reasons other than expressed in this opinion. "`This court has consistently held that where the trial court reaches the right result it will not be reversed even though based on erroneous conclusions or wrong reasons.'" Communication Tech. Sys., Inc. v. Densmore, 1998 SD 87, ¶ 20, 583 N.W.2d 125, 130 (citing Owens v. City of Beresford, 87 S.D. 8, 15, 201 N.W.2d 890, 893 (1972)). At this point our legislature has not provided relatives of abused and neglected minors a legal right to intervene in post dispositional A & N proceedings for the purpose of challenging DSS's adoptive placement. We hold that the Degens did not have a right to intervene. Therefore, the decision of trial court is affirmed.
[¶ 12.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER, Justices, concur.
[¶ 13.] SABERS, Justice, dissents.
SABERS, Justice (dissenting).
[¶ 14.] I dissent. The majority opinion 1) provides DSS unwarranted power to dictate to trial courts the placement of children for adoption; 2) turns a trial courts' grant of adoption in cases like this into a rubber stamping formality; 3) permits DSS to disregard its own policies regarding placement preference; and 4) prevents families from stepping into the breach when parental rights are terminated and DSS prefers, for whatever reason, another adoptive placement. This is a disservice *583 to our children, our families, and our State.
[¶ 15.] As the majority opinion notes, the motion to intervene was made after both parents' rights had been terminated.[3] The terminations were final adjudications and the court retained jurisdiction only for "purposes of review of status of the child until the adoption of the child is fully completed." SDCL 26-8A-27; SDCL 26-8A-29. The motion to intervene was made at a "post termination review" on September 16, 2002.[4] Therefore, "[w]hether Degens, as relatives of D.M., have the right to intervene in the A & N proceeding" (emphasis supplied) is an irrelevant question. The parties in this case were subject to SDCL chapter 25-6, the adoption statutes. Furthermore, the Degens have a legally protectable interest and a right of intervention. I would reverse and remand, allowing Degens their right to intervene in the adoption proceedings with regard to D.M.
[¶ 16.] 1. This decision should have been made under SDCL chapter 25-6 since the abuse and neglect proceedings were final.
[¶ 17.] A careful review of SDCL Chapter 26-7A and 8A reveals that A & N proceedings are for the purposes of determining whether a child is abused or neglected and if so, taking appropriate measures regarding the child's disposition. If a child is found abused and neglected, the trial court proceeds to a dispositional hearing. That phase will determine parents' status as to the child, with primary weight given to the child's best interest. SDCL 26-8A-26; SDCL 26-8A-27; SDCL 26-8A-29. If the court makes the determination that parental rights should be terminated, an order is entered and the child is placed in the custody of DSS for adoption. SDCL 26-8A-27.
[¶ 18.] There are no provisions under SDCL Chapter 26-7A or 26-8A for determining who the adoptive parents will be, nor should there be, since South Dakota has a separate statutory scheme for adoption under SDCL Chapter 25-6. The majority opinion's determination that Degens are not entitled to intervene in the A & N proceeding misses the mark. The correct question is whether a third party relative, who has been approved for adoptive placement, is entitled to be heard before a child is permanently placed with an unrelated family based solely on DSS recommendations. The answer is an unequivocal yes; our concern for the best interests of the child demands full consideration of all relevant facts in making the adoption placement.
[¶ 19.] SDCL 25-6-2 provides in part: In an adoption proceeding or in any proceeding that challenges an order of adoption or order terminating parental rights, the court shall give due consideration to the interests of the parties to the proceedings, but shall give paramount consideration to the best interests of the child.
The Department requested that the Degens allow themselves to be considered as an adoptive placement. They underwent a home study and DSS investigation. They were approved. Then they were denied contact with the child, and found out only a week prior to the first hearing on the motion to intervene that they were not going to be considered as an adoptive *584 placement. The Degens are blood relatives of the child with a desire to raise the child within her own family. Certainly they were an interested party in the adoption proceedings.
[¶ 20.] The conduct of DSS is especially arbitrary and unreasonable in these circumstances. First, it invites D.M.'s relatives into the proceeding by approving them for adoptive placement. Second, it causes them to get their hopes up and then third, attempts to cut off their chances without a hearing on the merits. This conduct then is approved by the trial court because it would cause "undue delay." Nonsense. What difference is a matter of hours, days or even two weeks if that is what is necessary to find the best adoptive parents for this child? To finalize these proceedings without a hearing on the merits as to the "best" adoptive parents prevents the "best interests of the child" from being properly determined and results in an abuse of discretion. Furthermore, there is nothing in either the adoption statutes or the A & N provisions that requires analysis of whether hearing evidence on the child's best interest will cause "undue delay." At the least, the trial court abused its discretion in denying intervention based on a finding that it would cause undue delay. By denying intervention, the trial court substantially increased the delay by necessitating an appeal to this Court. An evidentiary hearing could have easily been concluded in much less time than this appeal will take.
[¶ 21.] The majority opinion asserts that this was not an adoption proceeding and that the question whether the Degens have a right to intervene in a subsequent adoption proceeding is not in issue. Assuming the majority opinion is correct is its assertion that this is not an adoption proceeding, I would respectfully point out that refusing to consider whether the Degens can intervene in a subsequent adoption proceeding merely extends the "undue delay" the trial court was concerned about. Now the case can go back to the circuit court for consideration of the adoption, the Degens can attempt to intervene again, the court can deny intervention and the parties can once again bring this case back before this Court.
[¶ 22.] I agree with the general proposition that a child needs permanence as quickly as the court and DSS can provide it. However, haste is seldom a virtue that would lead to adequate consideration of a child's best interests, and in this case, the concern about undue delay has prolonged this process by months.
[¶ 23.] 2. The Degens have a protectable interest.
[¶ 24.] Assuming for the moment that the majority opinion is correct in its determination that this case is still under SDCL chapter 26-8A, the opinion improperly comes to the conclusion that Degens had no right of intervention. SDCL 26-7A-34 provides in part:
Hearings under [chapter 26-7A] and chapters 26-8A, 26-8B and 26-8C shall be conducted as follows:
(1) Adjudicatory hearings shall be conducted in accordance with rules of civil procedure under chapter 15-6, except as otherwise provided in this chapter; and
(2) Dispositional hearings and all other hearings shall be tried to the court and shall be conducted and designed to inform the court fully of the exact status of the child and to ascertain the history, environment and past and present physical, mental and moral condition of the child and of the child's parents, guardian or custodian.
(Emphasis supplied.) SDCL 26-7A-56 provides in part:
*585 [T]he rules of civil procedure and the rules of evidence apply to adjudicatory hearings. All other hearings shall be conducted under rules prescribed by the court. The rules may be designed by the court to inform the court fully of the exact status of the child and to ascertain the history, environment and the past and present physical, mental and moral condition of the child and the child's parents, guardian and custodian, as may be necessary or appropriate to enable the court to determine suitable disposition of the child according to the least restrictive alternative available in keeping with the child's best interests and with due regard for the rights and interests of the parents, guardian, custodian, the public and the state.
(Emphasis supplied.) The Legislature left no doubt of its intention that the rules of civil procedure be relaxed during the dispositional phase. The Legislature also made it clear that the trial court was to fully inform itself of the child's circumstances, including their "history, environment and the past and present physical, mental and moral condition[.]" Id. It is undeniably in the best interest of the state and the public to preserve family ties whenever it is possible. The majority opinion leaves courts in the position of ignoring the fact that relatives of the child are available, interested, and approved for adoption whenever DSS expresses a preference for another family. This is an unwarranted expansion of the scope of DSS power and authority. DSS does not have unlimited authority over final adoptive placement. Rather, DSS selection of adoptive parents is subject to the court's review and final approval. The court has the ultimate responsibility to determine the best interest of a child throughout the proceeding, including adoption. The majority opinion elevates DSS from the advisory and investigative role contemplated by the Legislature and presses trial courts into abdicating their role as the final arbiter of the best interest of the child.
[¶ 25.] The majority opinion concludes that there is no statutory authority providing the Degens' with a right of intervention. I disagree. DSS' internal policies provide the Degens a legally protected right to a preference above the foster family. This right gives them a legally protected interest in the dispositional proceedings. The South Dakota A & N statutes are silent as to preference for adoptive placement. They merely direct that DSS be vested with custody and guardianship "for the purpose of placing the child for adoption and authorizing appropriate personnel of the department to consent to adoption of the child[.]" SDCL 26-8A-27. By referring to well-settled law regarding a court's review of agency determinations, we can overcome the perceived lack of legislative guidance in this area.
[¶ 26.] In Chevron, the United States Supreme Court clarified the role of courts and agencies when an agency is charged with the responsibility of administering a statute. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694. In the instant case, the Legislature has clearly given DSS the responsibility of investigation and recommendation in adoption proceedings. See SDCL 26-8A-27. Chevron held that when the court reviews an agency's construction of a statute, it must make two inquiries:
1) Has Congress directly spoken to the precise question at issue? Chevron, 467 U.S. at 842-843, 104 S.Ct. at 2781-2782, 81 L. Ed. 2d 694. If Congress' intent is clear, the court and agency are bound to give effect to the expressed intent. Id. As the majority opinion *586 notes, under the A & N statutes, the Legislature is silent as to preferential placement order for adoption. Therefore, the Court "does not simply impose its own construction on the statute as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court" is:
2) Whether the agency's answer is based on a permissible construction of the statute.
Id. The Supreme Court clarified further, holding:
The power of an administrative agency to administer a congressionally created... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress. If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.
Id. Under the authority granted to DSS through SDCL chapter 26-8A, ARSD 67:14:30 and ARSD 67:14:31, DSS has promulgated a "Procedures Manual." This manual is given to case workers to guide and assist them in making appropriate assessments of children and their circumstances and making recommendations regarding foster care and adoption placement. On page six of that manual, DSS specifically provides an order of preference for permanent placement. At the top of the list of preferences is the "birth family," which includes, "father, mother, grandparents, uncles, aunts, cousins, and other persons identified by the child's family as significant others[.]" I submit that even under that portion of Chevron giving the least deference to agency regulations, this policy guideline is "reasonable" and should be enforced. Even in the absence of explicit Legislative directive, this Court has clear guidance in the guidelines of the agency as to family preference. The guideline is entitled to controlling weight. Chevron, 467 U.S. at 843, 104 S.Ct. at 2782, 81 L. Ed. 2d 694. Therefore, these internal policies give the Degens a legally protectable right to a preference above the foster family. This right could only be protected by intervening in the adoption proceeding and the trial court abused its discretion in holding otherwise.
[¶ 27.] I would reverse and remand for a hearing on the merits.
NOTES
[1] SDCL 25-5-29 provides: Except for proceedings under chapter 26-7A, 26-8A, 26-8B, or 26-8C, the court may allow any person other than the parent of a child to intervene or petition a court of competent jurisdiction for custody or visitation of any child with whom he or she has served as a primary caretaker, has closely bonded as a parental figure, or has otherwise formed a significant and substantial relationship. It is presumed to be in the best interest of a child to be in the care, custody, and control of the child's parent, and the parent shall be afforded the constitutional protections as determined by the United States Supreme Court and the South Dakota Supreme Court. A parent's presumptive right to custody of his or her child may be rebutted by proof:
(1) That the parent has abandoned or persistently neglected the child;
(2) That the parent has forfeited or surrendered his or her parental rights over the child to any person other than the parent;
(3) That the parent has abdicated his or her parental rights and responsibilities; or
(4) That other extraordinary circumstances exist which, if custody is awarded to the parent, would result in serious detriment to the child.
[2] If the court terminates the parental rights of the child's parents, the court shall transfer the guardianship and custody of the child to one of the following:
a. The department of human services.
b. A child-placing agency or other suitable private agency, facility or institution which is licensed or otherwise authorized by law to receive and provide care for the child.
c. A parent who does not have physical care of the child, other relative, or other suitable person.
IA ST § 232.117(3) (emphasis added).
[3] Mother's rights were terminated on January 28, 2002. Father's rights were terminated on October 16, 2001 and this Court summarily affirmed that termination on July 26, 2002.
[4] At this hearing, counsel for Degens made a point of informing the court that they were not attempting to intervene in the A & N.
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Case 1:20-cv-05544-NLH Document 31 Filed 12/16/20 Page 1 of 16 PageID: 478
Supplementa l Addendum # 1 4 . a . - - - - - - - - - - - - - - - -
- - - - - - - - - - Update: The Truth of the BOP s Mismanagement of Covid- 19----- -----
1
- - - - - - - - - - - - - - - - - - - at Fort Dix Prison
(1) "Even in the best run prisons, officials might find it difficult if not
impossible to follow the CDC 1 s guidelines for preventing the spread of virus
among inmates and staff practicing fastidious hygiene and keeping a distance of
at least 6 feet from others" citing: United States v. Gorai, 2020 US Dist LEXIS
72893 (D. Nev. Apr. 24, 2020).
(2) Courts have described in meticulous detail the history of FCI Fort Dix s
1
experience with, and response to Covid-19, Eg., Wragg v. Ortiz, 2020 US Dist
LEXIS 92033, Slip Op. at 4-27 (D. NJ, May 27, 2020). The Wragg v. Ortiz opinion
contains many disturbing accounts from inmates about Covid-19 procedures and
health conditions at Fort Dix. (Id. at 14-27).
(3) As of November 11, 2020, according to the Bureau of Prisons: 229 inmates and
12 staff members at Fort Dix have tested positive for Covid-19. 41 inmates, and
6 staff have recovered. None so far have died. https://www .bop/corona virus/
(viewed on 11/11/2020) .
(4) "While during this past summer, parts of the United States appeared to be
seeing a slowdown in the spread of Covid-19, the same was not true for the
summer epicenter of the Covid-19 pandemic; prisons and jails. See NY Times
article, June 16, 2020. https://www .nytimes.co m/2020/06/1 6/us/corona virus-
inmates-pri sons-jails.h tml ("Cases of coronavirus in prisons and jails across
the United States have soared in recent weeks, even as the overall daily
infection rate in the nation has remained relatively flat •.• [a]nd even the known
case numbers are likely a significant undercount because testing has been
extremely limited inside prisons and because some places that test do not
release the results.")
The BOP infection rate far exceeds the national average, with those in BOP
Custody infected at a rate demonstrabl y higher than those outside BOP custody:
1 of 13
Case 1:20-cv-05544-NLH Document 31 Filed 12/16/20 Page 2 of 16 PageID: 479
COVID-19 Infection s per 1,000 People
\ureau of Prisons United States China
86.07
17.87
4.25
0.06
Infection s/1,000 People
(collecte d from www.bop. gov/coron avirus, htps://cor onavirus. jhu.edu/m ap.html
includes number of federal inmates in BOP managed institutio ns, the number of
inmates in community based facilitie s, and the number of inmates who have died
from Covid-19. (Numbers as of 8-28-20).
And the United States knows these numbers will continue to climb,
recognizi ng in briefings across the country that "despite extensive measures to
prevent the transmiss ion, more federal inmates will inevitabl y contract Covid-
19 going forward." See US v. Conner, 2020 WL 3053368 at 1<8 (N.D. Iowa, June 8,
2020).
Indeed, as the winter months approach, the increase of Covid-19 c~ses has
been rising at an unprecede nted and alarming level, (especial ly at Fort Dix.)
https://ww w.nytime s.com/liv e/2020/l0 /26/world /covid-l9 -coronavi rus-updat es
("with the coronavir us spreading out of control in many parts of the United
States and daily count cases setting records, health experts say it is only a
matter of time before hospitals reach the breaking point .•• there are more than
41,000 Covid-19 patients hospitali zed in the United States, a 40 percent rise in
the last month.") As the situation regarding the pandemic in the United States
worsens considera bly, the situation in the prisons of the United States is even
2 of 13
Case 1:20-cv-05544-NLH Document 31 Filed 12/16/20 Page 3 of 16 PageID: 480
more grim.
(5) The CDC, various Federal Judges/Ju stices, as well as multiple governme ntal,
and non-gover nmental health organizat ions all agree that social distancin g is
"the cornersto ne" of reducing transmiss ion of Covid-19, and the further
mitigatio n of the undeniabl y high risk of irreprabl e harm posed by the
contracti on of Covid-19 contagion .
(6) It is very clear that Fort Dix's mitigatio n measures fall well short of the
CDC's guideline s on multiple levels. And clear and undisputa ble failure is
evident in the simple fact that due to internal physical configura tion of the
confineme nt structure of the inmate housing units at Fort Dix Prison, it is
impossibl e to maintain 6' social distancin g as per CDC guideline s. Said Fort
Dix housing units' internal configura tion is open in that it allows, and of
necessity places inmates and staff together continual ly mixing in very close
physical proximity to each other (much less than the required 6 foot
separatio n), and yet at the same time the internal physical configura tion of the
housing units are constrain ing; even with a reduced populatio n of inmates; due
to the confined spaces within the housing units, it is also in that regard
impossibl e to maintain the minimum CDC recommended 6' social distancin g.
In short; we, inmates and BOP staff, are like sardines stuffed into one
monolithi c can with the lid tightly sealed.
(7) The BOP and Fort Dix administr ation are well aware of the risk that the
virus could easily spread rapidly through its congregat e inmate populatio n. And
are further aware that addressin g that risk would require precautio nary
provision s, and safety measures that they simply are unable to execute due to
the inability to separate inmates so as to meet the required CDC quideline s.
(8) The BOP was advised to reduce its populatio n, but quite in fact in
oppositio n to that advisemen t, in the middle of the pandemic, at the moment of a
second wave of infection s, and increased resurgenc e of Covid-19 at Fort Dix
prison, the BOP instead is now increasin g Fort Dix's populatio n by busing in
more inmates from other prisons. At the very moment the BOP should be focused
on keeping inmate populatio n at Fort Dix Prison as low as possible, they are
transferr ing more inmates into Fort Dix Prison and this also in the face of
their statement s that they are not doing so.
(9) Regardles s of the deceptive empty lip service the BOP places forth, it is
well establish ed in the evidentia l findings that the BOP knowingly disregard s
the excessive risk to inmate health and safety as manifestl y self evident by
3 of 13
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their repeated, habitual inconsistencies , and ineffectiveness in containing the
spread of Covid-19 to Fort Dix Prison and within the boundaries of Fort Dix
Prison.
(10) Subsequent to not being able to provide the required CDC 6' social
distancing recorrnnendation, additionally BOP provided inmate face masks are
unsatisfactory in stopping fine particle contagion transmission. Yes, the
wearing of N-95 or finer filtration masks does substantially mitigate the spread
of Covid-19. But the wide mesh, cotton cloth masks provided by the BOP to
inmates does not stop the rnicrofine particulates that can float in the air for
hours after an infected person exhales.
Furthermore, even if inmates and staff were all supplied with N-95 masks,
it is impossible in such low BOP staffed/high inmate population for the BOP to
force inmates to continually wear their masks, especially while sleeping in
overcrowded stagnant ambient breathing conditions. Conditions wherein all
inmates in a room breath each others exhaled air all night long.
It is additionally impossible for staff to force all inmates to continually
wash their hands. And now many of the hand soap dispensers are breaking and as
of yet have not been replaced. I often watch inmates use the bathroom and use
only plain water to wash their hands, or not wash their [email protected].
(11) In a recent Order, a Court granted compassionate release of an inmate at
Fort Dix, stating that most of the inmates at this "heavily populated
correctional facility" have not been tested, and compares this prison's strategy
to "ignorance is the best policy" US v. McNish, 2020 US Dist LEXIS 173048 Slip
Op. at 6, 8 (E.D. PA, 9/22/20).
(lla) On October 26, 2020, New Jersey's U.S. Senators Cory Booker, and Bob
Menendez sent a letter to the U.S. BOP calling the situation a "rapidly
escalating crisis." The situation, they said, demands an indefinite moratorium
on inmate transfers and immediate testing of all staff and prisoners. "It is
clear the BOP does not have an effective plan to ensure COVID-19 positive
inmates are not transferred between facilities," they wrote the BOP Director
Michael Carvajal. They added, "All FCI Fort Dix inmates, staff, and the
surrounding corrnnunities are now at increased risk for contracting Covid-19 with
potentially deadly consequences."
(12) I assert and testify and is easily verifiable that as of November 11, 2020,
despite an explosion in Covid-19 positive inmates over the last 6 to 8 weeks,
FCI Fort Dix is still not testing the general population, and is not conducting
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general population temperature checks as it did for a period of time last
spring. Yet the CDC guidelines are clear: Updated CDC guidelines now recommend
daily symptom and temperature screening in any correctiona l facility with a
(one) reported case of Covid-19. U.S. Supreme Court 2020 US LEXIS cefe:d54c:ddd9:71d7:5b29:a3f9:4a6:77b Barnes
v. Ahlmancefe:d54c:ddd9:71d7:5b29:a3f9:4a6:77b Aug. 5, 2020, Dissent by The Honorable Justice Sotomayor, paragraph
2.
(13) Not only does BOP/Fort Dix Prison violate the CDC guidelines. Furthermore
Fort Dix Prison has misrepresen ted its actions to the court and failed in
multiple additional instances and scenarios to safeguard the health of inmates
in its care. The Federal Bureau of Prisons has proven to be ill-equippe d to
manage the federal prison system and has badly handled the directive of Attorney
General Barr made early in the pandemic.
http://www. nytimes.com /2020/06/25 /opinion/cor onavirus-pr isons-compa ssionate-
release.html ?smid=fb-ny topinion&sm typ=cur ("The Bureau's response has been
dysfunction al to the point of cruelty.") Astonishing ly, the BOP has advised
many inmates that they had been approved for release due to the pandemic, only
to be told later that a mistake had been made and that they would not be
released. Id., Woodard v. U.S., Id. (" [t]he Court is aware of the growing
evidence of the BOP's chronic mismanagement of its vulnerable population during
the Covid-19 pandemic.") US v. Rodriguez, Id., 202 WL 1627331 at '9 ("The BOP's
7
containment measures have already proven insufficien t to prevent the spread of
Covid-19."
In short it is clear they are playing Russian Roulette with the lives of
medically vulnerable inmates such as myself that are placed in their care and
safekeeping by the Honorable Federal Courts of the United States of America.
(14) During the current resurgence of Covid-19 in the worldwide general populous
and inside the confines of Fort Dix Prison, the BOP is still transferrin g
inmates from other prisons to Fort Dix Prison and within Fort Dix; housing unit
to housing unit.
Case in point: on 11-11-20, 20 inmates were placed in my housing unit
(5741). Upon interview of these inmates, they said they were held in 5851 for
(2) weeks after arriving at Fort Dix Prison from different locations outside
Fort Dix Prison.
During their period of (2) weeks in 5851, they testify that about (70)
inmates from 5812 (the infected building as witnessed in Exhibit "J") - about 70
inmates were moved into their building (5851). 70 inmates from the infected
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building (5812) moved to (5851). This is the same group of 70 ~nmates that were
removed from 5812 when it was discovered that approximately 150 inmates in 5812
were infected, they were removed from 5812 and placed in 5851. Subsequently, at
least one of those inmates from 5812 (Joshua Moses) that had previously tested
negative, subsequently tested positive for Covid-19 after being in 5851 for a
brief unspecified amount of time. Said inmate that subsequently tested positive
was moved back to 5812 which had become another quarantine unit. Subsequent to
all these events of cross contamination, the originally reference 20 inmates
from 5851 were; on 11-11-20, placed in my building (5741). To see the full
details of this negligent mismanagement, and reckless disregard for inmates
safety and security see "Exhibit J"' and the corrmentary contained here in,at(nL
(15) Another case in point: On Wednesday, 18th of November, 2020, approximately
26 inmates were moved into my housing unit (5741), moved from 5703 (the
quarantine unit). One of these inmates was moved into my room. He sleeps
directly over me in the top bunk. And where is he from? Elkton Federal Prison
that's where. He states he was held in quarantine in 5703 after arriving at
Fort Dix (2) weeks prior to being transferred into 5741. And now this Elkton
inmate sleeps directly above me. And this Elkton inmate is very often seated
beside my bed 2.5 feet from where I sit on the opposite side of my bed.
(16) Another case in point: On the same day they moved those inmates from 5703
into my building (5741) (Nov. 18, 2020) a number of iI1JT1ates questioned the C.O.
about how many more inmates were going to be transferred into our building. He
said he did not not. But he did know that Fort Dix administration was clearing
out all the inmates from 5703 (the quarantine building) so they could fill it up
with more inmates from other facilites. He added (2) buses of inmates would be
arriving next week to repopulate 5703.
(17) And the BOP/Fort Dix's deception/mismanagement should be no suprise in that
historically the Federal BOP continually exhibits the same deliberate
indifference, and malignant behavior of mismanagement. Case in point: "The
Compassionate Release Statute of 2013": The poor response of the BOP to A.G.
Barr's directive earlier this year is not to surprising given the BOP's initial
response to the Compassionate Release Statute in 2013. Indeed, the Department
of Justice itself found that the BOP did not "properly manage the compassionate
release program ... " See U.S. Dept. of Justice, Office of the Inspector General,
the Federal Bureau of Prisons' Compassionate Release Program 1 (2013).
https://www.oversigh t.gov/sites/default/file s/oig-reports/el306.pd f.
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(18) Th~ the f.OF hqs formally adopted a policy to nitigate the risk of, attempt
to isolate and contain Covid-19, its actual compliance, and implementat ion is
piecemeal and unsatisfact orily inadequate. Piecemeal and unsatisfact orily
inadequate in the face of such dangerously deadly high risk conditions of
confinement for those with vulnerable pre-existan t medical conditions such as
myself. Piecemeal and unsatisfact orily inadequate in compliance and
implementat ion of a supposed excellently crafted written policy. Regardless of
their supposed excellently crafted written policy of Covid-19 mitigation, the
reality of the matter is the BOP has and continues to unnecessari ly, through a
combination of incompetance and deliberate indifferenc e exposed and continues to
expose its inmates to significant unnecessary risks from highly contagious, and
potentially deadly disease. And simultaneou sly attempts to cover its corrupt
actions with lies thereof.
(19) Another case in point of the BOP/Fort Dix's incompeten ce/deliberat e
indifferenc e/gross negligence. Reference "Exhibit J"
News article Dated Nov. 10, 2020 -(CommentQry-below)
At some point prior to October 29, 2020, all inmates in Building 5812 of
FCI Fort Dix were tested for Covid-19. Then on October 29, at a town hall
meeting where all inmates were present, BOP officials place forth a list of
approximate ly 70 inmates. All inmates were informed, to assume they tested
positive if they did not find their name on the list. Further, the inmates on
the list who were assumed to have tested negative were moved from 5812 to
another housing unit. Thus 5812 effectively became a quarantine unit. Inmate
Joshua Moses of 5812 was listed on the list of those who had tested negative at
some point prior to October 29, 2020. That night, (the inmates of 5812 who were
assumed as being free from the Covid-19 contagion having been tested at some
point previous to October 29, 2020) they were moved to a different building.
But within days, he too (Joshua Moses) was feeling lethargic and feverish. He
tested positive, and was instructed to carry his mattress and belongings back to
quarantine (5812).
Your Honor, this very situation exemplifies the abject
mismanagem ent/executio n of testing/vio lation of quarantine procedures
characteriz ed as piecemeal and inadequate through a combination of incompetance
and deliberate indifferenc e: When the BOP discovers one or more inmates is/are
infected with Covid-19, they remove those supposed uninfected inmates to another
housing unit as clearly evidenced in the news article Exhibit J. This moving of
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supposed uninfected inmates from a housing unit where in they had lived in a
confined, close-contact living condition with inmates that had previously tested
positive for Covid-19, moving the supposed uninfected irnnates to another housing
unit, thus potentially causing the spread of the virus to other inmates in other
housing units and/or correctional officers. How? Here's ~ow: They tested all
inmates in 5812 at some point before October 29, 2020. Based on the evidence
presented of Joshua Moses testing negative prior to October 29, and later
testing positive very shortly thereafter being moved to another building. One
can only surmise that Mr. Moses became infected while he remained in 5812 at
some moment during the interval that transpired between the time all inmates in
5812 were tested and the moment he was moved from 5812, i.e., the time elapsed
between a Covid-19 test being given and the results being received vis-a-vis;
some hours, 1 day - 2 days, etc.
For example, if all inmates in a housing unit are tested: say 100 total
tested and say 50 test positive, 50 test negative and yet the results are only
available one or more days after the fact of administering the test, mean while
all 100 inmates continue to interact confined in the same close contact living
conditions of confinement. How does the BOP know that additional irnnates of the
yet to be discovered negative test resultant group were not infected during the
elapsed interval between the moment the entire unit of 100 inmates were tested
and hours or days later when the 50 were confirmed to be infected? The
unequivocal answer is they can not know even hours later after administering a
test, who is positive and who is negative when all inmates are in constant close
contact living conditions as is existant at Fort Dix low security prison. The
whole point is this: Quite in fact if one person in a unit tested positive every
inmate in that unit should be assumed positive for safety sake and none moved
from that building. Effectively all inmates should be on quarantine. I believe
this is universally accepted medical protocol. And even if I am mistaken -
These actions by BOP officials knowingly disregard corrnnon sense measures of
health and safety and place more and more inmates at excessive risk of
contraction of Covid-19 and the very real danger of premature death there of.
This one inmate, Joshua Moses could have easily spread Covid-19 to another unit
that previously had not evidence of infection. And this is only one inmate of
the 70 that were moved. I think I not need to belabor the point of the dire
situation that could be created by the miserable deliberate indifference and the
gross negligence of gross mismanagement of Covid-19 by BOP officials at Fort Dix
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Prison: In short a super spreader scenario could easily unfold by one wrong
action of BOP officials regardless of how well a written policy they place
forth. But this is the type of incompetence, deliberate indifference, and gross
negligence inmates confront on a daily basis. The dire situation I find myself
in, having a combination of multiple suspect vulnerable health conditions in
light of Covid-19 has brought to light the pre-existant elemental, constitute
failure of a corrupt system of imprisonment, that allows the oppression of
citizens and violates their human rights.
(20) Another case in point: During the recent major outbreak of Covid-19 at Fort
Dix Prison inmates were still being transferred to the Drug Program at Fort Dix
Prison located in housing unit 5852. Transfers were from both inside Fort Dix
Prison and from other facilites. And the fact is it would only require one
infected inmate to infect the entire housing unit of apprixmately 200 to 368
inmates. Well, Your Honor, I believe that one inmate has been identified. On
11-14-2020, a Federal Corrections Officer has anonymously confirmed the first
case of Covid-19 among Drug Program participants in building 5852. Some time
during the week of November 9, 2020, said infected individual was identified and
the drug program suspended. And now since one inmate has tested positive in
5852, will they investigate the origin of the infected inmate? Will the BOP use
contact tracing to identify and isolate every individual that the infected
inmate came into contact with, both inmates and BOP workers, and Federal
Marshals? Will the BOP test all contact traced individuals? Will the BOP
follow standard medical protocol and procedure or will they bury their head in
the proverbial sand and continue to follow "ignorance is the best policy" as
cited by a Federal Judge in U.S. v. McNish, 2020 US Dist LEXIS 173048 Slip Op.
at 6, 8 (E.D. Pa, 9/22/20)? Will the BOP now remove that one inmate to another
building, possibly spreading more Covid-19 contagion? And how do they know
whether other inmates and BOP staff in 5852 are not also infected? Thus this
could be a repeat scenario, the mise-en-scene fully furnished with, not actors,
but real life participants in a tragic unfolding of events as transpired and
evidence in "Exhibit J: News Article dated November 10, 2020".
Will the BOP consider all inmates in 5852 as infected and quarantine the
entire building? Or will they begin to play Russian Roulette as they did in
building 5812, using flawed procedures to pick and choose a corrupt
redistribution of inmates to other housing units, thus possibly creating
cascading super spreader scenarios of multiplicative actuation? For details of
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their previous and recent scandalous debacle see Exhibit J, and commentary
contained here in, at(fCJ).
This "ignorance is bliss" approach by the Federal BOP is not only
unacceptable ideology and behavior unbecoming taxpayer supported government
officials, but places; inmates, BOP employees and the general populace
[email protected]. A Federal Judge commenting in a case related to Federal
Prison Allenwood Low, Reference: (Loyd v. U.S., 2020 WL 2572275 (ED Mich., 5-21-
20)) states the underlying attitude of deliberate indifference to the
seriousness of the spread of Covid-19: "zero confirmed cases is likely more a
result of lack of testing than a lack of the virus' presence in the prison. If
anything, the Court is more concerned that inmates and staff members are
interacting with one another as normal and blissfully unaware of the virus
spreading throughout the system." (I)nmates currently, "eat, sleep, and
interact with each other in a confined space, making it easier for the virus to
spread once introduced. Inmates are still being transferred between facilites.
Although they are screened for symptoms, they are not tested for the virus,
leaving potentially asymptomatic individuals to spread the virus to others. In
low security facilites, inmates are being quarantined with their own unit, as
opposed to individual cells, preventing them from complying with social
distancing recommendations."
The haphazard manner in which BOP officials use in transferring inmates not
only endangers the lives of inmates and BOP workers, but as well endangers the
surrounding [email protected]. The mere fact; in the middle of the pandemic,
that inmates are still being transferred between prisons clearly exemplifies
deliberate indifference, negligent mismanagement and gross negligence in the
light of past deadly Covid-19 outcomes. Additionally, the transfer of inmates
during this highly volatile moment of Covid-19 resurgence is bad enough, but
even worse, they do not test inmates for the virus before transfer, only
screening them for symptoms, leaving potentially asymptomatic individuals to
become super spreaders of the virus to other inmates/prisons, BOP workers/ and
the surrounding general populace.
When a reasonable, morally minded person thinks about these things in
relation to the thousands of evidential deaths that have already occurred, such
a person cannot help but to be shocked and outraged at this despicable,
despotic, oppressive violation of a human being's right, not to be knowingly
exposed to a known, deadly contagion by a representative government of the
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United States of America.
No matter what an inmate's crime may have been, such confineme nt, and
mistreatm ent far exceeds the punishment meted out by an Honorable Court.
Said corrupt situation makes one wonder: Is the BOP/Fort Dix Prison trying
to indirectl y extermina te inmates by directly exposing them to a known, deadly
contagion ?
(21) As related to Covid-19; in simple layman's terms, the BOP has knowingly
conducted and continues to knowingly conduct "a dog and pony show"; i.e. make
everythin g sound good for itching ears, and everythin g look good for the
proverbia l camera, but all along ignoring the facts, in the hopes that everyone
else will ignore the facts as well.
All the while behind the scenes of a supposed well orchestra ted facade is
the discombo bulated, and convolute d pretense of impeccabl e management, with the
pretense of a supposed satisfact ory execution of safety and security for all
involved. But it is just a very unstable, high rise house of cards as multiple
evidentia ry facts assert and testify to the fallacy of the BOP's well
orchestra ted facade.
(22) In the event of indicator s of improvement related to Covid-19 positive
inmates; improvement and/or reduction of Covid-19 positive tested inmates, does
not conclusiv ely establish that the Covid-19 outbreak at FCI Fort Dix has been
contained . Many inmates are asymptom atic, thus the virus remains active in the
prison and with the impossib ility of adequate social distancin g; as unanimously
attested to by multiple experts, remains unchanged, thus, absent additiona l
evidence, we must assume for purposes of my present motion; no matter the
quantity of reported negative/ positive cases at Fort Dix Prison, I am still at a
heightene d risk of contracti ng Covid-19 as long as I remain confined at Fort Dix
Prison.
(23) As a habeas corpus petitione r I assert, based on all the evidence of
condition s of confineme nt as related to my verified vulnerabl e pre-exist ant
medical condition s, that no set of confineme nt condition s would be
constitut ionally sufficien t. My clain challenge s the fact and/or extent of
confineme nt rather than the mere condition s of confineme nt and improvement
thereof. For those with vulnerabl e health condition s such as myself, there are
no condition s of confineme nt within the structure of Fort Dix Prison sufficien t
to prevent possible irreparab le physical harm and constitut ional injury. I
assert that no set condition s would be constitut ionally sufficien t to mitigate
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injury. My challenge is the legality of confinement and not the mere conditions
thereof. Adam v. Bradshaw, 644 F. 3d 481 (6th Cir, 2011) cf. Terrell v. U.S.,
564 F. 3d 442, 446-48 (6th Cir, 2009). The Supreme Court has held that release
from confinement - the remedy petitioners seek here - is "the heart of habeas
corpus" Freiser v. Rodriguez, 411 U.S. 475, 498, 93 S. Ct. 1827, 36 L. Ed. 2d
439 (1973).
(24) Based on the evidence presented it is evidently clear the BOP/Fort Dix
Prison is deliberatel y indifferent , with malignant mismanagement and gross
negligence to the serious risk of harm presented by Covid-19 for inmates such as
myself with pre-existin g vulnerable health conditions. This assertion is
evident both subjectivel y and objectively .
Subjectivel y: it has been demonstrate d that BOP/Fort Dix officials "know of
and disregard the excessive risk of harm to inmates" such as myself "with known
pre-existan ce vulnerable health conditions" . "And it is, indeed fair to say
that acting or failing to act with deliberate indifferenc e to this substantial
risk of serious harm" to my person "is the equivalent of recklessly disregardin g
that risk," by continuing to confine me at Fort Dix Prison.
Objectively : The evidence is also clear that the BOP/Fort Dix Prison has
continued and does continue to incarcerate my medically vulnerable self "under
conditions posing a substantial risk of serious harm."
Deliberate indifferenc e and gross negligence are questions of fact subject
to demonstrati on in the usual ways, including inference from circumstan tial
evidence. This is especially true where, as here, the BOP/Fort Dix Prison
substantial ly and utterly fails in its applying basic morality and ethics to the
facts and equities before it, as related to my being confined in high risk
environmen tal living condition with vulnerable pre-existan t medical conditions,
as opposed to releasing me from confinement at Fort Dix prison by the efficacy
of, home confinement , compassiona te release, sentence reduction or any
combination thereof.
Yet courts have granted compassiona te release to a substantial number of
medically vulnerable prisoners at Fort Dix, a diverse group in terms of their
ages and medical issues, criminal charges, and time remaining on their
sentences: United States v. Pagliuca, N. 17-432 (cs) (granting compassiona te
release to an inmate at Fort Dix serving a 10 year sentence for child
pornography offenses); U.S. v. Pena, No. 15-cr-551 (AJN), 2020 WL 2301199
(S.D.N.Y., May 8, 2020) (granting compassiona te release to an inmate at Fort Dix
12 of 13
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)-1, 2020 WL 1974372
with hyper tensio n); U.S. v. Willia ms, No. 3:17-c r-121 -(VAB
to Fort Dix inmat e
(D. Conn. , Apr. 24, 2020) (gran ting comp assion ate relea se
1:12-cr-00307-LEK,
with asthm a, diabe tes, and hyper tensio n); U.S. v. Logan, No.
relea se to Fort Dix
Dkt. N. 140 (N.D.N.Y., Apr 22, 2020) (gran ting comp assion ate
al issue s); U.S. v.
inmat e with diabe tes, high blood press ure, and other medic
25, 2020) (gran ted
Patric k Janse n, No. 1:20-c v-015 42 (SEB-MPB) Dist 7th (Nov.
nce for child
comp assion ate relea se to Fort Dix inmat e servi ng 15-ye ar sente
of BMI class ifica tion
porno graph y offen se, with pre-e xistin g medic al condi tions
obesi ty, forme r smoker, and heart arryth mia).
place d forth
I belie ve the merit s of my case, the overwhelming evide nce
ly and objec tively
clear ly indic ates the valid ity of my asser tion both subje ctive
neglig ence in its
that the BOP is guilt y of delib erate indif feren ce and gross
relea se from Fort
handl ing of Covid-19 and its refus al to grant my reque st for
attem pting to cover
Dix Priso n with the addit ional impli catio n of syste matic ally
up the facts of their malig nant mismanagement.
reque st and
I again respe ctful ly ask this Hono rable Court to grant my
the effica cy of
pleas e relea se me from this uncon stiuti onal confin emen t, by
.
whate ver statu te the Honorable Judge Hillm an deems appro priate
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---------------
- - - - - - - - - - - - - - - Supplemental Addendum # 1 4 . a . ( 1 )
------------
---------------------Exhibit: J ---------
--------------
- - - - - - - - - - - - - - - - N e w s Article Dated Nov. 10, 2 0 2 0 - -
- A Very Sad Situati on -
On October 29, the prison ers of Buildin g 5812 at FCI Fort Dix, the low-
securit v prison in New Jersey, were invited to a town hall meeting about the
Covid-19 outbrea k raging through the facilit y.
A list of about 70 inrrmtes had been oosted behind plexig lass. The
remain ing 150 inmates who could not find their names on the list were told to
assume they had tested positiv e, advoca tes said. Their cell block was now a
quaran tine unit. One, Troy Wragg, whose complex medica l conditi ons had already
the
left him wheelc hair bound, had been the lead plaint iff in a lawsui t filed by
.
ACLU of New Jersey seeking release for a class of medica1ly vulner able 1)80ple
A federa l judge dismiss ed the case in May. N0w, Wragg wrote to his wife~ his
fears had been confirm ed. "I am sick. It is officia l. Prayer s and hard work
are all that will help."
Familie s and adv0ca tes are raising alarms about the conditi ons at Fort Dix,
where 229 prison ers and 12 staff a.re now sick. They say the outbrea k was
pre,ren table and blame the Federa l BOP for transfe rring 150 prisone rs this fall
from Ohio's FCI Elkton , where more than 1,000 prison ers and staff have been
~nfecte d.
On Monday afterno on, New Jersey 's U.S. Senato rs Cory Booker, and Bob
Menendez sent a letter to the U.S. BOP calling the situati on a "rapid ly
escala ting crisis. " The situati on, they said~ der.IBnds an indefin ite
moratorium on inmate transfe rs and immediate testing of all staff and
prison ers. "It is clear the BOP does not have an effecti ve plan to ensure.
COVID-19 positiv e inmates are not transfe rred between facilit ies~" they
wrote tbe BOP Directo r Michael Carvaj al. They added, "All FCI Fort Dix
inmate s, staff, and the surroun ding corrnnunities are now at increas ed risk
for contra cting Covid-19 with potent ially d~adly conseq uences. "
The Bureau of Prisons clJ d not respond to a reques t for comment on Monday
afterno on. As recentl y as mid-October U.S. Attorne ys opposin g compas sionate
ve
release motions by :i:;'ort Dix prison ers argued that "tJe BOP has taken effecti
steps to limit the transm ission of Covid- 19."
Videos purpor tedly taken by a prison er inside 5812 and circula ting among
a
family members show a unit in chaos, debris scatter ed and trash overflo wing,
Case 1:20-cv-05544-NLH Document 31 Filed 12/16/20 Page 15 of 16 PageID: 492
byproduct of a shortage of staff and healthy inmate workers, according to family
members. Wragg's wife, Megan Hallett Wragg, 28, said her husband sounds hoarse
and out of breath. "He barely has a voice. It's very raspy. He's coughed up
blood from coughing so much. Everybody there just walks around like zombies,"
she said.
Shannon Clark Moses, said her husband Joshua, 39, was in the same unit as
Wragg. "There's no way we can socially distance," he told her. He described
hanging towels around his bunk, a fort to keep out the disease.
On October 29, Joshua found he was on the list of those who'd tested
negative. That night they were moved to a different building. But, within
days, he too was feeling lethargic and feverish. He tested positive and was
instructed to carry his mattress and belongings back to quarantine.
The last time Moses heard from him, a week ago, he told her he couldn't
breath. "I'm hearing about men passing out. He said, big, healthy, strong
men ..• he's watching them pass out on the floor, and be carried off," said Moses,
39, of North Philadelphia.
The situation at Fort Dix, which has a population of 2,600, has been at the
center of a series of federal lawsuits waged by prisoners seeking compassionate
release. Those petitions have largely been denied by judges who cited the low
incidence of infections there, but that could be changing. On November 3, a
judge in the Eastern District of New York granted release for Daniel Mongelli,
citing "the failure of the Bureau of Prisons to prevent and control a Covid-19
outbreak at FCI Fort Dix."
Source: George Woolston, Burlington Country Times; Philadlephia Inquirer/
November 10; and the Press of Atlantic City
Case 1:20-cv-05544-NLH Document 31 Filed 12/16/20 Page 16 of 16 PageID: 493
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Exhibit 10.82
[g135461kmi001.jpg]
Inspired by Simplicity.
Driven by Innovation.
Engineered with Excellence.
May 3, 2008
Jeanne Seeley
Re: Terms of Employment Offer
Dear Jeanne:
This letter will confirm the terms of your offer of employment with Occam
Networks, Inc. (“Occam Networks”). Such terms are as follows:
1. POSITION AND RESPONSIBILITIES. YOU WILL SERVE IN THE POSITION OF SENIOR
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER REPORTING TO BOB HOWARD-ANDERSON,
PRESIDENT & CEO. IT IS ANTICIPATED THAT YOUR FIRST DAY OF EMPLOYMENT WILL BE
MAY 12, 2008. YOU WILL ASSUME AND DISCHARGE SUCH RESPONSIBILITIES AS ARE
COMMENSURATE WITH SUCH POSITION AND AS YOUR MANAGER MAY DIRECT. DURING THE TERM
OF YOUR EMPLOYMENT, YOU SHALL DEVOTE YOUR FULL TIME, SKILL AND ATTENTION TO YOUR
DUTIES AND RESPONSIBILITIES AND SHALL PERFORM THEM FAITHFULLY, DILIGENTLY AND
COMPETENTLY. IN ADDITION, YOU SHALL COMPLY WITH AND BE BOUND BY THE OPERATING
POLICIES, PROCEDURES AND PRACTICES OF OCCAM NETWORKS IN EFFECT FROM TIME TO TIME
DURING YOUR EMPLOYMENT.
2. AT-WILL EMPLOYMENT. YOU ACKNOWLEDGE THAT YOUR EMPLOYMENT WITH OCCAM
NETWORKS IS FOR AN UNSPECIFIED DURATION THAT CONSTITUTES AT-WILL EMPLOYMENT, AND
THAT EITHER YOU OR OCCAM NETWORKS CAN TERMINATE THIS RELATIONSHIP AT ANY TIME,
WITH OR WITHOUT CAUSE AND WITH OR WITHOUT NOTICE.
3. COMPENSATION.
A) IN CONSIDERATION FOR YOUR SERVICES, EFFECTIVE YOUR FIRST DAY OF
EMPLOYMENT, YOU WILL BE PAID A BASE SALARY OF $250,000 PER YEAR, PAYABLE
SEMI-MONTHLY IN ACCORDANCE WITH OCCAM NETWORKS’ STANDARD PAYROLL PRACTICES.
B) EXECUTIVE CASH INCENTIVE: THE TARGET FOR YOUR EXECUTIVE CASH INCENTIVE
WILL BE 70% ON AN ANNUALIZED BASIS. BONUS TARGET FOR THE SECOND HALF OF FISCAL
2008 WILL BE AT 35% OF ANNUAL BASE SALARY AND WILL BE BASED 50% ON COMPANY
FINANCIAL PERFORMANCE (REVENUE AND OPINC) VERSUS PLAN, AND 50% ON PERSONAL
OBJECTIVES ESTABLISHED BY THE CEO AND APPROVED BY THE COMPENSATION COMMITTEE FOR
THE HALF YEAR ENDING DECEMBER 31, 2008. EACH PAYOUT WILL HAVE A PERFORMANCE
MULTIPLIER THAT WILL HAVE THE RANGE OF 50% PAYOUT FOR 90% ACHIEVEMENT UP TO 150%
PAYOUT FOR 120% ACHIEVEMENT, SCALED LINEARLY IN BETWEEN. OCCAM’S COMPENSATION
COMMITTEE HAS NOT DETERMINED THE STRUCTURE OF ANY INCENTIVE COMPENSATION PLAN
FOR EXECUTIVE OFFICERS FOR FISCAL 2009, BUT OCCAM WOULD EXPECT, SUBJECT TO YOUR
CONTINUED STATUS AS AN EXECUTIVE OFFICER, THAT YOU WOULD PARTICIPATE IN ANY SUCH
PLAN ESTABLISHED BY THE COMPENSATION COMMITTEE.
Occam Networks, Inc.
main +1-845-898-1721
6868 Cortona Drive
fax +1-845-898-1721
Santa Barbara, California 93117
www.occamnetworks.com
1
--------------------------------------------------------------------------------
C) IF YOUR EMPLOYMENT IS TERMINATED BY OCCAM NETWORKS FOR ANY REASON, WITH
OR WITHOUT CAUSE, OR IF YOU RESIGN YOUR EMPLOYMENT VOLUNTARILY, NO COMPENSATION
OR OTHER PAYMENTS WILL BE PAID OR PROVIDED TO YOU FOR PERIODS FOLLOWING THE DATE
WHEN SUCH A TERMINATION OF EMPLOYMENT IS EFFECTIVE, PROVIDED THAT ANY RIGHTS YOU
MAY HAVE UNDER THE BENEFIT PLANS OF OCCAM NETWORKS (INCLUDING ANY EQUITY
INCENTIVE AND INCENTIVE COMPENSATION PLANS) SHALL BE DETERMINED UNDER THE
PROVISIONS OF THOSE PLANS. IF YOUR EMPLOYMENT TERMINATES AS A RESULT OF YOUR
DEATH OR DISABILITY, NO COMPENSATION OR PAYMENTS WILL BE MADE TO YOU OTHER THAN
THOSE TO WHICH YOU MAY OTHERWISE BE ENTITLED UNDER THE BENEFIT PLANS OF OCCAM
NETWORKS.
4. OTHER BENEFITS. YOU WILL BE ENTITLED TO RECEIVE THE STANDARD EMPLOYEE
BENEFITS MADE AVAILABLE BY OCCAM NETWORKS TO ITS EMPLOYEES TO THE FULL EXTENT OF
YOUR ELIGIBILITY THEREFORE. YOU SHALL BE ENTITLED TO 15 DAYS OF PAID TIME OFF
(PTO) PER YEAR. DURING YOUR EMPLOYMENT, YOU SHALL BE PERMITTED, TO THE EXTENT
ELIGIBLE, TO PARTICIPATE IN ANY GROUP MEDICAL, DENTAL, LIFE INSURANCE AND
DISABILITY INSURANCE PLANS, OR SIMILAR BENEFIT PLAN OF OCCAM NETWORKS THAT IS
AVAILABLE TO EMPLOYEES GENERALLY. PARTICIPATION IN ANY SUCH PLAN SHALL BE
CONSISTENT WITH YOUR RATE OF COMPENSATION TO THE EXTENT THAT COMPENSATION IS A
DETERMINATIVE FACTOR WITH RESPECT TO COVERAGE UNDER ANY SUCH PLAN.
As an executive officer of Occam Networks, you will be entitled to the benefits
outlined in the change of control severance agreement in the form approved by
Occam’s compensation committee for all executive officers, which we will enter
with you at the time you commence employment.
Occam Networks shall reimburse you for all reasonable expenses actually incurred
or paid by you in the performance of your services on behalf of the company,
upon prior authorization and approval in accordance with Occam Networks’ expense
reimbursement policy as from time to time in effect.
5. STOCK OPTION. SUBJECT TO THE APPROVAL OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF OCCAM NETWORKS, AND UNDER THE TERMS AND CONDITIONS OF
THE OCCAM NETWORKS 2006 EQUITY INCENTIVE PLAN AND THE APPROVED STOCK OPTION
AGREEMENT FOR EXECUTIVE OFFICERS (NET EXERCISE FORM), YOU WILL BE GRANTED A
NON-STATUTORY STOCK OPTION TO PURCHASE 75,000 SHARES OF OCCAM NETWORKS’ COMMON
STOCK AT AN EXERCISE PRICE THAT IS EQUAL TO THE CLOSING TRADING PRICE OF OCCAM
NETWORKS’ COMMON STOCK ON THE DATE OF GRANT (WHICH MAY, IN ACCORDANCE WITH OCCAM
NETWORKS’ ADMINISTRATIVE POLICY RELATING TO STOCK OPTION GRANTS BE SUBSEQUENT TO
THE DATE OF COMPENSATION COMMITTEE APPROVAL). ADDITIONALLY, SUBJECT TO
COMPENSATION COMMITTEE APPROVAL, YOU WILL BE GRANTED 35,000 RESTRICTED STOCK
UNITS (RSUS). SUBJECT TO YOUR CONTINUING TO BE A SERVICE PROVIDER (AS DEFINED IN
THE 2006 EQUITY INCENTIVE PLAN), THE COMMON STOCK OPTIONS WILL VEST AND BECOME
EXERCISABLE AT THE RATE OF 25% VESTING ON THE FIRST ANNIVERSARY OF THE VESTING
COMMENCEMENT DATE AND THE REMAINING 75% VESTING THEREAFTER IN 36 EQUAL MONTHLY
INSTALLMENTS. ALSO ASSUMING CONTINUED STATUS AS A SERVICE PROVIDER, THE RSUS
WILL VEST OVER A THREE YEAR PERIOD AS FOLLOWS: 1/6TH WILL VEST UPON THE SIX
MONTH ANNIVERSARY OF THE DATE OF GRANT, 1/6TH WILL VEST ON THE FIRST ANNIVERSARY
OF THE DATE OF THE GRANT, 1/3RD WILL VEST ON THE SECOND ANNIVERSARY OF THE DATE
OF THE GRANT, AND 1/3RD WILL VEST ON THE THIRD ANNIVERSARY OF THE DATE OF GRANT.
2
--------------------------------------------------------------------------------
6. CONFIDENTIAL INFORMATION. YOU AGREE THAT YOUR EMPLOYMENT IS CONTINGENT
UPON YOUR EXECUTION OF, AND DELIVERY TO, OCCAM NETWORKS OF AN EMPLOYMENT,
CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT IN THE STANDARD FORM
UTILIZED BY OCCAM NETWORKS (THE “CONFIDENTIALITY AGREEMENT”).
7. CONFLICTING EMPLOYMENT. YOU AGREE THAT, DURING THE TERM OF YOUR
EMPLOYMENT WITH OCCAM NETWORKS, YOU WILL NOT ENGAGE IN ANY OTHER EMPLOYMENT,
OCCUPATION, CONSULTING OR OTHER BUSINESS ACTIVITY DIRECTLY RELATED TO THE
BUSINESS IN WHICH OCCAM NETWORKS IS NOW INVOLVED OR BECOMES INVOLVED DURING THE
TERM OF YOUR EMPLOYMENT, NOR WILL YOU ENGAGE IN ANY OTHER ACTIVITIES THAT
CONFLICT WITH YOUR OBLIGATIONS TO OCCAM NETWORKS.
8. FEDERAL IMMIGRATION LAW. FOR PURPOSES OF FEDERAL IMMIGRATION LAW, YOU
WILL BE REQUIRED TO PROVIDE TO OCCAM NETWORKS DOCUMENTARY EVIDENCE OF YOUR
IDENTITY AND ELIGIBILITY FOR EMPLOYMENT IN THE UNITED STATES. SUCH
DOCUMENTATION MUST BE PROVIDED TO OCCAM NETWORKS WITHIN TWO (2) BUSINESS DAYS OF
YOUR DATE OF HIRE.
9. GENERAL PROVISIONS. THIS OFFER LETTER WILL BE GOVERNED BY THE LAWS OF
THE STATE OF CALIFORNIA, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
A) THIS OFFER LETTERS SETS FORTH THE ENTIRE AGREEMENT AND UNDERSTANDING
BETWEEN OCCAM NETWORKS AND YOU RELATING YOUR EMPLOYMENT AND SUPERSEDES ALL PRIOR
VERBAL DISCUSSION BETWEEN US. ANY SUBSEQUENT CHANGE OR CHANGES IN YOUR DUTIES,
SALARY OR OTHER COMPENSATION WILL NOT AFFECT THE VALIDITY OR SCOPE OF THIS
AGREEMENT. ANY CHANGE TO THE AT-WILL TERM OF THIS AGREEMENT MUST BE EXECUTED IN
WRITING AND SIGNED BY YOU AND THE PRESIDENT OF OCCAM NETWORKS.
B) THIS AGREEMENT WILL BE BINDING UPON YOUR HEIRS, EXECUTORS, ADMINISTRATORS
AND OTHER LEGAL REPRESENTATIVES AND WILL BE FOR THE BENEFIT OF OCCAM NETWORKS
AND ITS RESPECTIVE SUCCESSORS AND ASSIGNS.
c) This offer letter expires as of the close of business on Friday, May 9,
2008.
Please acknowledge and confirm your acceptance of this letter by signing and
returning the enclosed copy of this offer letter as soon as possible. If you
have any questions about this offer letter, please call me directly.
OCCAM NETWORKS, INC.
By:
/s/ Robert Howard-Anderson
Robert Howard-Anderson
President & Chief Executive Officer
3
--------------------------------------------------------------------------------
* * * * * * * * * * * * *
ACCEPTANCE:
I accept the terms of my employment with Occam Networks as set forth herein. I
understand that this offer letter does not constitute a contract of employment
for any specified period of time, and that my employment relationship may be
terminated by either party, with or without cause and with or without notice.
/s/ Jeanne Seeley
May 3, 2008
Jeanne Seeley
Date
4
-------------------------------------------------------------------------------- |
Title: (Chicago, Illinois) Situation with 19 year old who is on drugs and is beat by parents.
Question:I don't know this person by the way, but I'd appreciate any advice on the matter. My question really, is what would happen if authorities got involved? Knowing that he does drugs, it sounds like a one way ticket to prison. However, also knowing that his parents are abusive and cause him to have depression and do self harm makes me think maybe getting him away from them and to somewhere better would allow him to heal and get off drugs without a prison sentence. I have no idea though if there's any or enough proof of his parents' abuse. He's also suicidal. Thoughts?
Answer #1: He should move out of his parents house. That's the simplest solution here, since he's an adult. |
Citation Nr: 0835500
Decision Date: 10/16/08 Archive Date: 10/27/08
DOCKET NO. 06-32 893 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Muskogee,
Oklahoma
THE ISSUE
Whether new and material evidence has been received
sufficient to reopen a claim of entitlement to VA
compensation benefits under the provisions of 38 U.S.C.A.
§ 1151 for residuals of coronary artery bypass graft (CABG)
performed at a VA medical facility in May 1995.
REPRESENTATION
Appellant represented by: Oklahoma Department of
Veterans Affairs
WITNESS AT HEARINGS ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
K.A. Kennerly, Associate Counsel
INTRODUCTION
The veteran served on active duty from June 1958 to May 1961.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a December 2005 rating decision of the
Muskogee, Oklahoma, Regional Office (RO) of the Department of
Veterans Affairs (VA), which denied the veteran's claim.
The veteran participated in a Decision Review Officer hearing
in July 2006 and a Board video conference hearing with the
undersigned Veterans Law Judge in March 2008. Transcripts of
these proceedings have been associated with the veteran's
claims file.
To establish jurisdiction over this issue, the Board must
first consider whether new and material evidence has been
submitted to reopen the claim. See 38 U.S.C.A. §§ 5108, 7104
(West 2002 & Supp. 2008). The Board must proceed in this
fashion regardless of the RO's actions. See Barnett v.
Brown, 83 F.3rd 1380 (Fed. Cir. 1996) and VAOPGCPREC 05-92.
As discussed fully under the analysis section, new and
material evidence has been submitted to reopen the claim.
The issue of entitlement to compensation benefits under
38 U.S.C.A. § 1151, on the merits, is addressed in the REMAND
portion of the decision below and is REMANDED to the RO via
the Appeals Management Center (AMC), in Washington, DC. VA
will notify the veteran if additional action is required on
his part.
FINDINGS OF FACT
1. The RO denied entitlement to VA compensation benefits
under the provisions of 38 U.S.C.A. § 1151 for residuals of
CABG performed at a VA medical facility in May 1995, in
December 2004 and the veteran did not appeal this decision.
2. Evidence received since the December 2004 decision
relates to unestablished facts necessary to substantiate the
claim of entitlement to VA compensation benefits under the
provisions of 38 U.S.C.A. § 1151 for residuals of CABG
performed at a VA medical facility in May 1995, and raises a
reasonable possibility of substantiating the claim.
CONCLUSION OF LAW
New and material evidence has been received since the RO's
final, unappealed December 2004 decision, and the claim of
entitlement to VA compensation benefits under the provisions
of 38 U.S.C.A. § 1151 for residuals of CABG performed at a VA
medical facility in May 1995, is reopened. 38 U.S.C.A. §§
5108, 7104 (West 2002 & Supp. 2008); 38 C.F.R. § 3.156
(2007).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The issue for resolution before the Board is whether new and
material evidence has been received to reopen the veteran's
claim of entitlement to VA compensation benefits under the
provisions of 38 U.S.C.A. § 1151 for residuals of CABG
performed at a VA medical facility in May 1995. After a
review of the evidence of record, the Board finds that new
and material evidence has been received.
In December 2004, the RO denied the veteran's claim of
entitlement to VA compensation benefits under the provisions
of 38 U.S.C.A. § 1151 for residuals of CABG performed at a VA
medical facility in May 1995. The veteran was provided with
notice thereof, including his appellate rights, by letter
dated later that month, and he did not file an appeal. The
December 2004 RO decision is final. See 38 U.S.C.A. § 7105
(West 2002 & Supp. 2008). The denial was based on the fact
that the veteran did not begin to suffer from a ventral
hernia until many years after his surgery at a VA medical
facility. Additionally, any such hernia would have been
considered a necessary consequence of the CABG surgery, for
which the veteran signed a consent form.
At the time of the December 2004 denial of the claim,
evidence of record included: service treatment records for
the period June 25, 1958 to May 10, 1961; treatment reports
from the VA Medical Center (VAMC) in Oklahoma City dated May
22, 1995 to August 29, 2004; treatment records from Integris
Baptist Medical Center dated March 22, 2004; treatment report
from Healthsouth dated June 10, 2004; treatment reports from
Dr. Phillip Palmer dated February 27, 2004 to June 25, 2004;
the veteran's statements received in September 2004 and
October 2004; VA examination reports dated in October 2004
and November 2004; report from Dr. Kautilya Mehta dated March
22, 2004; and a report of examination by Dr. Sidney Williams
dated July 24, 2000.
Prior unappealed decisions are final. However, a claim will
be reopened and the former disposition reviewed if new and
material evidence is presented or secured with respect to the
claim which has been disallowed. See 38 U.S.C.A. § 5108
(West 2002 & Supp. 2008); 38 C.F.R. § 3.156(a) (2007). The
United States Court of Appeals for Veterans Claims (Court)
has held that, when "new and material evidence" is presented
or secured with respect to a previously and finally
disallowed claim, VA must reopen the claim. See Manio v.
Derwinski, 1 Vet. App. 140, 145 (1991).
The legal standard of what constitutes "new and material"
evidence was recently amended. This amendment is applicable
in the instant case as the amendment applies prospectively to
claims filed on or after August 29, 2001, as in this case.
See 38 C.F.R. § 3.156(a) (2007).
New evidence means existing evidence not previously submitted
to agency decision makers. Material evidence means existing
evidence that, by itself or when considered with previous
evidence of record, relates to an unestablished fact
necessary to substantiate the claim. New and material
evidence can be neither cumulative nor redundant of the
evidence of record at the time of the last prior final denial
of the claim sought to be reopened, and must raise a
reasonable possibility of substantiating the claim. See 38
C.F.R. § 3.156(a) (2007).
According to the Court, the pertinent VA law requires that in
order to reopen a previously and finally disallowed claim,
there must be new and material evidence presented or secured
since the time that the claim was finally disallowed on any
basis. See Evans v. Brown, 9 Vet. App. 273 (1996).
Evidence received in the current application to reopen the
claim includes: treatment records from VAMC Oklahoma City
dated October 21, 2004 to August 31, 2007; statements of Dr.
Barry G. Perkins dated September 7, 2005 and July 25, 2006;
transcript of Decision Review Officer hearing held July 12,
2006; statements regarding the veteran's previous employment;
medical evidence from various medical providers received
September 6, 2007; and the transcript of the Board video
conference hearing on March 26, 2008.
As noted, entitlement to VA compensation benefits under the
provisions of 38 U.S.C.A. § 1151 for residuals of CABG
performed at a VA medical facility in May 1995 was denied in
December 2004 because the RO found that too much time had
elapsed between the veteran's surgery and his complaints of a
ventral hernia to attribute the hernia to surgery and the
fact that the veteran consented to the possibility of such.
The Board finds that the additional evidence which has been
newly submitted in conjunction with the current application
to reopen the claim is both new and material as defined by
regulation because a private medical statement opines that
the ventral hernia occurred after bypass surgery. See 38
C.F.R. § 3.156(a) (2007).
Having determined that new and material evidence has been
added to the record, the veteran's claim for service
connection is reopened. See 38 U.S.C.A. § 5108 (West 2002 &
Supp. 2008); 38 C.F.R. § 3.156(a) (2007). However, the Board
cannot, at this point, adjudicate the reopened claim, as
further assistance is required to comply with the duty to
assist. This is detailed in the REMAND below.
ORDER
The application to reopen the claim of entitlement to VA
compensation benefits under the provisions of 38 U.S.C.A. §
1151 for residuals of CABG performed at a VA medical facility
in May 1995 is granted, and, to that extent only, the appeal
is granted.
REMAND
After a thorough review of the veteran's claims file, the
Board has determined that additional evidentiary development
is necessary prior to the adjudication of the veteran's
claim.
The veteran seeks compensation under 38 U.S.C.A. § 1151,
claiming fault on the part of VA as the cause of a ventral
hernia resulting from surgery performed at a VA treatment
facility in May 1995. Section 1151 provides in pertinent
part as follows:
(a) Compensation under this chapter. . .shall be awarded for
a qualifying additional disability. . .of a veteran in the
same manner as if such additional disability. . .were
service[]connected. For purposes of this section, a
disability. . .is a qualifying additional disability. . .if
the disability. . .was not the result of the veteran's
willful misconduct and-
(1) the disability. . .was caused by hospital care, medical
or surgical treatment, or examination furnished the veteran
under any law administered by the Secretary, either by a
Department employee or in a Department facility as defined in
section 1701(3)(A) of this title, and the proximate cause of
the disability. . .was--
(A) carelessness, negligence, lack of proper skill, error in
judgment, or similar instance of fault on the part of the
Department in furnishing the hospital care, medical or
surgical treatment, or examination; or
(B) an event not reasonably foreseeable . . .
See 38 U.S.C.A. § 1151. In sum, the law states that the
proximate cause of the additional disability must be one of
the causes identified in 38 U.S.C.A. § 1151(a)(1)(A) or 38
U.S.C.A. § 1151(a)(1)(B).
The RO denied the veteran's claim in a decision dated in
December 2005, finding that the proximate cause of the
veteran's post-surgery ventral hernia was not carelessness,
negligence, lack of proper skill, error in judgment, or
similar instance of fault on the part of VA, and that the
proximate cause of the ventral hernia was not an event that
was not reasonably foreseeable. Additionally, the RO stated
that the veteran's ventral hernia could not have possibly
resulted from his May 1995 CABG since it did not manifest
until many years after his surgery.
In reviewing the evidence of record, the Board finds that the
veteran has submitted conflicting medical evidence. Several
of the medical statements associated with the claims file
provide unsupported positive nexus statements, and one
opinion is unclear. Regardless however, none of the medical
opinions addresses the specific criteria necessary to recover
under 38 U.S.C.A. § 1151. Because the evidence of record is
insufficient to decide the veteran's claim, the Board will
remand in order to obtain an expert medical opinion by an
experienced surgeon to aid the Board in determining whether
the proximate cause of the claimed disability was due to
either carelessness, negligence, lack of proper skill, error
in judgment, or similar instance of fault on the part of VA
in furnishing the May 1995 surgical treatment, or, whether
the veteran's residual disability was, or was not, reasonably
foreseeable under the circumstances present at the time of
the veteran's May 1995 surgery.
Accordingly, the case is REMANDED for the following action:
1. The AMC should obtain any
outstanding VA treatment records for
the veteran, dated from August 31,
2007, to the present.
2. Thereafter, the AMC should arrange
for an expert medical opinion by a
surgeon. The veteran's claims file must
be made available to the physician for
review of pertinent documents therein in
connection with the preparation of the
requested opinion. The report should
reflect that such a review was
conducted.
The physician should review the claims
file, including specifically all
records related to the veteran's May
1995 surgery, the post-operative period
and the subsequent diagnoses of ventral
hernia, and provide an opinion as to
medical probabilities that the
proximate cause of the residual
disability (the ventral hernia) was due
to either carelessness, negligence,
lack of proper skill, error in
judgment, or similar instance of fault
on the part of VA in furnishing the May
1995 surgical treatment, or, whether
the veteran's residual disability was
or was not reasonably foreseeable.
If, after review of the claims file,
the physician believes that an
examination is required in order to
provide the opinion sought, one should
be scheduled. If an examination is
provided, all indicated studies, tests
and evaluations deemed necessary should
be performed and the results noted in
the examination report.
In preparing the opinion, the physician
should refer to the wording of the
relevant statute quoted on the pages
above. The AMC should ensure that the
opinion provided complies with this
remand and the questions presented in
the AMC's opinion request. If any
report is insufficient, it should be
returned to the physician for necessary
corrective action, as appropriate.
3. After undertaking any other
development deemed appropriate, the AMC
should consider the issue on appeal in
light of all information or evidence
received. If the benefit sought is not
granted, the veteran and his
representative should be furnished with
a supplemental statement of the case and
afforded an opportunity to respond
before the record is returned to the
Board for further review.
The appellant has the right to submit additional evidence and
argument on the matter or matters the Board has remanded.
See Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board of
Veterans' Appeals or by the United States Court of Appeals
for Veterans Claims for additional development or other
appropriate action must be handled in an expeditious manner.
See 38 U.S.C.A. §§ 5109B, 7112 (West 2002 & Supp. 2008).
_________________________________________________
BARBARA B. COPELAND
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Appeals for Veterans Claims. This remand is in the
nature of a preliminary order and does not constitute a
decision of the Board on the merits of your appeal. See
38 C.F.R. § 20.1100(b) (2007).
Department of Veterans Affairs
|
618 N.E.2d 1343 (1993)
In the matter of the Della Lustgarten Nathan Trust.
No. 23A01-9306-CV-182.
Court of Appeals of Indiana, First District.
August 11, 1993.
Rehearing Denied October 8, 1993.
*1344 George L. Hanna, Hanna, Gerde & Burns, Lafayette, for appellant.
Robert O. Williams, Williams Law Offices, Covington, for appellee.
ROBERTSON, Judge.
This appeal raises the question of whether, when a trust, the purpose of which is to provide for the support and maintenance of a particular settlor, has terminated upon the death of the settlor, the trustees have the power to sell land which is the corpus of the trust in order to pay expenses and costs incurred in the administration of the trust before they make a final distribution of the corpus to the remaindermen. The trial court examined the trust document, concluded that the trustees did not possess the power to sell the realty after the settlor's death and denied the trustees' permission to sell. We reverse.
Louis Nathan died on October 9, 1973, leaving a will and codicil, which, for various reasons, could not be carried out in the manner Nathan had intended. Nathan's legatees reached a compromise and entered into a family settlement agreement by which Nathan's children agreed to place in trust the undivided one-half interest in a 509.26 acre farm they were to receive by virtue of Nathan's will and codicil with the income and principal to be made available for the benefit and use of their mother, Della Nathan. The agreement provided that the trustees would be instructed that upon the demise of Della Nathan, any and all remaining corpus of the trust should be divided equally among the five children. In consideration for this agreement, Della Nathan irrevocably placed her undivided one-half interest in the farm in the trust. On September 23, 1977, Della Nathan and each of her children executed the trust agreement which is the subject of this litigation.
Della Nathan died on January 4, 1992. At that time, the farm had been leased for a one-year term ending in December, 1992. The co-trustees continued to manage the farm and had it appraised, hoping to obtain agreement among the five children concerning its disposition. At some point, it became apparent to the co-trustees that expenses of administration and advances made by one of the trustees to the trust estate could not be fully paid from income accumulated in the trust account and the farm would need to be sold. The co-trustees had the trust docketed to authorize the payment of various expenses and the sale *1345 of the farm. Unhappy with the appraisals obtained for the farm, four of Della Nathan's children filed a petition to terminate the trust in an effort to obtain the farm in fee.
The merits of the controversy involve an interpretation of the trust instrument. Whether the co-trustees have the authority to sell the farm after Della Nathan's death must be determined from the intention of the settlors of the trust as expressed or implied in the trust instrument. Powell v. Madison Safe Deposit & Trust Co. (1935), 208 Ind. 432, 438, 196 N.E. 324. The intention and purpose of the testator or settlor in creating the trust is controlling. Id. at 448, 196 N.E. 324.
The trust agreement directs the co-trustees to pay income from the trust to Della Nathan during her lifetime. "If the income payments from the trust shall be insufficient in the discretion of the co-trustees to provide for the reasonable support, care and comfort of any beneficiary," the co-trustees may pay to "such beneficiary" or apply for her benefit so much of the principal as the co-trustees deem proper or necessary for that purpose. Upon the death of Della Nathan, the trust "shall be terminated and the corpus of the trust estate and any accumulated income shall be distributed equally, share and share alike" to the Nathans' five children or their heirs per stirpes.
The trust agreement also gives the co-trustees "with respect to any property at any time constituting any part of the trust estate" the "full power and authority" to alter and change the investments of the trust estate, the power to sell, give options to purchase, assign, lease, mortgage, and transfer any of the property and assets of the trust estate, the power to pay the charges and expenses of the trust estate, and the power "to perform any and all other acts which they may deem necessary or proper for the carrying out of the purposes of this trust agreement." The co-trustees are entitled to reasonable compensation for their services in the administration of the trust. "Such compensation shall be as agreed by the Co-Trustees or by a court of competent jurisdiction, at the expense of the trust."
We are convinced by the language of the trust document that the primary and controlling purpose of the settlors was not to reserve in Della Nathan a life estate in the land or to give her children an interest or estate in the land itself but to provide a means by which the land and the income from it could be used for her reasonable support and maintenance, leaving to her children whatever remained of the land or its proceeds. The trust fully empowers the co-trustees with the discretion to incur whatever expense is necessary for the reasonable support, care and comfort of Della Nathan and to charge those expenses, if income from the corpus is insufficient in the discretion of the co-trustees, against the corpus of the trust estate itself, that is, the land. Absolute title to the entire farm was placed in the hands of the co-trustees to sell for the purpose of defraying the expenses of Della Nathan which, under the express terms of the trust, include a reasonable compensation for the co-trustees' services "at the expense of the trust."
When the power invested in the co-trustees to sell the real estate for the purpose of the trust is coupled with absolute title to the premises, the power created is not destroyed by the death of the settlor. McNew v. Vert (1908), 43 Ind. App. 83, 87, 86 N.E. 969. Hence, it matters not whether the power to sell is exercised before the expense is incurred or after, id., or that expenses remain to be paid after the settlor's death.
The record reflects that, in addition to administrative expenses, one of the co-trustees may have advanced his own funds in furtherance of the purpose of the trust. Where a trustee uses his own money for purposes of the trust, he is entitled to reimbursement. American Bonding Co. v. State ex rel. Whisler (1907), 40 Ind. App. 559, 567, 82 N.E. 548. See also Ind. Code 30-4-3-3(a)(10). Likewise, a trustee has an equitable right to be reimbursed for all reasonable expenses properly incurred in the execution of his trust. Matter of the *1346 Trust of Loeb (1986), Ind. App., 492 N.E.2d 40, 43, trans. denied. He will not be compelled to part with the trust property until the disbursements are paid. Curran v. Abbott (1895), 141 Ind. 492, 497, 40 N.E. 1091.
Indiana Code 30-4-5-11 instructs the co-trustees on how to charge expenses against income and principal. The remaindermen have not questioned whether the co-trustees have properly charged funds received and expenditures made against income and principal. Hence, this court has before it only the question of whether the trust authorizes the co-trustees to sell the property if necessary to pay for expenses incurred for the benefit of the income beneficiary. We have concluded that the trust document gives the co-trustees the discretion to make this decision. The trust relationship involves the exercise of the utmost good faith on the part of the trustees for the benefit and furtherance of the interest of the beneficiaries under the trust; a trustee must exercise in its management of the trust the care, skill, prudence and diligence of an ordinarily prudent person engaged in similar business affairs. Robison v. Elston Bank & Trust Co. (1943) 113 Ind. App. 633, 658, 48 N.E.2d 181. In the absence of bad faith, or an abuse or unreasonable exercise of discretion by the co-trustees, the courts will not interfere with a decision to use a portion of the corpus for the purpose intended by the settlor. Id.
The sole basis for the trial court's decision not to authorize the sale appears to be its determination that the co-trustees did not possess the power to sell the land for the trust purposes after the death of Della Nathan. Indiana law provides otherwise. Accordingly, we reverse the judgment and remand for further proceedings consistent with this opinion.
Reversed and remanded.
NAJAM and MILLER, JJ., concur.
|
6 Wash. App. 43 (1971)
492 P.2d 600
J.S.K. ENTERPRISES, INC., Appellant,
v.
THE CITY OF LACEY, Respondent.
No. 361-2.
The Court of Appeals of Washington, Division Two.
December 17, 1971.
Anthony T. Ressa, for appellant.
Argal D. Oberquell, for respondent.
ARMSTRONG, J.
The plaintiff commenced this action against the City of Lacey to declare invalid an ordinance which amends a prior ordinance regulating the operation of massage parlors, to restrain the city from enforcing the ordinance, and to seek damages for interfering with the operation of plaintiff's business. At the conclusion of the *45 plaintiff's case the defendant city moved to dismiss the amended complaint for failure to state a claim upon which relief can be granted. This motion was primarily grounded upon the validity of ordinance No. 139 as a reasonable exercise of the police power of the city. After considering the evidence the court entered findings of fact and conclusions of law dismissing the amended complaint. Although the court stated: "there is no way this court will grant a money judgment in favor of plaintiffs and against the defendant city", it is not clear whether that statement and the conclusion that the plaintiff failed to state a claim upon which relief can be granted were predicated upon the assumed validity of ordinance No. 139. Plaintiff appeals from the dismissal of its case.
The plaintiff was licensed under ordinance No. 86 to conduct a sauna parlor in the city of Lacey in 1968, 1969 and 1970. The license was renewed by the city on February 18, 1970 2 months before the enactment of ordinance No. 139. The court found, and the evidence disclosed, that the city has not conducted a harassment program against the plaintiff but has, over the last 2 years, conducted an investigation of plaintiff's Royal Sauna and one other sauna located in the city of Lacey. There was substantial evidence to justify the court's finding that a sauna massage business, such as that conducted by the plaintiff, is a potential setting for lewd and immoral acts and can and does attract people interested in lewd and immoral acts. The plaintiff has conducted its business with a certain degree of emphasis on sex and as a result has contributed to the setting of a background for lewd and immoral acts to be possibly permitted or performed on the premises.
In support of the court's findings there is evidence that sexually provocative advertising was carried in the classified advertising columns of the Daily Olympian, the masseuses wore mini skirts and low cut blouses, and talked and acted in a sexually provocative manner. They adopted what they termed "nicknames" for their professional service.
Undercover agents were employed to obtain massages at *46 the plaintiff's Royal Sauna as well as the other sauna that is no longer in operation in the city of Lacey. For a fee of $20 they received what the police chief modestly referred to as a "lower abdominal massage."
The evidence clearly established that lewd acts occurred at the Royal Sauna before the amendment of ordinance No. 86 and before and after the Royal Sauna received its last license. There were no cases brought to trial for anything other than the failure of one masseuse to have a valid license. There were no convictions of lewdness relating to this sauna although the statements of police officers and reports of undercover agents clearly described acts of lewdness for which the masseuses, if convicted, could have been jailed for terms up to 6 months and fined up to $500 under the city statute relating to lewd acts.
On April 23, 1970 the Lacey City Council adopted ordinance No. 139 as an amendment to ordinance No. 86. That amendment permits massagists to administer massages only to customers of their own sex; except that a person of the opposite sex may administer treatment in good faith in the course of practice of any healing art or profession provided for under RCW Title 18, relating to businesses or professions. Massage or massotherapy is not specifically included in the healing arts covered in that section although it is utilized in varying degrees by several classifications which are licensed.
The trial court held that (1) ordinance No. 139 is a legitimate exercise of the police power of the City of Lacey; (2) it regulates sauna and massage parlor businesses but does not prohibit them; (3) the fact that a regulatory ordinance changes the nature of the business by its regulation does not make it discriminating; (4) the ordinance is clear and not ambiguous; (5) it is not class legislation; (6) it is not discriminating to women in violation of RCW 49.12.200; and (7) the plaintiff failed to state a claim upon which relief can be granted.
The plaintiff contends that ordinance No. 139 is an unreasonable imposition of police power which resulted in a denial *47 of due process, and equal protection under the fourteenth amendment to the United States Constitution and that RCW 49.12.200, relating to the right of women to pursue any employment, prohibits the enactment of the ordinance.
[1, 2] It has been established that a city, in the exercise of its police power, may regulate massagists on the grounds of public health, safety and morality. See Annot., Regulations of masseurs, 17 A.L.R. 2d 1183 (1951). As in any other exercise of the police power the means adopted must be reasonably necessary and appropriate to accomplish the objective sought and it must not be unduly oppressive upon individuals. Seattle v. Proctor, 183 Wash. 293, 48 P.2d 238 (1935). In addition to those tests, the police power regulation is subject to the provisions of the state and federal constitutions which prohibit the granting of special privileges and immunities and guarantee equal protection of the laws, require that class legislation must apply alike to all persons within a class, and reasonable ground must exist for making a distinction between those within and those without a designated class. Within the limits of such restrictive rules, the legislative body has a wide measure of discretion and its determination cannot be successfully attacked unless it is manifestly arbitrary, unreasonable, inequitable and unjust. State ex rel. O'Brien v. Towne, 64 Wash. 2d 581, 392 P.2d 818 (1964).
At the outset we must agree that all of the court's conclusions can be sustained if we were to adopt the rationale of In re Maki, 56 Cal. App. 2d 635, 133 P.2d 64 (1943), the leading case on this subject. The rationale of Maki was adopted in Cheek v. Charlotte, 273 N.C. 293, 160 S.E.2d 18 (1968) and in other cases.
In Maki the court upheld the constitutionality of a city ordinance which forbade any person, for hire or reward, to administer a massage to a person of the opposite sex unless the massage be given under the supervision of a licensed physician. The appellant there, as here, contended that the ordinance was an unreasonable exercise of the police *48 power, was sexual discrimination of the right to employment, denied him the equal protection of the laws, and deprived him of property without due process of law. In declaring the ordinance constitutional, the California Court of Appeals stated in In re Maki, supra at 639, 643 and 644:
The ordinance applies alike to both men and women.... The barrier erected by the ordinance against immoral acts likely to result from too intimate familiarity of the sexes is no more than a reasonable regulation imposed by the city council in the fair exercise of police powers.... [133 P.2d at 67].
...
... The reasonable exercise of the police power in regulating any occupation in order to maintain the moral welfare does not arbitrarily deprive a person so engaged of his property.... Enactments that curb the vicious or restrain the wicked necessarily restrict the emoluments of his enterprise. However, such results are not to be considered in determining the validity of a law.
...
There is nothing in the ordinance that denies the equal protection guaranteed by the Fourteenth Amendment. It applies to all alike who give massages for hire and who are not licensed to practice one of the arts of healing. [133 P.2d at 68-69].
The trial judge accepted this rationale in his analysis and oral decision. We have set forth in the footnote a portion of his analysis and his own viewpoint of the ordinance in question.[1]
[3] We decline to follow the doctrine of Maki because *49 the 1943 decision of the California Court of Appeals does not recognize the economic, social and legal rights of women and the right of both men and women to be free from sex discrimination in employment as such rights exist today. The doctrine of that case permits an unreasonable exercise of police power that unnecessarily goes beyond the objective of protecting the public from lewd acts in sauna massage parlors; under the guise of regulation it denies all massagists the right to treat members of the opposite sex. This is the blanket-type classification by sex which is prohibited by the equal protection clause of the fourteenth amendment to the United States Constitution.
At the time this case was argued before our court the Supreme Court of the United States had consistently held that sex is a valid basis for classification. Muller v. Oregon, 208 U.S. 412, 422, 52 L. Ed. 551, 28 S. Ct. 324 (1908); Goesaert v. Cleary, 335 U.S. 464, 69 S. Ct. 198, 93 L. Ed. 163 (1948). The weight of authority, in state as well as federal *50 courts, recognized the principle of "reasonableness" of sex discrimination as the basis of legitimate public policy.[2] Several state courts had decided that such classification was not in fact permissible. Ritchie v. People, 155 Ill. 98, 40 N.E. 454 (1895); Paterson Tavern & Grill Owners Ass'n v. Hawthorne, 57 N.J. 180, 270 A.2d 628 (1970). Two federal cases had attacked sexual discrimination in cases based upon Title 7 of the Civil Rights Act of 1964. Weeks v. Southern Bell Tel. & Tel. Co., 408 F.2d 228 (5th Cir.1969); Bowe v. Colgate-Palmolive Co., 416 F.2d 711 (7th Cir.1969). Weeks noted that such classifications generally are based upon stereotyped characterizations of females as a class. Bowe also attacked discriminatory stereotyped conceptions and required a "highly individualized test" for women in employment applications. The culmination of judicial attacks upon sexual discrimination in employment was reached in the historic decision of Reed v. Reed, 404 U.S. 71, 30 L. Ed. 2d 225, 92 S. Ct. 251 (1971). That case, decided shortly after the argument on the instant case in our court, brought the question of discrimination by reason of sex within the ambit of the equal protection clause of the fourteenth amendment to the United States Constitution.
[4] In Reed the United States Supreme Court held that a mandatory provision of the Idaho probate code that gives preference to men over women when persons of the same entitlement class apply for appointment as administrator of a decedent's estate is based upon a discrimination prohibited by the equal protection clause of the Fourteenth Amendment. In referring to the equal protection clause the court stated at page 75:
In applying that clause, this Court has consistently recognized that the Fourteenth Amendment does not deny to States the power to treat different classes of persons in different ways. [Citations omitted.] The Equal *51 Protection Clause of that amendment does, however, deny to States the power to legislate that different treatment be accorded to persons placed by a statute into different classes on the basis of criteria wholly unrelated to the objective of that statute. A classification "must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike." Royster Guano Co. v. Virginia, 253 U.S. 412, 415 (1920). The question presented by this case, then, is whether a difference in the sex of competing applicants for letters of administration bears a rational relationship to a state objective that is sought to be advanced by the operation of §§ 15-312 and 15-314.
In upholding the latter section, the Idaho Supreme Court concluded that its objective was to eliminate one area of controversy when two or more persons, equally entitled under § 15-312, seek letters of administration and thereby present the probate court "with the issue of which one should be named." The court also concluded that where such persons are not of the same sex, the elimination of females from consideration "is neither an illogical nor arbitrary method devised by the legislature to resolve an issue that would otherwise require a hearing as to the relative merits ... of the two or more petitioning relatives...." 93 Idaho, at 514, 465 P.2d, at 638.
Clearly the objective of reducing the workload on probate courts by eliminating one class of contests is not without some legitimacy. The crucial question, however, is whether § 15-314 advances that objective in a manner consistent with the command of the Equal Protection Clause. We hold that it does not. To give a mandatory preference to members of either sex over members of the other, merely to accomplish the elimination of hearings on the merits, is to make the very kind of arbitrary legislative choice forbidden by the Equal Protection Clause of the Fourteenth Amendment; and whatever may be said as to the positive values of avoiding intrafamily controversy, the choice in this context may not lawfully be mandated solely on the basis of sex.
This state has prohibited sex discrimination against women in employment since 1890. In 1963 the legislature *52 strengthened the statute which provided that women may pursue any calling open to men. RCW 49.12.200 now provides:
That hereafter in this state every avenue of employment shall be open to women; and any business, vocation, profession and calling followed and pursued by men may be followed and pursued by women, and no person shall be disqualified from engaging in or pursuing any business, vocation, profession, calling or employment or excluded from any premises or place of work or employment on account of sex.
The trial court held that since women massagists could massage women and men massagists could massage men, both sexes were treated equally. We think that since the equal protection clause of the Fourteenth Amendment forbids a determination based solely upon sex, this argument becomes analogous to the rule of Plessy v. Ferguson, 163 U.S. 537, 41 L. Ed. 256, 16 S. Ct. 1138 (1896). In that case the Supreme Court held that the enforced separation of the races, as applied to the internal commerce of the state in transportation, neither abridges the privileges and immunities of the Negro, deprives him of his property without due process of law, nor denies him the equal protection of the laws. Under that doctrine, equality of treatment is accorded when the races are provided substantially equal facilities, even though these facilities be separate.
The concept of "separate but equal" was rejected in Brown v. Board of Educ., 347 U.S. 483, 98 L. Ed. 873, 74 S. Ct. 686, 38 A.L.R. 2d 1180 (1954) in the field of education. The decision in the Brown case and in subsequent decisions rejecting the "separate but equal" doctrine in other fact settings vindicate Mr. Justice Harlan's dissent in Plessy v. Ferguson, supra, where he said: "Our Constitution is color-blind, and neither knows nor tolerates classes among citizens."
We believe that "separate but equal" opportunities of employment for men and women are not justified unless the difference in classification as to sex bears a rational *53 relationship to the objective that is sought to be advanced and is not unreasonable, unnecessary, arbitrary or unduly oppressive. No longer can we accomplish that by "drawing a sharp line between the sexes" as the United States Supreme Court authorized in Goesaert v. Cleary, supra. The rule of Plessy v. Ferguson, supra is not a viable doctrine with respect to sex segregation.
In Paterson Tavern & Grill Owners Ass'n v. Hawthorne, supra, the Supreme Court of New Jersey recognized the differences in the times and the economic and social rights of women between 1948 and 1970. That case declined to follow the United States Supreme Court opinion in Goesaert and held that a municipal ordinance which prohibited licensed taverns from employing female bartenders did not constitute a necessary and reasonable exercise of the police power. We concur in the rationale expressed in Paterson, where the Supreme Court of New Jersey stated at page 189:
We are satisfied that Hawthorne's prohibition of female bartenders is unreasonable and goes beyond any public need. It is blanket in nature and seeks to exclude female bartenders, no matter how individually qualified, from all licensed establishments, no matter how suitably conducted. While the law may look to the past for the lessons it teaches, it must be geared to the present and towards the future if it is to serve the people in just and proper fashion. In the current climate the law may not tolerate blanket municipal bartending exclusions grounded solely on sex.
If we were interpreting RCW 49.60.180,[3] relating to unfair employment practices, we would apply the logical rationale *54 of Weeks v. Southern Bell Tel. & Tel. Co., supra and Bowe v. Colgate-Palmolive Co., supra. Our state statute and the statutes considered in the two federal cases were concerned with whether employment is within the "bona fide occupational qualification" exception to a civil rights act prohibiting discrimination in employment because of sex. The existing state statute was amended in 1971 after the date of the trial of this case. The significant amendment was the addition of the word "sex". The statutory amendment in 1971 demonstrates the increased awareness of the problem of discrimination on the basis of sex. We do not directly apply the statute because it relates to employment practices, and not police power. We note, however, that if the ordinance was held to be a valid exercise of the police power the employer would be violating the law if it complied with the ordinance, unless the administration of massages only to persons of the opposite sex was deemed a bona fide occupational exception to the sex discrimination prohibited by the statute.
[5] There is a similarity in the issue of determining whether an employment classification based upon sex is a reasonable exercise of the police power and is not forbidden by the equal protection clause of the Fourteenth Amendment and whether a classification based upon sex violates the state and federal civil rights acts because it is not a bona fide occupational exception to the sex discrimination prohibited by statute. Because of the explicit statutory *55 language and commission guidelines we do not find that the tests are identically the same. We do find applicable to both the admonition of Weeks that the principle of nondiscrimination requires that individuals be considered on the basis of individual capacities and not on the basis of a stereotyped characterization attributed to women as a group. Of course the same principle is applicable to men. Bowe also emphasized the necessity to consider individual qualifications and conditions, and stressed the necessity of each employee being afforded a reasonable opportunity to demonstrate his or her ability. We believe these requirements of establishing the principle of nondiscrimination on the basis of sex are equally applicable to a consideration of whether an ordinance is a reasonable exercise of the police power and does not offend the equal protection clause of the Fourteenth Amendment.
With these principles in mind we shall analyze the facts of our case. We find that under the express terms of the original ordinance (No. 86), a license could be denied upon proof that the health, safety and morals of the community may be harmed by issuance of the license. After the issuance of a license the city had authority to revoke the license if the licensee was charged with committing acts of prostitution or related offenses. Without resorting to the full details of the sexual behavior of the masseuses and the type of massage administered for $20, it is obvious that their activities would classify as acts related to prostitution. We conclude that even prior to the questioned amendment of ordinance No. 86 the city had existing authority to deny or revoke a license to the Royal Sauna. The trial court's suggestions could have been followed to strengthen the ordinance if the city council deemed strengthening to be necessary.
Massage is one of the oldest forms of therapy. When properly administered in an appropriate case, it can be one of the most useful forms of therapy. To deny all massagists the right to practice their profession upon both sexes because some individuals utilize a sauna massage parlor as a *56 subterfuge to perform lewd acts for compensation would require stereotyping of the worst kind. It is saying, in effect, that because some women perform lewd acts in sauna parlors that all massagists can be judged to be lewd if given the opportunity and therefore they cannot massage members of the opposite sex. Not only is this discrimination as to both sexes of massagists but it would deny the people who need their services the opportunity to select the best qualified massagist available to them.
We therefore hold that ordinance No. 139, enacted by the City of Lacey, is an unreasonable and arbitrary exercise of the police power. It goes beyond the means reasonably necessary and appropriate to accomplish its objective and it is unduly oppressive to massagists and their patients. Because it prohibits all massagists, not licensed under one of the other healing arts, from performing massages upon the opposite sex, without a reasonable basis for such a mandate, it constitutes discrimination on the basis of sex in contravention of the equal protection clause of the fourteenth amendment to the United States Constitution.
Reversed as to the validity of the challenged ordinance and remanded for clarification of the findings of fact and conclusions of law on the issue of damages, or for such other action as the trial court may deem appropriate.
PETRIE, C.J., and PEARSON, J., concur.
Petition for rehearing denied February 7, 1972 (see 6 Wash. App. 433).
Review denied by Supreme Court March 21, 1972.
NOTES
[1] "Now the most difficult question here to me was whether this ordinance as it now stands is discriminatory to one sex or the other or discriminatory to massagists or masseuses; and whether it is discriminatory and contrary to RCW 49.12.200, which provides for equal employment rights for women, for their wages and professional and vocational opportunities. In careful consideration and study of this statute and this ordinance, I have come to the conclusion that Ordinance 139 governs all men and women, all persons, regulates all massagists, whether male or female, does not regulate the pursuance of a vocation, but rather, regulates the practice of a vocation for those who are already in that vocation or choose to join it, whether they be men or women. And it is with that in mind that I have come to the conclusion that Ordinance 139 squares itself with RCW 49.12.200 and is not discriminatory. And those findings and comments lead me to the conclusion that Ordinance 139 is legal and is constitutional and should stand.
"Now I want to make some more comments about it though:
"This was a difficult decision for me because I frankly feel this is a lousy ordinance and that it is not the best way to attack the problem that is presented. This attacks a legitimate business through the back door in order to get at the businesses that are not run legitimately, and it makes a legitimate massage parlor suffer needlessly, it seems to me, for the acts of parlors that are run contrary to law. And it seems to me it would be much better if the City of Lacey or the State, hopefully, would regulate the giving of massages in detail, including licensing practices of course, the dress for both the massagist and the customer, the surroundings; massage parlors can properly be regulated. Lewd acts in this connection should be defined in more detail. And when the ground rules are carefully laid, so that the operator such as Mrs. Sherlie here and other operators know exactly what they can and cannot do, this should be followed with vigorous enforcement and vigorous prosecution of any who then violate the rules set up. And all I am saying is that the avenue chosen by the City of Lacey is in my opinion not the best avenue available for the eradication of potential social ill. But I feel and believe and find that it is a legally acceptable avenue to control this particular business which needs regulation."
[2] For comprehensive analyses of the entire area of sex discrimination in employment see Sex Discrimination in Employment: A Survey of State and Federal Remedies, 20 Drake L. Rev. 417 (1971); Symposium Women and the Law, 5 Valparaiso U.L. Rev. 203 (1971).
[3] RCW 49.60.180 provides: "It is an unfair practice for any employer:
"(1) To refuse to hire any person because of such person's age, sex, race, creed, color, or national origin, unless based upon a bona fide occupational qualification.
"(2) To discharge or bar any person from employment because of such person's age, sex, race, creed, color, or national origin.
"(3) To discriminate against any person in compensation or in other terms or conditions of employment because of such person's age, sex, race, creed, color, or national origin: PROVIDED, That it shall not be an unfair practice for an employer to segregate washrooms or locker facilities on the basis of sex, or to base other terms and conditions of employment on the sex of employees where the board by regulation or ruling in a particular instance has found the employment practice to be appropriate for the practical realization of equality of opportunity between the sexes.
"(4) To print, or circulate, or cause to be printed or circulated any statement, advertisement, or publication, or to use any form of application for employment, or to make any inquiry in connection with prospective employment, which expresses any limitation, specification or discrimination as to age, sex, race, creed, color, or national origin, or any intent to make any such limitation, specification or discrimination, unless based upon a bona fide occupational qualification: PROVIDED, Nothing contained herein shall prohibit advertising in a foreign language."
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Citation Nr: 1309588
Decision Date: 03/21/13 Archive Date: 04/01/13
DOCKET NO. 06-04 687 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Chicago, Illinois
THE ISSUE
Entitlement to service connection for peripheral neuropathy of the left lower extremity, including due to exposure to Agent Orange.
REPRESENTATION
Appellant represented by: James Fausone, Attorney
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
S.J. Janec, Counsel
INTRODUCTION
The Veteran had active military service from February 1966 to January 1968. He served in the Republic of Vietnam.
This case initially came to the Board of Veterans' Appeals (Board) from a March 2005-issued rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Chicago, Illinois, that determined that no new and material evidence had been submitted to reopen claims for service connection for right and left upper extremity peripheral neuropathy, claimed due to herbicide exposure. The decision also denied service connection for right lower extremity neuropathy and peripheral neuropathy, claimed due to herbicide exposure.
In a September 2010 decision, the Board also denied the claims. The Veteran appealed the decision to the United States Court of Appeals for Veterans Claims (Court). In an April 1012 Memorandum Decision, the Court affirmed the Board's denial of service connection for right lower extremity neuropathy and peripheral neuropathy, claimed due to herbicide exposure, as well as the Board's conclusion that new and material evidence had not been submitted to reopen claims for service connection for right and left upper extremity peripheral neuropathy, claimed due to herbicide exposure. However, the Court also determined that the Board failed to adjudicate the claim for service connection for peripheral neuropathy of the left lower extremity, including due to exposure to Agent Orange, as that issue was also denied in the March 2005 rating decision that was properly appealed to the Board.
The appeal is REMANDED to the Department of Veterans Affairs Regional Office. VA will notify the appellant if further action is required.
REMAND
In response to a 90-day letter sent to the Veteran by the Board in October 2012, the Veteran submitted additional evidence that was received in December 2012. He specifically requested that the evidence be remanded to the RO for review prior to appellate review by the Board. See Disabled American Veterans v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 2003); 38 C.F.R. § 20.1304 (2012).
Accordingly, the case is REMANDED for the following action:
Review the evidence associated with the claims file since the November 2005 statement of the case and the Court's April 2012 Memorandum Decision, and readjudicate the claim for entitlement to service connection for peripheral neuropathy of the left lower extremity, including due to exposure to Agent Orange. If the benefit sought is not fully granted, the Veteran and his representative, if any, should be furnished a supplemental statement of the case, and be afforded a reasonable opportunity to respond.
The appellant has the right to submit additional evidence and argument on the matter the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012).
_________________________________________________
FRANK J. FLOWERS
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2012).
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Case: 16-15751 Date Filed: 08/16/2018 Page: 1 of 18
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-15751
Non-Argument Calendar
________________________
D.C. Docket No. 3:15-cv-00083-CDL
GUARANTEE COMPANY OF NORTH AMERICA,
Plaintiff - Appellee,
versus
GARY'S GRADING & PIPELINE CO., INC., et al.,
Defendants -
Cross Defendants,
PINE PLANTATION LLC,
Defendant -
Cross Claimant -
Appellant,
CGP EQUIPMENT COMPANY, INC., et al.,
Defendants,
GARY G. OPOLKA,
Defendant -
Case: 16-15751 Date Filed: 08/16/2018 Page: 2 of 18
Cross Defendant -
Cross Claimant.
________________________
Appeal from the United States District Court
for the Middle District of Georgia
________________________
(August 16, 2018)
Before JORDAN, ROSENBAUM, and JULIE CARNES, Circuit Judges.
PER CURIAM:
Plaintiff Guarantee Company of North America (“GCNA”) brought this
action to collect payments GCNA made to third parties pursuant to a bond
indemnification agreement. Defendant Pine Plantation LLC (Pine Plantation) is
one of several indemnitors named in the agreement. The district court entered
summary judgment in favor of GCNA as to Pine Plantation’s liability under the
agreement, and a jury determined that GCNA is entitled to $2,546,354.69 in
damages. Pine Plantation appeals the district court’s summary judgment order, as
well as its entry of judgment on the jury’s verdict as to damages. After careful
review, we affirm.
BACKGROUND
GCNA is a surety company that issues payment and performance bonds to
assist in financing construction projects. Pine Plantation is a Georgia LLC that is
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owned in equal shares and co-managed by brothers Christopher, Gary, and Peter
Opolka. At all times relevant to this action, Gary’s Grading was a Georgia
construction company primarily operated by Christopher Opolka.
In October 2012, Christopher Opolka, as a manager and on behalf of Gary’s
Grading and Pine Plantation, entered into a bond indemnification agreement with
GCNA. Pursuant to the agreement, GCNA agreed to issue payment and
performance bonds to suppliers and subcontractors of Gary’s Grading on various
construction projects. In exchange, Gary’s Grading, Pine Plantation, and other
related entities—including Christopher Opolka individually—agreed to post
collateral at GCNA’s request and to indemnify GCNA for any losses incurred in
connection with the bonds.
While negotiating the bond agreement, GCNA employees met only with
Christopher Opolka. The agreement contains both Christopher and Gary’s
notarized signatures, but Pine Plantation argues that Christopher forged Gary’s
signature and that Gary had no knowledge of the agreement until 2015, nearly
three years after it was executed. A jury agreed with Pine Plantation on that point,
finding that Gary did not sign the agreement. Thus, we must assume that
Christopher Opolka was the only Pine Plantation manager who authorized Pine
Plantation to enter into the agreement.
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As required by the agreement, GCNA issued multiple bonds to suppliers and
subcontractors of Gary’s Grading. Those suppliers and subcontractors sought
payment from GCNA when Gary’s Grading failed to pay them for services and
materials provided in relation to the bonded construction projects. GCNA paid the
suppliers and subconctractors, and then demanded that the indemnitors named in
the bond agreement—including Christopher Opolka, Gary Opolka, Pine Plantation,
and Gary’s Grading—post collateral and reimburse GCNA for the payments it
made. After none of the indemnitors complied with its request, GCNA filed this
action.
GCNA’s claims against Christopher Opolka were stayed when he initiated
bankruptcy proceedings. All of the other indemnitors except Gary Opolka and
Pine Plantation failed to answer GCNA’s complaint and thus defaulted on the
claims asserted therein. GCNA’s claims against Pine Plantation and Gary Opolka
proceeded to discovery.
At the close of discovery, GCNA moved for summary judgment on its
claims against Pine Plantation. In opposition to the motion, Pine Plantation argued
that Christopher Opolka did not have the authority to bind Pine Plantation to the
bond agreement. The district court granted summary judgment to GCNA on the
issue of Pine Plantation’s liability, holding that the bond agreement was binding on
Pine Plantation and that Pine Plantation had breached the agreement by not posting
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collateral or reimbursing GCNA for the payments it had made to bond claimants.
But the court found insufficient evidence to calculate GCNA’s damages as a matter
of law, and ultimately held a jury trial as to GCNA’s damages, as well as the issue
of Gary Opolka’s liability.
The jury concluded that Gary Opolka did not sign the bond agreement and
was therefore not liable under it. As to GCNA’s damages, the jury found Pine
Plantation liable to GCNA in the amount of $2,546,354.69. This finding was
based on the testimony of Christina Zabek, the GCNA employee who handled the
Gary’s Grading bond claims, and on documentary evidence, specifically, the
checks written by GCNA to bond claimants. Pine Plantation objected to Zabek’s
testimony on hearsay and other grounds. In addition, Pine Plantation filed a
motion for judgment as a matter of law, claiming that GCNA did not adequately
prove its damages. The district court overruled the objection to Zabek’s testimony
and denied Pine Plantation’s motion for judgment as a matter of law.
Pine Plantation now appeals three issues: (1) whether Christopher Opolka
had the authority to bind Pine Plantation to the bond agreement, as the district
court held in its summary judgment order, (2) whether the district court abused its
discretion by relying on inadmissible hearsay in its summary judgment ruling, and
(3) whether the district court erred when it denied Pine Plantation’s motion for
judgment as a matter of law.
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STANDARDS OF REVIEW
We review the district court’s summary judgment ruling de novo, using the
same legal standard as the district court. Feliciano v. City of Miami Beach, 707
F.3d 1244, 1247 (11th Cir. 2013). Pursuant to that standard, summary judgment is
appropriate if there is “no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In conducting our
review, we view all facts and resolve all doubts in favor of the nonmoving party.
Feliciano, 707 [email protected]. Similarly, we review the district court’s denial of
Pine Plantation’s motion for judgment as a matter of law de novo, drawing all
reasonable inferences in favor of the nonmoving party. Home Design Servs., Inc.
v. Turner Heritage Homes Inc., 825 F.3d 1314, 1320 (11th Cir. 2016). We review
the district court’s evidentiary rulings for an abuse of discretion. Corwin v. Walt
Disney Co., 475 F.3d 1239, 1249 (11th Cir. 2007). Applying that standard, we will
only reverse if the district court “made a clear error of judgment” or “applied the
wrong legal standard.” Id.
DISCUSSION
I. The district court correctly held, on summary judgment, that Pine
Plantation is liable to GCNA under the bond agreement.
Pine Plantation argues that it is not bound by the bond agreement because
Christopher Opolka did not have the authority to execute the agreement on Pine
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Plantation’s behalf. For the reasons set out below, we agree with the district court
that Christopher Opolka acted within the scope of his authority as a manager of
Pine Plantation when he signed the agreement, and that Pine Plantation is thus
liable to GCNA under the agreement.
A. Pine Plantation’s operating agreement determines the scope of
Christopher Opolka’s agency authority.
The parties agree that Georgia law applies to this action, which is on appeal
from a Middle District of Georgia court sitting in diversity jurisdiction and which
involves a bond agreement that was executed and delivered in Georgia. See Rosa
and Raymond Parks Inst. for Self Dev. v. Target Corp., 812 F.3d 824, 829 (11th
Cir. 2016) (explaining that “a federal court sitting in diversity applies the
substantive law of the state in which it sits”); Travelers Property Cas. Co. of Am. v.
Moore, 763 F.3d 1265, 1270–71 (11th Cir. 2014) (noting that Georgia applies the
lex loci contractus rule, and that in Georgia a contract is “made” where it is
delivered). Under Georgia law, an agent acting within the scope of his agency
authority can bind his principal to a contract with a third party. See Harvey v.
Bank One, N.A., 290 Ga. App. 55, 57 (Ga. Ct. App. 2008). To determine whether
Christopher Opolka had the agency authority to bind Pine Plantation to the bond
agreement at issue in this case, we look to Pine Plantation’s operating agreement,
which expressly addresses his authority as an agent of the LLC. See BBL-
McCarthy, LLC v. Baldwin Paving Co., 285 Ga. App. 494, 497 (Ga. Ct. App.
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2007) (explaining that the clear and unambiguous terms of a written contract
govern its construction); Findlay Brick Co. v. Am. Sewer Pipe Co., 18 Ga. App.
446 (Ga. Ct. App. 1916) (“Where an agent’s authority is conferred and defined in
writing, the scope or extent of such authority must be determined from the terms of
the writing, and is to be determined and construed by the court.”).
It is undisputed that the operating agreement made Christopher Opolka an
agent of Pine Plantation. The determinative issue is whether Christopher Opolka
exceeded the scope of his agency authority by executing the bond agreement
without the knowledge or consent of Pine Plantation’s co-managers Gary and Peter
Opolka. Pine Plantation argues that under its operating agreement, a single
manager cannot bind the corporation. In support of its argument, Pine Plantation
cites a provision in its operating agreement that states:
At any time when there is more than one Manager, no one Manager
may take any action permitted to be taken by the Managers without
agreement of the other Manager or Managers, or unless other approval
requirements of the Managers are expressly set forth elsewhere in this
Operating Agreement or the Georgia Act.
According to Pine Plantation, this language requires all managers to authorize a
contract in order for Pine Plantation to be bound under it.
We are unpersuaded by this argument. As quoted above, the operating
agreement states that “no one Manager may take any action permitted to be taken
by the Managers without agreement of the other Manager or Managers, or unless
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other approval requirements of the Managers are expressly set forth elsewhere in
this Operating Agreement or the Georgia Act.” As used in this provision, the
“Georgia Act” refers to the Georgia Limited Liability Company Act (the LLC
Act), O.C.G.A. § 14-11-100, et seq. The plain language of the agreement thus lays
out three ways in which a manager can bind Pine Plantation: (1) by getting the
approval of the other managers, (2) by complying with “other approval”
requirements set out elsewhere in the operating agreement, or (3) by complying
with “other approval” requirements set out in the LLC Act. See Albritton v. Kopp,
300 Ga. 529, 531 (Ga. 2017) (emphasizing that the plain language of a contract
governs its interpretation).
We assume based on the jury’s finding that Christopher did not get Gary or
Peter Opolka’s approval to enter into the bond agreement. And the parties agree
that there are no relevant “other approval” provisions set out elsewhere in the
operating agreement. Nevertheless, we agree with the district court that
Christopher Opolka complied with “other approval” requirements set forth in § 14-
11-301(b)(2) of the LLC Act in executing the bond agreement, thus binding Pine
Plantation to the agreement.
B. Christopher Opolka satisfied the requirements of § 14-11-301(b)(2) of
the LLC Act, thereby binding Pine Plantation to the bond agreement.
Section 14-11-301(b)(2) of the LLC Act states that:
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Every manager is an agent of the limited liability company . . . for
apparently carrying on in the usual way the business and affairs of the
limited liability company . . . unless the manager so acting has, in fact,
no authority to act for the limited liability company in the particular
matter, and the person with whom he or she is dealing has knowledge
of the fact that the manager has no such authority.
O.C.G.A. § 14-11-301(b)(2). Pursuant to this provision, a manager acts as an
agent for an LLC to the extent that he is (1) “apparently carrying on in the usual
way the business” of the LLC and (2) unless he has no authority to take the
particular action at issue “and the person with whom he . . . is dealing has
knowledge of the fact that the manager has no such authority.” Id. Christopher
Opolka satisfied both of these requirements when he executed the bond agreement
with GCNA.
As to the first requirement, Pine Plantation’s argument focuses on whether
Christopher Opolka actually had the authority to sign the bond agreement without
the approval of his co-managers. But § 14-11-301(b)(2) asks whether a manager
acted with apparent, rather than actual, agency authority. There is no question that
Christopher Opolka acted with apparent agency authority when he executed the
bond agreement with GCNA. He approached GCNA about the bond agreement in
an effort to obtain financing that was necessary to the business of Pine Plantation’s
sister corporation, Gary’s Grading. During the negotiations concerning the
agreement, Christopher provided GCNA with consolidated financial statements of
Gary’s Grading and Pine Plantation, and he represented (1) that the corporations
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functioned as a conglomerate, (2) that he was authorized as a manager to enter into
an agreement that would be binding on both corporations, and (3) that Gary
Opolka also had authorized the agreement. Further, it is undisputed that GCNA
believed Christopher had on a prior occasion executed a bond agreement on behalf
of Pine Plantation and Gary’s Grading in the exact same manner as he did here,
and without signatures from Gary or Peter Opolka. See Fielbon Dev. Co., LLC v.
Colony Bank of Houston Cty., 290 Ga. App. 847, 851 (Ga. Ct. App. 2008)
(interpreting an identical “carrying on the usual way” phrase in O.C.G.A. § 14-11-
301(c) to encompass an act the manager had done in the past).
Pine Plantation is therefore bound to the bond agreement unless Christopher
Opolka did not have the authority to act and GCNA had knowledge of that fact.
See § 14-11-301(b)(2). There is no evidence that GCNA knew Christopher Opolka
lacked authority to execute the bond agreement without the signatures of Gary and
Peter Opolka. In support of its argument to the contrary, Pine Plantation points to
the fact that GCNA might have possessed a copy of Pine Plantation’s operating
agreement. Even if GCNA saw Pine Plantation’s operating agreement, that would
not inform the company that Christopher Opolka lacked authority to execute the
bond agreement. In fact, it affirms the opposite. The operating agreement
explicitly states that:
Any person dealing with the company, other than a Member, may
rely on the authority of any manager or officer in taking any
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action in the Company’s name. They will not need to inquire into
the provision of this Operating Agreement or with compliance,
regardless of whether the action actually is taken in accordance with
this Operating Agreement.
Contrary to the plain language of O.C.G.A. § 14-11-301(b)(2), Pine
Plantation argues that it should not be held liable under the bond agreement
because GCNA failed to adequately investigate whether Christopher Opolka had
the authority to execute the agreement on behalf of Pine Plantation. But Pine
Plantation’s reliance on Ly v. Jimmy Carter Commons, LLC, 286 Ga. 831 (Ga.
2010) in support of this argument is misguided. In Ly, the Georgia Supreme Court
denied summary judgment because there was substantial evidence that the
contracting third party knew the agent did not have the authority to execute the
loan documents at issue in that case. Id. at 831–32. Here, as discussed, there is no
evidence that GCNA knew Christopher Opolka lacked authority to execute the
bond agreement. In the absence of any governing authority that is more closely
aligned to the facts of this case, we decline to read a due diligence requirement into
§ 14-11-301(b)(2) that does not appear in the text of the statute. See Six Flags
Over Ga. v. Kull, 276 Ga. 210, 211 (Ga. 2003) (“Where the language of a statute is
plain and unambiguous, judicial construction is not only unnecessary but
forbidden.”).
In short, Christopher Opolka, a manager of Pine Plantation, appeared to have
the authority to execute the bond agreement on behalf of Pine Plantation, and there
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is no evidence GCNA knew he lacked the authority. Having thus satisfied the
“other approval” requirements of § 14-11-301(b)(2), Christopher Opolka acted
within his agency authority as a manager of Pine Plantation when he executed the
bond agreement, thereby binding Pine Plantation to the agreement.
II. The district court did not abuse its discretion by relying on inadmissible
hearsay in ruling on GCNA’s summary judgment motion.
In support of its motion for summary judgment, GCNA submitted deposition
and affidavit testimony from John Redding and Michael Dawson. Redding is the
GCNA underwriter who negotiated and drafted the bond agreement. Dawson, an
agent from Yates Insurance Company, assisted in the drafting and in the
negotiations. Pine Plantation argues that the district court should not have relied
on Redding and Dawson’s testimony because it contained inadmissible hearsay.
Hearsay is an out-of-court statement that is offered in evidence “to prove the
truth of the matter asserted in the statement.” Fed. R. Evid. 801(c)(2). An out-of-
court statement not admitted for its truth, but instead used for another purpose, is
not hearsay. United States v. Mateos, 623 F.3d 1350, 1355 (11th Cir. 2010). In
their testimony, Redding and Dawson both recounted certain out-of-court
statements regarding the scope of Christopher Opolka’s agency authority. But
GCNA did not rely on those statements to prove the truth of the matter asserted,
that is, to prove that Christopher Opolka was in fact authorized to execute the bond
agreement. Instead, GCNA relied upon Redding’s testimony to prove that it had
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no knowledge of the limited scope of Christopher Opolka’s agency authority under
Pine Plantation’s operating agreement and it relied upon Dawson’s testimony to
prove that it believed Christopher Opolka had executed a similar agreement on
Pine Plantation’s behalf in the past. Accordingly, the testimony is not hearsay, and
the district court did not abuse its discretion in relying upon it.
III. GCNA produced sufficient evidence to prove damages.
Finally, Pine Plantation argues that GCNA did not present sufficient
evidence at trial to prove damages, an essential element of its breach of contract
claim. Specifically, Pine Plantation asserts that Christina Zabek’s testimony as to
damages was not based on her personal knowledge and contained inadmissible
hearsay, and that GCNA was required to produce physical copies of the bond claim
documents rather than relying on the checks it produced showing paid claims. Due
to these deficiencies, Pine Plantation argues, the district court should have granted
judgment as a matter of law. We do not agree.
A. Christina Zabek’s testimony was admissible.
As discussed, Zabek is the GCNA employee who was responsible for
handling the bond claims GCNA received from suppliers and subcontractors of
Gary’s Grading. In her trial testimony, Zabek explained her process for
investigating and settling bond payment demands related to the Gary’s Grading
account. In addition, Zabek described how much GCNA paid to the bond
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claimants, the costs of processing and settling the bond demands, the amount of
GCNA’s attorney’s fees incurred in this lawsuit, the amount GCNA expects to pay
to bond claimants in the future, and the amount of any funds GCNA has recovered
on the Gary’s Grading bonds.
Zabek’s testimony was based on her personal knowledge obtained from
working with Gary’s Grading bond claimants. Fed. R. Evid. 602 (“A witness may
testify to a matter only if evidence is introduced sufficient to support a finding that
the witness has personal knowledge of the matter.”). And contrary to Pine
Plantation’s argument, the testimony was not hearsay. Although Zabek repeated
out-of-court statements during her testimony, including the amount of money
demanded of GCNA by Gary’s Grading bond claimants, GCNA did not rely upon
those statements to prove the truth of the matter asserted in the statements, but
rather to show that GCNA received bond claims and its response to those claims.
See United States v. Rivera, 780 F.3d 1084, 1092 (11th Cir. 2015) (“Generally, an
out-of-court statement admitted to show its effect on the hearer is not hearsay.”).
B. GCNA was not required to produce bond claim documents to
substantiate the amount of its damages.
As discussed, GCNA relied upon Zabek’s testimony and copies of the
checks it wrote to bond claimants in order to prove its damages. Pine Plantation
argues that GCNA was required to also produce copies of the bond claim
documents submitted to GCNA, and that it violated the best evidence rule by
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failing to do so. We disagree. The best evidence rule requires a litigant to produce
an original document “to prove [the] content” of the document. Fed. R. Evid.
1002. But GCNA was not required to produce the original bond claim documents,
because it was not trying to prove the content of those documents. See Telecom
Tech. Servs., Inc. v. Rolm Co., 388 F.3d 820, 830 (11th Cir. 2004) (“The best
evidence rule applies where the party presenting evidence seeks to prove the
specific contents of a writing.”). Rather, GCNA was trying to prove the amount of
money it spent paying and settling claims pursuant to the bond agreement.
Zabek’s testimony and the checks verifying payments GCNA made to Gary’s
Grading bond claimants were sufficient evidence of that amount.
Further, the bond agreement expressly states that if GCNA seeks
indemnification, “[v]ouchers or other evidence of payments made by [GCNA]
shall be prima facie evidence of the fact and amount of the liability” of Pine
Plantation to GCNA. This type of provision is enforceable under Georgia law, and
it clearly was satisfied by the “other evidence” produced by GCNA. See Cagle
Constr., LLC v. Travelers Indem. Co., 305 Ga. App. 666, 668–69 (Ga. Ct. App.
2010).
C. The district court correctly denied Pine Plantation’s motion for
judgment as a matter of law.
As indicated by the above discussion, the district court correctly denied Pine
Plantation’s motion for judgment as a matter of law. Judgment as a matter of law
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is only appropriate if “a reasonable jury would not have a legally sufficient
evidentiary basis” to find for the nonmovant on a particular issue. Fed. R. Civ. P.
50(a)(1). To substantiate its claimed damages, GCNA submitted 105 pages of
checks written to bond claimants. Zabek explained these checks to the jury, and
she summarized GCNA’s total costs: GCNA paid $3,006,338.55 to the bond
claimants, spent $50,756.83 investigating and settling the claims, expended
$60,053.15 in attorney’s fees, and expects to pay an additional $954,069.27 to
bond claimants who have demanded payment, but whom GCNA has not yet paid.
This totals $4,071,217.80. GCNA has already received $1,524,863.11 in
recoveries from other sources. The jury subtracted GCNA’s recoveries
($1,524,863.11) from its total losses ($4,071,217.80) to get the damages figure of
$2,546,354.69.
Zabek’s testimony and the checks provide sufficient evidence for a
reasonable jury to find for GCNA. Fed. R. Civ. P. 50(a). It appears that the jury
found Zabek credible, relying on her totals and the admitted checks to calculate
damages. It was reasonable for the jury to do so. Though GCNA did not provide
physical copies of the bond demand documents, the jury had testimony and copies
of checks. There was a sufficient evidentiary basis for a reasonable jury to find the
defendant-indemnitors liable for $2,546,354.69.
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CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s summary
judgment order and its entry of judgment on the jury’s verdict as to damages.
18
|
655 S.W.2d 214 (1982)
Jacinto SANCHEZ, Appellant,
v.
STATE of Texas, Appellee.
Nos. 2002cr, 2577cr, 13-81-015-CR and 13-82-076-CR.
Court of Appeals of Texas, Corpus Christi.
September 9, 1982.
Discretionary Review Granted December 22, 1982.
Kenneth A. Korth, Korth & Easley, Victoria, for appellant.
Knute L. Dietze, Cr. Dist. Atty., Victoria, for appellee.
Before NYE, C.J., and UTTER and KENNEDY, JJ.
OPINION ON REMAND
UTTER, Justice.
In our original opinion, 622 S.W.2d 491, we declined to review ground of error three on the ground that appellant had not preserved his error by a sufficient trial objection. On February 17, 1982, in response to appellant's petition for discretionary review, the Court of Criminal Appeals, 628 S.W.2d 780, held that the trial objection was sufficient and remanded the case to this court for reconsideration of ground of error three. We will now review the issue raised by ground of error three.
Defendant, testifying in his own behalf, admitted stabbing Billy Yarnell, but claimed that he had done so in self defense when it appeared to him that Yarnell was reaching for a weapon. On cross-examination the prosecutor was permitted over timely objection, to ask appellant whether, after his arrest and while in custody, he had told the arresting officer that the deceased was reaching for a knife or gun. The appellant responded that he had not discussed the case with the officer. In his objection, defense counsel argued in effect that the prosecutor's question was an effort to have the jury consider appellant's silence while in custody as a factor discrediting his testimony concerning Yarnell's apparent movement *215 to obtain a weapon. Appellant contends that under Doyle v. Ohio, 426 U.S. 610, 96 S. Ct. 2240, 49 L. Ed. 2d 91 (1976) the trial court erred in permitting the question and that the error constituted a harmful violation of his right to due process. In Doyle v. Ohio the Supreme Court held it was a violation of the Due Process Clause of the Fourteenth Amendment for a State prosecutor to seek to impeach a defendant's exculpatory story, told for the first time at trial, by cross-examining him about his failure to tell the story earlier while in custody and after receiving Miranda warnings. Without a showing that appellant had received Miranda warnings at the time inquired about by the prosecutor we are unable to apply the holding in Doyle v. Ohio. (A preliminary hearing to determine the admissibility of the oral statements called for by the prosecutor's questions would no doubt have revealed whether Miranda warnings had been given. No such hearing was requested.)
In Fletcher v. Weir, 455 U.S. 603, 102 S. Ct. 1309, 71 L. Ed. 2d 490 (1982) the Supreme Court construing Doyle v. Ohio has held that it is not a violation of due process for a State to permit cross-examination as to post-arrest silence when the defendant had not received Miranda warnings before his silence. No error being shown, ground of error three is overruled.
Judgment of the trial court is AFFIRMED.
|
Warren E. Burger: We will hear arguments next in Matsushita v. Zenith Radio. Mr. Zoeller, I think you may proceed whenever you're ready.
Donald J. Zoeller: Thank you, Mr. Chief Justice, and may it please the Court: This appeal involves the circumstances under which courts may permit factfinders to infer from a mix of evidence that there has been a conspiracy in violation of the United States antitrust laws. In this case, the district court, after carefully reviewing and analyzing the mountain of evidence that had been gathered by the plaintiffs during the pretrial phase, determined that that evidence could not support a rational inference that the defendants had entered into and carried out the alleged conspiracy to establish low and predatory prices in the United States market. The court accordingly granted summary judgment. The court of appeals reversed and said a trial was necessary. In reversing, the court of appeals made two fundamental errors. First, it failed to follow and carry out this Court's inference standards as enunciated in the case of First National City Bank of Arizona v. Cities Service. As a result of that error, the court was led to authorize a factfinder to speculate that pricing conduct in the United States market, indistinguishable from the kind of vigorous pricing competition fostered by the antitrust laws and beneficial to consumers, that is low prices for the purpose of getting business, was actually not competition as it appeared to be but was conspiracy. In reversing and finding summary judgment inappropriate, the court of appeals also held and made basic reliance on its conclusion that a factfinder could incur... infer, excuse me, that conduct by the defendants which their government ordered them and said it ordered them to enter into in furtherance of a Japanese governmental program was part of a conspiracy that violated our laws. Now, these two errors not only call for reversal in this case but established a dangerous precedent that this Court should deal with. First of all, they are dangerous from the standpoint of antitrust policy. Permitting an inference of conspiracy to be drawn from conduct indistinguishable from competition can chill the vigorous competition that the antitrust laws seek to foster in the interest of American consumers. Secondly, this precedent is dangerous from the standpoint of judicial administration. District... carving out and fashioning exceptions to this Court's inference standards in order to turn down motions for summary judgment can cause district courts to say all the monumental effort that it takes to tame and control a case of the size of this case is simply not worth it; that it will simply be frustrated by the courts above. And this decision is dangerous from the standpoint of the relationship of the United States to its most valued trading partners. I would like to deal first with the inference of conspiracy question. Now, the court of appeals held that a factfinder could infer from the record in this case that the pricing activities of the defendants in the United States market were not individual competitive activities, but were coordinated and orchestrated pursuant to some common plan or some agreement. For such an inference to be rational, however, the record should show there should be evidence of uniform prices suggestive of conspiracy, or at the very minimum that those prices showed some discernible pattern in the United States market. There is no such evidence in this case. The plaintiffs don't even pretend there is such evidence in this case. The most that the evidence in this case shows, such pricing evidence as there is, is that the prices by the Japanese defendants in this market were, as the district court stated, all over the lot; that they ran at every price level in the United States market from the highest price levels on down; that they were so varied that the plaintiffs could describe the allegedly conspiratorial conduct only in terms of competition. They say the Japanese defendants agreed to charge prices necessary to get the sale. So does every competitor. The court of appeals said that the jury or a factfinder could infer that these pricing activities were predatory and that they were part of an overall scheme under which supposedly high prices and profits in the Japanese market could be dumped into the United States market for the purpose of supporting low prices here; for the ultimate purpose of jointly monopolizing the United States market. Now, for such an inference to be rational, the plaintiffs should be able to produce some evidence that there was a purpose to predation; that ultimately those who paid the price of predation could recover their predatory losses through monopoly profits at some foreseeable point where it made some sense. They should also have some evidence that those smaller Japanese competitors, those who had smaller shares of the United States market, had a mechanism to share the burdens and benefit of predation at the one hand and monopolization at the other. Far from showing that, the record in this case is entirely to the contrary. The undisputed facts of this case are that from the beginning of the alleged period of conspiracy when these companies entered the United States market with zero market shares, on through the roughly 20 years covered by this case, the two market leaders in the United States, Zenith and RCA, remained the two market Leaders in the United States; lost none of their market shares. And there is no evidence of any high barriers to entry in this market. It was a highly competitive market; therefore, where could an inference be drawn that predation would make any sense, that there could ever be a recoupment. The plaintiffs don't address themselves to it. The court of appeals did not address itself to it. There is no evidence whatever of a sharing mechanism among these companies. Thus, the undisputed facts of this case show that the pricing activities of the defendants in the United States are entirely indistinguishable from normal pricing activities by competitors, and that there is no basis for an inference of predatory purpose behind their activities.
John Paul Stevens: Mr. Zoeller, in your view, is the evidence about what happened in the Japanese market entirely irrelevant?
Donald J. Zoeller: Yes, Your Honor, it is entirely irrelevant.
John Paul Stevens: Is the evidence about sharing the figures on production and inventories entirely irrelevant?
Donald J. Zoeller: That evidence has to do with sharing figures on production and inventory in the Japanese, as to the Japanese market. It is entirely irrelevant--
John Paul Stevens: I thought the production figures showed that they produced much more than they consumed in Japan.
Donald J. Zoeller: --Your Honor, as a matter of fact, the experts that the defendants rely upon say... didn't say that they began by producing much more than they consume. They said that as time went on, they built plants to produce more, which doesn't suggest a predatory purpose, Your Honor, but it suggests that there is competition taking place, and they are attempting now to satisfy increasing shares in the United States through investment in new plant and facilities; not that they had it on their hands and had to dump itself.
John Paul Stevens: Does the evidence explain why they exchanged this information about production and inventory?
Donald J. Zoeller: They were members of trade associations, Your Honor, and they exchange a lot of kinds of information that people do in trade associations. There is some evidence that there was allegedly collusive activities in the Japanese market designed to hold up the prices of the Japanese market, but there is no evidence that would show any rational, logical or natural connection between that and activities in the United States. And on this record of the type of activities that were engaged in in the United States, such a connection would not make sense. What really happened here is that when it came to the critical, Your Honor, when it came to the critical question of what was happening in the United States market, whether the activities in the United States market showed the signs of conspiracy, the court of appeals said it did not have to follow this Court's inference standards for that purpose. The court of appeals said that the fact that it saw some evidence of some collusion in Japan and that it saw the Japanese companies engaging in their government's export program, which would have had a natural tendency to hold up prices in the United States, not drive them down, but since it saw some collusion someplace, it said all it had to do then as far as the critical question of what was going on in the United States market is see some "circumstantial evidence having some tendency to suggest that other kinds of conduct of concert of action may have occurred. " And that's at page 165a of the record, and there the court, in deciding the critical question of whether the activities in the United States were beneficial to American consumers or were injurious, collusive activities, said we look at it in terms of possibilities, not what flows naturally and logically from the record, as this Court required in Cities Service. And to make that point unmistakably clear, the court expressly said that a line of Third Circuit cases based on Cities Service did not apply and that the court did not have to follow the usual rules of the inference-drawing process.
John Paul Stevens: Let me just... You focus our attention on that page. The court says direct evidence of some kinds of concert of action like price fixing in Japan may be circumstantial evidence of a broader conspiracy. Do you agree or disagree with that statement of law?
Donald J. Zoeller: Your Honor, under some circumstances they might be, but on the record of this case there's no basis to suggest that they were. Then, in other words, what the court was really saying, and it's the point I addressed earlier, that the pricing activities in the Japanese market were designed to create profits that could be then poured into the United States market to assume losses. That is a design of predatory intent, but on this record with 20 years having gone by and no opportunity to recoup and no possibility of a rational inference that recoupment could take place in the near future, such an inference would not be appropriate. So, the relationship was not shown in this case. Those activities did not constitute circumstantial evidence of a U.S. pricing conspiracy in this case. The proof of the putting, if the court had looked at it from the standpoint of the United States market, the proof of the putting is that by the plaintiffs' own theory, for 20 unbroken years all of the pricing activities of the Japanese defendants in the American market were beneficial to American consumers, because it is the plaintiffs' contention that those prices were always low; that they brought down pricing competition in the United States market. But at the end of the period the two American market leaders are still the American market leaders with no loss of market share and no basis for a rational suggestion that that condition would change at any time in the foreseeable future. On the basis of that, to suggest predatory conspiracy when you see none of its footprints in the United States market we say is a wrong reading of the law of inference and a dangerous standpoint, because now the United States antitrust laws are used by those who wish to protect themselves from competition as a way of blocking competition.
William H. Rehnquist: Mr. Zoeller, do you think the Cities Service case laid down a rule of inference drawing through summary judgment that's peculiar to antitrust law, or does it apply across the board in summary judgment?
Donald J. Zoeller: Well, I would say, Your Honor, it is not peculiar. It applies basic the principles of inference drawing, but it does have cognizance, I believe, of another principle as well and that is, in addition to the fact that it's wrong and inappropriate to draw an inference of... to draw an inference unless that inference flows naturally and logically from the facts before you, it is also dangerous, and I think the Cities Service case recognized it, from the standpoint of antitrust policy to take conduct that could either be competition or could possibly be conspiracy and treat it as conspiracy because, as this Court warned in Monsanto, there is a danger of intruding on normal competitive activity. So, I think both policies coalesce in that case.
William H. Rehnquist: Well, to that extent then, if you just had an ordinary action for fraud and not antitrust, I suppose you would say Cities Service didn't apply because there's no harm in showing fraud.
Donald J. Zoeller: That might be possibly so, but to the extent that Cities Service also says that the inference of conspiracy must be natural and logical, it applies. But the same broader policy that the record must be rationally explainable in terms of conspiracy than in terms of inference, which is the Cities Service standard as we read it, would not necessarily have to apply in a fraud case. The court of appeals committed a second fundamental error when it Failed to apply the sovereign compulsion and active state defenses to the conduct of the Japanese defendants in following their government's export program. The Japanese government has said in a clear, detailed, explicit and unequivocal statement and in a note verbal that it compelled the conduct in question. That should be recognized for reasons, among others, that the defense is supported in this case by the American government, by the executive branch of this government. It is appropriate because the conduct, the program by the Japanese government is a fundamental government program, the control and regulation of its own exports; because it was not designed by the Japanese government to be harmful to the United States but to avoid trade frictions with this country.
Byron R. White: Is it logically possible that you could win on the antitrust case and lose on the dumping part of the case?
Donald J. Zoeller: In theory it is, Your Honor, but the facts of the case show that there would be no basis to find a predatory intent as we see it, absent the evidence of conspiracy. But as a matter of theory, there are individual claims--
Byron R. White: Then if the claim of government authorization of whatever conduct is alleged, if that is sustained, it also undermines the dumping case, is that it? Not necessarily, Your Honor, in that sense. It undermines any conspirational claim, and therefore it undermines it in the sense that it destroys the evidence of predatory intent. But if there were low prices not compelled by the Japanese government, we don't intend that a finding of sovereign compulsion would bar that. Well, the dumping case under the court of appeals judgment would still be tried, too, wouldn't it?
Donald J. Zoeller: --Yes, it would, Your Honor. If there were anything to try--
Byron R. White: But you think that part of it should be reversed, too?
Donald J. Zoeller: --I think it should, Your Honor, because the failure of the conspiracy evidence would destroy any evidence of predatory intent under the record of this case.
William H. Rehnquist: Do you think your questions presented, your petition, raises anything about the dumping charges?
Donald J. Zoeller: It does not directly, Judge Rehnquist. What it does is it indicates how the conspiracy claim must fail, and I think we have shown in our arguments that that should cause the dumping claims to fail as well.
Byron R. White: It would any joint predatory... it would undermine any finding of a joint predatory intent.
Donald J. Zoeller: Yes, and we don't see any other evidence in this record of predatory intent, Your Honor, so that I think the court of appeals relied upon the conspiracy in showing any predatory intent joint or individual, and that is why they dismissed the dumping claims jointly and individually as to the defendant Sony, for example. If I may, Mr. Chief Justice, I would like to reserve the rest of my time for rebuttal.
Warren E. Burger: Mr. Rule?
Charles F. Rule: Mr. Chief Justice, and may it please the Court: This case, we believe, is an unfortunate example of the distortion of the antitrust laws by competitors to thwart competition; precisely the sort of case that the rules of Cities Service were created for. It's important to note and remember the background of this case in our view. After nine years of discovery, seven different judges, hundreds of depositions and literally hundreds of thousands of documents, district Judge Becker took several months to sift through the evidence very carefully and wrote a 430 page opinion granting the petitioners' motion for summary judgment on the ground that there was no reasonable inference that could be drawn from all the evidence of a low price conspiracy that injured the respondents.
John Paul Stevens: Mr. Rule, perhaps I should have asked your opponent, but do I correctly recall that the district judge held a great deal of evidence inadmissible that the court of appeals said was admissible, so the court of appeals decided the case on a different record?
Charles F. Rule: The court of appeals did reverse Judge Becker as to a number of evidentiary motions; however, Judge--
John Paul Stevens: But most of its opinion deals with evidentiary ruling.
Charles F. Rule: --Yes, sir. Judge Becker, though, in deciding the summary judgment motions, in effect assumed, arguendo, that certain evidence was admissible. Moreover, when you look at the evidence that the court of appeals relied on in reversing Judge Becker, and when you distill it down to its essence, essentially you have four facts that the court of appeals relied on. The respondents have characterized those facts in various ways to make the list look a little broader and bigger, but the fact is there are four facts. And because there was direct evidence as to at least two of those facts, the court felt that it didn't have to apply the rules of inference drawing of Cities Service. However, I think when you look at those four facts, either individually or together, the four facts are not even probative circumstantial evidence of an agreement to charge low prices in the United States that injured the respondents, much less direct evidence of such an agreement: therefore, Cities Services requires summary judgment. Those four facts are essentially these. First, there was an agreement, let's assume, to stabilize price in a protected Japanese market; that is, the Japanese got together, the petitioners in this case, to fix prices, hold them up at higher levels. They were protected from competition from foreign parties. Now, that very well have injured Japanese consumers, but no one, including the respondents, would argue that that's an American antitrust violation. Next, the court relied on Japanese mandated export control arrangements and so-called check price agreements, which fixed the minimum export prices below which the petitioners were not to sell in the United States, and the so-called five company rule, which established that the petitioners could only sell to five customers in the United States, although one of those customers could be their subsidiary who could in turn resell to almost anyone in this country. If these agreements were effective at all, and I think that even respondents recognize that they were less effective than the Japanese would have liked, the effect of those agreements was simply to keep prices higher in the United States to, in effect, reduce the competitive vigor of Japanese manufacturers in this market, and while that may be objectionable under the antitrust laws, it certainly doesn't create the sort of antitrust violation that the respondents have alleged, in that indeed they must prove to establish injury that they are entitled to claim under the antitrust laws. Moreover, as we pointed out in our brief--
Byron R. White: Have you reached all four facts?
Charles F. Rule: --No. There's--
Byron R. White: Is there more than one?
Charles F. Rule: --Two more, actually. I view the mandated export program as, in effect, one factor, although there may have been various--
Byron R. White: Along with the five companies.
Charles F. Rule: --Right, which was part of that program, and those agreements were also compelled, in effect, by the government of Japan as it's indicated twice to the court. The third fact is the secret rebates that were not disclosed by petitioners. In effect, the petitioners engaged in, so the court said, more than 25 different rebating schemes that resulted in prices varying from the very lowest to the very highest. Again, this is more indicative of individuals evading regulatory constraints that hampered their individual efforts to try to compete in the marketplace and sell at the lowest price possible. The final fact was the allegations that the petitioners sold at dumping prices in the United States. Again, the petitioners dispute that. Even assuming that it's true, it's to be expected. You had a Japanese market that was protected, where there was a price stabilization agreement; therefore, prices were artificially high. In the United States, you had a competitive environment; no protected market. It's inevitable that prices would be lower in the United States than Japan. It simply proves nothing. Taken together, the inference is overwhelming that the evidence is indicative of individual competitors responding unilaterally and vigorously to market forces; in effect, their new entrance, the petitioners, through the relevant time, trying to make a place in the market by competing on the basis of price, trying to develop customer loyalty, that sort of thing. Now, that may have injured the respondents, but that's competition, and competition is what the antitrust laws are designed to promote, not to thwart. We believe that the Third Circuit's decision offers strong encouragement, if it's upheld, to beleaguered competitors seeking protection from the vigors of competition, and we think that's precisely the wrong thing that the antitrust laws should do. The threat of treble damages and never-ending litigation such as this is precisely the sort of thing that can, in effect, undermine the competitive enthusiasm of very efficient firms and result in the perversion of prices and competition that the antitrust laws were designed to prevent. We are very much concerned, the United States government, about this case and about the abuse it pretends for the law. To the extent the protection of domestic industries from foreign competition is necessary, there is an extensive body of trade laws with safeguards to do precisely that. It seems to us that unless the courts are willing and able to enter summary judgment in suits such as this, respect for the antitrust laws at home and abroad will be seriously eroded. For all these reasons, including as I have indicated the fact that we believe the statements, two statements, by the Japanese government, that they compelled the export control arrangements, the five company rule and the check price agreement, and that therefore evidences to those agreements cannot be the basis of liability against the petitioners, that for all these reasons the Court should reverse the Third Circuit and reinstate the summary judgment on dismissing respondents' antitrust claims. Thank you.
Warren E. Burger: Mr. Rome?
Edwin P. Rome: Mr. Chief Justice, may it please the Court: At the argument below which lasted two full days, counsel for petitioners here said that what the court had to do was to look at the record. That's what the case is all about. The court of appeals did exactly that over a period of fourteen months, examining a record of some 18,000 pages, as its lengthy opinion shows in detail, and decided unanimously that there are disputed issues of material fact which preclude the grant of summary judgment to petitioners here. The court of appeals said that respondents are entitled to have a trial on the merits. After 12 years of the most arduous effort in which we had to overcome every possible and conceivable defensive tactic, the court of appeals reached its decision after reversing most of the evidentiary rulings of the district court and after a careful consideration of the restated evidentiary record, much of which came from the files of the petitioners themselves. In doing so, the court of appeals applied the appropriate standards of sufficiency or evidence of a Sherman Act conspiracy and correctly drew all reasonable inferences in favor of respondents who were the opponents of the summary judgment motions. In fact, the court below tested the respondents' evidence by an unusually stringent standard under Rule 56 of the Federal Rules. Thus, the court of appeals ignored the fact that petitioners' summary judgment motions were inadequately based, in that on their own application to the district court they had been relieved from filing their final pretrial statement setting forth their view of the evidence in the record. Under the normal summary judgment procedures, this would alone have been sufficient to require their motions to be denied. Instead, the court tested the sufficiency of the respondents' evidence, sifted through the massive factual record for the l4 months, and upheld unanimously the sufficiency of the evidence. In addition, respondents' unrebutted expert economic reports evidence analyzing the admissible evidence and concluding that it pointed only to collusion is dispositive, we respectfully submit, on summary judgment. Now, petitioners argue that the concept of sovereign compulsion insulates them from liability for the wrongful acts done in the United States which restrained the interstate and foreign commerce of the United States. This, with great respect for my friends, is a false issue belatedly raised and is based on an obvious misinterpretation of what the court of appeals said and did. The Solicitor General, in his brief, acknowledges and concedes that sovereign compulsion is an affirmative defense, yet it was not raised by petitioners in their answers to the complaints with the exception of MELKO, which posed it in the context of questioning subject matter jurisdiction. But both the district court and the court of appeals have upheld subject matter jurisdiction, which holdings are not questioned in this Court. Sovereign compulsion was not discussed by the district court and was not briefed or argued in the court of appeals, again except by MELKO in the context of a question as to subject matter jurisdiction. In fact, counsel for petitioners, my friend here, told the court of appeals that sovereign compulsion was of no importance on the appeal and was not being pressed by petitioners. The court of appeals in its decision cited specific reasons why summary judgment on the ground of sovereign compulsion was not possible, the most important being that petitioners simply did not do what they say the Ministry of International Trade and Industry in Japan directed them to do. And that is unquestionably the fact, because MITI did not direct the petitioners to dump or to lie to the U.S. Customs on the thousands of entry documents about their prices in the United States, or to lie to the U.S. Treasury about their prices in their responses to the government proceedings and to the Antidumping Act of 1921, or to sell their products in the United States below the so-called minimum or check prices, or to pay millions of dollars in so-called difference money in a myriad of secret ways in the United States. Moreover, there simply cannot be compulsion since, under the very Japanese export and import trading act on which my friends rely, petitioners had the right to withdraw from the very agreements that are here in evidence, which right to withdraw could not, under the Japanese statute, be unduly restricted. That it was intentional on their part and not directed or compelled by MITI is evidenced by the fact that it is admitted that the petitioners continued their course of conduct after there was not a renewal of the agreements and rules in 1973.
William H. Rehnquist: Mr. Rome?
Edwin P. Rome: Sir?
William H. Rehnquist: There's a certain tendency, I think, on the part of your briefs. They're going to pass in the night; namely, yours and your opponents'. In their... in your opponents' description of your case, they say that respondents alleged that from the mid-50s to at least 1977, you claimed seven Japanese television manufacturers and 17 other named defendants participated in a low price export conspiracy to destroy their competitors and take over the U.S. market for television receivers. Now, is that a reasonably accurate description of your claim?
Edwin P. Rome: Yes, sir. The reason being, Mr. Justice Rehnquist, is that the entire evidentiary record has to be looked at as an entirety without fragmentation, and what we were charging here is a conspiracy in restraint of trade and a conspiracy to monopolize which manifested itself in dumping in the United States. There must not, we respectfully suggest, be an ignoring of what happened in the Japanese market, and when that is examined as a unitary course of conduct, we then find that there were high prices admittedly charged in Japan which indeed did enable the penetration of the U.S. market to be undertaken at a lesser cost than would otherwise be the case.
William H. Rehnquist: Is it a necessary element of your claim that eventually these people would have to recoup their losses?
Edwin P. Rome: No, sir. That is a completely contention advanced by my friends, because in actuality it ignores the fact of what was occurring in the Japanese market where they were in a closed market that no U.S. competitor could enter--
William H. Rehnquist: But how does that bear on a claim of the American antitrust law?
Edwin P. Rome: --Because, sir, if it had an impact on the interstate and foreign commerce of the United States and is to be considered as part of the unitary course of conduct, then indeed it must be considered as the court of appeals held below.
William H. Rehnquist: Well, but supposing your evidence of what happened in this country shows nothing more than that these people constantly lowered their prices and met competition and tried to compete so heavily as to become the only people and the only suppliers in the American market? Now, if that proof... if there's nothing more than that, now can showing something that happened in the Japanese market fortify that case?
Edwin P. Rome: But what they did, sir, was as the result of collusion. It is admitted by my friends that there was indeed collusion in the Japanese market. That conduct there was found to have violated even Japanese law, and then what happened here in the United States was not just the minimum prices that are referred to in these agreements, but in actuality they continued predation because they were charging actual prices that were significantly lower in the United States, with all of them knowing that those prices were lower--
William H. Rehnquist: Well, what was their motive?
Edwin P. Rome: --Their motive, indeed, Your Honor, was to take control, as happened, of the U.S. market for consumer electronic products, because... well, my friend says that the two leaders are still here, RCA and Zenith. There had been, initially over 20 companies in the U.S. market, and only two are now left, and those two have suffered losses so that while they have managed to survive despite the losses, they have indeed ended up taking over the U.S. market with more than 50 percent of--
William H. Rehnquist: But surely they didn't take over the U.S. market with the intent to just continue dumping and charging low prices, did they?
Edwin P. Rome: --Sir, they have been doing that all of this time, because the prices are in fact dumping prices, as has been found by the expert testimony which is unrebutted; and moreover, their losses, which they admittedly suffered in the United States, were protected by the high prices that they were getting in Japan, and that is the very essence of dumping--
Speaker: But this is--
Edwin P. Rome: --price discrimination in the two markets.
William H. Rehnquist: --Does that state a claim under the antitrust laws?
Edwin P. Rome: Oh, yes, sir, because it is a restraint of trade and an attempt to monopolize. We do, indeed, contend that it violates the antitrust laws as well as the separate Antidumping Act of 1960, which issue is not presently before Your Honors.
Speaker: Were the American companies selling in competition with the Japanese in Japan?
Edwin P. Rome: No, sir. Zenith attempted, Your Honor, Motorola attempted, and were unable to do so. It is admitted on this record that the Japanese market was closed. Excuse, me, sir.
Speaker: If Japan had these inflated prices, couldn't the American producers have returned the compliments?
Edwin P. Rome: If they had been able to. There was an ardent desire on their part of American companies to do that, but there had not been an ability to sell in Japan, sir. That's undisputed on this record, showing, indeed--
Speaker: I'm trying to get at the reason. What was the reason?
Edwin P. Rome: --A variety of both tariff and other barriers that prevented their attempting to carry through their attempt to sell in the U.S. market. Zenith made a number of repeated efforts, sir, and were forbidden the opportunity to--
Speaker: To sell in Japan, you mean?
Edwin P. Rome: --To sell in Japan, yes, sir. Yes sir.
Speaker: Well, what did you say was not at issue here?
Edwin P. Rome: We say that the Antidumping Act is not in issue because that is something that is still for trial below, and although my friend charges that the conspiracy issue, if it were to go out, would take out the antidumping case. That is not an issue before this Court, because there is independent evidence of predatory intent and individual dumping, and that Antidumping Act claim is not before this Court.
Speaker: Well, I suppose that if reversing the judges below with respect to the antitrust case nevertheless rubs off on the dumping case, then it--
Edwin P. Rome: If that were so, I would agree, Your Honor. But our respectful position is that it does not because--
Speaker: --Well, the other side says it does, so you disagree on that?
Edwin P. Rome: --Only as to the conspiracy, sir. But there is independent evidence of individual acts done by the individual petitioners over a sufficiently long period of time that represents a separate cause of action under--
Speaker: Well, that's your view of the evidence. Of course, I gathered from what your opposition said that if you take away the conspiracy evidence, there's just no evidence of any kind of a predatory intent, individual or joint.
Edwin P. Rome: --On the contrary, Your Honor, there are... is the evidence of the experts in this case--
Speaker: Yes, I know. That's your position about the evidence.
Edwin P. Rome: --But there is also evidence of the continued long period of time in which the prices charges were below their own costs as well as the fact that their prices resulted in losses on the part of the companies.
Speaker: So, I gather if we happen to, if we reverse the lower court on the antitrust case, you would... you think we should say that this has absolutely nothing to do with the dumping case?
Edwin P. Rome: Indeed, sir. That issue is not here. There was no effort to seek certiorari as to the cause of action under the 1916 Antidumping Act.
Speaker: And if we don't agree with you on the predatory action, you can't win, can you?
Edwin P. Rome: On the contrary, sir. I think that--
Speaker: Well, how can you win when the only evidence is that they dropped prices?
Edwin P. Rome: --Well, sir, there is much more evidence than that they dropped prices. There is undisputed evidence that they met over a period of years at every level of the hierarchy and exchanged elaborate, detailed information about production, about prices, and a variety of--
Speaker: What effect did that have on the American market?
Edwin P. Rome: --It was aimed at the American--
Speaker: What effect did it have?
Edwin P. Rome: --It had the result, sir, of taking over the American market, as I've attempted to describe, and driving out of business the National Union Electric Company, which is one of the respondents here, along with some 18 or 20 other--
Speaker: And it also drove down prices, too.
Edwin P. Rome: --It drove down prices, but that is the very essence of dumping, and the fact that it drove down pricing as the result of a combination in conspiracy, and representing an unlawful act is the very reason why we are here--
Speaker: As a consumer, why am I worried about a drop in prices?
Edwin P. Rome: --As a consumer, you may not be, Your Honor, but in actuality the Congress has said that even a low price, if fixed as a result of conspiracy, is something that violates the antitrust laws of the United States. It is not sufficient merely to say that there is a reasonable price being fixed or a low price being fixed. It is the very fact that a price has been fixed which runs counter to our laws, and it is that which makes the vice here. And, moreover, in this instance we have a conspiracy and restraint of trade which manifests itself in dumping, which is a price discrimination in two geographic markets, which has always historically been recognized as the extreme example of predation, as it has been under the GATT, the General Agreement on Trade, which is a... to which agreement Japan itself is a signatory, as is the United States. And that low price is the definition of dumping. It is a lower price here than the higher price in Japan.
Speaker: And I'm worried about the prices in Japan.
Edwin P. Rome: So, with respect, I think our whole point is that there has to be an examination of the entire evidentiary record. I agree, if this had only occurred in Japan without having an impact; if it had not been aimed with effects taking place in the United States, it would be a very different case. But when it does affect the interstate commerce of the United States in its foreign commerce, then indeed it is a situation as to which all must be concerned, with respect, sir.
Speaker: May I ask this question?
Edwin P. Rome: Sir?
Speaker: Did I understand your competitor to say that your clients had not lost share of market over the past 15 to 20 years?
Edwin P. Rome: He did so say, sir. He did so say, but in actuality it is demonstrated on this record that the pricing in the United States has been woefully under... the pricing by the petitioners has been woefully under the prices charged by other competitors in the United States.
Speaker: But my question was whether or not your clients have lost share of market?
Edwin P. Rome: We have maintained a degree brought but not have been able to go out of separate losses because the prices at which the goods have been sold have been sufficiently depressed.
Speaker: You maintain the market share by cutting your prices to beat the predatory prices?
Edwin P. Rome: Yes, sir.
Speaker: That's your position?
Edwin P. Rome: Yes, sir.
Speaker: Did the court of appeals expressly find that?
Edwin P. Rome: I have no recollection, sir, that there was any specific reference to the position of the respective market shares of the respondents here. It should be noted with regard to the 1975 statement from the Ministry of International Trade and Industry on which my friends rely that that statement was sent five years after the NUE complaint was filed, eight months after the Zenith complaint was filed, and long after petitioners had filed their answers to the complaint, without raising the affirmative defense of sovereign compulsion. That MITI statement is unsigned. It purports to refer to an alleged direction given 13 years before, without saying by whom or to whom it was given, whether it was oral or in writing. It makes no reference whatever to the right on the part of the petitioners to withdraw or to their right of appeal, nor is there any statement from Japan's highest legal officer stating the consequences under Japanese law. And the MITI statement--
Speaker: Do you think that there has to be some fact finding with respect to that statement, or not?
Edwin P. Rome: --No, sir. What I'm attempting to suggest is that the issue of sovereign compulsion is not properly in our respectful submission before the Court because, number one, even if it be assumed that MITI mandated or directed the petitioners to do something, they did not do what MITI directed them to do, as I've attempted to suggest. And I'm attempting now to turn my attention, if I may, sir, to the diplomatic communications which have come from the Japanese Embassy, because the MITI statement itself makes no reference to the right to withdraw, and the communication from the embassy of Japan when first transmitted in 1975 made no reference, however, to that. But in 1984, six months after the court of appeals had handed down its decision, then there is again a transmittal of the same 1975 MITI statement by the Japanese embassy, and then a parenthetical reference which seeks to import into the 1975 statement a reference to the five company rule which is not there in the original statement. We say, therefore, that those diplomatic communications do not meet the normal criteria recognized to give effectiveness to a diplomatic communication, in that they were neither timely nor sufficiently specific. Now, what happened then is that in addition to sovereign compulsion, which we say is a false issue, there is indeed the further point that even if there had been a mandate by MITI of what they did under the decisions of this Court going back 80 years, that would not prevent that conduct being admissible in evidence and being a part of the overall course of conduct which is capable of being shown to violate our laws, because 80 years ago this Court said no conduct has such an absolute privilege as to justify all possible schemes of which it may be a part. The most innocent and constitutionally protected facts may be made a step in a criminal plot, and it is... if it is a step in a plot, neither its innocence nor the Constitution is sufficient to prevent the punishment of the plot by law. Our contention, therefore, is that if constitutionally protected conduct, speech, may become a part in a scheme which violates the law and force your right, this purported unspecific mandate from MITI may similarly be so considered. A word should be added here, if I may, about the position advanced by the brief of the Solicitor General that although the government prosecuted these same petitioners for many years under the 1921 Antidumping Act, ultimately successfully, in which proceedings neither the petitioners nor the Japanese government ever raised the defense of sovereign compulsion, the U.S. government in its brief now argues inconsistently against the respondents pursuing their private rights of action against the same petitioners for the same course of conduct. It is suggested by the Solicitor General's brief that sovereign compulsion should not be available in the action brought by the U.S. government, but that it should be limited in its applicability to suits by private litigants. This novel contention, we suggest, is unprecedented, and runs afoul not only of the long recognition by this Court that the private litigant has been a bulwark of the enforcement of the antitrust laws, but also of the specific grant by the Congress of private rights of action. If there is to be a change in that law, it should be legislated by the Congress, we respectfully suggest, not in response to a rather casual reference in an amicus brief. But in similar fashion, petitioners' formulation of the conspiracy issue in terms of alleged parallel acts and other circumstantial evidence is again a false issue in our view and a misstatement of what the circuit court said and did. The court below expressly said that this is not simply a parallel action case, nor is it one based on circumstantial evidence alone. On the contrary, the circuit court carefully distinguished the line of cases based on conscious parallelism from this case, which presents a record in which there is both direct evidence of certain kinds of concert of action and circumstantial evidence which suggests certain other kinds of concert of action. The court of appeals expressly said that thus none of those conscious parallelism cases can be dispositive on the propriety of summary judgment in this case. The court of appeals followed the direction of this Court in refusing to fragment the evidence and examined all the admissible evidence, both direct and circumstantial, in the restated evidentiary record to determine what legitimate inference could be drawn as to the ultimate facts in issue. Contrary to the contentions by my friends, the court of appeals did not create an exception to the rule in Cities Service, which was a totally different case. There, in Cities Service, was not a horizontal price fixing case. Petitioners in Cities Service were not competitors. It was conceded there that the interests of Cities Service were directly opposed to those of the other defendants. Mr. Justice Marshall noted that the record cited an overwhelming amount of evidence as to Cities Service motives, which evidence came from Cities Service itself. In that case, the only evidence there cited was the refusal to buy, while in our case there is extensive evidence, both direct and circumstantial, of collusion, meetings at all levels, exchanges of all kinds of information, including price information, aimed at the U.S. market and carefully coordinated concealed activities that leave no doubt about petitioners' conscious commitment to a common scheme to achieve an unlawful objective. Whereas, Cities Service made a conclusive showing on its part, in actuality what happened here below was that there was no showing by the petitioners at all, because as I have said they were relieved on their own application by the district court of any obligation to file their final pretrial statement. Mr. Justice Marshall, in Cities Service, said the question whether summary judgment is appropriate in any case is one to be decided upon the particular facts of that case. Here, petitioners simply ignore the vastly different evidentiary record of our case in their reliance upon the inapposite facts of Cities Service. Petitioners' response to the undisputed record is to argue that the direct evidence of their collusive conduct in Japan relates to a different conspiracy from the one alleged by the respondents. They seek, thereby, to impermissibly fragment their unitary course of conduct, the single conspiracy that we have charged, into two separate conspiracies and to argue that what they did in Japan is nonactionable. The reason why they say it is nonactionable is because of the alleged mandate from MITI, which I have attempted to refer to in my argument about sovereign compulsion. Whatever MITI directed the petitioners to do lost its exempt character when it became part of petitioners' common design and understanding regarding their conduct outside of Japan which affected the interstate and foreign commerce of the U.S., and in any event, their conduct and agreements in Japan are admissible in our case to illuminate the character and effect of their conduct in the United States. Moreover, their attempt to fragment the record into different conspiracies and to take up each piece of evidence item by item, scrutinize it, and then wipe the slate clean runs counter to the dictate of this Court in Continental Ore. The entire body of evidence must be viewed in the light most favorable to respondents to give them the benefit of all inferences which the evidence fairly supports even the contrary inferences... even though contrary inferences might reasonably be drawn. Nor was it permissible for the district court to attempt, as it did, to decide which reasonable inferences are the more probable, because as has been said in Tennant, cited again in Continental Ore, it is not the function of the court to search the record for conflicting circumstantial evidence nor to take the case away from the jury on a theory that the proof gives equal support to inconsistent and uncertain inferences. Petitioners have not really challenged, because they cannot challenge our statement of the procedural history of this case and the careful detailed reference to the factual record. The conclusory arguments of lawyers cannot prevail over the particular facts of this case established by evidence held to be admissible, which evidentiary rulings are not subject of attack here before Your Honors, and when it is all examined together without fragmenting, we saw that it reasonably tends to prove that petitioners had a conscious commitment to a common scheme designed to achieve an unlawful objective, and therefore the court below should be affirmed. Thank you, sir.
Warren E. Burger: Do you have anything further, Mr. Zoeller?
Donald J. Zoeller: Just a minute or two, Your Honor. If I was able, successfully, to pick my way through the last part of Mr. Rome's argument, I think he and I did agree on one thing, and that is that the Third Circuit did not follow the teachings of the Cities Service case, and they had good reason not to. The record would not support a rational, logical inference that a conspiracy to establish predatory low prices in the United States ever existed. Indeed, this is an unusual case where the record directly rebuts it. That is perhaps the reason, also, why Mr. Rome, now having spent an additional half hour, has never touched on the question of what the record of the activities of these companies in the United States market was; hasn't discussed their pricing activities; disavows any intention to show that there was recoupment; shows no way that those activities could be distinguished from the competition beneficial to consumers which the antitrust laws are seeking to foster, not to squelch.
Speaker: Mr. Zoeller, do you contend that recoupment is an essential part of the cause of action?
Donald J. Zoeller: I am... as far as an inference is concerned, yes, Your Honor. In other words, I am saying that this is an inference case, and in order to draw an inference that there was a predatory conspiracy, in order to distinguish the activities of these companies, the pricing activities from competition, predation would be an essential part of what they're saying.
Speaker: Would proof that sales were below cost tend to prove that conclusion?
Donald J. Zoeller: Not on this record, Your Honor, and I'll take that on two fronts. One, it would be illogical to assume that a group of companies would engage together to sell below costs for 20 years with no hope of ever getting that back out of those activities, and this record will not support such a hope. As a matter of fact, the record in this case shows only very brief, very sporadic losses by four of the petitioners, and as to even one of those four, no sales losses on the critical area of color television receivers. As another one of those petitioners, only one instance of a sale of cost in the critical area of television, of color television receivers. So, there really isn't evidence of sales below costs on any pervasive record in this case, and it would be illogical to assume that there would be one because it would simply be an act of insanity to go for 20 years predating and then hope ever to get it back. Even forget the future, just take 20 years--
Speaker: --thesis, is it true that some 17 or 18 companies have gone out of business in the American market?
Donald J. Zoeller: --Oh, I don't know how many companies have gone out of business. I do know this, Your Honor, that the record shows that the rate of failure of companies before the Japanese in this market, before the Japanese companies entered and their rate of failure afterward was actually greater before than after. And as far as Mr.... Justice Powell asked me about, or asked Mr. Rome about market shares, there is a reference to market shares in the plaintiffs' own evidence at page 2576a of the record, and it picks up at the year 1969, and Zenith's market share was 21.1. At the end of the period relevant, or the period raised by--
Speaker: What about the other plaintiff?
Donald J. Zoeller: --these plaintiffs, it was 22 percent.
Speaker: What about the other plaintiff?
Donald J. Zoeller: The other plaintiff had gone out of business in the year 1970, and that other plaintiff was one of, as far as this record shows, a number of companies that--
Speaker: And even as to Zenith--
Donald J. Zoeller: --didn't make--
Speaker: --as I read the court of appeals opinion, they say that you conceded the fact of damage; that there was enough evidence. I don't mean you conceded on the merits, but that you didn't contend that the record was deficient with regard to proof of damage, is that right?
Donald J. Zoeller: --On this record, Your Honor, we have argued on summary judgment only the issue of liability. We have not addressed the issue of damage either in the court below or in the court of appeals, or not do we address it at this Court. It simply is not raised by the motion for summary judgment, which raises itself to the more basic issue of liability. Thank you.
Warren E. Burger: Thank you, gentlemen. The case is submitted.
Speaker: The honorable Court is now adjourned until tomorrow at 10 o'clock. |
The following are substantially the facts agreed:
At Fall Term, 1874, a motion was made in the cause, to call (341) in an execution and set aside a levy. The motion was continued until Spring Term, 1875, when it was heard upon the following state of facts, as appeared from the proofs and affidavits:
The plaintiff had caused the defendant's homestead to be laid off and a levy to be made upon the excess. Soon after the homestead was laid off, the defendant applied to the township trustees to have it re-allotted, but subsequently withdrew the application and declared himself satisfied with the allotment. He then sold his homestead and recited in the deed that it was the homestead set apart to him by the appraisers.
He now makes the motion. It appears and the facts are, that one of the appraisers was related by marriage to the plaintiff, having married a cousin of the plaintiff's wife. This was known by the defendant at the time his homestead was allotted.
The appraisers did not set apart any personal property exemption. The defendant did not claim any, nor did he exhibit any personal property to the appraisers.
The motion was overruled by the court, and the defendant appealed.
It is the declared policy of the State to secure every debtor a homestead who has one, although its effect should be to inflict upon the creditor the hardship of losing his debt. And therefore, the sheriff before levying, shall have a homestead valued and laid off; and if the debtor is dissatisfied he may apply to the township trustees, and have a *Page 263
re-valuation and allotment. And the allotment of the trustees may be set aside upon petition as in other special proceedings "for fraud, complicity or other irregularity. Bat. Rev., Chap. 55, Secs. 2, 20, 24.
But after the debtor has had his rights passed upon and secured (342) by these liberal provisions, there is no policy which encourages captious or trifling objections, thrown in the way of the creditor's pursuing his remedies against the excess, over and above the homestead. Such seems to be the character of the objections in this case, and they place the defendant in the position of appearing to be ungrateful for the favors shown him; insensible to the resulting hardship upon the plaintiff, and disposed to add to it by expensive and vexatious delays.
The defendant's homestead was laid off by the sheriff. He applied to the trustees for a re-allotment. He withdrew that application. Expressed himself satisfied with the first allotment, and sold his homestead so allotted. He now seeks to stop the creditor's execution against the excess and have a re-allotment upon the ground that one of the sheriff's appraisers was the husband of a cousin of the plaintiff's wife, a fact which was known to defendant at the time, and not objected to; nor is it alleged that there was any "fraud or complicity or other irregularity."
This objection cannot avail the defendant for three reasons: (1) first, it was not made in apt time to the sheriff; (2) secondly, if not allowed by the sheriff it ought to have been taken advantage of in an application to the township trustees, as provided for in section 20; (3) thirdly, if not allowed by the trustees, then it ought to have been taken advantage of by a "petition, as in other special proceedings," under section 24.
There is no error. This will be certified.
PER CURIAM. Judgment affirmed.
(343) |
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Ameen A. Muhammad, #1337028, ) C/A No.: 1:19-3489-DCC-SVH
)
Plaintiff, )
)
v. )
)
CCOH or CCHM, H. Drayton, ) ORDER AND NOTICE
Theodolph Jacobs, O’Brien, G. )
Williams, and John Doe, )
)
Defendants. )
)
Ameen A. Muhammad (“Plaintiff”), proceeding pro se and in forma
pauperis, filed this complaint pursuant to 42 U.S.C. § 1983 against CCOH or
CCHM, Detention Center Director H. Drayton (“Drayton”), Dr. Theodolph
Jacobs (“Dr. Jacobs”), Dr. O’Brien, Dr. G. Williams (“Dr. Williams”), and John
Doe (“Doe”) (collectively “Defendants”), in their official and individual
capacities, alleging violations of his constitutional rights. Pursuant to the
provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e)
(D.S.C.), the undersigned is authorized to review such complaints for relief and
submit findings and recommendations to the district judge.
I. Factual and Procedural Background
Plaintiff is a pretrial detainee incarcerated at Sheriff Al Cannon
Detention Center (“Detention Center”) in North Charleston. [ECF No. 1 at 2,
4]. He alleges Defendants violated his due process rights under the Fourteenth
Amendment by subjecting him to cruel and unusual punishment and providing
inadequate medical care in violation of the Eighth Amendment. Id. at 4. He
claims additional violations based on negligence and breach of contract. 1 Id.
Plaintiff alleges Defendants violated minimum standards for screening
for communicable diseases in local detention facilities. Id. at 4. He claims that
on November 15, 2019, hepatitis A vaccines were administered to all inmates
in the Detention Center. Id. at 5. He maintains he has been experiencing
symptoms of hepatitis A, including headache, fatigue, throbbing behind his left
eye, blurred vision, and anal irritation. Id. at 5–6. He alleges CCMH did not
properly screen for the disease, allowing him to become infected. 2 Id. at 5.
Plaintiff demands compensatory damages of $5,000,000, “nominal”
damages of $100,000, punitive damages of $5,000,000, a declaratory judgment,
a change in policy, “or reduced likelihood of future violations.” Id. at 6.
II. Discussion
A. Standard of Review
Plaintiff filed his complaint pursuant to 28 U.S.C. § 1915, which permits
an indigent litigant to commence an action in federal court without prepaying
the administrative costs of proceeding with the lawsuit. To protect against
1 Plaintiff also claims Defendants violated his constitutional or statutory rights
as to “third party beneficiary.” [ECF No. 1 at 4]. This does not appear to be a
cognizable claim.
2 Plaintiff does not allege he has received a positive Hepatitis A diagnosis.
2
possible abuses of this privilege, the statute allows a district court to dismiss
a case upon a finding that the action fails to state a claim on which relief may
be granted or is frivolous or malicious. 28 U.S.C. § 1915(e)(2)(B)(i), (ii). A
finding of frivolity can be made where the complaint lacks an arguable basis
either in law or in fact. Denton v. Hernandez, 504 U.S. 25, 31 (1992). A claim
based on a meritless legal theory may be dismissed sua sponte under 28 U.S.C.
§ 1915(e)(2)(B). See Neitzke v. Williams, 490 U.S. 319, 327 (1989).
A complaint must contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Pro se
complaints are held to a less stringent standard than those drafted by
attorneys. Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). In evaluating
a pro se complaint, the plaintiff’s allegations are assumed to be true. Fine v.
City of N.Y., 529 F.2d 70, 74 (2d Cir. 1975). The mandated liberal construction
afforded to pro se pleadings means that if the court can reasonably read the
pleadings to state a valid claim on which the plaintiff could prevail, it should
do so. A federal court is charged with liberally construing a complaint filed by
a pro se litigant to allow the development of a potentially meritorious case.
Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The requirement of liberal construction does not mean that the court can
ignore a clear failure in the pleading to allege facts that set forth a claim
currently cognizable in a federal district court. Weller v. Dep’t of Soc. Servs.,
3
901 F.2d 387, 390–91 (4th Cir. 1990). Although the court must liberally
construe a pro se complaint, the United States Supreme Court has made it
clear a plaintiff must do more than make conclusory statements to state a
claim. See Ashcroft v. Iqbal, 556 U.S. 662, 677‒78 (2009); Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555 (2007). Rather, the complaint must contain
sufficient factual matter, accepted as true, to state a claim that is plausible on
its face, and the reviewing court need only accept as true the complaint’s
factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678‒79.
B. Analysis
1. CCOH or CCHM Not A “Person” Under § 1983
To state a plausible claim for relief under 42 U.S.C. § 1983, 3 an
aggrieved party must sufficiently allege that he was injured by “the
deprivation of any [of his or her] rights, privileges, or immunities secured by
the [United States] Constitution and laws” by a “person” acting “under color of
state law.” See 42 U.S.C. § 1983; see generally 5 Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure § 1230 (3d ed. 2014). Only “persons”
3 Plaintiff’s Complaint is properly before this court pursuant to 42 U.S.C. §
1983. Section 1983 is the procedural mechanism through which Congress
provided a private civil cause of action based on allegations of federal
constitutional violations by persons acting under color of state law. The
purpose of § 1983 is to deter state actors from using badge of their authority to
deprive individuals of their federally guaranteed rights and to provide relief to
victims if such deterrence fails.
4
may act under color of state law; therefore, a defendant in a § 1983 action must
qualify as a “person.” For example, inanimate objects such as buildings,
facilities, and grounds are not “persons” and cannot act under color of state
law. See Preval v. Reno, 57 F. Supp. 2d 307, 310 (E.D. Va. 1999) (“[T]he
Piedmont Regional Jail is not a ‘person,’ and therefore not amenable to suit
under 42 U.S.C. § 1983.”); Brooks v. Pembroke City Jail, 722 F. Supp. 1294,
1301 (E.D.N.C. 1989) (“Claims under § 1983 are directed at ‘persons’ and the
jail is not a person amenable to suit.”).
Additionally, use of the term “staff” or the equivalent as a name for
alleged defendants, without the naming of specific staff members, is not
adequate to state a claim against a “person” as required in § 1983 actions. See
Barnes v. Baskerville Corr. Cen. Med. Staff, No. 3:07CV195, 2008 WL 2564779
(E.D. Va. June 25, 2008).
Plaintiff names “CCOH or CCHM” as a defendant and alleges “CCMH”
did not properly screen for hepatitis A, causing him to become infected. [ECF
No. 1 at 5]. As Plaintiff provided no identifying information as to “CCOH or
CCHM,” the undersigned is unable to determine whether CCOH or CCHM was
acting under color of state law. Nevertheless, it does not appear that CCOH or
CCHM qualifies as a “person” subject to suit under § 1983. Accordingly,
Plaintiff’s complaint is subject to summary dismissal as to CCOH or CCHM.
5
2. Failure to Allege Personal Participation by Other
Defendants
Plaintiff does not allege any specific personal actions by Drayton, Dr.
Jacobs, Dr. O’Brien, Dr. Williams, or Doe that violated his rights.
To assert a viable § 1983 claim against a public official, a causal
connection or affirmative link must exist between the public official and his/her
conduct. See Iqbal, 556 U.S. at 676 (providing a plaintiff in a § 1983 action
must plead that the defendant, through his own individual actions, violated
the Constitution); Rizzo v. Goode, 423 U.S. 362, 371-72 (1976) (a § 1983
plaintiff must show he suffered a specific injury as a result of specific conduct
of a defendant, and an affirmative link between the injury and that conduct);
Wright v. Collins, 766 F.2d 841, 850 (4th Cir. 1985) (“In order for an individual
to be liable under § 1983, it must be ‘affirmatively shown that the official
charged acted personally in the deprivation of the plaintiff’s rights. The
doctrine of respondeat superior has no application under this section.’”)
(quoting Vinnedge v. Gibbs, 550 F.2d 926, 928 (4th Cir. 1977)); Vinnedge, 550
F.2d at 928 (for an individual to be liable under § 1983, it must be affirmatively
shown the official charged acted personally in the deprivation of the plaintiff’s
rights).
Plaintiff has made the conclusory allegation that all defendants violated
his due process rights under the Fourteenth Amendment, but he has cited no
6
specific action by Drayton, Dr. Jacobs, Dr. O’Brien, Dr. Williams, or Doe that
violated his rights. In addition, Plaintiff has not provided information
suggesting Dr. Jacobs, Dr. O’Brien, Dr. Williams, and Doe are public officials
who qualify as state actors amendable to suit under § 1983. Accordingly,
Plaintiff’s complaint is subject to summary dismissal as to Drayton, Dr. Jacobs,
Dr. O’Brien, Dr. Williams, and Doe.
3. Failure to Allege Elements for Breach of Contract Claim
To the extent Plaintiff alleges a claim for breach of contract, he has failed
to identify any violation of the Constitution or federal law implicated by the
alleged breach of contract, which is required to support a cause of action under
§ 1983. See 42 U.S.C. § 1983. To the extent Plaintiff alleges a claim for breach
of contract under state law, he has failed to plead the elements necessary to
support such a claim. Therefore, Plaintiff’s claim for breach of contract is
subject to summary dismissal.
4. Negligence Not Actionable Under § 1983
To the extent Plaintiff alleges a claim of negligence against Defendants
for the alleged transmission of hepatitis A, the law is well settled that a claim
of negligence is not actionable under 42 U.S.C. § 1983. See Daniels v. Williams,
474 U.S. 327, 335–36 n.3 (1986); Davidson v. Cannon, 474 U.S. 344, 347–48
(1986); Pink v. Lester, 52 F.3d 73 (4th Cir. 1995). Accordingly, Plaintiff’s claim
of negligence against Defendants is subject to summary dismissal.
7
NOTICE CONCERNING AMENDMENT
Plaintiff may attempt to correct the defects in his complaint by filing an
amended complaint by January 8, 2020, along with any appropriate service
documents. Plaintiff is reminded an amended complaint replaces the original
complaint and should be complete in itself. See Young v. City of Mount Ranier,
238 F.3d 567, 572 (4th Cir. 2001) (“As a general rule, an amended pleading
ordinarily supersedes the original and renders it of no legal effect.”) (citation
and internal quotation marks omitted). If Plaintiff files an amended complaint,
the undersigned will conduct screening of the amended complaint pursuant to
28 U.S.C. § 1915A. If Plaintiff fails to file an amended complaint or fails to
cure the deficiencies identified above, the undersigned will recommend to the
district court that the claims be dismissed without leave for further
amendment.
IT IS SO ORDERED.
December 18, 2019 Shiva V. Hodges
Columbia, South Carolina United States Magistrate Judge
8
|
[Cite as Toledo v. Rainey, 2019-Ohio-4618.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY
State of Ohio/City of Toledo Court of Appeals No. L-18-1270
Appellee Trial Court No. CRB-18-13830
v.
Dominick Rainey DECISION AND JUDGMENT
Appellant Decided: November 8, 2019
*****
David Toska, Chief Prosecutor, and Jimmie Jones,
Assistant Prosecutor, for appellee.
Misty Wood, for appellant.
*****
PIETRYKOWSKI, J.
{¶ 1} Appellant, Dominick Rainey, appeals from the December 20, 2018 judgment
of the Toledo Municipal Court convicting him of assault, a violation of R.C. 2903.13(A),
and sentencing him to 160 days in the Corrections Center of Northwest Ohio. For the
reasons which follow, we affirm. Appellant asserts the following single assignment of
error on appeal:
THE PROSECUTION DID NOT PRESENT SUFFICIENT
EVIDENCE TO MEET THEIR BURDEN OF PROOF.
{¶ 2} At trial, Carrie Mohler, a therapeutic program worker for the Northwest
Ohio Psychiatric Hospital, testified she was assisting a patient on October 20, 2018, when
appellant, who was also a patient at the hospital, told the other patient to come into a
room to fight. That patient refused. Appellant had only been in the unit for two days and
there had been no prior altercation with this patient, but appellant had assaulted other
patients. Mohler told the patient to come toward her and she went around the nurse’s
station to walk the patient to the TV area and away from appellant. While they were
moving away, appellant lunged out from the doorway where he had been standing and
started hitting the patient in the face and head and pulled the patient’s t-shirt over his
head. The patient was bleeding and unable to fight back. When Mohler and a nurse tried
to intervene, appellant punched the nurse in the arm and Mohler in the chest with a closed
fist. Mohler further testified that as she attempted to grab appellant’s arm, which was
slippery because he had covered himself in Vaseline, he turned around and looked her in
the eye before striking her. Mohler was taken to the hospital and was told she had a
contusion to the chest and rib. She had therapy, but the pain persisted for three weeks.
Other personnel came to help get appellant back to his room and provide first aid for the
patient and Mohler.
2.
{¶ 3} Officer Reynolds, a police officer for the Northwest Ohio Psychiatric
Hospital, testified that he responded within two minutes to the call for help for the above-
mentioned incident. When he arrived on the scene that day, he found the nurse and
Mohler assisting the patient. The officer moved Mohler behind the nurse’s station
because she was complaining of chest pain and had trouble breathing. He later
questioned all of the parties involved. Appellant told the officer that he was going to
continue to hit the employees as long as he was there. The officer spoke with Dr. Sirken
and informed him that the victims wanted to press charges. Dr. Sirken was required to
prepare a capacity assessment the same day. Dr. Sirken indicated that appellant was
admitted because of paranoid demeanor, agitation, and propensity for violence and that
he was uncooperative in the evaluation of his competency. Dr. Sirken also indicated
appellant was able to understand what he was doing because he was laughing while
taunting the other patient and had covered himself in Vaseline prior to initiating a fight in
order to prevent someone from pulling him away. Dr. Sirken opined appellant’s behavior
was due to his antisocial behavior.
{¶ 4} Appellant argues in his sole assignment of error that insufficient evidence
was admitted to support his conviction.
{¶ 5} Sufficiency of the evidence is a legal question of whether there was adequate
evidence to present a case to the jury and whether the evidence was sufficient as a matter
of law to support the verdict. State v. Thompkins, 78 Ohio St. 3d 380, 386, 678 N.E.2d
541 (1997). The appellate court does not weigh the evidence nor assess the credibility of
3.
the witnesses. State v. Beasley, 153 Ohio St. 3d 497, 2018-Ohio-493, 108 N.E.3d 1028,
¶ 207; State v. Walker, 55 Ohio St. 2d 208, 212, 378 N.E.2d 1049 (1978). The evidence
must be viewed in favor of the prosecution and we must find that “any rational trier of
fact could have found the essential elements of the crime [were proven] beyond a
reasonable doubt.” Beasley, quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct.
2781, 61 L. Ed. 2d 560 (1979); State v. Jenks, 61 Ohio St. 3d 259, 574 N.E.2d 492 (1991),
paragraph two of the syllabus. A conviction can be sustained with the testimony of a
single witness. State v. DeHass, 10 Ohio St. 2d 230, 234, 227 N.E.2d 212 (1967); State v.
Patterson, 8th Dist. Cuyahoga No. 105265, 2017-Ohio-8318, 99 N.E.3d 970, ¶ 24. In
this case, appellee was required to establish that appellant “knowingly cause[d] or
attempt[ed] to cause physical harm to another.” R.C. 2903.13(A).
{¶ 6} Appellant argues the only witness was one of the alleged victims, Mohler.
While evidence was presented to corroborate her injuries, he asserts no other evidence
corroborated her testimony that appellant knowingly caused harm to her. Furthermore,
he asserts the police officer’s testimony was inconsistent with the original police report.
{¶ 7} In this case, the victim testified she saw assailant look at her prior to
assaulting her and both she and the police officer on the scene testified regarding her
injuries. Her testimony is sufficient evidence to support a conviction. There was no need
for her testimony to be corroborated. Therefore, we find this evidence was sufficient to
submit the case to the jury and support the conviction as a matter of law. Appellant’s
sole assignment of error is found not well-taken.
4.
{¶ 8} Having found that the trial court did not commit error prejudicial to
appellant and that substantial justice has been done, the judgment of the Toledo
Municipal Court is affirmed. Appellant is ordered to pay the costs of this appeal pursuant
to App.R. 24.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Christine E. Mayle, P.J.
_______________________________
Gene A. Zmuda, J. JUDGE
CONCUR.
_______________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
5.
|
7 N.Y.3d 915 (2006)
CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC, Respondent,
v.
MARIE LOUISE CHAUDRY, Appellant, et al., Defendants.
Court of Appeals of New York.
Submitted October 23, 2006.
Decided December 19, 2006.
Motion for leave to appeal dismissed upon the ground that the Court of Appeals does not have jurisdiction to entertain it (see NY Const, art VI, § 3 [b]; CPLR 5602).
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27 F.3d 563
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.In Re: Aaron HOLSEY, Petitioner.
No. 94-8022.
United States Court of Appeals, Fourth Circuit.
Submitted: May 24, 1994.Decided: June 24, 1994.
On Petition for Writ of Mandamus.
Aaron Holsey, Petitioner Pro Se.
PETITION DENIED
Before WIDENER, WILKINSON, and NIEMEYER, Circuit Judges.
PER CURIAM:
1
Aaron Holsey petitions for a writ of mandamus ordering the district court to compel the Defendants in an ongoing matter to provide Holsey with discovery. We deny the petition.
2
Mandamus is an extraordinary remedy, available only if other remedies are ineffective to vindicate the petitioner's rights. Further, mandamus cannot be used as a substitute for appeal. See In re Beard, 811 F.2d 818, 827 (4th Cir.1987); In re United Steelworkers, 595 F.2d 958, 960 (4th Cir.1979). Holsey may, if he chooses, raise the discovery issue on appeal from the final order in the underlying case. The mandamus petition accordingly is denied. As our review of the material before us reveals that it would not aid the decisional process, we dispense with oral argument. We grant leave to proceed in forma pauperis and deny the petition for a writ of mandamus.
PETITION DENIED
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24 F.3d 632
Richard BAKER, Petitioner,v.BETHLEHEM STEEL CORPORATION; Director, Office of Workers'Compensation Programs, United States Department ofLabor, Respondents.
No. 93-1695.
United States Court of Appeals,Fourth Circuit.
Argued Feb. 7, 1994.Decided May 24, 1994.
ARGUED: Thomas L. Samuel, Law Offices of Peter G. Angelos, Baltimore, MD, for petitioner. Karen Birnbaum Kracov, Office of the Sol., U.S. Dept. of Labor, Washington, D.C., for Respondent Director; Richard William Scheiner, Semmes, Bowen & Semmes, Baltimore, MD, for respondent Bethlehem Steel.
ON BRIEF: Jeffrey R. Scholnick, Keith E. Haynes, Law Offices of Peter G. Angelos, Baltimore, MD, for petitioner. Thomas S. Williamson, Jr., Sol. of Labor, Carol A. De Deo, Associate Sol., Samuel J. Oshinsky, Counsel for Longshore, Office of the Sol., U.S. Dept. of Labor, Washington, D.C., for respondent Director; Heather H. Kraus, Semmes, Bowen & Semmes, Baltimore, MD, for respondent Bethlehem Steel.
Before MURNAGHAN and NIEMEYER, Circuit Judges, and ELLIS, United States District Judge for the Eastern District of Virginia, sitting by designation.
Reversed and remanded by published opinion. Judge MURNAGHAN wrote the opinion, in which Judge NIEMEYER and District Judge ELLIS joined.
OPINION
MURNAGHAN, Circuit Judge:
1
The instant case presents the issue of whether a longshore employee who sustains an occupational, noise-induced, monaural hearing loss may be compensated for a monaural loss or must instead have his loss converted into a binaural loss for purposes of calculating his benefits under the Longshore and Harbor Workers' Compensation Act, as amended. 33 U.S.C. Secs. 901-950 (1988).
2
Appellant, Richard Baker, has worked for Bethlehem Steel Shipyard since 1968 as a shipfitter. In his job he was exposed to noise when he used or worked with coworkers who used handjacks, mauls, and airhammers to shape and cut steel. He also worked in the proximity of overhead cranes that used sirens and whistles to signal workers.
3
Baker was given a hearing test on August 23, 1988 by Bethlehem Steel Corporation which showed a hearing loss of 30% in the left ear. Bethlehem Steel referred Baker to Dr. Robert Schwager who also found a 30% monaural loss in the left ear which he attributed to noise exposure. Dr. Schwager recommended that Baker receive a hearing aid for the left ear. When Bethlehem Steel refused to obtain a hearing aid for Mr. Baker, he filed a compensation claim.
4
A hearing was held on February 2, 1991 before an Administrative Law Judge. The ALJ found that Baker had sustained under 33 U.S.C. Sec. 908(c)(13)(A) an occupational monaural hearing loss in his left ear of 30% and that pursuant to 33 U.S.C. Sec. 908(c)(19), he was entitled to compensation for permanent partial disability at a rate of $279.24 per week for a period of 15.6 weeks.* Bethlehem Steel filed an Appeal to the Benefits Review Board (the "Board").
5
While Bethlehem Steel did not contest that Mr. Baker sustained an occupational hearing loss, the Company argued that Baker should have been compensated for a binaural and not for a monaural loss. The Benefits Review Board vacated and modified the ALJ's Decision and held that the ALJ should have converted the 30 percent monaural loss to a 5 percent binaural hearing impairment under The American Medical Association's Guides to the Evaluation of Permanent Impairments (3d ed., revised, 1990). The Board ruled that pursuant to 33 U.S.C. Sec. 908(C)(13)(B), all monaural hearing loss must be converted to a binaural impairment, on a finding that the formula for calculating monaural hearing loss under 33 U.S.C. Sec. 908(c)(13)(A) could not be used in cases where hearing loss was caused by exposure to noise.
6
The Board majority determined that subsection (A) was intended to address only circumstances in which the monaural loss occurred because of a traumatic injury. The decision by the Board reduced the disability of the Appellant from 15.6 weeks to 10 weeks while maintaining the same compensation rate of $279.24, thereby lowering the Award from $4,356.14 to $2,792.40.
7
A Motion for Reconsideration of the Benefits Review Board Decision was filed and was denied.
8
The instant discussion need not detain us long, for this Court has been joined by two other circuits in deciding the legal issue presented by this appeal against the position advanced by the Board. In Garner v. Newport News Shipbuilding & Dry Dock Co., 955 F.2d 41 (4th Cir.1992) (unpublished), we wrote:
9
It is well settled that a statute must not be interpreted to render a portion of the statute meaningless or without effect. See Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 U.S. 237, 249 [105 S. Ct. 2587, 2594, 86 L. Ed. 2d 168] (1985); Woodfork v. Marine Cooks and Steward's Union, 642 F.2d 966, 970-71 (5th Cir.1981), quoting Zeigler Coal Co. v. Kleppe, 536 F.2d 398 (D.C.Cir.1976). The interpretation of the Board majority runs afoul of this principle by effectively reading subsection (A) out of the statute. Neither the statute nor its legislative history provides any basis for the view that subsection (A) is limited to cases where hearing loss was caused by traumatic injury. Moreover, we see no logical reason for compensating monaural hearing losses differently depending on their cause.
10
We see no irreconcilable conflict between the statute's directive that monaural losses be compensated according to the criteria of subsection (A) and the directive of subsection (E) that determinations of hearing loss be made in accordance with the Guides. The Guides provide the methods employed under the Act for measuring hearing loss, whether monaural or binaural. The statute serves a different function; it provides a formula for determining how such losses should be compensated.
11
While the Garner opinion is unpublished, its logic is persuasive. It is fortified by Tanner v. Ingalls Shipbuilding, Inc., 2 F.3d 143 (5th Cir.1993) (unpublished); Rasmussen v. General Dynamics Corp., Elec. Boat Div., 993 F.2d 1014, 1017 (2nd Cir.1993).
12
Accordingly, the decision of the Benefits Review Board is hereby reversed and the case is remanded for reinstatement of the Administrative Law Judge's determination.
13
REVERSED AND REMANDED.
*
The Statute provides in pertinent part:
Compensation for disability shall be paid to the employee as follows:
....
(c) Permanent partial disability: In case of disability partial in character but permanent in quality the compensation shall be 66 2/3 percentum of the average weekly wages, ... and shall be paid to employee as follows:
....
(13) Loss of hearing
(A) Compensation for loss of hearing in one ear, fifty-two weeks.
(B) Compensation for loss of hearing in both ears, two-hundred weeks.
....
(E) Determination of loss of hearing shall be made in accordance with the guides or the evaluation of permanent impairment as promulgated ... by the American Medical Association.
33 U.S.C. Sec. 908 (1980 & Supp.1993).
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792 F. Supp. 334 (1992)
GATES CONSTRUCTION CORPORATION, Plaintiff,
v.
Walter KOSCHAK, Jr., and Carol Koschak, Defendants.
Walter KOSCHAK, Jr., and Carol Koschak, Plaintiffs,
v.
GATES CONSTRUCTION CORPORATION, Defendant.
Nos. 91 Civ. 5889 (MBM), 91 Civ. 6890 (MBM).
United States District Court, S.D. New York.
June 5, 1992.
John A.V. Nicoletti, John K. McElligott, Donovan Parry Walsh & Repetto, New York City, for Gates Const. Corp.
Paul C. Matthews, New York City, for Walter Koschak, Jr., and Carol Koschak.
*335 OPINION AND ORDER
MUKASEY, District Judge.
Gates Construction Corporation ("defendant") has sued Walter Koschak, Jr., and Carol Koschak ("plaintiffs") for a declaratory judgment that Walter Koschak is not entitled to sue as a seaman under the Jones Act, 46 App.U.S.C. § 688, for injuries sustained while employed by defendant ("the declaratory judgment action"). Just after filing the declaratory judgment action, defendant removed to federal court the Jones Act personal injury suit brought by plaintiffs in Supreme Court, Bronx County ("the Jones Act suit"). Plaintiffs move to remand the Jones Act suit and to dismiss the declaratory judgment action. For the reasons set forth below, plaintiffs' motions are granted.
I.
On March 8, 1989, during his employment and while constructing foot bridges at Liberty Island State Park, Walter Koschak was injured by a piece of flying debris. (Declaratory J. Compl. ¶ 11) In December, 1990, plaintiffs attempted to commence the Jones Act suit in Supreme Court, Bronx County, by mailing a summons and complaint to defendant's New Jersey headquarters. (Pl. Notice of Mot.Ex. A) In its Answer, defendant alleged that the December service had been defective and that, therefore, the court lacked personal jurisdiction over defendant. (McElligott Aff. ¶ 5; see Notice of Mot.Ex. H)
In addition to its Answer, defendant also served on plaintiffs a series of discovery demands. (See McElligott Aff. ¶ 6 and Ex. A) Defendant deposed Walter Koschak on February 28, 1991, and plaintiffs deposed defendant for the first time on May 29, 1991. The parties continued with discovery throughout the summer of 1991. (Id. ¶¶ 713)
Plaintiffs' attorney, Paul Matthews, Esq., claims that on June 4, 1991, he had a summons and complaint personally served on defendant. However, defendant claims that it never received the June 4, 1991 summons and complaint (Declaratory J. Compl. ¶¶ 17-18), and Matthews did not provide an affidavit service until October 23, 1991, when he moved to have it admitted nunc pro tunc in the state action. Matthews claims that he did not file the affidavit of service until October because of a change in the New York service statute and a timing error. (Matthews Aff. ¶ 5)
On August 29, 1991, defendant filed the declaratory judgment action at hand, seeking a determination "of its rights and responsibilities to Walter Koschak under either the Longshore and Harbor Workers' Compensation Act or the Jones Act...." (Declaratory J.Compl. I ¶ 18)
On September 27, 1991, plaintiffs again served process on defendant; defendant does not contest the validity of this service of process. (McElligott Aff. ¶ 22)
On October 15, 1991, defendant filed a notice of removal in the Southern District of New York pursuant to 28 U.S.C. § 1441 et seq.; accordingly, the Jones Act suit was removed to this Court.
II.
Plaintiffs move to remand the Jones Act suit to state court on the grounds that: (1) 28 U.S.C. § 1445(a) prohibits removal of Jones Act suits; (2) the removal petition was untimely; and (3) defendant is barred by laches. (Pl.Mem. at 2)
Section 1445(a) of Title 28 provides that: "A civil action in any State Court against a railroad or its receivers or trustees, arising under Sections 51 to 60 of Title 45, may not be removed to any district court of the United States." Under 46 App.U.S.C. § 688, the statutes modifying railway employees' remedies are applicable to seamen. Therefore, Jones Act claims ordinarily are not removable. See Gonsalves v. Amoco Shipping Co., 733 F.2d 1020, 1021-22 (2d Cir.1984); Pate v. Standard Dredging Corp., 193 F.2d 498, 500 (5th Cir.1952).
Defendant argues that the Jones Act suit is removable because the declaratory judgment action was brought "to ascertain whether indeed Walter Koschak *336 was a seaman at the time of his injuries, or was only a dock builder, as Gates contends." (Def.Mem. at 9-10) Although a question of fact exists as to whether Walter Koschak qualifies as a Jones Act seaman, I need not resolve that issue here because defendant's removal was not timely.
Under 28 U.S.C. § 1446(b) (emphasis added), the petition for removal must be filed "within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based...." Although defendant has cited cases holding that the 30-day removal period does not commence until service of process has been effected, see, e.g., Love v. State Farm Mutual Auto Ins. Co., 542 F. Supp. 65 (N.D.Ga.1982), the more substantial authority is to the contrary.
In fact, most courts and commentators that have passed on the question have determined that, because § 1446(b) expressly refers to the defendant's receipt of the initial pleading through service or process "or otherwise," "[s]ervice of process under state law does not control for removal purposes." Tyler v. Prudential Inc. Co., 524 F. Supp. 1211, 1213 (W.D.Pa.1981); see, e.g., Conticommodity Serv., Inc. v. Perl, 663 F. Supp. 27 (N.D.Ill.1987) (so long as defendant receives actual notice of substance of litigation, proper service need not be effected in order to start § 1446(b)'s 30-day time limit); Schwartz Bros., Inc. v. Striped Horse Records, 745 F. Supp. 338, 340 (D.Md.1990) (30-day time limit under § 1446(b) "begins to run when the defendant receives the complaint, through proper service or otherwise"); see also 14A Charles A. Wright, Arthur R. Miller & Edward H. Cooper Federal Practice and Procedure § 3732 at 516 (1985) ("Technicalities of state law as to the completion of service of process are ignored ... when removal is considered."); 1A Moore's Federal Practice, 0.168 [3.-5-3] at 576 (1986) ("The statute [28 U.S.C. § 1446(b)] does not refer to `commencement of the action or service of process.'").
Moreover, reason counsels in favor of finding that perfection of service of process does not determine when § 1446(b)'s 30-day removal period begins. As the court in Schwartz Bros., supra, 745 F.Supp. at 340 (emphasis in original), explained:
Three considerations compel this conclusion. First, the plain language of § 1446(b) indicates that proper service is not required; all that is required is that the defendant receive the complaint `through service or otherwise.' ... Second, construing § 1446(b) in the manner adopted by this Court fulfills the purpose of Congress in enacting the provision. The purpose ... was to establish a uniform federal system for removal of cases to federal court.... Finally, construing the statute as not requiring perfected service is consistent with the well-establish principle that the removal statute is to be construed narrowly and against removal.
Because I find the above reasoning persuasive and because it represents prevailing authority, I find that defendant's 30-day removal period began to run when defendant received plaintiff's complaint in December 1990. Therefore, because defendant did not petition for removal until over nine months after first receiving plaintiffs' Jones Act complaint, defendant's removal is time-barred.
III.
"Even if federal jurisdiction exists and the requirements for a declaratory judgement action are met, it remains within the discretion of the district court to decline to hear a declaratory judgment action." Sturge v. Diversified Transport Corp., 772 F. Supp. 183, 186 (S.D.N.Y.1991) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494, 62 S. Ct. 1173, 1175, 86 L. Ed. 1620 (1942)). One basis for declining to hear a declaratory judgment action is the existence of a pending action in another court that will resolve the controversies between the parties in the declaratory judgment action. Brillhart, 316 U.S. at 495, 62 S.Ct. at 1175; see Sturge, 772 F.Supp. at 186; see also Ven-Fuel, Inc. v. Dep't of Treasury, 673 F.2d 1194, 1195 (11th Cir. *337 1982); Amerada Petroleum Corp. v. Marshall, 381 F.2d 661, 663 (5th Cir.1967) ("That Amerada's petition for declaratory judgment apparently was in anticipation of the New York suit is an equitable consideration that the district court was entitled to take into account."), cert. denied, 389 U.S. 1039, 88 S. Ct. 776, 19 L. Ed. 2d 828 (1968).
Moreover, declining to hear a declaratory judgment action when a coercive action regarding substantially similar claims between the parties is pending in another court accords with the underlying purpose of the Declaratory Judgment Act. "The Declaratory Judgment Act was not intended to enable a party to obtain a change of tribunal from a state to federal court, and it is not the function of the federal declaratory action merely to anticipate a defense that otherwise could be presented in a state action." 10A Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 2758 at 630-32 (1983).
The Second Circuit has held also that "[w]hen the declaratory judgment action has been triggered by a notice [of suit] letter, this equitable consideration may be a factor in the decision to allow the later filed action to proceed to judgment in the plaintiff's chosen forum." Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 219 (2d Cir.1978), cert. denied, 440 U.S. 908, 99 S. Ct. 1215, 59 L. Ed. 2d 455 (1979). "As Mr. Justice Brennan has observed, `[t]he federal declaratory judgment is not a prize to the winner of a race to the courthouses.'" Id. (Perez v. Ledesma, 401 U.S. 82, 119 n. 12, 91 S. Ct. 674, 694 n. 21, 27 L. Ed. 2d 701 (1971) (Brennan, J. dissenting)).
In the case at hand, three factors weigh against exercising jurisdiction over the declaratory judgment action. Most importantly, proceeding with the declaratory judgment action would enable defendant to circumvent the Jones Act's removal prohibition. If defendant were allowed to litigate in a federal declaratory judgment action its defense to plaintiff's Jones Act suit, which plaintiffs chose to file in state court, the Jones Act's explicit grant to "Jones Act plaintiff[s] [of] a choice-of-forum privilege," Gonsalves, 733 F.2d at 1022, would be materially undermined. Second, defendant filed the declaratory judgment action with notice that plaintiff intended to, and was attempting to, proceed in state court; defendant itself was conducting discovery in state court until the time it petitioned for removal. Third, the issues presented for decision in the declaratory judgment action can, and presumably will, be determined in the Jones Act suit; determining here whether plaintiff qualifies as a Jones Act seaman merely would afford defendant an alternative forum in which to litigate an issue properly raised as a defense in the state court action. Therefore, I decline to exercise jurisdiction over defendant's declaratory judgment action.
For the above reasons, the Jones Act suit is remanded to state court and the declaratory judgment action is dismissed.
SO ORDERED.
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621 N.E.2d 128 (1993)
250 Ill. App. 3d 403
190 Ill. Dec. 259
Paul J. ARRA and Mary Ann Arra, Plaintiffs-Appellants,
v.
FIRST STATE BANK & TRUST COMPANY OF FRANKLIN PARK, Defendant-Appellee.
No. 1-92-3529.
Appellate Court of Illinois, First District, Fourth Division.
July 29, 1993.
*129 Richard M. Kates, Chicago, for plaintiffs-appellants.
Carey, Filter, White & Boland, Chicago (Daniel R. Harper and Edmund P. Boland, of counsel), for defendant-appellee.
Justice HOFFMAN delivered the opinion of the court:
In July 1986, a debtor-creditor relationship existed between the plaintiffs, Paul J. Arra and Mary Ann Arra, and the defendant, The First State Bank and Trust Company of Franklin Park (now known as Affiliated Bank/Franklin Park). Under the notes and other instruments evidencing the relationship, the defendant obtained both a mortgage interest in the plaintiffs' home located in Glen Ellyn, Illinois (the property) and a collateral assignment of the beneficial interest of the land trust which held legal title to the property. Among other provisions, the collateral instruments provided that, in the event of a default, the defendant could recover all reasonable expenses incurred by it in exercising its rights including attorney fees and court costs.
The plaintiffs defaulted under the terms of the notes because they did not pay the installments due. As a consequence, the defendant filed a foreclosure proceeding in the circuit court of Du Page County on July 15, 1986. Additionally, on October 10, 1986, the defendant gave notice of a public sale of the beneficial interest of the trust holding title to the property pursuant to section 9-504 of the Uniform Commercial Code (the U.C.C. sale) (Ill.Rev.Stat.1985, ch. 26, par. 9-504). The U.C.C. sale was scheduled for November 20, 1986.
In addition to the defendant's collateral interests, the property was also encumbered by a Federal tax lien in favor of the Internal Revenue Service.
On November 20, 1986, prior to the scheduled U.C.C. sale, the plaintiffs filed for protection under chapter 11 of the Bankruptcy Code (11 U.S.C. § 1101 et seq. (1982)) in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. As a result, the foreclosure action and the U.C.C. sale were automatically stayed. See 11 U.S.C. § 362 (1982).
In 1989, while the bankruptcy proceeding was pending, the plaintiffs litigated their dispute with the Internal Revenue Service to a conclusion with a finding that no tax was owed.
On November 21, 1989, an order was entered in the bankruptcy proceeding modifying *130 the automatic stay to permit the defendant to enforce its collateral rights in the property after January 22, 1990. On January 22, 1990, the plaintiffs filed an emergency motion before the bankruptcy court requesting that the stay be reinstated. In support of their motion they alleged, inter alia, that they had not yet received a commitment for refinancing of the property which would allow them to pay off the defendant and that the defendant's payoff figure tendered to the plaintiffs included $14,000 for attorney fees which were being contested. At the hearing on the plaintiffs' emergency motion, the plaintiffs' attorney informed the bankruptcy judge in the presence of the defendant's attorney that the attorney fees included in the payoff figure were in question and that if the plaintiffs had to pay the fees to obtain refinancing they would do so and then sue the defendant. On January 23, 1990, the judge in the bankruptcy proceeding entered an order on the plaintiffs' emergency motion granting a final extension of the stay until February 22, 1990.
The plaintiffs obtained refinancing of the property and scheduled a loan closing for the afternoon of February 22, 1990. In preparation for the loan closing, the plaintiffs secured an updated payoff statement from the defendant on that date which included attorney fees of $15,409.19. At 10 a.m., on the same day, the plaintiffs' attorney secured the dismissal of the bankruptcy proceeding. In the afternoon, the plaintiffs closed the refinancing loan and from its proceeds paid the defendant the full sum reflected in the payoff statement including the attorney fees.
The plaintiffs demanded a return of a portion of the attorney fees paid to the defendant. When the defendant refused, the plaintiffs filed the instant action. Although in two counts, the plaintiffs' amended complaint sought a judgment against the defendant for the attorney fees paid in excess of reasonable charges.
The defendant answered the plaintiffs' amended complaint, filed two affirmative defenses, and moved for summary judgment. The defendant argued that the plaintiffs' payment of the demanded sums for attorney fees was not made under duress but was a voluntary payment; and, by failing to raise their objection to the fees demanded in either the bankruptcy proceeding or the foreclosure proceeding, the plaintiffs waived any cause of action for a return of the attorney fees.
The trial court granted the defendant's motion for summary judgment on both counts of the plaintiffs' amended complaint and the plaintiffs now appeal. For the reasons which follow, we reverse the judgment of the trial court and remand this action for further proceedings.
Because this case is on appeal from the entry of summary judgment, the issue on review is the same as that before the trial court; namely, whether the evidentiary material before the trial court, when viewed in a light most favorable to the plaintiff, establishes the absence of a genuine issue of material fact and the defendant's entitlement to judgment as a matter of law. Purtill v. Hess (1986), 111 Ill. 2d 229, 95 Ill. Dec. 305, 489 N.E.2d 867; Murphy v. Urso (1981), 88 Ill. 2d 444, 58 Ill. Dec. 828, 430 N.E.2d 1079; Kolakowski v. Voris (1980), 83 Ill. 2d 388, 47 Ill. Dec. 392, 415 N.E.2d 397; Carruthers v. B.C. Christopher & Co. (1974), 57 Ill. 2d 376, 313 N.E.2d 457.
As a preliminary matter, the defendant points to an apparent conflict in this district as to the appropriate standard of review in cases involving an appeal from the entry of summary judgment. To be sure, there are a group of cases which suggest that an abuse of discretion standard should be applied. (See, e.g., Choi v. Commonwealth Edison Co. (1991), 217 Ill. App. 3d 952, 160 Ill. Dec. 854, 578 N.E.2d 33; Fearon v. Mobil Joliet Refining Corp. (1984), 131 Ill.App.3d 1, 86 Ill. Dec. 335, 475 N.E.2d 549.) We, however, follow the line of cases which hold that whether summary judgment is appropriate is a question of law to be determined by a de novo review independent of the trial court's reasoning on the issues presented. (Demos v. National Bank (1991), 209 Ill.App.3d 655, 153 *131 Ill.Dec. 856, 567 N.E.2d 1083; Hatton v. Money Lenders & Associates, Ltd. (1984), 127 Ill.App.3d 577, 82 Ill. Dec. 826, 469 N.E.2d 360.) If, from a review of the evidentiary material before the trial court, a reviewing court determines that a material issue of fact exists or that summary judgment was based upon an erroneous interpretation of the law, a reversal is warranted. Reed v. Fleming (1985), 132 Ill.App.3d 722, 87 Ill. Dec. 607, 477 N.E.2d 733; Warren v. Lemay (1986), 144 Ill.App.3d 107, 98 Ill. Dec. 279, 494 N.E.2d 206.
The resolution of this appeal rests upon the application of the voluntary-payment doctrine to the facts of this case. Our supreme court articulated this doctrine in Illinois Glass Co. v. Chicago Telephone Co. (1908), 234 Ill. 535, 541, 85 N.E. 200, 201:
"It has been a universally recognized rule that money voluntarily paid under a claim of right to the payment and with knowledge of the facts by the person making the payment cannot be recovered back on the ground that the claim was illegal. It has been deemed necessary not only to show that the claim asserted was unlawful, but also that the payment was not voluntary; that there was some necessity which amounted to compulsion, and payment was made under the influence of such compulsion."
The court reaffirmed the voluntary-payment doctrine in Geary v. Dominick's Finer Foods, Inc. (1989), 129 Ill. 2d 389, 393, 135 Ill. Dec. 848, 850, 544 N.E.2d 344, 346, and Getto v. City of Chicago (1981), 86 Ill. 2d 39, 48-49, 55 Ill. Dec. 519, 524, 426 N.E.2d 844, 849.
In this case, there is no question that the defendant demanded payment of attorney fees under a claim of right and that the plaintiffs paid the fees with sufficient knowledge of the source of the defendant's claim and the quantum of legal services incurred to form a conclusion as to the propriety of the amount demanded. But the fact that payment was demanded under a claim of right and paid with knowledge of the relevant facts does not mandate the application of the voluntary-payment doctrine to bar the plaintiffs' right to recover the sums paid for attorney fees in excess of reasonable fees. The voluntariness of a payment is a prerequisite to the application of the doctrine. (Isenstein v. Rosewell (1985), 106 Ill. 2d 301, 88 Ill. Dec. 15, 478 N.E.2d 330.) If a payment is made after a protest (Isenstein, 106 Ill.2d at 309, 88 Ill. Dec. 15, 478 N.E.2d 330), or as a result of compulsion or duress (Getto, 86 Ill.2d at 51-52, 55 Ill. Dec. 519, 426 N.E.2d 844), it is stripped of its voluntary character.
The facts of this case reveal that the plaintiffs objected to the amount the defendant demanded for attorney fees in both the bankruptcy proceeding on January 22, 1990, and in the arguments of their attorney in the hearing of the emergency motion on the same day. In the presence of the defendant's counsel, the plaintiffs' attorney informed the bankruptcy judge: "[i]f we have to pay the attorney fees, we will pay them. We will turn around, and we will sue them." The defendant argues that the plaintiffs did not pay the disputed fees under protest because after it issued the revised payoff statement on February 22, 1990, the plaintiffs did not protest prior to payment later that day. The defendant further contends that not only did the plaintiffs have an opportunity to again protest before the bankruptcy judge in the hearing on that day, but that when the plaintiffs' payment was tendered in the afternoon of the same day, it was made under a cover letter which stated: "[t]hese checks represent payment in full on said proceeds letter."
The notes and security instruments which govern the contractual relationship of the parties do not contain any provisions for paying under protest. Our research fails to reveal any cases in this jurisdiction which address the adequacy of a protest in the absence of a designated procedure. We are of the opinion that when the payor objects or protests in some manner, the question of whether the objection was adequate or whether the payor waived the objection prior to payment are peculiarly questions for the trier of fact to determine *132 when considering all of the facts and circumstances of the case. As such, it would be error to hold that as a matter of law the plaintiffs in this case did not pay the attorney fees demanded by the defendant under protest.
Even if the plaintiffs failed to pay the defendant under protest, the voluntary-payment doctrine would not bar their right of action if the payment was made under duress. "[P]laintiffs have always been allowed to use duress as an exception to the doctrine, regardless of whether they failed to protest." Geary, 129 Ill.2d at 407, 135 Ill. Dec. 848, 544 N.E.2d 344.
In determining whether duress motivated the payment of a demanded sum, attention must be given to the nature of the asset involved and the consequences of nonpayment. If the asset is a necessity and the consequences of nonpayment would adversely affect the asset, a case might be made for duress as a motivating factor in payment. (See Geary, 129 Ill.2d at 398, 135 Ill. Dec. 848, 544 N.E.2d 344.) The asset in this case was the plaintiffs' home which was certainly a necessity. The effect of nonpayment of the sums demanded by the defendant would have been that the defendant would not have released its liens upon the property, the refinancing loan would not have closed, the bankruptcy stay would have expired on February 22, 1990, and the defendant would have been at liberty to proceed with its foreclosure action and, more threatening, its U.C.C. sale. The plaintiffs could have litigated the fee issue in the bankruptcy proceeding but they would have been required to do so without the protection of the statutory stay because the bankruptcy judge granted a final extension of the stay in the order of January 22, 1990. The plaintiffs also could have litigated the issue in the foreclosure proceeding but only after the bankruptcy stay was lifted. In either case, the property would have [email protected].
When a person, to prevent injury to his property, is required to make a payment of money to which the payee is not entitled and no adequate opportunity is afforded to the payor to resist the demand, the payment is made under duress and can be recovered. (Schlossberg v. E.L. Trendel & Associates, Inc. (1978), 63 Ill.App.3d 939, 20 Ill. Dec. 741, 380 N.E.2d 950.) The questions of whether duress was actually present or whether remedies alternative to a payment of the demanded sum were adequate in light of the circumstances of the transaction are questions of fact for the trier of fact to resolve. Schlossberg, 63 Ill.App.3d 939, 20 Ill. Dec. 741, 380 N.E.2d 950.
Our review of the evidentiary material that was before the trial court, when construed in a light most favorable to the plaintiffs, leads us to the conclusion that genuine issues of material fact exist as to whether the plaintiffs' protest of the sums demanded by the defendant for attorney fees was adequate and whether the plaintiffs paid those sums under duress. As such, we hold that the trial court erred when it granted summary judgment in the defendant's favor on counts I and II of the plaintiffs' amended complaint.
For the foregoing reasons, we reverse the judgment of the circuit court of Cook County and remand this cause for further proceedings.
Reversed and remanded.
JOHNSON and CAHILL, JJ., concur.
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297 F.2d 935
JOHN P. DANT DISTILLERY CO., Plaintiff-Appellee,v.SCHENLEY DISTILLERS, INC., Defendant and Third Party Plaintiff-Appellant,v.John P. DANT, Jr., Third Party Defendant-Appellee.
No. 14549.
United States Court of Appeals Sixth Circuit.
January 4, 1962.
Milton Handler, New York City, Sidney A. Diamond, New York City, Kaye, Scholer, Fierman, Hays & Handler, New York City, Joseph J. Kaplan, Ben F. Washer, Louisville, Ky., Nichols, Woods, Marx & Ginter, Roy G. Holmes, Cincinnati, Ohio, on brief, for appellant.
Oldham Clarke, Louisville, Ky., McElwain, Dinning, Clarke & Winstead, Louisville, Ky., on brief, for appellees.
Before SIMONS and MARTIN, Circuit Judges, and DARR, District Judge.
PER CURIAM.
1
The appellant, Schenley Distillers, Inc., is successor in title to the trade-mark "J. W. Dant," distiller of Kentucky whiskey from way back in 1836. The appellee, John P. Dant Distillery Co., and the third-party defendant-appellee, John P. Dant, Jr., its president, assert their right to use the trade-mark under which the whiskey of appellee's distillery is marketed and to use its corporate name. John P. Dant, Jr., is a grand-son of J. W. Dant and a nephew of the latter's son, George W. Dant — the family's early Kentucky distillers.
2
In this action, tried without the intervention of a jury, the United States District Court held that the appellee is entitled to use the name "John P. Dant" in its corporate name, and is entitled, as exclusive licensee of the owner John P. Dant, Jr., to use the name and mark "John P. Dant" in the manner and style in which such name and mark have been used in the whiskey business for many years. The Court held further that the trade-mark "John P. Dant" is not confusingly similar to appellant's trade-mark "J. W. Dant."
3
District Judge Shelbourne, in a Memorandum (published in 189 F. Supp. 821) consisting of Findings of Fact, supported by substantial evidence and not clearly erroneous, and appropriate and correct Conclusions of Law, set forth succinctly the basis upon which he reached his conclusion. The Conclusions of Law are documented with appropriate authority, including several decisions of this court.
4
Inasmuch as the findings and conclusions are published, as shown, supra, and are entirely adequate, we find no occasion to re-write or add to Judge Shelbourne's excellent work.
5
Accordingly, the judgment of the District Court is affirmed.
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 333-145939 CLEANTECH BIOFUELS, INC. (Exact name of registrant as specified in its charter) Delaware 33-0754902 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 7386 Pershing Ave., University City, Missouri (Address of principal executive offices) (Zip Code) (Registrant's telephone number): (352)783-9682 Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yeso No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ As of May 10, 2011, 69,077,151 shares of the Company's common stock were outstanding. CLEANTECH BIOFUELS, INC. TABLE OF CONTENTS PART I
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601 P.2d 37 (1979)
M.E. ROGERS, Plaintiff and Respondent,
v.
George A. RELYEA and Dorothy Relyea, Defendants and Appellants.
No. 14492.
Supreme Court of Montana.
Submitted on Briefs August 1, 1979.
Decided October 2, 1979.
Rehearing Denied October 26, 1979.
*38 Daniels & Mizner, Deer Lodge, for defendants and appellants.
Gough, Shanahan, Johnson & Waterman, Helena, for plaintiff and respondent.
HARRISON, Justice.
This is an appeal from Broadwater County concerning the specific performance of an agreement and option to purchase mining claims.
Defendants Relyea are the owners of patented and unpatented mining claims in Broadwater County. In 1965 defendants entered into an agreement permitting the Finley Company to mine the property on which the claims were located and keep all proceeds from the mining operations. The agreement included an option to purchase the mining claims and provided for the establishment of escrow and a deposit of a deed in escrow by the defendants. In 1967 Finley and the defendants modified the schedule of payments in the agreement.
The original agreement with its modification was assigned by Finley to plaintiff M.E. Rogers also in 1967. The assignment specifically recited that the escrow mentioned in the original agreement had never been established. Between 1967 and 1974, the parties modified the assigned contract *39 four or more times because of plaintiff's failure to make timely payments. One of these modifications was a document entitled "Option Agreement" where plaintiff was granted the exclusive right to purchase the mining claims and payments were made annually beginning on January 2, 1974. The first January 2nd payment was further extended until June 15, 1974, by a modification executed by the parties on March 15, 1974. Plaintiff failed to make the June 15th payment.
In May 1974 plaintiff contacted Richard Voit to secure financing for the development of the mine. Voit and plaintiff observed the mining property and went to the bank where the escrow was to have been established. They discovered, however, that the escrow had not been established. Voit told plaintiff that he would withdraw his financial commitment to the mine if the escrow was not established. Plaintiff then went to defendants' residence and requested that the deed be placed in escrow. Defendants refused, however, claiming that plaintiff had not complied with the terms of the agreement. Defendants thereafter assumed the relationship was terminated with plaintiff and arrangements were made with other parties for the development of the property.
Prior to the termination of the agreement, plaintiff, defendants and a third party entered into a contract in 1974 for the cutting of stumpage on the mining property. Under the stumpage contract, payments by the third party were made to defendants and applied to plaintiff's annual payment under the contract between defendants and plaintiff.
Plaintiff filed a complaint on December 8, 1975, seeking to restrain defendants from terminating the agreement, requiring defendants to specifically perform portions of the agreement, and requesting damages for the breach of the agreement. Upon a motion for partial summary judgment, the District Court found that a valid agreement existed between the parties which agreement was breached by defendants' failure to establish an escrow agreement and credit certain payments to plaintiff. The court excused plaintiff from his performance under the agreement. Upon the trial of the remaining issues, the court reformed the contract and ordered specific performance. Damages resulting from the breach were denied. From this judgment, both plaintiff and defendants appeal.
Several issues are raised on appeal:
1. Did the District Court err in granting plaintiff specific performance because the agreement contained an option to purchase and therefore lacked mutuality required for the granting of specific performance?
2. Was defendants' failure to establish an escrow agreement a material breach of the contract which excused plaintiff's failure to make required payments under the contract?
3. Did the District Court err in finding that defendants failed to credit payments under the stumpage contract to plaintiff?
4. Was the stumpage contract not binding on the parties because it was not supported by consideration?
5. In reforming the contract, did the District Court err in requiring plaintiff to execute a promissory note and real mortgage upon payment of one-fifth of the balance of the purchase price?
6. Did the District Court err in failing to grant plaintiff damages for the breach of the agreement?
With regard to the first issue, defendants argue that equity will not decree the specific performance of an option to purchase contained within a mining agreement because options are unilateral in nature and lack mutual obligations. We disagree. The rule is well settled that options to purchase may be specifically enforced in circumstances like the present case. Steen v. Rustad (1957), 132 Mont. 96, 313 P.2d 1014; McLaren Gold Mining Co. v. Morton (1950), 124 Mont. 382, 224 P.2d 975. The McLaren case is particularly analogous to this case. McLaren involved an action for specific performance of an option to purchase contained within a mining lease. The *40 plaintiff, as lessee, assigned his interest in the contract to a third party who expended considerable sums in developing and mining the property. In directing the defendant lessor to specifically perform the terms of the contract and option to purchase, the Court stated:
"`There is no class of contracts connected with the mining industry more familiar to the profession than that of options to purchase, working bonds, or executory contracts of sale. Unlike other classes of real estate, the value of a mine cannot be determined by mere superficial observation. Expensive investigations, involving measurements, examination of underground geological conditions, and sampling invariably precede the consummation of a purchase or sale of mining property. In order to justify an intending purchaser in making the requisite investigations and incurring the attendant expense, he invariably exacts some contract from the owner by which he secures the first privilege of purchasing the property in the event the examination proves satisfactory. In addition to this, a large army of "promoters," recruited from the ranks of all professions, trades, and occupations, swarm through the mining regions, seeking exclusive privileges and "options" on mining properties of all classes for the purpose of marketing them in the moneyed centers of the world. These conditions have given rise to a class of contracts infinite in variety, from a mere letter signed by the owner, agreeing to accept a certain price for his mine if paid within a certain time, to a formidable working bond, which contemplates entry into possession and extensive exploitation to prove the value of the mine before the privilege of purchase must be exercised. The ultimate object of all of them, however, is to secure the exclusive privilege of purchasing at a given price, within a specified time. * * *
"`* * * the rule that contracts which do not involve mutuality cannot be specifically enforced is modified in favor of the holder of this class or contracts. He is afforded this equitable remedy, where he fully and fairly performs, or offers to perform, the terms of his contract within the time stipulated.
"`The very purpose of an optional contract of this nature is to extinguish this mutuality of right and vest in one of the parties the privilege of determining whether the contract shall be vitalized and enforced. An option to buy or sell land, more than any other form of contract, contemplates a specific performance of its terms; and it is the right to have them specifically enforced that imparts to them their usefulness and value.'" 124 Mont. at 392-93, 224 P.2d at 980, quoting 3 Lindley on Mines (3rd Ed.), section 859, pp. 2123-2127.
We hold, therefore, that the option to purchase contained within the contract in the instant case may be enforced by specific performance.
With respect to the second issue, defendants argue that the covenant to establish escrow was not a material part of the contract and was independent of plaintiff's covenant to make timely payments. On this basis defendants argue that their failure to establish the escrow did not excuse plaintiff's failure to make the June 15 payment. In the alternative, defendants contend that plaintiff waived the establishment of escrow as a material part of the contract. It is argued that plaintiff knew from the modifications and the assignment that the escrow had never been established and that this became an immaterial part of the agreement.
We disagree. The covenant to establish escrow was a material part of the contract and a condition precedent to plaintiff's obligation to make payments. The object of the contract entered into between the parties was the purchase, development and financing of the mining claims. The establishment of the deed in escrow was an integral part in the attainment of this object. Without the escrow, it is highly probable that the parties would not have even contemplated such an agreement.
*41 As to defendants' argument that plaintiff waived the establishment of escrow as a material part of the contract, the record is clear that plaintiff did not waive this requirement. Though the assignment acknowledged the escrow had never been established, plaintiff went to defendants' residence in May 1974 to request the establishment of the escrow. At that time, plaintiff was current in his payments. Plaintiff did not default until he failed to make the June 15 payment; defendants, however, defaulted earlier when they refused to establish the escrow.
The general rule is that a party committing a substantial breach of a contract cannot maintain an action against the other contracting party or his predecessor in interest for a subsequent failure to perform if the promises are dependent. 17 Am.Jur.2d Contracts, § 366, p. 807. A substantial or material breach is one which touches the fundamental purposes of the contract and defeats the object of the parties in making the contract. Here, the District Court found that defendants committed a substantial breach of the agreement and ordered defendants to specifically perform the terms of the contract. Implicit in the court's order was the fact that the covenants were dependent. It is the general rule that the court's findings will not be disturbed on appeal unless unsupported by substantial evidence. Arrowhead, Inc. v. Safeway Stores, Inc. (1978), Mont., 587 P.2d 411, 413, 35 St.Rep. 1830, 1832. Here, we find that there is sufficient credible evidence to support the findings of the court.
Defendants next argue that the District Court erred in finding that defendants failed to credit certain amounts received to plaintiff's annual payment under the agreement. These amounts stemmed from a separate contract for the sale of stumpage on the mining property. Under this contract plaintiff, defendants and a third party agreed that payments under the stumpage contract would be made to defendants and applied against the plaintiff's annual payment under the agreement between plaintiff and defendants.
Defendants contend that the finding is not supported by substantial evidence, since the record does not reflect the receipt of any such money. Plaintiff argues, however, that defendants admitted the finding because they failed to answer a request for admission regarding the matter within 30 days. The request asked defendants to admit that they failed to credit payments from the stumpage contract to plaintiff's annual payment.
Under Rule 36, M.R.Civ.P., "[t]he matter is admitted unless, within 30 days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection ..." Here, the record discloses that defendants failed to answer the request and were not granted an extension by the court. Therefore, as plaintiff properly contends, the matter was deemed admitted. In so holding, however, we feel it is noteworthy to mention that the District Court also ordered an accounting to ascertain the exact amount of plaintiff's credit in the instant case and that, if defendants' assertion is in fact true, it will bear itself out when that accounting occurs.
Defendants also argue that the stumpage contract was not a binding agreement on the parties because it was not supported by any consideration. This is simply not true. Defendants had an injunction and a suit pending against plaintiff and the third party regarding the cutting of stumpage on the mining property. They later relinquished their claim when the parties resolved their disagreement by executing the stumpage contract. This was sufficient consideration to create a binding contract. Murray v. White (1911), 42 Mont. 423, 113 p. 754; Mustang Equipment, Inc. v. Welch (1977), 115 Ariz. 206, 564 P.2d 895.
The fifth issue raised concerns the extent to which a court may reform a contract. Plaintiff contends that it was error for the District Court, in reforming the contract, to require plaintiff to execute a promissory note and a real estate mortgage upon payment *42 of one-fifth of the balance of the purchase price. It is argued that this requirement imposed greater burdens on plaintiff than originally contemplated by the parties: it obligated plaintiff to making all further payments after making the first payment; it created personal liability on the part of plaintiff for the unpaid balance of the purchase price; and it gave defendants the right to foreclose in the event of a future default.
Defendants also contend it was error for the District Court in reforming the contract to order an accounting, schedule a new option to purchase date, and set up a new payment schedule.
The power of a court to reform a contract was discussed in Sullivan v. Marsh (1950), 124 Mont. 415, 421-22, 225 P.2d 868, 872, where this Court stated:
"One may not employ a suit for reformation of a contract for the purpose of making an entirely new agreement. Such suits are only to establish and perpetuate an already existing contract, and to make it express the real intent of the parties as such intent existed at the time of the making of the agreement. A court of equity is not empowered to supply by decree an agreement which was never made .. . It is the duty of the court to enforce contracts which the parties themselves have made and not to make new and different contracts for the parties or to make significant additions thereto and thus give to one or more of the parties, benefits and advantages on which the minds of the contracting parties have never met."
We hold that it was not error for the District Court to order an accounting, schedule a new option to purchase date and set up a new payment schedule. These adjustments were necessary to determine the state of affairs between the parties and carry out their agreement once the contract had been breached and the dates for plaintiff's performance had passed. Without these adjustments, it was impossible for the court to give effect to the order for specific performance. The adjustment of these terms was consonant with the powers of a court in equity and the purposes of equitable relief. Amos v. Bennion (1969), 23 Utah 2d 40, 456 P.2d 172.
However, it was error for the District Court to require plaintiff to execute a promissory note and real estate mortgage upon the payment of one-fifth of the balance of the purchase price. Although the requirement was, understandably, a sincere effort by the court to remedy the pattern of untimely payments by plaintiff, it nevertheless exceeded the scope of the agreement as originally contemplated by the parties. It altered the original agreement by creating new rights and obligations, and it was not necessary to reinstate the contractual relationship between the parties. For these reasons, we order that the requirement be deleted.
Finally plaintiff argues that the District Court erred in not granting damages for the breach of the contract. The thrust of plaintiff's contention is that defendants' breach "drove off a potential investor [Voit] attracted to the mine" and prevented plaintiff from financially developing the mine.
Montana statutes set forth the measure of damages in the case of breach of contract. Section 27-1-311, MCA, provides:
"For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby or which in the ordinary course of things would be likely to result therefrom. No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin." (Emphasis added.)
The District Court held that plaintiff's claims were too speculative or not supported by the evidence to permit an award of damages. We agree. We cannot say with absolute certainty that the mine would not have been developed if Voit had not decided to invest in the venture. Another *43 investor could have possibly expressed interest, or it might have been that Voit would have decided for some other reason not to invest in the mine regardless of the establishment of escrow.
Affirmed in part and reversed in part.
HASWELL, C.J., and DALY, SHEA and SHEEHY, JJ., concur.
|
915 P.2d 1053 (1996)
140 Or. App. 548
In the Matter of the Compensation of Richard J. Messmer, Claimant.
DELUXE CABINET WORKS and Aetna Casualty & Surety, Petitioners-Cross-Respondents,
v.
Richard J. MESSMER, Respondent-Cross-Petitioner.
91-12265; CA A87910 (Control), CA A88122.
Court of Appeals of Oregon.
Argued and Submitted January 29, 1996.
Decided May 1, 1996.
*1054 Jerald P. Keene, Tigard, argued the cause and filed the brief for petitioners.
Kevin Keaney, Portland, argued the cause and filed the brief for respondent.
Before RIGGS, P.J., and LANDAU and LEESON, JJ.
LANDAU, Judge.
The principal issue in this case is whether the legislature has enacted a statute that has the effect of overruling our prior decision, Messmer v. Deluxe Cabinet Works, 130 Or. App. 254, 881 P.2d 180 (1994), rev. den. 320 Or. 507, 888 P.2d 568 (1995), holding that employer is precluded from contesting compensability. Armed with what it characterizes as dispositive legislative history, employer argues that the legislature did so intend. Armed with the language of the statute itself, claimant argues that, whatever its intentions may have been, the legislature's enactment does not require a change in the result in this case. We agree with claimant.
In 1987, claimant injured his neck and [email protected]. The injury was diagnosed as thoraco-cervical strain and myofascitis. Employer accepted the claim. The following month, claimant's physician diagnosed degenerative disc disease in claimant's neck. Although it neither accepted nor denied compensability of that condition, employer did authorize surgery for it. In 1989, the claim was closed by a determination order awarding claimant permanent partial disability based in part on the effects of the surgery for the degenerative disc disease. Employer did not request a hearing on the determination order.
Claimant's pain worsened, and in 1991, his physician requested authorization for treatment of degenerative changes to the cervical spine. Employer denied compensability, contending that there was no connection between claimant's condition and the accepted thoraco-cervical strain. On review of the Board's order denying the claim, we held:
"Employer could have appealed the determination order and challenged the award if it believed that it was being made in part for a noncompensable condition. It did not do that. Therefore, claim preclusion bars it from later arguing that the condition for which the award was made is not part of the compensable claim."
Messmer, 130 Or.App. at 258, 881 P.2d 180 (emphasis supplied). We remanded the case to the Board, and the Board ordered employer to accept and process the claim.
On review, employer argues that recent changes in the workers' compensation statutes effectively overrule our decision in Messmer.[1] Those changes, codified at ORS 656.262(10), are reflected in the following boldfaced text:
"Merely paying or providing compensation shall not be considered acceptance of a claim or an admission of liability, nor shall mere acceptance of such compensation be considered a waiver of the right to question the amount thereof. Payment of permanent disability benefits pursuant to a determination order, notice of closure, reconsideration order or litigation order shall not preclude an insurer or self-insured employer from subsequently contesting the compensability of the *1055 condition rated therein, unless the condition has been formally accepted."
Or.Laws 1995, ch. 332, § 28 (boldface in original). Employer argues that the foregoing amendatory language, which applies retroactively,[2] was intended to permit employers to challenge the compensability conditions for which compensation has been awarded even though the employers have failed to request a hearing on the determination order. Employer concedes that the language of the statute itself says nothing about the determination order being unchallenged but refers only to benefits having been paid. Nevertheless, employer insists that the legislature intended that language to effect the change in the law that it suggests. In support of that assertion, employer relies on two portions of legislative history.
The first is a statement of Representative Mannix, one of the sponsors of Senate Bill 369, before the Senate Labor Committee. Mannix explained that the amendment to ORS 656.262
"is meant to overrule a recent decision which stated that once an award of permanent disability has been made, this will constitute a tacit irrevocable acceptance of the condition. What's the problem here? If that court case stays in place, insurers and employers will be tempted to fight many awards of permanent disability that they might otherwise have eaten. Why will they fight it? Because they suddenly feel that they are now permanently obligated to provide benefits for life for a condition that was never really litigated. This says no, go ahead and pay out the disability benefits, you don't have to litigate it. Later on, if you develop evidence that this was a preexisting condition that's resolved, or subsequently developed condition that is not attributable to the injury, you can rescind the denial, you can litigate it, but go ahead and pay out the permanent disability award, you don't have to litigate it at that time."
Tape recording, Senate Committee on Labor and Government Operations, January 30, 1995, Tape 15, Side [email protected]. Second, employer relies on a statement of a workers' compensation attorney who also testified before the Senate committee that the proposed amendment "overrules Messmer v. Deluxe Cabinet Works in the manner described by Representative Mannix." Tape recording, Senate Committee on Labor and Government Operations, February 1, 1995, Tape 19, Side [email protected].[3]
Claimant argues that, although the legislative history may demonstrate that some *1056 legislators thought the proposed amendment would effectively overrule Messmer, the fact remains that the language that the legislature actually enacted did not do that. Claimant relies on the fact that the statute says nothing about claim preclusion or failure to appeal a determination order and says only that the payment of benefits does not preclude a later challenge.
When we construe the language of a statute, we are to effectuate the intentions of the legislature, "if possible." ORS 174.020. To ascertain the intentions of the legislature, we examine the text, its context and, if necessary, the legislative history. PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993). In all events, however, we are constrained by the reasonable construction of the language that the legislature actually enacted. We are forbidden, both by statutory command and by constitutional principles, to insert language that the legislature, whether by design or by default, has omitted. ORS 174.010; Fernandez v. Board of Parole, 137 Or.App. 247, 252, 904 P.2d 1071 (1995).
The language of ORS 656.262(10), as amended, says nothing about the preclusive consequences of an employer's failure to appeal a determination order. The only subject of the sentence is the "payment of permanent disability benefits." The act of payment, the statute now says, does not preclude an employer from subsequently contesting compensability. Employer urges us to read "[p]ayment of permanent disability benefits" to mean "[p]ayment of permanent disability benefits or failure to appeal a determination order." The emphasized language, however, is not part of the enacted statute, and we are not at liberty to add it. Nor can the words "payment of * * * benefits" reasonably be construed by themselves to contain the missing words employer seeks to have inserted. Payment of benefits is one thing; failing to appeal a determination order is another.
That very distinction was at the heart of our prior decision in this case:
"Although employer's payment of the compensation, by itself, does not constitute acceptance of a claim for the degenerative condition, ORS 656.262(9), employer's failure to challenge the award on the basis that it included an award for a noncompensable condition precludes employer from contending later that that condition is not part of the compensable claim."
Messmer, 130 Or.App. at 258, 881 P.2d 180. Our decision was expressly based on employer's failure to challenge the determination order, not on its payment of permanent disability benefits. The statute addresses only the latter. Thus, our holding in Messmer is unaffected by the amended version of ORS 656.262(10).
Employer argues that such a reading of the statute would make a redundancy of the 1995 amendments, because the workers' compensation statutes already said that payment of benefits does not preclude later challenge to compensability. It may well be that the amended language is a redundancy. Nevertheless, the potentially redundant effect of statutory language does not give us license to redraft the statute so that it means something "new." See Fifth Ave. Corp. v. Washington Co., 282 Or. 591, 597-98, 581 P.2d 50 (1978).
Employer insists that our reading of the statute ignores the manifest intentions of the legislature, as revealed in the cited portions of the legislative history.
We reject that argument for two reasons. First, whatever the legislative history shows, the fact remains that the language of the statute cannot reasonably be read to accomplish what employer suggests, and we may not rewrite that language so that it more closely tracks with the legislature's unenacted intentions. ORS 174.010. Second, assuming for the sake of argument that the language of the statute is sufficiently ambiguous to warrant examination of the legislative history, we do not read the legislative history to demonstrate so conclusively the intentions employer asserts. Mannix did say that he intended Senate Bill 369 "to overrule a recent decision" of this court which he described as holding that
"when you paid out an award of permanent disability, you were suddenly accepting *1057 everything that was included in the award [of permanent disability]"
and that his proposed amendment would effectively say "no you can pay for it, but if you later want to raise that issue [of compensability] you may do so." The problem is that what Mannix described clearly is not what we said in Messmer. As we have noted, Messmer addressed employer's failure to challenge the determination order, not the decision to pay benefits.[4] Therefore, if the legislative history reveals anything at all, it is that the legislature mistakenly read one of our opinions and then enacted language to overrule a holding that we did not make.
We acknowledge, and respect, the legislature's constitutional prerogative to amend statutes in order to alter the effect of our prior decisions. Nevertheless, if that is what the legislature intends, it must enact language that, reasonably construed, actually changes that law. In this case, it is apparent that the legislature proceeded from an inaccurate understanding of our decision and enacted language that changes nothing of substance in that decision. Under the circumstances, we cannot rewrite the statute to give effect to what we may speculate the legislature would have intended had it correctly read our prior decision. As the Supreme Court stated when confronted with similar circumstances:
"Whatever the legislative history of an act may indicate, it is for the legislature to translate its intent into operational language. This court cannot correct clear and unambiguous language for the legislature so as to better serve what the court feels was, or should have been, the legislature's intent."
Monaco v. U.S. Fidelity & Guar., 275 Or. 183, 188, 550 P.2d 422 (1976); see also Dilger v. School District 24CJ, 222 Or. 108, 112, 352 P.2d 564 (1960) ("[i]t is axiomatic that the courts cannot in the guise of construction supply an integral part of a statutory scheme omitted by the legislature"); Eslamizar v. American States Ins. Co., 134 Or.App. 138, 145 n. 3, 894 P.2d 1195, rev. den. 322 Or. 228, 904 P.2d 1070 (1995) (if "the legislature has made a mistake, * * * only the legislature may remedy it").
We conclude that ORS 656.262(10) did not effectively overrule our prior decision in this case and does not require reversal of the Board's decision on remand.
Affirmed on petition for judicial review; cross-petition for judicial review dismissed.
NOTES
[1] Claimant has withdrawn his cross-petition for review.
[2] Subject to exceptions not pertinent to this case, the legislature has provided that the 1995 amendments to the workers' compensation statutes apply retroactively to all pending cases. Volk v. America West Airlines, 135 Or.App. 565, 572-73, 899 P.2d 746 (1995), rev. den. 322 Or. 645, 912 P.2d 376 (1996). Generally, once we determine that such retroactive amendments apply in a given case, we remand to the Board for its initial construction and application of the new law. Baar v. Fairview Training Center, 139 Or. App. 196, 204, 911 P.2d 1232 (1996). The Board, however, already has decided, in another case, that the 1995 amendments codified at ORS 656.262(10) effectively overrule our decision in Messmer. Craig L. Hiatt, 47 Van Natta 2287 (1995). Accordingly, we find no good reason to delay our decision as to the proper construction of the statute.
[3] We note that additional legislative history reflects the same understanding. A summary submitted by Senator Gene Derfler, for example, stated that the proposed amendment, ultimately enacted and codified at ORS 656.262(10),
"overrules a recent court decision which stated that once an award of permanent disability has been made for a condition, this will constitute a tacit irrevocable acceptance of the condition."
Summary, Senate Committee on Labor and Government Operations, January 30, 1995, Ex [email protected]. That summary was repeated in another Senate staff summary. Summary, Senate Committee on Labor and Government Operations, February 17, 1995, Ex [email protected]. That summary, in turn, was submitted to the House. Summary, House Committee on Labor, March 6, 1995, Ex A at 8. Mannix also testified before the House Committee on Labor, describing the effect of the amendment he proposed:
"[T]here's been some case law that recently said that, by, when you paid out an award of permanent disability, that you were suddenly accepting everything that was included in that award, even though there may have been a rating of the condition that you didn't think should have been covered. Well this says `no, you can pay on it, but if you later want to raise that issue by a denial you may do so.'"
Tape recording, House Committee on Labor, March 6, 1995, Tape 46, Side [email protected].
[4] The same misunderstanding is reflected in the other relevant portions of legislative history. Senator Derfler's summary, for example, summarizes Messmer as holding that
"once an award of permanent disability is made for a condition, this will constitute a tacit irrevocable acceptance of the condition."
Summary, Senate Committee on Labor and Government Operations, January 30, 1995, Ex [email protected]. That is simply wrong. In Messmer, we held that an
"employer's payment of the compensation * * * does not constitute acceptance of a claim."
130 Or.App. at 258, 881 P.2d 180 (emphasis supplied).
|
Sangaray v West Riv. Assoc., LLC (2014 NY Slip Op 07421)
Sangaray v West Riv. Assoc., LLC
2014 NY Slip Op 07421
Decided on October 30, 2014
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on October 30, 2014
Mazzarelli, J.P., Acosta, Andrias, Saxe, Clark, JJ.
(408)854-3841/10
[*1] Yousufu Sangaray, Plaintiff-Appellant, —
vWest River Associates, LLC, Defendant-Respondent, Sandy Mercado, et al., Defendants. [And a Third-Party Action]
Kelner & Kelner, New York (Joshua D. Kelner of counsel), for appellant.
Michelle S. Russo, P.C., Port Washington (Michelle S. Russo of counsel), for respondent.
Order, Supreme Court, New York County (Doris Ling-Cohan, J.), entered April 23, 2013, which granted the motion of defendant West River Associates, LLC (West River) for summary judgment dismissing the complaint and all cross claims as against it, affirmed, without costs.
Dismissal of the complaint as against West River was proper, where the record, including an affidavit of a land surveyor, showed that West River did not own the property that abutted the sidewalk where plaintiff tripped and fell. West River was therefore not responsible for maintaining the sidewalk in a reasonably safe condition (see Administrative Code of City of NY § 7-210; Thompson v 793-97 Garden St. Hous. Dev. Fund Corp., 101 AD3d 642 [1st Dept 2012]; Montalbano v 136 W. 80 St. CP, 84 AD3d 600, 602 [1st Dept 2011]). Nor can West River be held liable under an exception to Administrative Code § 7-210, because the record does not show that it committed an affirmative act of negligence that caused the alleged defect or made special use of the accident location (see O'Brien v Prestige Bay Plaza Dev. Corp., 103 AD3d 428, 429 [1st Dept 2013]).
All concur except Acosta and Saxe, JJ. who concur in a separate memorandum by Saxe, J. as follows:
SAXE, J. (concurring)
I reluctantly agree with my colleagues that the language of Administrative Code of the City of New York § 7-210 requires affirmance of the grant of summary judgment dismissing the complaint against defendant West River Associates, LLC. I write separately to emphasize how the Code provision fails to achieve at least one of its stated purposes in circumstances such as these.
Plaintiff Yousufu Sangaray tripped and fell due to a height differential between two adjacent flags of pavement on a public sidewalk; the point at which the two flags met was [*2]situated in front of 1785 Amsterdam Avenue in Manhattan. Defendants Sandy Mercado and Rhina Mercado own the property at 1785 Amsterdam Avenue; defendant West River Associates, LLC owns the neighboring premises located at 1787 Amsterdam Avenue.
The tripping hazard had developed because the lower of the two adjacent sidewalk flags, which according to plaintiff's surveyor was located approximately 92-94% on West River's property and 6-8% on the Mercado property, had been allowed to cave in and sink without repair. The point at which the two flags met, forming the height differential on which plaintiff tripped, was unquestionably on the Mercados' property. But, as the Mercados point out, they could not have corrected the defect on their own, without the participation of West River. Had they attempted to raise the height of the portion of the sunken flag located at their property, they would only have served to move the location of the tripping hazard to the property line, several inches to the north, and even then, in doing so they could still have been liable for affirmatively creating the new tripping hazard.
Yet defendant West River Associates sought and obtained summary judgment dismissing the complaint as against it, on the ground that the undisputed evidence established that the spot at which plaintiff tripped was on the sidewalk abutting the Mercado property, and not the West River property. Based on my reading of Administrative Code § 7-210, I am constrained to join in the affirmance of that order.
Section 7-210(b) of the Administrative Code provides that "the owner of real property abutting any sidewalk . . . shall be liable for any injury to property or personal injury . . . proximately caused by the failure of such owner to maintain such sidewalk in a reasonably safe condition." It was enacted in 2003 to transfer tort liability from the City of New York to abutting owners for personal injuries that are proximately caused by defective sidewalks (Vucetovic v Epsom Downs, Inc., 10 NY3d 517, 521 [2008]). While the transfer of tort liability from the City to the abutting property owners was primarily a cost-saving measure for the City (id.), according to a Report of the Committee on Transportation, another important purpose of enacting the provision was to encourage the maintenance of sidewalks in good repair, by ensuring that those who are in the best position to be aware of the need for repairs namely, the abutting property owners are motivated to make the necessary repairs in order to avoid liability (see Rep of Infrastructure Div, Comm on Transp at 9, Local Law Bill Jacket, Local Law No. 49 [2003] of City of NY).
Because this 2003 legislative enactment was "in derogation of common law," and "creat[ed] liability where none previously existed," we must construe it strictly (Vucetovic, 10 NY3d at 521, quoting Blue Cross & Blue Shield of N.J., Inc. v Philip Morris USA Inc., 3 NY3d 200, 206 [2004], and citing McKinney's Cons Laws of NY, Book 1, Statutes § 301[c]). Consequently, the provision's imposition of liability on owners of the property abutting the defect that caused plaintiff's injury may not be broadly construed to apply to the owner of the property next to that abutting property, even if part of the defective condition extends to that neighboring property. When strictly construing the Code provision, it is irrelevant that the hazard here could only have been corrected by the two neighboring property owners together; the condition on which plaintiff actually tripped, the height differential, was located on the portion of the sidewalk that abutted the Mercados' property, and therefore only the Mercados are liable under the provision.
This Court has previously addressed similar factual scenarios. In Montalbano v 136 W. 80 St. CP (84 AD3d 600 [1st Dept 2011]), the plaintiff similarly fell as he stepped from a raised [*3]sidewalk flag onto a lower one. The raised sidewalk flag spanned two properties, but the plaintiff was only permitted to proceed with the action against the owner of the property abutting the part of the sidewalk where the height differential was located (84 AD3d at 602). Among its grounds for dismissing the action as against the neighbor, this Court reasoned that because it was uncontroverted that regardless of its condition, the neighboring property did not abut the portion of the sidewalk where the plaintiff fell, there was no basis for holding that neighbor liable (id.). Similar facts and reasoning led to the same result from the Second Department in Camacho v City of New York (96 AD3d 795 [2d Dept 2012]).
The result we are constrained to reach fails to comport with the important purpose of the Code provision - encouraging the maintenance of sidewalks in good repair, by ensuring that those who are in the best position to be aware of the need for repairs are motivated to make the necessary repairs in order to avoid liability (see Rep of Infrastructure Div, Comm on Transp at 9). West River is being allowed to avoid liability for the consequences of its failure to maintain its own sidewalk. Nevertheless, the law as it now stands permits the imposition of liability in these circumstances only on the Mercados.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: OCTOBER 30, 2014
CLERK
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Case 21-10176-JDW Doc 16 Filed 03/08/21 Entered 03/08/21 15:39:17 Desc Main
Document Page 1 of 2
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
IN RE: CASE NO.: 2110176JDW
CHAPTER 13
Eurnell Hoyle,
Debtor.
_________________________________/
REQUEST FOR SERVICE
PLEASE TAKE NOTICE THAT the undersigned hereby appears on behalf of U.S.
Bank, N.A., as Trustee, successor in interest to Wachovia Bank, National Association, as
Trustee, for Mid-State Trust XI ("Secured Creditor"). Pursuant to Rule 2002 of the Federal Rules
of Bankruptcy Procedure, the undersigned requests all notices given or required to be given and
all papers required to be served in this case to creditors, any creditors committees, and any other
parties-in-interest, be sent to and served upon the undersigned and the following be added to the
Court's Master Mailing List:
ROBERTSON, ANSCHUTZ, SCHNEID, CRANE & PARTNERS, PLLC
10700 ABBOTT’S BRIDGE RD, SUITE 170
DULUTH, GA 30097
Robertson, Anschutz, Schneid, Crane &
Partners, PLLC
Authorized Agent for Secured Creditor
10700 Abbott’s Bridge Rd, Suite 170
Duluth, GA 30097
Telephone: (603)832-9245
By: /s/Susana E. Lykins
Susana E. Lykins
Email: [email protected]
Case 21-10176-JDW Doc 16 Filed 03/08/21 Entered 03/08/21 15:39:17 Desc Main
Document Page 2 of 2
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on March 8, 2021 , I electronically filed the foregoing
with the Clerk of Court using the CM/ECF system, and a true and correct copy has been served
via United States Mail to the following:
EURNELL HOYLE
103 NORTH ROAD
HOLLY SPRINGS, MS 38635
And via electronic mail to:
ROBERT HUDSON LOMENICK, JR.
P.O. BOX 417
HOLLY SPRINGS, MS 38635
LOCKE D. BARKLEY
6360 I-55 NORTH SUITE 140
JACKSON, MS 39211
U. S. TRUSTEE
501 EAST COURT STREET, SUITE 6-430
JACKSON, MS 39201
By: /s/ VJ Allen
VJ Allen
Email: [email protected]
|
The conviction should be set aside and a new trial ordered.
The court was in error in permitting Dr. Hubbard to testify to the statement made to him by the little girl, when brought to his office by her mother, several days after the alleged offense. Such repetition of the accusation, previously made to the mother, was improper and should not have been permitted to serve as corroborative of the statements made by the girl in court. That such purpose was permitted appears from the following instruction to the jury:
"The testimony that Dr. Hubbard gave here likewise is merely corroborative. The testimony of both of those witnesses is corroborative in two respects, if true, and particularly as far as it tends to corroborate the story the girl told upon the stand, as to the truth of her claim."
If such be declared the rule then a child may, by statements to many persons, be corroborated in court by each merely telling in court what the child said to them out of court. No such rule prevails.
The fact that a child of tender years complains of sexual abuse may be shown, but repetitions of the complaint are wholly inadmissible. The first complaint by the girl was made to her mother. The offense was alleged to have been committed on August 10th, complaint to the mother was not made until several days later and, therefore, was too remote to be a part of theres gestæ. People v. Tobin, 230 Mich. 214. There was no claim of coercion or threats operating to delay complaint and the holding *Page 285
in People v. Gage, 62 Mich. 271 (4 Am. St. Rep. 854), does not apply. Because of the unexcused delay in making complaint even the mother could not, in corroboration of the child, or for any other purpose, detail the statement made by the child with reference to the alleged offense. People v. Hicks, 98 Mich. 86;People v. Place, 226 Mich. 212; People v. Tobin,supra.
The court was also in error in receiving the testimony of the physician who examined defendant at the jail and in submitting such testimony to the jury. The circumstances surrounding such examination were in dispute and the result of the examination was not admissible unless defendant voluntarily submitted his person to examination. The jury should not have been permitted to consider the result of the examination unless it was found by the jury to have been a voluntary submission by defendant. Defendant was not permitted to explain why he submitted. The court instructed the jury:
"Now, the local doctor, Dr. Lilly, has testified about that examination and to the extent that he found the disease to exist in the respondent. His testimony would be corroborative to an extent, if true, of the testimony of the girl.
"It can be used for that purpose only and for no other. Some criticism has been based upon the means and methods by which this examination was had. That is not for your [email protected]. That is a matter to be passed upon by the court and it was passed upon by the court. The testimony was admitted. It is for your consideration and you have no right to reject it unless you find it to be false."
All authority holds that an accused may not becompelled to submit to such an examination as was *Page 286
had in this case. This is because Art. 2, § 16, of the Constitution of this State provides:
"No person shall be compelled in any criminal case to be a witness against himself." * * *
An accused may, of course, consent and furnish evidence against himself but, unless he consents, the examination of his person cannot be made. Consent cannot be predicated upon failure to protest or resist. Ignorance of right to resist, fear under the distress of arrest and confinement, may lead a prisoner to be passive, or even to comply with a request to exhibit his person to medical examination, without loss of the protective provision in the Constitution. It was not enough to show that defendant was a docile prisoner and failed to protest or resist. To constitute the result of the examination lawful evidence it was necessary to show that he voluntarily exposed his person, or, at least, was willing to be examined. No court in this State would assume power to order such an examination. It was ordered by a magistrate in England and the magistrate and doctor were later cast in damages for an assault. We quote the syllabus:
"A magistrate has no right to order an examination of the person of a prisoner. An examination by medical men, in pursuance of such an order, of the person of a female, in custody upon the charge of concealing the birth of her illegitimate child constitutes an assault." Agnew v. Jobson, 13 Cox's Cr. Cas. 625.
That was a holding at circuit but well states the common law. See Union Pacific R. Co. v. Botsford, 141 U.S. 250
(11 Sup. Ct. 1000).
In the case at bar a mere ministerial officer called in a physician and assumed to exercise a power no *Page 287
court could extend to him, and, because the prisoner submitted without protest or resistance, it seems to be thought that he volunteered to disclose evidence against himself. If an examination of an accused extends to his private parts the result thereof cannot be received in evidence unless it affirmatively appears that he consented thereto.
In Union Pacific R. Co. v. Botsford, supra, we find this:
"As well said by Judge Cooley, 'The right to one's person may be said to be a right of complete immunity: to be let alone.' Cooley on Torts, 29."
Defendant was not let alone but brought from his cell by his jailer to be subjected to medical examination in an effort to discover evidence tending to establish his guilt. Defendant was about to be released on bail and it was evidently considered that if the examination was had it would have to be made while he was in custody.
Our attention is directed to the holding in People v. Glover,71 Mich. 303, as authority for the examination. The protection of an accused against being required to furnish evidence against himself was not presented in the Glover Case or there considered. The court merely held that the relation of physician and patient did not obtain, and, therefore, the testimony of the physician did not fall within the rule of a privileged communication. This is made plain by the opinion. The brief in behalf of defendant in the Glover Case urged that the physicians who made the examination "became his physicians, and the relation of physician and patient became established," and "the result of that examination was privileged." Duress was also claimed. The Glover Case is not authority upon the question before us. *Page 288
It cannot be said, under defendant's testimony, that he voluntarily submitted to an examination of his person. At most he involuntarily submitted. Submission alone establishes no waiver. Voluntary submission may, but involuntary submission, never. Defendant was not permitted to tell why he submitted. He should have been allowed to do so even though contradicted by his action and words.
Cases in the books involving the charge of rape, and venereal disease of the victim, with one exception, disclose no instance where a court of last resort, in jurisdictions having a constitution containing a provision like ours, sanctioned an examination of the privates of an accused without his consent.Angeloff v. State, 91 Ohio St. 361 (110 N.E. 936), is the exception, and there the decision was based upon a submission, without objection and with knowledge of the purpose. That case is not satisfactory, contains no reasoning, mentions no constitutional provision, states no ground of objection urged or considered, and does not disclose any of the circumstances showing the asserted submission.
We now turn to cases directly in point. In State v. Newcomb,220 Mo. 54 (119 S.W. 405), the charge was rape and a physical examination of the accused, while in custody, was ordered by a magistrate. The court held that the examination was a violation of the protection afforded by the constitution. It was also said by the court:
"Some effort was made to show that defendant voluntarily consented to this violation of his person, but we think it is apparent that he simply submitted because he thought he was compelled to do so. When it is considered that he was at the time in custody for this very crime; that the prosecuting attorney demanded an order from the justice for this examination; *Page 289
that the sheriff took him into a private room for the purpose of the examination, it is not strange that the defendant thought he was compelled to submit. It is idle to talk of his having voluntarily consented to this violation of his person. As we read the record, he had no option in the matter.
The point was again considered in State v. Horton,247 Mo. 657 (153 S.W. 1051). We quote:
"Defendant insists that the physicians who examined him while he was in custody should not have been allowed to testify to the fact that he was suffering from a venereal disease. To meet this insistence the State contends that the examination complained of was made with defendant's consent. We have read the record carefully and find that the 'consent' consisted of the failure of defendant to object to the physical examination.
"When a man is under arrest, without counsel, and, speaking metaphorically, is standing in the shadow of a policeman's club, it requires something much more substantial than silence to justify an invasion of his constitutional right not to be compelled to furnish evidence against himself."
In State v. Matsinger (Mo.), 180 S.W. 856, the charge was assault with intent to rape. The prosecuting attorney sent physicians to examine the accused to discover if he was afflicted with a venereal disease. The accused was not apprised of his right to resist the examination and was merely silent, when informed that the physicians were there to make it, instead of positively consenting thereto. Again the court held the evidence obtained under such an examination was inadmissible. See, also, State v. Height, 117 Iowa, 650
(91 N.W. 935, 94 Am. St. Rep. 323); People v. Akens, 25 Cal. App. 373
(143 P. 795); People v. McCoy, 45 How. Pr. Rep. (N.Y.) 216; Voorhees on Arrest (2d Ed.), § 212. *Page 290
We have decided to follow the holdings in cases involving rape and not the cases merely involving measuring of the foot of an accused, exhibiting a wound on the arm or tattoo marks, scars on the face or portions of the body usually exposed, requiring a prisoner to stand up, and like cases.
For the reasons stated the conviction is set aside, a new trial granted, and defendant remanded to the proper custody.
FELLOWS and CLARK, JJ., concurred with WIEST, J. McDONALD, J., concurred in the result. POTTER, J., did not sit. |
Citation Nr: 1602727
Decision Date: 01/28/16 Archive Date: 02/05/16
DOCKET NO. 06-02 103 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Phoenix, Arizona
THE ISSUES
1. Entitlement to an initial rating in excess of 10 percent disabling for a cervical strain after June 2, 2008.
2. Entitlement to an initial rating in excess of 10 percent disabling for a lumbar strain with degenerative joint disease after June 2, 2008.
3. Entitlement to an initial rating in excess of 10 percent disabling for IBS after June 2, 2008 and in excess of 30 percent disabling after October 9, 2014.
REPRESENTATION
Veteran represented by: Veterans of Foreign Wars of the United States
WITNESS AT HEARING ON APPEAL
Veteran
ATTORNEY FOR THE BOARD
Jennifer R. White, Counsel
INTRODUCTION
The Veteran had active duty from September 1993 to September 1999 and from February 2003 to December 2003.
These matters come before the Board of Veterans' Appeals (Board) from a January 2005 rating decision, which in part granted service connection for cervical and lumbar spine disorders and assigned initial noncompensable evaluations for these disorders. In April 2007, the Veteran appeared at a hearing at the RO before the undersigned Veterans Law Judge. The transcript is of record
In November 2007 the Board remanded this matter for further development.
While this matter was pending on remand, the RO in an August 2009 rating decision, granted increased ratings of 10 percent each for the cervical spine and lumbar spine disabilities, each effective the December 24, 2003 date of initial entitlement. This decision also granted service connection for a bilateral hand disorder that had also been remanded, thereby removing this matter from appellate status. See Grantham v. Brown, 114 F. 3d 1156, 1158 (Fed. Cir. 1997). The record currently before the Board contains no indication that the Veteran initiated an appeal with the initial ratings or effective date assigned. Thus, this matter is no longer in appellate status. Grantham, 114 F.3d at 1158 (holding that a separate notice of disagreement must be filed to initiate appellate review of "downstream" elements such as the disability rating or effective date assigned).
The Board also notes that the Board's November 2007 remand included directing the RO to issue the Veteran a statement of the case (SOC) that addresses the issue of entitlement to an initial compensable rating for irritable bowel syndrome (IBS). See 38 U.S.C.A. § 7105 (West 2014); 38 C.F.R. §§ 19.26, 19.29, 19.30 (2015), Manlincon v. West, 12 Vet. App. 238 (1999). Subsequently the RO issued a SOC addressing this issue in April 2008. Thereafter in May 2008 the Veteran submitted statements that described symptoms of his IBS, which the Board construed as a timely substantive appeal for his IBS.
The Board decided in a March 2014 decision, the increased rating claims as staged from initial entitlement up to June 2, 2008. The issues as indicated on the title page herein were remanded at that time.
While this matter was pending on remand the RO, in a January 2015 rating decision, granted an increased rating of 30 percent for IBS, effective October 9, 2014. This decision also granted service connection for a right knee disability that had also been remanded, thereby removing this matter from appellate status. See Grantham v. Brown, 114 F. 3d 1156, 1158 (Fed. Cir. 1997). The record currently before the Board contains no indication that the Veteran initiated an appeal with the initial ratings or effective date assigned. Thus, this matter is no longer in appellate status. Grantham, 114 F.3d at 1158 (holding that a separate notice of disagreement must be filed to initiate appellate review of "downstream" elements such as the disability rating or effective date assigned). As the increased rating issues are not the maximum allowable ratings, these remain on appeal. AB v. Brown, 6 Vet. App. 35, 38 (1993).
The issues of entitlement to increased ratings for the cervical spine and lumbar disabilities after June 2, 2008 are addressed in the REMAND portion of the decision below and are REMANDED to the Agency of Original Jurisdiction (AOJ).
FINDING OF FACT
From June 2, 2008, the Veteran's digestive disorder most closely approximates frequent episodes of bowel disturbance with abdominal distress.
CONCLUSION OF LAW
The criteria for an initial rating in excess of 10 percent disabling for IBS after June 2, 2008 and in excess of 30 percent disabling after October 9, 2014 have not been met. 38 U.S.C.A. §§ 1155, 5107 (West 2014); 38 C.F.R. §§ 4.3, 4.7, 4.114, Diagnostic Code 7319 (2015).
REASONS AND BASES FOR FINDING AND CONCLUSION
VCAA
As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), VA has a duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2014); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2015).
Proper notice from VA must inform the claimant of any information and medical or lay evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; and (3) that the claimant is expected to provide. 38 C.F.R. § 3.159(b)(1); Quartuccio v. Principi, 16 Vet. App. 183 (2002).
In addition, the notice requirements of the VCAA apply to all elements of a service-connection claim. Accordingly, notice must include information that a disability rating and an effective date for the award of benefits will be assigned if service connection is awarded. See Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006).
VCAA notice must be provided prior to an initial unfavorable decision on a claim by the RO. Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); Pelegrini v. Principi, 18 Vet. App. 112 (2004). Where complete notice is not timely accomplished, such error may be cured by issuance of a fully compliant notice, followed by readjudication of the claim. See Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); see also Prickett v. Nicholson, 20 Vet. App. 370, 376 (2006).
The Veteran's claim arises from an appeal of the initial evaluation following the grant of service connection. Courts have held that once service connection is granted the claim is substantiated, additional notice is not required and any defect in the notice is not prejudicial. Hartman v. Nicholson, 483 F.3d 1311 (Fed. Cir. 2007); Dunlap v. Nicholson, 21 Vet. App. 112 (2007). Therefore, no further notice is needed under VCAA.
Next, VA has a duty to assist the Veteran in the development of the claim. This duty includes assisting him in the procurement of service treatment records and pertinent treatment records and providing an examination when necessary. 38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159.
The Board finds that all necessary development has been accomplished, and therefore appellate review may proceed without prejudice to the appellant. See Bernard v. Brown, 4 Vet. App. 384 (1993). The claims file contains the Veteran's service treatment records, as well as post-service reports of VA and private treatment and examination. Moreover, the Veteran's statements in support of the claim are of record, including testimony provided at an April 2007 hearing before the undersigned. The Board has carefully reviewed such statements and concludes that no available outstanding evidence has been identified. The Board has also perused the medical records for references to additional treatment reports not of record, but has found nothing to suggest that there is any outstanding evidence with respect to the Veteran's claim.
In Bryant v. Shinseki, 23 Vet App 488 (2010), the United States Court of Appeals for Veterans Claims (Court) held that 38 C.F.R. 3.103 requires that the Veterans Law Judge who chairs a hearing fulfill two duties to comply with the above the regulation. These duties consist of (1) the duty to fully explain the issues and (2) the duty to suggest the submission of evidence that may have been overlooked. Here, during the hearing, the Veterans Law Judge outlined the issues on appeal and suggested that any evidence tending to show the current severity of service-connected disability would be helpful in establishing the claim. Moreover, neither the Veteran nor his representative has asserted that VA failed to comply with 38 C.F.R. 3.103; they have not identified any prejudice in the conduct of the Board hearing.
For the above reasons, no further notice or assistance to the Veteran is required to fulfill VA's duty to assist the Veteran in the development of the claim. Smith v. Gober, 14 Vet. App. 227 (2000), aff'd, 281 F.3d 1384 (Fed. Cir. 2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001).
Laws and regulations
Disability evaluations are determined by the application of the Schedule For Rating Disabilities, which assigns ratings based on the average impairment of earning capacity resulting from a service-connected disability. 38 U.S.C.A. § 1155; 38 C.F.R. Part 4. Where there is a question as to which of two evaluations shall be applied, the higher evaluation will be assigned if the disability picture more nearly approximates the criteria required for that rating. Otherwise, the lower rating will be assigned. 38 C.F.R. § 4.7.
In order to evaluate the level of disability and any changes in condition, it is necessary to consider the complete medical history of the veteran's condition. Schafrath v. Derwinski, 1 Vet. App. 589, 594 (1991). Where, as in the instant case, the appeal arises from the original assignment of a disability evaluation following an award of service connection, the severity of the disability at issue is to be considered during the entire period from the initial assignment of the disability rating to the present time. See Fenderson v. West, 12 Vet. App. 119 (1999).
The Board has reviewed the evidence in the Veteran's claims file. Although the Board has an obligation to provide adequate reasons and bases supporting this decision, there is no requirement that the evidence submitted by an appellant or obtained on his behalf be discussed in detail. Rather, the Board's analysis below will focus specifically on what evidence is needed to substantiate the claim and what the evidence in the claims file shows, or fails to show, with respect to the claim. See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000).
When all the evidence is assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the appellant prevailing in either event, or whether a preponderance of the evidence is against a claim, in which case, the claim is denied. Gilbert v. Derwinski, 1 Vet. App. 49 (1990).
The Veteran is challenging the rating assigned for his IBS disability, which was granted effective from December 24, 2003, the date of initial entitlement. The Board's decision in this matter shall address the initial rating for this disability after the date of a June 2, 2008 VA examination, with the prior period being finally decided, and denied, by a March 2014 Board decision.
The Veteran was afforded a VA examination for his IBS in October 2014, the Veteran reported that he had two to three days of constipation, two to three times in one day, with abdominal distress. The Veteran weighs 200 pounds and is 70 inches tall. He had good appetite and a stable weight, with an unrestricted diet. The examiner indicated that the Veteran had frequent disturbances of his bowel with abdominal distress but these episodes were not constant. He had no weight loss and no malnutrition. His intestinal condition did not impact his ability to work. The examiner indicated that the Veteran's IBS was of moderate severity. There were no symptoms of fecal leakage or any other symptoms such as recurrent epigastric distress with dysphagia, pyrosis or regurgitation, accompanied by substernal or arm or shoulder pain or productive of considerable impairment of health.
The Rating Schedule states that there are diseases of the digestive system which, while differing in the site of pathology, produce a common disability picture characterized in the main by varying degrees of abdominal distress or pain, anemia, and disturbances in nutrition. Consequently, certain coexisting diseases in this area do not lend themselves to distinct and separate disability evaluations without violating the fundamental principle relating to pyramiding. 38 C.F.R. §§ 4.113, 4.114. The Rating Schedule prohibits DCs 7301 to 7329, inclusive, 7331, 7342, and 7345 to 7348, inclusive, from being combined with each other. A single evaluation will be assigned under the DC that reflects the predominant disability picture, with elevation to the next higher evaluation where the severity of the overall disability warrants such elevation. 38 C.F.R. § 4.114. As such, the Board will evaluate the evidence of record, along with the criteria noted under DCs 7319 and 7346, and award a rating for the predominant disability picture from both digestive disorders.
The Veteran's IBS or irritable colon syndrome is currently rated under 38 C.F.R. § 4.114, Diagnostic Code 7319. The Board finds that this Diagnostic Code encapsulates the Veteran's predominant disability picture with regard to his specific symptomatology. According to Diagnostic Code 7319, a non-compensable evaluation is assigned for mild irritable colon syndrome with disturbances of bowel function with occasional episodes of abdominal distress. A 10 percent evaluation is assigned for moderate irritable colon syndrome with frequent episodes of bowel disturbance with abdominal distress. A 30 percent evaluation, the highest schedular rating available, is assigned for severe irritable colon syndrome with diarrhea or alternating diarrhea and constipation, with more or less constant abdominal distress.
Based on a review of the foregoing, the Board finds that even with application of consideration of the benefit of the doubt, the criteria for a rating higher than 10 percent after June 2, 2008 and higher than 30 percent after October 9, 2014 must be denied. 38 C.F.R. § 4.7.
Generally the Veteran has described symptoms that include regular (although not constant) episodes of constipation. Such symptoms detailed above, are shown to more closely resemble moderate irritable colon syndrome with frequent episodes of bowel disturbance with abdominal distress. See 38 C.F.R. § 4.114, Diagnostic Code 7319.
However, the symptoms do not more closely resemble severe irritable colon syndrome with diarrhea or alternating diarrhea and constipation, with more or less constant abdominal distress, nor do they resemble symptoms of impairment of sphincter control with occasional involuntary bowel movements, necessitating wearing of a pad. The Veteran has not described symptoms as causing constant abdominal distress. Finally the Veteran's symptoms are not described as resembling that of persistently recurrent epigastric distress with dysphagia, pyrosis, and regurgitation, accompanied by substernal or arm or shoulder pain, productive of considerable impairment of health.
In sum the evidence supports a 10 percent rating but no more for the Veteran's IBS from June 2, 2008. The Board leaves undisturbed the RO's finding that the Veteran's IBS should be rated as 30 percent disabling from October 9, 2014.
The Board must also determine whether the schedular evaluation is inadequate, thus requiring that the RO refer a claim to the Chief Benefits Director or the Director, Compensation and Pension Service, for consideration of "an extra-schedular evaluation commensurate with the average earning capacity impairment due exclusively to the service-connected disability or disabilities." 38 C.F.R. § 3.321(b)(1) (2015).
An extra-schedular evaluation is for consideration where a service-connected disability presents an exceptional or unusual disability picture. An exceptional or unusual disability picture occurs where the diagnostic criteria do not reasonably describe or contemplate the severity and symptomatology of the Veteran's service-connected disability. Thun v. Peake, 22 Vet. App. 111, 115 (2008).
If there is an exceptional or unusual disability picture, then the Board must consider whether the disability picture exhibits other factors such as marked interference with employment or frequent periods of hospitalization. Id. at 115-116. When either of those elements has been satisfied, the appeal must be referred for consideration of the assignment of an extraschedular rating. Otherwise, the schedular evaluation is adequate, and referral is not required. 38 C.F.R. § 3.321(b)(1); Thun, 22 Vet. App. at 116.
In this case, the Board finds that neither the first nor second Thun element is satisfied here for the remaining issues. The Veteran's service-connected disability is manifested by signs and symptoms such as constipation and epigastric discomfort. These signs and symptoms are contemplated by the rating schedule. In summary, the schedular criteria for gastrointestinal disabilities contemplate a variety of manifestations of functional loss.
Given the variety of ways in which the rating schedule contemplates functional loss for gastrointestinal disabilities, the Board concludes that the schedular criteria reasonably describe the Veteran's disability picture. In short, there is nothing exceptional or unusual about the Veteran's disabilities because the rating criteria contemplate his symptomatology. Thun, 22 Vet. App. at 115.
With respect to the second Thun element, the evidence does not suggest that any of the "related factors" are present. In particular, there is no indication that his work as a police officer has been impacted by his gastrointestinal symptoms and he had no periods of hospitalization. The Board finds, therefore, that the Veteran's service-connected disability decided herein do not result in marked interference with employment or frequent periods of hospitalization. 38 C.F.R. § 3.321(b)(1). Thus, referral for consideration of extraschedular rating is not warranted.
ORDER
Entitlement to an initial rating in excess of 10 percent disabling for IBS after June 2, 2008 and in excess of 30 percent disabling after October 9, 2014 is denied.
REMAND
The March 2014 remand noted that private treatment records, relevant to the Veteran's claims for increased ratings for his lumbar spine and cervical spine disabilities, had been associated with the electronic record after the most recent AOJ adjudication in February 2010; however, there was no waiver of AOJ adjudication. Unfortunately, the January 2015 supplemental statement of the case also did not consider these private treatment records when denying the Veteran's claims for increased ratings. Thus, on remand, the AOJ must promulgate an additional adjudicatory document with consideration of the private treatment records associated with the Virtual VA file in February 2014.
The Board's March 2014 remand conferred on the Veteran the right to compliance with the remand orders, as a matter of law. See Stegall v. West, 11 Vet. App. 268, 271 (1998). However, as already explained herein, the Board's remand orders were not fully complied with. Thus, the AOJ is required to conduct the development requested by the Board in order for the Veteran's claims to be fully and fairly adjudicated.
Accordingly, the case is REMANDED for the following action:
Readjudicate the Veteran's claim with consideration of the private treatment records associated in February 2014 and any other evidence not considered in prior AOJ adjudications. If the benefits sought on appeal are not granted to the Veteran's satisfaction, the Veteran and his representative should be furnished a supplemental statement of the case, and be given the requisite opportunity to respond. The case should then be returned to the Board for further appellate action.
The Veteran has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
These claims must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West 2014).
______________________________________________
THOMAS J. DANNAHER
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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393 Mass. 186 (1984)
469 N.E.2d 1259
CHELMSFORD TRAILER PARK, INC.
vs.
TOWN OF CHELMSFORD & others.[1]
Supreme Judicial Court of Massachusetts, Suffolk.
June 4, 1984.
October 25, 1984.
Present: HENNESSEY, C.J., WILKINS, ABRAMS, LYNCH, & O'CONNOR, JJ.
*187 Peter B. Sessa for Chelmsford Mobile Home Park Tenants Association, Inc. (James M. Harrington for the town of Chelmsford & others, with him).
Vincent R. Brogna (Edward H. London with him) for the plaintiff.
Richard C. Allen, Assistant Attorney General, for the Attorney General, joined in a brief.
LYNCH, J.
The plaintiff, the owner of a mobile home park, challenges the validity of St. 1983, c. 449 (the act), an act enabling the town of Chelmsford to adopt a by-law to control rents and evictions in mobile home parks, and the validity of the by-law adopted by the town pursuant to the act.
The owner's complaint sought a declaratory judgment that the act and the by-law were invalid and unconstitutional, as well as preliminary and permanent injunctions against the implementation of the by-law by the town. The Attorney General intervened as a party defendant pursuant to G.L.c. 231A, § 8. On April 9, 1984, a judge in the Superior Court granted the preliminary injunction sought by the owner. On May 3, 1984, a Justice of this court transferred the case from the Superior Court to the Supreme Judicial Court for Suffolk County pursuant to G.L.c. 211, § 4A, and the parties filed a statement of agreed facts. On May 14, the case was reserved and reported without decision to the full court. The parties waived oral argument on the issues, but on June 4, 1984, presented argument on a motion of the tenants' association and the town, assented to by the Attorney General, that the court vacate the injunction against implementation of the by-law. That motion was denied on June 5, 1984. We conclude that both the by-law and the enabling act are constitutional and enforceable.
The plaintiff is a corporation owning approximately thirty-eight acres of land in the town and licensed pursuant to G.L.c. 140, § 32B, to operate and to do business as a mobile home park. There is no other mobile home park licensed by the town. The Chelmsford Mobile Home Park has approximately 600 *188 residents, with space for 254 mobile homes. Park residents own their mobile homes. For a monthly fee, the owner provides the land for the homes, connections for water and sewerage pipes and electrical services, and various other services, such as rubbish disposal, road maintenance and plowing, outside lighting and general maintenance.
At a special town meeting on May 16, 1983, the town voted to petition the Legislature for enabling legislation that would permit the town to adopt a rent and eviction control by-law. Pursuant to that vote, a home rule petition was filed with the Legislature and on or about October 27, 1983, the act was signed into law. In January, 1984, a special town meeting adopted a by-law implementing the provisions of the act.
1. The act and the by-law. Although it is not identical in every particular with rent control acts previously enacted in the Commonwealth,[2] the act is similar to those other laws in substance, language, and tone. Section 1 is a declaration of public emergency by the Legislature, "which emergency has been created by excessive, abnormally high and unwarranted rental increases imposed by some[3] owners of mobile home parks." Section 2 authorizes the town to adopt as a town by-law the subsequent sections. Section 3 is a definitional section, not materially different from parallel sections in other rent control statutes, and not at issue here. Section 4 establishes a mobile home park rent control board (rent board) consisting of five residents of the town to be appointed by the board of selectmen. Section 5 directs the rent board to "set maximum rents, set minimum standards for use or occupancy of mobile home parks and evictions of tenants therefrom" and empowers the rent board to "make rules and regulations, sue and be sued, compel attendance of persons and the production of papers and information, and issue appropriate orders which shall be binding on both the owner and tenants...." Section 6 concerns *189 individual and general rent adjustments and is set out in full in the margin.[4] Section 7 states that "[t]he Board may regulate evictions of tenants at mobile home parks and may issue orders which shall be a defense to an action of summary process for possession." Section 8 establishes that the rent board is subject to the provisions of G.L.c. 30A as if it were an agency of the Commonwealth, and jurisdiction of all petitions for review is vested in the Lowell Division of the District Court and in the Superior Court. Section 9 limits initially the monthly rent of a mobile home lot to the rent charged the occupant six months prior to the adoption of the by-law by the town meeting. A fine of not more than $1,000 for any one offense is authorized by § 10. Section 11 is a severability clause.
The by-law adopted the language of the act verbatim, with a slight change in the wording of § 2, which in the by-law states: "The Town of Chelmsford hereby adopts the following nine sections as a Town by-law which shall be known and may be cited as the `Mobile Home Rent Control By-law'"
2. Delegation of legislative authority. The main thrust of the owner's argument is that the act is an unlawful delegation of legislative authority to the rent board because it fails to delineate sufficiently specific guidelines, standards, and procedures for the application of the by-law by the board. Although the act is less detailed than rent control laws referred to by the owner, it nevertheless provides sufficient direction to enable *190 the rent board to implement its policies and sufficient safeguards to protect against arbitrary action or abuse of discretion.
The owner has identified three areas of the act in which it argues there are insufficiently detailed standards. We shall address each one separately, but a few general comments about delegation of legislative authority will help focus the individual analyses.
Provided that the policy and purpose of the Legislature are clearly expressed, the absence of detailed standards in the legislation itself will not necessarily render it invalid as an unlawful delegation of legislative authority. "The standards for action to carry out a declared legislative policy may be found not only in the express provisions of an act but also in its necessary implications. The purpose, to a substantial degree, sets the standards. A detailed specification of standards is not required. The Legislature may delegate to a board or officer the working out of the details of a policy adopted by the Legislature." Massachusetts Bay Transp. Auth. v. Boston Safe Deposit & Trust Co., 348 Mass. 538, 544 (1965). This principle applies equally in the area of rent control legislation. "Having adopted a policy of rent control by this emergency legislation [the Legislature] may also delegate to the cities and towns as governmental agencies the administration of its details in respect to matters peculiarly affecting local interests." Russell v. Treasurer & Receiver Gen., 331 Mass. 501, 507 (1954).
No formula exists for determining whether a delegation of legislative authority is "proper" or not. Here, in order to make that determination, we undertake a threefold analysis: (1) Did the Legislature delegate the making of fundamental policy decisions, rather than just the implementation of legislatively determined policy; (2) does the act provide adequate direction for implementation, either in the form of statutory standards or, if the local authority is to develop the standards, sufficient guidance to enable it to do so; and (3) does the act provide safeguards such that abuses of discretion can be controlled? We examine the three aspects of the act which, the owner argues, contain an improper delegation of legislative authority.
*191 a. Procedural requirements. The act does not provide a timetable for the rent board to act on rent adjustments or evictions. Neither do any of the other rent control acts upheld by this court. The rent board has not had the opportunity to develop any working rules nor to demonstrate how quickly or slowly it will work. The owner cites Carson Mobile Home Park Owners' Ass'n v. Carson, 35 Cal. 3d 184 (1983), as suggesting that time constraints are required. No such message can be found in that case, however. There a rent control ordinance set a total of 105 days for the rent control board to act on a rent increase application. In upholding the act, the court did not suggest that this or any other time limit was required. In the absence of evidence to the contrary, it is to be presumed that the rent board will act in a reasonable and timely manner.
b. Eviction provisions. Section 7 of the act states that "[t]he Board may regulate evictions of tenants at mobile home parks and may issue orders which shall be a defense to an action of summary process for possession." It does not include, as do some other rent control acts, a list of reasons for which an owner is permitted to bring an eviction action. See, e.g., St. 1976, c. 37, § 8 (Somerville).[5] Because of the absence of this list, the owner argues, the rent board has unbridled power to regulate evictions, and can be subject to no meaningful review. No such result follows.
In Grace v. Brookline, 379 Mass. 43, 49 (1979), this court acknowledged that cities and towns which have adopted a policy of rent control may regulate evictions of tenants. The act upheld in Grace, supra at 45-46 & n. 8 (St. 1970, c. 843), did not include a list of reasons justifying eviction.
It does not follow, as the owner contends, that the rent board has no standards whatsoever to guide it in reviewing applications for eviction. In addition to G.L.c. 239, which governs summary process generally, the board should also look to G.L. *192 c. 140, § 32J, which deals specifically and exclusively with evictions of tenants in a mobile home park.[6] The eviction certificate procedure of the board could not alter the system of summary process under G.L.c. 239 and G.L.c. 140, § 32J. "[I]ndividual statutory provisions related to the same general area must be read `as a whole ... to the end that, as far as possible, the [entire legislative program] will constitute a consistent and harmonious whole.'" Jones v. Wayland, 380 Mass. 110, 118 (1980), quoting Haines v. Town Manager of Mansfield, 320 Mass. 140, 142 (1946). It is clear, therefore, that the rent board may only act on applications to evict mobile home tenants in a manner consistent with generally established limitations and procedures.
c. Adjustment of rents. Finally, the owner argues that the act provides inadequate guidance to the rent board regarding applications for rent adjustments. The owner relies upon the absence of the phrase "remove hardships or correct inequities," which appears in several, although not all, of the other rent control acts.[7] Nothing turns on the absence of this language. It is at best a statement of policy, and would provide no concrete assistance to a rent board faced with an application for adjustment. "Nothing should hinge upon presence or absence of such *193 vague phrases as `public interest' or `just and reasonable.'" 1 K.C. Davis, Administrative Law § 3.5, at 160 (2d ed. 1978).
What the act does provide is that whatever adjustments are made must assure that the owner will receive a "fair net operating income." St. 1983, c. 449, § 6. "Fair net operating income" is that income, after expenses, which will yield a return on the fair market value of the property equal to the generally available debt service rate or such other rate as the board deems appropriate. Identical language has been interpreted as requiring that rent be set so as to assure a "reasonable return on the fair value of the landlord's investment." Marshal House, Inc. v. Rent Control Bd. of Brookline, 358 Mass. 686, 705 (1971). There the court compared the rent adjustment provisions of St. 1970, c. 842 (State enabling act), and St. 1970, c. 843. Both acts required rents to be set so as to yield landlords a "fair net operating income." Chapter 843 defined the term (as precisely as it is defined in the Chelmsford act). Chapter 842 provided no definition but instead listed six relevant factors which were to be considered in determining what constitutes fair net operating income. Id. at 702. The court found that both formulations were acceptable. "Neither ... is inflexible enough to require a result more or less advantageous to landlords than the other. The lack of a list of relevant factors in c. 843 in no way precludes the administrator under that act from considering them; nor is he by the terms of § 3 of c. 843 irrevocably wedded in every case to the definition of `fair net operating income' therein contained." Id. at 704.
But, argues the owner, this will lead to inequities among the tenants. If the board grants a decrease to one tenant, the others will have to make up the difference so as to assure the owner a "fair net operating income." In granting or denying adjustments, however, the rent board must be mindful of the provision of G.L.c. 140, § 32L (2), as appearing in St. 1973, c. 1007, § 2, that "[a]ny rule or change in rent which does not apply uniformly to all mobile home residents of a similar class shall create a rebuttable presumption that such rule or change in rent is unfair." This act, coupled with the availability of judicial review and the clearly expressed objectives of the *194 act, provides sufficient protection to the owner and to the other tenants against the arbitrary granting of rent decreases. Another court, faced with the same issue, put it this way: "In exercising his discretion ... the commissioner's power is necessarily circumscribed by this overriding objective. To be sure, this is a rather broad standard to guide the commissioner's discretion. However, in view of the strong presumption of constitutionality attaching to legislative enactments ... and more importantly, the complexity of the matter of rent controls and regulation, we are persuaded that the standard is sufficient and that the act should be upheld." 241 E. 22nd St. Corp. v. City Rent Agency, 33 N.Y.2d 134, 142-143 (1973).
3. Separation of powers. The next argument advanced by the owner concerns whether § 7 of the act violates art. 30 of the Declaration of Rights of the Massachusetts Constitution,[8] and art. 89 of the Amendments to the Constitution by endowing the rent board with judicial authority. Section 7 states that the rent board "may regulate evictions of tenants at mobile home parks and may issue orders which shall be a defense to an action of summary process for possession." In the past, we have stated that "separation of powers does not require three `watertight compartments' within the government." Opinion of the Justices, 372 Mass. 883, 892 (1977), quoting Springer v. Government of the Phil. Islands, 277 U.S. 189, 211 (1928) (Holmes, J., dissenting). Indeed, "an absolute division of the three general types of functions is neither possible nor always desirable." Opinion of the Justices, 365 Mass. 639, 641 (1974). "The critical inquiry is whether the actions of [one branch of government] interfere with the functions of another." Boston Gas Co. v. Department of Pub. Utils., 387 Mass. 531, 541 (1982). "This latter [quality] is the essence of what cannot be tolerated under art. 30." Opinion of the Justices, 365 Mass. at 642.
*195 Contrary to the owner's assertion, we can find nothing in § 7 which permits the rent board to interfere with the exercise of the judicial function. The language of the section closely tracks the provisions regulating evictions in other, older rent control acts. See, e.g., St. 1970, c. 843, § 6 (Brookline); St. 1976, c. 131, § 6 (Peabody [mobile home parks]). It has long been understood that successful implementation of a rent control program must include some local control over evictions, otherwise the objective of maintaining a stable rental market will be thwarted. Block v. Hirsh, 256 U.S. 135, 157-158 (1921). Empowering the board with the authority to "issue orders which shall be a defense to an action of summary process" is a traditional vehicle for forestalling evictions in response to newly imposed rent ceilings; rent control boards have then instituted certificate of eviction procedures or similar regulations as a way of channeling this authority. See, e.g., Moulton v. Brookline Rent Control Bd., 385 Mass. 228 (1982); Rule 2 (d) (3) of the Uniform Rules of Summary Process (1982).
Such procedures do not contradict existing statutory provisions dealing with judicial resolution of disputes in the housing area. For example, in Grace v. Brookline, 379 Mass. 43, 53 (1979), we considered whether there was a conflict between the procedures pertaining to stays of eviction in the summary process act, G.L.c. 239, §§ 9-11, and Brookline's passage of a by-law imposing a six-to twelve-month waiting period before a purchaser of a condominium could evict the existing occupant.[9] We held that the operation of the by-law "merely *196 postpones the application of c. 239, without compromising its objectives." Id. at 54. Similarly, the right of a landlord to judicial review of an adverse ruling by the rent board on an eviction application is preserved by the Chelmsford act: § 8 (2) explicitly provides for judicial review of the board's decisions in the District or Superior Courts. As we observed in Grace, supra at 54, regarding the relationship between the Brookline by-laws and c. 239, the eviction provisions "supplement c. 239; they do not supplant it." Section 7 of the Chelmsford act does not violate the separation of powers provision contained in art. 30.
4. Unintelligibility. The owner further contends that § 6 (1) of the act should be struck down because it is "unintelligible."[10] In effect, the owner argues that, since the word "tenants" makes no sense as written, it is impossible to attach any meaning to the entire section and therefore it is void.
We disagree. "[A] statute must be interpreted according to the intent of the Legislature ... considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated." Commonwealth v. Graham, 388 Mass. 115, 119 (1983), quoting from Industrial Fin. Corp. v. State Tax Comm'n, 367 Mass. 360, 364 (1975). "A statute should not read in a manner that defeats its intended utility." Simon v. Solomon, 385 Mass. 91, 100 (1982). Instead, when "[t]he draftmanship is faulty, ... the duty devolves upon us to give ... [the statute] a reasonable construction." Massachusetts Comm'n Against Discrimination v. Liberty Mut. Ins. Co., 371 Mass. 186, 190 (1976), quoting Massachusetts Turnpike Auth. v. Commonwealth, 347 Mass. 524, 528 (1964).
*197 The conclusion is inescapable that the word "rents" was inadvertently omitted from § 6 (1).[11] Examination of a number of other rent control statutes reveals that each of them employs the term "rents" in the context of other language practically identical to that of the Chelmsford act. See, e.g., St. 1970, c. 842, § 7; St. 1970, c. 843, § 3; St. 1976, c. 131, § 3. Further, when the word "rents" is added to § 6 (1), this section becomes consistent with the rest of the Chelmsford law.
It is a "fundamental principle of statutory construction that in interpreting any particular provision it should be construed as part of the statute as a consistent whole." Walker v. Board of Appeals of Harwich, 388 Mass. 42, 51 (1983); C. Sands, Sutherland Statutory Construction § 46.05 (4th ed. 1973). It is true that we are not faced with the typical case of ambiguity in, or inconsistency between, sections of an act. The choice open to us here is between adopting the literal meaning of the words used, which renders the section unintelligible, and substituting or adding a word which was clearly intended and which gives the section the meaning plainly intended. Although this court has never before done so, "a large majority of the cases permit the substitution of one word for another where it is necessary to carry out the legislative intent or express clearly manifested meaning." C. Sands, Sutherland Statutory Construction, supra at § 47.36. We might resist substitution if we were not faced with such a clear case of mistake and if other legislative enactments on the same subject did not make the intended phrase so manifestly apparent. Rather than strike down this section of the act on account of a clear error, we hold that § 6 (1), reasonably read, should include the words "rents" either in place of or immediately following the word "tenants."
5. Ex post facto law. The plaintiff makes a final argument that § 10 of the act[12] is unconstitutional since it amounts to an *198 ex post facto law,[13] an argument which we shall dispose of summarily. The application of rent controls to existing leases is constitutional, as is the imposition of rent ceilings based on a six-month "rollback" provision.[14]Huard v. Forest St. Hous., 366 Mass. 203, 207-208 (1974). Marshal House, Inc. v. Rent Control Bd. of Brookline, 358 Mass. 686, 700-701 (1971). Further, § 9 (1) operates in conjunction with § 10 only to punish landlords charging future rents in excess of the statutory ceiling; the act imposes no retroactive penalties for rents charged in the past. Therefore, it is not an ex post facto law.
The order granting the injunction is vacated and the case is remanded to the single justice for the entry of judgment.
So ordered.
NOTES
[1] The other defendants are the board of selectmen of Chelmsford, the town clerk of Chelmsford, the board of health of Chelmsford, Chelmsford Mobile Home Park Tenants Association, Inc., and tenants at the Chelmsford Mobile Home Park.
[2] See, e.g., St. 1970, c. 842 (State Enabling Act); St. 1970, c. 843 (Brookline); St. 1976, c. 36 (Cambridge); St. 1976, c. 37 (Somerville); St. 1976, c. 131 (Peabody [mobile home parks]).
[3] The plaintiff is the only owner of a mobile home park in Chelmsford. In our view nothing turns on this distinction.
[4] Statute 1983, c. 449, § 6, provides: "(1) The Board may make individual or general adjustments, either upward or downward, as may be necessary to assure that tenants [sic] for mobile home park accommodations are established on levels which yield to owners a fair net operating income for such units.
"(2) Fair net operating income shall be that income which will yield a return, after all reasonable operating expenses, on the fair market value of the property, equal to the debt service rate generally available from institutional first mortgage lenders or such other rates of return as the Board, on the basis of evidence presented before it, deems more appropriate to the circumstances of the case.
"(3) Fair market value shall be the assessed valuation of the property or such other valuation as the Board, on the basis of evidence presented before it, deems more appropriate to the circumstances of the case.
"(4) The Board may establish further standards and rules consistent with the foregoing."
[5] It is worth noting that in addition to nine specific reasons for which a tenant can be evicted, this list invariably includes the catch-all "for any other just cause, provided that the purpose is not in conflict with the provisions and purposes of this act." Thus, rent boards retain a significant measure of discretion, despite any guidelines in the statute.
[6] General Laws c. 140, § 32J, as amended through St. 1975, c. 692, states that tenancy in a mobile home park may be terminated only for one or more of four reasons: "(1) nonpayment of rent. (2) substantial violation of any enforceable rule of the mobile home park. (3) violation of any laws or ordinances which protect the health or safety of other mobile home park residents. (4) a discontinuance in good faith by the licensee, of the use of part or all of the land owned by the licensee as a mobile home park subject to any existing contractual rights or agreements between the licensee and the tenants located in the mobile home park" (emphasis supplied).
The owner argues that § 32J concerns "terminations of tenancies" as distinguished from evictions. In Commonwealth v. Gustafsson, 370 Mass. 181, 185 (1976), § 32J was characterized as a statute "which pertains to evictions." In Liberty Mobilehome Sales, Inc. v. Bernard, 6 Mass. App. Ct. 914, 915 (1978), the Appeals Court stated that § 32J "regulates evictions from mobile home parks."
[7] See, e.g., St. 1970, c. 843, § 2 (Brookline), and St. 1976, c. 131, § 2 (Peabody), which include this phrase, and St. 1970, c. 842 (State enabling act), St. 1976, c. 36 (Cambridge), and St. 1976, c. 37 (Somerville), which do not.
[8] Article 30 provides: "In the government of this Commonwealth, the legislative department shall never exercise the executive and judicial powers, or either of them: The executive shall never exercise the legislative and judicial powers, or either of them: The judicial shall never exercise the legislative and executive powers, or either of them: to the end it may be a government of laws and not of men."
[9] The Brookline by-law was enacted pursuant to specific grant of authority to the town to establish rent control and, at the same time, to control evictions. St. 1970, c. 843. Chapter 843, § 6, explicitly gave the town the power to regulate evictions, and its language is almost identical to that of § 7 of the statute at issue here. The only difference of any consequence is that the Brookline statute specifies that the town "may by by-law regulate the evictions of tenants," while the Chelmsford statute simply states that "[t]he Board may regulate evictions of tenants at mobile home parks...." We do not consider the additional phrase "by by-law" to be significant. As we noted in connection with the Cambridge rent control statute, St. 1976, c. 36, "[w]hen analyzing a grant of power to a municipal government we must keep in mind that `a grant of an express power carries with it all unexpressed, incidental powers necessary to carry it into-effect.'" Flynn v. Cambridge, 383 Mass. 152, 158 (1981), quoting 3 C. Sands, Sutherland Statutory Construction § 64.02 (4th ed. 1974).
[10] Section 6 (1) states: "The Board may make individual or general adjustments, either upward or downward, as may be necessary to assure that tenants for mobile home park accommodations are established on levels which yield to owners a fair net operating income for such units" (emphasis added).
[11] If the word "rents" is added (and the word "tenants" is deleted or, alternatively, with the addition of an apostrophe, making it "tenants' rents") to the section, it makes sense.
[12] Section 10 provides: "Violations of this by-law or any order of the board shall be punishable by a fine of not more than one thousand dollars for any one offense."
[13] Article 24 of the Declaration of Rights of the Massachusetts Constitution states the prohibition against ex post facto laws: "Laws made to punish for actions done before the existence of such laws, and which have not been declared crimes by preceding laws, are unjust, oppressive, and inconsistent with the fundamental principles of a free government."
[14] Section 9 (1) of the Chelmsford act provides that "[t]he maximum rent of a mobile home lot or unit shall be the rent charged with the occupant for the month six months prior to the acceptance of this by-law by town meeting."
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 24F-2 Annual Notice of Securities Sold Pursuant to Rule 24f-2 1. Name and address of issuer: JNL Investors Series Trust 1 Corporate Way Lansing, MI 48951 2. The name of each series or class of securities for which this Form is filed (If the Form is being filed for all series and classes of securities of the issuer, check the box but do not list series or classes):[X] 3.Investment Company Act File Number: 811-10041 Securities Act File Number: 333-43300 4(a).Last day of fiscal year for which this Form is filed: December 31, 2013 4(b).[]Check box if this Form is being filed late (i.e., more than 90 calendar days after the end of the issuer’s fiscal year.).(See Instruction A.2) 4(c).[]Check box if this is the last time the issuer will be filing this Form. 5.Calculation of registration fee: (i) Aggregate sale price of securities sold during the fiscal year pursuant to section 24(f): $ 29,381,440,381 (ii) Aggregate price of securities redeemed or repurchased during the fiscal year: $ 28,461,530,360 (iii) Aggregate price of securities redeemed or repurchased during any prior fiscal year ending no earlier than October 11, 1995 that were not previously used to reduce registration fees payable to the Commission: $ 0 (iv) Total available redemption credits [add Items 5(ii) and 5(iii)]: $ 28,461,530,360 (v) Net sales if Item 5(i) is greater than Item 5(iv) [subtract Item 5(iv) from Item 5(i)]: $ 919,910,021 (vi) Redemption credits available for use in future years $ 0 if Item 5(i) is less than Items 5(iv) [subtract Item 5(iv) from Item 5(i)]: (vii) Multiplier for determining registration fee (See Instruction C.9): x0.0001288 (viii) Registration fee due [multiply Item 5(v) by item 5(vii)] (enter “0” if no fee is due): $ 118,484 6.Prepaid Shares If the response to Item 5(i) was determined by deducting an amount of securities that were registered under the Securities Act of 1933 pursuant to rule 24e-2 as in effect before October 11, 1997, then report the amount of securities (number of shares or other units) deducted here: If there is a number of shares or other units that were registered pursuant to rule 24e-2 remaining unsold at the end of the fiscal year for which this form is filed that are available for use by the issuer in future fiscal years, then state that number here: . 7. Interest due if this Form is being filed more than 90 days after the end of the issuer’s fiscal year (see Instruction D): +$ 0 8. Total of the amount of the registration fee due plus any interest due [line 5(viii) plus line 7]: $ 118,484 9. Date the registration fee and any interest payment was sent to the Commission’s lockbox depository:March 18, 2014 Method of Delivery: [X] Wire Transfer [] Mail or other means SIGNATURES This report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gerard A.M. Oprins Gerard A.M. Oprins Treasurer and Chief Financial Officer Date: March 24, 2014 *Please print the name and title of the signing officer below the signature.
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Mr. Pat D. Westbrook Executive Director Texas Commission for the Blind P.O. Box 12866 Austin, Texas 78711
Re: Enforcement of the support dog laws under chapter 121 of the Human Resources Code (RQ-1749)
Dear Mr. Westbrook:
You refer to the provisions of sections 121.003 and 121.004(a) of the Human Resources Code. Section 121.003 prohibits, inter alia, discrimination against visually handicapped persons accompanied by support dogs in their use of public facilities. Section 121.004(a) provides:
(a) A person, firm, association, corporation, or other organization, or the agent of a person, firm, association, corporation, or other organization who violates Section 121.003 of this chapter is guilty of a misdemeanor and on conviction shall be punished by a fine of not less than $100 nor more than $300. (Emphasis added.)
You say that "there appears to be confusion regarding the appropriate legal jurisdiction in enforcing this law. . . . It appears as though the City is not sure whether the County should prosecute this matter, and the County is not sure whether the City should prosecute this matter." You ask our advice in this respect.
Article V, section 19, of the Texas Constitution provides in full:
Justice of the peace courts shall have original jurisdiction in criminal matters of misdemeanor cases punishable by fine only, exclusive jurisdiction in civil matters where the amount in controversy is two hundred dollars or less, and such other jurisdiction as may be provided by law. Justices of the peace shall be ex officio notaries public.
The Code of Criminal Procedure, article 4.11, still provides that justice courts have jurisdiction of misdemeanors "where the fine to be imposed by law may not exceed two hundred dollars." This provision was codified into the current Code of Criminal Procedure in 1965. Acts 1965, 59th Leg., ch. 722, at 331. At that time article V, section 19, of the constitution still provided that justice court jurisdiction extended to "criminal matters of all cases where the penalty or fine to be imposed by law may not be more than for two hundred dollars." S.J.R. 14, Acts 1985, 69th Leg., § 7, at 3359. The current provisions of article V, section 19, expanding justice court jurisdiction to "misdemeanor cases punishable by fine only" were adopted in 1985. Id.
We think that the current article V, section 19, provision in question indicates on its face that it is self-enacting, i.e., that its provision for justice court jurisdiction over "misdemeanor cases punishable by find only" does not require further legislative action to be given effect. The public notice given for that constitutional amendment election ("The amendment would provide for the jurisdiction of justice courts, which may have additional jurisdiction as provided by law.") as well as the explanatory materials prepared by the Legislative Council and House Study Group, support, we think, our conclusion that the provision is self-enacting and controls over the narrower jurisdictional provision still found in article 4.11
of the Code of Criminal Procedure. See Analyses of Proposed Constitutional Amendments Appearing on the November 5, 1985 Ballot, Texas Legislative Council Information Report No. 85-3, August 1985 ("changes . . . redefine . . . justice court jurisdiction"); House Study Group Special Legislative Report, 1985 Constitutional Amendments, August 23, 1985 ("The specific constitutional grants of jurisdiction to justice-of-the-peace courts in Art. 5, sec. 19, would be eliminated, except for original jurisdiction over misdemeanors punishable by fine only. . . ."); see also, Gov't Code § 27.031 (providing that justice courts have "the jurisdiction and powers provided by the constitution and other law").
Thus, at the county level, justice of the peace courts would have jurisdiction over the offense described in section 121.004(a) of the Human Resources Code.
Also, at the county level, various criminal district courts and constitutional and statutory county courts would have jurisdiction over such offense depending on the particular county in question. See Gov't Code ch. 24, subch. E (particular criminal district courts), §§ 26.045 (county court jurisdiction generally), 26.106-26.351 (particular county courts), 25.0003 (statutory county court jurisdiction generally), 25.0413-08-5871 (particular statutory county courts).
The officer performing the criminal law duties of the county attorney has responsibility for prosecuting offenses in the above-mentioned courts of the county. Code Crim.Proc. art. 2.02
(regarding county attorney's duties in courts of the county "below the grade of district court"). In some counties these duties are performed by the officer known as the criminal district attorney. See Gov't Code ch. 44 (for duties of criminal district attorneys in particular counties). In a few counties they are performed by a district attorney. See Gov't Code ch. 43 (for duties of district attorneys in specific counties; particularly, for example, § 43.180 regarding duties of Harris County District Attorney to represent the state in criminal cases pending in district and inferior courts of the county).
Thus, in answer to your question, at the county level the prosecutor responsible for representing the state in justice of the peace courts, and in the criminal district courts and constitutional and statutory county courts where those latter courts also have jurisdiction over the offense in question, would be responsible for prosecuting such offense.1
Also, in a few cities the city attorney would have concurrent responsibility with the county level prosecutor for prosecuting the offense in question. While the jurisdiction of municipal courts proper with respect to criminal cases arising under state law is limited to offenses punishable by a fine not to exceed $200 under section 29.003(b) of the Government Code, and such courts would thus have no jurisdiction over an offense under section 121.004(a), the legislature has authorized certain municipalities to create a distinct tribunal called the municipal court of record. In some instances the legislature has expanded the jurisdiction of such municipal courts of record beyond that provided for municipal courts proper, which, as noted above, have no jurisdiction over the offense you ask about.
For example, the city of Austin is authorized to create municipal courts of record having concurrent jurisdiction with the justice court over criminal cases punishable by fine only. See Gov't Code § 30.323. Thus a municipal court of record created in Austin could have jurisdiction over a section 121.004(a) offense, and the city attorney or his deputies or assistants would be responsible for prosecuting such case. Gov't Code §§ 30.329, 30.490; see, e.g., id. §§ 30.381, 30.383 (a Dallas Municipal Court of Record has concurrent jurisdiction with justice court over offenses punishable by fine only). But see id. ss 250.324.0549 (Houston Municipal Court of Record jurisdiction over offenses for which justice court has jurisdiction only where punishable by fine not to exceed $200), 30.141, 30.143 (Fort Worth Municipal Court of Record jurisdiction over offenses under state law limited to that of municipal court proper). See generally id. ch. 30 (the provisions for particular municipal courts of record).
We also understand that you are concerned about apparent confusion among municipal police and county sheriff's office personnel as to their respective responsibilities for responding to reports of violations of section 121.004(a). A peace officer, whether a sheriff or sheriff's deputy or a municipal police officer, has the duty to act to keep the peace and to report to a magistrate all offenses under state law committed within his jurisdiction. Code Crim.Proc. arts. 2.12, 2.13. Therefore it would be appropriate for a person wishing to report a violation of section 121.004(a) to contact the sheriff's office or, if the offense was committed in an incorporated area, the municipal police.
SUMMARY
The prosecutor at the county level — the county attorney or in some cases the criminal district attorney or district attorney — has responsibility for prosecuting the offense described in section121.004(a) of the Human Resources Code, relating to discrimination against visually handicapped persons using support dogs in public facilities. Where the offense is committed in a city having a municipal court of record with jurisdiction over such offense, the city attorney may also prosecute such offense in that court.
Very truly yours,
Jim Mattox Attorney General of Texas
Mary Keller First Assistant Attorney General
Lou McCreary Executive Assistant Attorney General
Judge Zollie Steakley Special Assistant Attorney General
Rick Gilpin Chairman, Opinion Committee
Prepared by William Walker Assistant Attorney General
1 We also note that various particular district courts are given concurrent jurisdiction with county courts in criminal matters. In such cases the district attorney responsible for prosecuting cases in such courts may prosecute the offense described in section 121.004(a) of the Human Resources Code. See Code Crim.Proc. art. 2.01 (district attorney's duty to represent the state in district court); Gov't Code §§ 24.101-24.276, 24.351-24.507 (regarding particular district courts and judicial districts). |
Case 1:17-cr-00255-NONE-SKO Document 95 Filed 09/29/20 Page 1 of 2
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
10
UNITED STATES OF AMERICA, No. 1:17-CR-00255-LJO-SKO-1
11
Plaintiff,
12
v. ORDER DENYING RENEWED REQUEST
13 TO STAY COLLECTION OF SPECIAL
KYLE EVAN PETERSON, ASSESSMENT
14
Defendant. (Doc. No. 93)
15
16 Defendant Kyle Peterson pled guilty on March 20, 2019, to one count of receipt of
17 material involving the sexual exploitation of minors. (Doc. No 51.) He was sentenced on July
18 15, 2019, to 162 months incarceration and 180 months supervised release. (Doc. Nos. 66, 67.)
19 At the time of his sentencing, he was also ordered to pay a mandatory special assessment of $100.
20 (Id.) Defendant appealed from his judgment of conviction on July 19, 2019. (Doc. Nos. 68, 69.)
21 That appeal remains pending before the Ninth Circuit Court of Appeals.
22 On March 16, 2020, and again on June 2, 2020, defendant moved the court for a stay on
23 the collection of the $100 special assessment imposed as part of his sentence in this case. (Doc.
24 Nos. 88, 89.) On June 4, 2020, the court denied the request without prejudice as insufficiently
25 supported. (Doc. No. 90.) Defendant Peterson has now renewed the request. (Doc. No. 93.)
26 As this court explained in its June 4, 2020 Order, the imposition of a special assessment
27 on a convicted person is required by 18 U.S.C. § 3013, which provides that any such assessment
28 “shall be collected in the manner that fines are collected in criminal cases.” 18 U.S.C. § 3013(b).
1
Case 1:17-cr-00255-NONE-SKO Document 95 Filed 09/29/20 Page 2 of 2
1 Under Federal Rule of Criminal Procedure 38(c) (“Rule 38”), a court “may stay a sentence to pay
2 a fine or a fine and costs . . . on any terms considered appropriate.” It is in the discretion of the
3 sentencing court to grant a motion to stay under Rule 38. United States v. Alvarez, No. 14-CR-
4 1748-GPC, 2015 WL 13187313, at *2 (S.D. Cal. Apr. 10, 2015); United States v. Catlett, No.
5 2:13-CR-00208 JAM, 2013 WL 6797482, at *1 (E.D. Cal. Dec. 19, 2013). At least one court in
6 this district has applied factors related to entering a stay pending appeal in the civil context to a
7 stay sought pursuant to Rule 38. See Catlett, 2013 WL 6797482, at *1 (applying to Rule 38 stay
8 analysis the following factors from Lair v. Bullock, 697 F.3d 1200, 1203 (9th Cir. 2012): “(1)
9 whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
10 (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the
11 stay will substantially injure the other parties interested in the proceeding; and (4) where the
12 public interest lies.”). Other district courts have questioned whether consideration of the factors
13 relevant to the issuance of a stay pending appeal in the civil context is appropriate in the context
14 of a request brought pursuant to Rule 38. See Alvarez, 2015 WL 13187313, at *1 n. 1.
15 Assuming without deciding that the Liar factors apply under Rule 38, the court once again
16 declines to exercise its discretion to stay the special assessment. The court has carefully
17 examined the pending motion and the underlying record, including the plea agreement of the
18 parties (Doc. No. 50), the plea colloquy (Doc. No. 59), defendant’s motion to withdraw his plea
19 (Doc. No. 57), the government’s opposition thereto (Doc. No. 63), and the transcript of the
20 hearing on defendant’s motion to withdraw his plea. (Doc. No. 75). For the reasons the
21 previously-assigned district judge articulated in ruling on defendant’s motion to withdraw his
22 plea, the undersigned concludes that defendant Peterson has not made a sufficient showing that he
23 is likely to succeed on the merits of his appeal.
24 Accordingly, the request to stay the imposition of the $100 special assessment (Doc. No.
25 93) is DENIED.
26 IT IS SO ORDERED.
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Dated: September 29, 2020
28 UNITED STATES DISTRICT JUDGE
2
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Citation Nr: 1716317
Decision Date: 05/15/17 Archive Date: 05/22/17
DOCKET NO. 12-27 739 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Detroit, Michigan
THE ISSUES
1. Entitlement to service connection for the cause of the Veteran's death.
2. Entitlement to receipt of VA nonservice-connected death pension benefits.
REPRESENTATION
Appellant represented by: The American Legion
ATTORNEY FOR THE BOARD
K. L. Wallin, Counsel
INTRODUCTION
The Veteran served on active duty from July 1951 to July 1953. This case is before the Board of Veterans' Appeals (Board) on appeal from a February 2012 rating decision of a Department of Veterans Affairs (VA) Regional Office (RO). The Veteran died in July 1990. The Appellant is his widow.
A Travel Board hearing was scheduled for May 2016; the hearing was cancelled by the Appellant. Consequently, there are no outstanding hearing requests of record.
This appeal was processed using the Veterans Benefits Management System (VBMS). Accordingly, any future consideration of this Veteran's case should take into consideration the existence of this electronic record.
The issue of entitlement to nonservice-connected death pension benefits is addressed in the REMAND portion of the decision below and is REMANDED to the Agency of Original Jurisdiction (AOJ).
FINDINGS OF FACT
1. The Veteran's certificate of death lists the immediate cause of death as myocardial infarct with shock.
2. At the time of his death, service connection was not in effect for any disorder.
3. The probative evidence of record does not show that the listed cause of the Veteran's death, myocardial infarct with shock, was related to his active military service.
4. The probative evidence of record does not show that a service-connected disorder caused or contributed substantially and materially to the Veteran's death.
CONCLUSION OF LAW
A disability incurred in or aggravated by service or presumed to have been incurred in service did not cause or contribute substantially or materially to cause the Veteran's death. 38 U.S.C.A. §§ 1110, 1112, 1310, 5103A, 5107 (West 2015);
38 C.F.R. §§ 3.303, 3.307, 3.309, 3.312 (2016).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
With respect to the Appellant's claim herein, VA has met all statutory and regulatory notice and duty to assist provisions. See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2014); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326 (2016); see also Scott v. McDonald, 789 F.3d 1375 (Fed. Cir. 2015).
The Appellant was provided a notification letter in January 2012 that satisfied the duty to notify provisions. 38 U.S.C.A. § 5103 (a); 38 C.F.R. § 3.159 (b)(1); Quartuccio v. principia, 16 Vet. App. 183, 187 (2002); Dingess/Hartman v. Nicholson, 19 Vet. App. 473, 491 (2006).
In addition, the duty to assist the Appellant has also been satisfied in this case.
38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159. The RO has obtained the Veteran's available service treatment records, DD-214, and his death certificate.
The Appellant indicated in January 2012, that she had no additional information or evidence to submit in support of her appeal. As there is no indication that any failure on the part of VA to provide additional notice or assistance reasonably affects the outcome of this case, the Board finds that any such failure is harmless. See Mayfield v. Nicholson, 20 Vet. App. 537 (2006).
The Appellant seeks service connection for the cause of the Veteran's death. She claims that the Veteran was exposed to contaminated drinking water while stationed at Camp Lejeune, North Carolina, during his period of service.
At the time of his death in July 1990, service connection was not in effect for any disability. His death certificate lists his immediate cause of death as myocardial infarct with shock.
When a veteran dies after December 31, 1956, from a service-connected or compensable disability, VA will pay dependency and indemnity compensation to such veteran's surviving spouse, children, and parents. 38 U.S.C.A. § 1310. In a claim where service connection was not established for the fatal disability prior to the death of the Veteran, the initial inquiry is to determine whether the fatal disorder had been incurred in or aggravated by service. 38 C.F.R. § 3.312.
Generally, service connection may be established for disability resulting from disease or injury incurred in or aggravated by service. 38 U.S.C.A. § 1110;
38 C.F.R. § 3.303(a). Service connection may also be established for any disease diagnosed after discharge, when all the evidence, including that pertinent to service, establishes the disease was incurred in service. 38 C.F.R. § 3.303(d). For certain chronic disorders, such as cardiovascular-renal disease, service connection may be granted if the disease becomes manifest to a compensable degree within one year following separation from service. 38 U.S.C.A. §§ 1101, 1112, 1113 (West 2015); 38 C.F.R. §§ 3.307, 3.309.
VA has acknowledged that persons residing or working at the U.S. Marine Corps Base Camp Lejeune from August 1953 through December 1987 were potentially exposed to drinking water contaminated with volatile organic compounds (VOCs), and it will be assumed by VA that any given Veteran-claimant who served at Camp Lejeune was potentially exposed in some manner to the full range of chemicals known to have contaminated the water there between 1957 and 1987. See Veterans Benefits Administration (VBA) Fast Letter 11-03 (January 11, 2011); VBA Training Letter 11-03 (Revised) (November 29, 2011).
The Veteran's DD-214 reveals that he separated from military service in July 1953. Regardless of whether the Veteran had duty at Camp Lejeune for a period of more than 30 days and that the place of separation was U.S. Marine Corps Base Camp Lejeune, North Carolina, he did not serve during the applicable time period. Moreover, the immediate cause of death, myocardial infarct, is not specifically recognized by VA as residuals of contaminated water at Camp Lejeune pursuant to 38 U.S.C.A. § 1710 and 38 C.F.R. § 17.400. Thus, he is not afforded the presumptions based on exposure to contaminated drinking water. However, this does not preclude establishing service connection with proof of direct causation. See Combee v. Brown, 34 F.3d 1039 (Fed. Cir. 1994).
There is no factual basis in the record that the fatal disease listed on the Veteran's death certificate, myocardial infarct with shock, was incurred during service. Service treatment records are negative for the fatal disease. Post-service, he did not suffer from the fatal myocardial infarct until July 1990, some 37 years after his discharge from service in July 1953. Clearly, there was the passage of many years between discharge from active service and medical documentation of myocardial infarct. These factors tend to weigh against a claim for service connection. Mense v. Derwinski, 1 Vet. App. 354, 356 (1991).
Moreover, in this case, the record does not include any probative medical evidence or opinion showing a causal relationship between the Veteran's myocardial infarct and his active military service. In fact, the Appellant has submitted no medical evidence on behalf of her claim. A development letter was sent to her in January 2012, asking her to identify information and evidence that she thought would support her claim, as well as submit any evidence in her possession. She was also furnished with authorization forms to complete and return if she wished VA to obtain private medical records on her behalf. She responded in January 2012 that she had no evidence or information to submit and asked that her claim be decided as soon as possible.
Based on the foregoing discussion, there is no basis upon which to conclude that the Veteran's listed cause of death, myocardial infarct with shock, was incurred in or aggravated during military service, including on any presumptive basis. 38 C.F.R. §§ 3.303, 3.307, 3.309, 17.400.
The death of a Veteran will be considered as having been due to a service-connected disability when the evidence establishes that such disability was either the principal or a contributory cause of death. 38 U.S.C.A. § 1310; 38 C.F.R. § 3.312(a). In determining whether a service-connected disability contributed to death, it must be shown that it contributed substantially or materially; that it combined to cause death; that it aided or lent assistance to the production of death. It is not sufficient to show that it casually shared in producing death, but rather it must be shown that there was a causal connection. 38 C.F.R. § 3.312(c)(1). Medical evidence is required to establish a causal connection between service or a disability of service origin and the Veteran's death. See Van Slack v. Brown, 5 Vet. App. 499, 502 (1993).
The record does not include any probative medical evidence or opinion that a service-connected disability contributed substantially or materially to the Veteran's death; that it combined to cause death; or that it aided or lent assistance to the production of death. The Appellant has not submitted any medical opinion other than her assertions that the Veteran was exposed to contaminated drinking water during his service, which resulted in his myocardial infarct. As noted above, medical evidence is required to establish a causal connection between a disability of service origin and the Veteran's death. See Van Slack, 5 Vet. [email protected]. Due to the lack thereof, the Appellant's claim must be denied on a direct basis as there is no evidence that a service related disease or injury caused the Veteran's death.
The Appellant's statements that the Veteran was exposed to contaminated drinking water during his service, which caused his death from myocardial infarct, are not competent evidence. Evidence of the etiology of the cause of the Veteran's death requires medical diagnosis based on diagnostic testing. See Jandreau v. Nicholson, 492 F.3d 1372, 1377 (Fed. Cir. 2007). The Appellant's statements are competent evidence as to observable symptomatology. See Barr, 21 Vet. App. at 307 (noting that lay testimony is competent to establish observable symptomatology but not competent to establish medical etiology or render medical opinions); Washington v. Nicholson, 21 Vet. App. 191, 195 (2007) (holding that, "[a]s a layperson, an appellant is competent to provide information regarding visible, or otherwise observable, symptoms of disability"). However, the statements that the Veteran's death was caused by or aggravated by a disability incurred during service draw medical conclusions, which the Appellant and her representative are not qualified to make. Although lay statements are competent evidence to provide opinions on some medical issues, the etiology of the Veteran's cause of death falls outside the realm of common knowledge of a lay person. See Kahana v. Shinseki, 24 Vet. App. 428, 435 (2011); see also Jandreau, 492 [email protected].
In arriving at the decision to deny the claim, the Board has considered the applicability of the benefit-of-the-doubt doctrine. However, as the preponderance of the evidence is against the Appellant's claim for entitlement to service connection for the cause of the Veteran's death, that doctrine is not applicable.
38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49, 53-56 (1990).
ORDER
Service connection for the cause of the Veteran's death is denied.
REMAND
The Appellant has also claimed entitlement to VA nonservice-connected death pension benefits.
VA pays non-service-connected death pension to the surviving spouse of a Veteran of a period of war who met certain requirements. 38 U.S.C.A. § 1541. As the Veteran served on active duty for a period of 90 days or more and such period began during a period of war, his service meets the service requirements under
38 U.S.C.A. § 1521 (j), such that he was a Veteran of a period of war for purposes of entitlement to non-service-connected pension and for purposes of eligibility of his survivors for non-service-connected death pension. See also 38 C.F.R. § 3.3 (a)(3); (b)(4).
A surviving spouse of a Veteran of a period of war, is eligible to receive non-service-connected death pension. A surviving spouse will be paid the maximum rate of death pension, reduced by the amount of countable income. 38 U.S.C.A.
§ 1541; 38 C.F.R. § 3.23. If the surviving spouse's income exceeds the maximum rate of pension, he or she is ineligible to receive death pension payments.
In determining income for this purpose, payments of any kind from any source, including salary, retirement or annuity payments, or similar income, which has been waived, are counted as income during the 12-month annualization period in which received unless specifically excluded. 38 U.S.C.A. § 1503; 38 C.F.R. § 3.271. Exclusions from income include the expenses of the Veteran's last illness and burial and for the Veteran's just debts, debts not incurred to secure real or personal property, if paid by the Appellant. 38 C.F.R. § 3.272 (h). Such expenses may be deducted only for the 12-month annualization period in which they were paid.
38 C.F.R. § 3.272 (h). Significantly, medical expenses in excess of five percent of the maximum income rate allowable may be excluded from an individual's income for the same 12-month annualization period, to the extent they actually were paid. 38 C.F.R. § 3.272 (g).
The monthly rate of pension shall be computed by reducing the applicable maximum annual pension rate (MAPR) by the countable income on the effective date of entitlement, dividing the remainder by 12 and rounding the result down to the nearest whole dollar amount. 38 C.F.R. § 3.273 (a). The MAPR is published in Appendix B of VA Manual M21-1 (M21-1) and is to be given the same force and effect as published in VA regulations. 38 C.F.R. § 3.21.
In the instant case, when the Appellant filed her claim for VA pension benefits as a surviving spouse in December 2011, the maximum death pension amount was $8,219.00. See 38 C.F.R. § 3.23. The question in this case is whether the Appellant's annual income from December 2011exceeded the statutory limit. The Board must make its decision on a year-by-year basis pursuant to statute.
Information received from the Appellant on her December 2011 application shows that her income for VA purposes at that time was $9,290.00, which would exceed the applicable MAPR for purposes of entitlement to non-service-connected death pension. Notwithstanding the above, the Appellant was given the opportunity to show that her net worth and income do not exceed the applicable MAPR. The MAPR is revised every December 1st and is applicable for the following 12-month period.
Since the April 2013 Supplemental Statement of the Case (which in actuality was the Statement of the Case and properly perfected thereafter), the Appellant has submitted copies of property taxes paid, Financial Status Reports dated in April 2013 and July 2013, Medical Expense Reports dated in March 2013 and May 2016, Attendant Affidavits (though signed and dated in 2019), and Improved Pension Eligibility Verification Reports dated in May 2016. However, a Supplemental Statement of the Case was not issued after the additional evidence was received and this procedural defect must be cured. 38 C.F.R. § 19.31.
A question has also been raised whether the Appellant remarried after the Veteran's death. Of particular note is a May 2016 Medical Expense Report indicating that $2,840.00, was paid between May and December 2014 by "spouse." Clarification must be sought upon Remand.
Accordingly, the case is REMANDED for the following action:
1. Clarify whether the Appellant remarried after the Veteran's death, and if so when. All requests for clarification and any documentation received in response to such request, must be added to the electronic record
2. Once the above action has been completed, and any other development as may be indicated by any response received as a consequence of the actions taken above, the RO must readjudicate the claim on appeal, to include consideration of all evidence received since the April 2013 Supplemental Statement of the Case. If any benefit remains denied, a supplemental statement of the case must be provided to the Appellant and her representative. After they have had an adequate opportunity to respond, the appeal must be returned to the Board for further appellate review.
The Appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West 2014).
______________________________________________
E. I. VELEZ
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB þAnnual report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2007. ¨Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission File Number 0-8092 (Exact name of small business issuer as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 94-1620407 (I.R.S. employer identification number) 323 Vintage Park Drive, Suite B, Foster City, CA 94404 (Address of principal executive offices and zip code) (281)216-9269 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ¨ Check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO ¨ Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO þ The issuer’s revenues for its fiscal year ended December 31, 2007 were Aggregate market value of the common equity held by non-affiliates of the issuer as of April 4, 2008 was $2,107,539. Number of shares outstanding of the issuer’s common stock as of April 4, 2008: 46,850,809 shares. TABLE OF CONTENTS PART I Page Item 1. Description of Business 2 Item 2. Description of Property 17 Item 3. Legal Proceedings 17 Item 4. Submission of Matters to a Vote of Security Holders 17 PART II Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities 19 Item 6. Management’s Discussion and Analysis or Plan of Operation 22 Item 6. Risk Factors 34 Item 7. Financial Statements 50 Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 50 Item 8A. Controls and Procedures 50 Item 8B. Other Information 51 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act 52 Item 10. Executive Compensation 55 Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 61 Item 12. Certain Relationships and Related Transactions 65 Item 13. Exhibits 65 Item 14. Principal Accountant Fees and Services 65 SIGNATURES 66 EXHIBIT INDEX 67 PART I CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS This annual report on Form 10-KSB and the documents incorporated by reference include “forward-looking statements.” To the extent that the information presented in this report discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “might,” “would,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” and “Management’s Discussion and Analysis and Plan of Operation” sections of this report. These cautionary statements identify important factors that could cause actual results to differ materially from those described in the forward-looking statements. When considering forward-looking statements in this report, you should keep in mind the cautionary statements in the “Risk Factors” section and “Management’s Discussion and Analysisor Plan of Operation” section below, and other sections of this report. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results could differ materially from those included in such forward-looking statements.
|
Citation Nr: 0839074
Decision Date: 11/13/08 Archive Date: 11/20/08
DOCKET NO. 06-34 127 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Sioux
Falls, South Dakota
THE ISSUES
1. Whether new and material evidence has been received in
order to reopen a claim of entitlement to service connection
for a respiratory disorder, to include asthma and COPD.
2. Whether new and material evidence has been received in
order to reopen a claim of entitlement to service connection
for a back disorder, to include degenerative arthritis.
3. Whether new and material evidence has been received in
order to reopen a claim of entitlement to service connection
for residuals of frozen feet.
4. Whether new and material evidence has been received in
order to reopen a claim of entitlement to service connection
for a nose disorder.
REPRESENTATION
Veteran represented by: Disabled American Veterans
WITNESSES AT HEARING ON APPEAL
The veteran and his spouse
ATTORNEY FOR THE BOARD
K. M. Schaefer, Associate Counsel
INTRODUCTION
The veteran served on active duty from February 1952 to
January 1954. He is the recipient of the Combat Infantryman
Badge.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a rating decision issued in March 2006
by the Department of Veterans Affairs (VA) Regional Office
(RO) in Sioux Falls, South Dakota.
In January 2007, the veteran and his spouse testified at a
personal hearing before a Decision Review Officer (DRO),
sitting at the RO. A transcript of the hearing is associated
with the claims file.
The veteran also filed timely appeals with the denial of a
compensable rating for a service-connected scar of the right
wrist and the denial of service connection for a scar on the
nose. However, in January 2007, the veteran withdrew his
appeal with regard to these issues; therefore, they are not
before the Board at this time.
The Board notes that the veteran's December 2005 claim
included a claim for service connection for breathing
problems. The Board observes that the RO framed this issue
as an attempt to reopen the veteran's claim for service
connection for asthma. However, the March 2006 rating
decision reflects that the veteran's diagnoses of asthma and
COPD were both considered by the RO in its adjudication.
Therefore, the Board determines that recharacterizing the
issue to be a claim to reopen a claim for service connection
for a respiratory disorder, to include asthma and COPD, is
not prejudicial to the veteran.
Please note this appeal has been advanced on the Board's
docket pursuant to 38 C.F.R. § 20.900(c) (2008). 38 U.S.C.A.
§ 7107(a)(2) (West 2002).
FINDINGS OF FACT
1. In a final rating decision issued in February 2005, the RO
denied claims to reopen a claim of entitlement to service
connection for asthma, COPD, a back disorder, residuals of
frozen feet, and a nose disorder.
2. Evidence added to the record since the prior final denial
in February 2005 is both cumulative and redundant of the
evidence of record at that time and does not raise a
reasonable possibility of substantiating the claims for
service connection for a respiratory disorder, to include
asthma and COPD, a back disorder, residuals of frozen feet,
and a nose disorder.
CONCLUSIONS OF LAW
1. The February 2005 rating decision is final. 38 U.S.C.A.
§ 7105 (West 2002); 38 C.F.R. §§ 3.104, 20.302, 20.1103
(2004) [(2008)].
2. New and material evidence has not been received to reopen
a claim of entitlement to service connection for a
respiratory disorder, to include asthma and COPD. 38
U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156(a) (2008).
3. New and material evidence has not been received to reopen
a claim of entitlement to service connection for a back
disorder. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. §
3.156(a) (2008).
4. New and material evidence has not been received to reopen
a claim of entitlement to service connection for residuals of
frozen feet. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. §
3.156(a) (2008).
5. New and material evidence has not been received to reopen
a claim of entitlement to service connection for a nose
disorder. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. §
3.156(a) (2008).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. VA's Duties to Notify and Assist
The Veterans Claims Assistance Act of 2000 (VCAA) imposes
certain duties upon VA to notify the claimant of the shared
obligations of the claimant and VA in developing his or her
claim and to assist the claimant by making reasonable efforts
to obtain relevant evidence in support of the claim. 38
U.S.C.A. §§ 5102, 5103, 5103A, 5107 (West 2002 & Supp. 2008);
38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2008). VA
must inform a claimant about the information and evidence not
of record that is necessary to substantiate the claims, the
information and evidence that VA will seek to provide, and
the information and evidence that the claimant is expected to
provide. 38 C.F.R. § 3.159(b)(1) (revised 73 Fed. Reg.
23353-23356, April 30, 2008); Quartuccio v. Principi, 16 Vet.
App. 183 (2002). Additionally, in the consolidated appeal
of Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006), the
Court of Appeals for Veterans Claims (Court) held that VCAA
notice requirements also apply to the evidence considered in
determinations of the degree of disability and effective date
of the disability once service connection has been
established. Further, for claims requiring new and material
evidence, the veteran must be notified that service
connection was previously denied and of the reason for that
denial. Kent v. Nicholson, 20 Vet. App. 1 (2006).
VCAA notice must be provided before the initial unfavorable
agency of original jurisdiction (AOJ) decision on the claims
for VA benefits. Pelegrini v. Principi, 18 Vet. App. 112
(2004). In this case, the veteran was provided with a VCAA
notification letter in January 2006, prior to the initial
unfavorable AOJ decision issued in May 2006.
The Board notes that, in Pelegrini, the Court held that VA
must request that the claimant provide any evidence in his
possession that pertains to the claim based upon 38 C.F.R.
§ 3.159(b). Nevertheless, during the course of the appeal,
38 C.F.R. § 3.159(b) was revised to eliminate the requirement
of requesting that the claimant provide any evidence in his
or her possession that pertains to the claims. See 73 Fed.
Reg. 23353 (final rule revising 38 C.F.R. § 3.159(b) to
rescind fourth element notice as required under Pelegrini,
effective May 30, 2008). Thus, any defect in notice as to
this element is considered harmless.
In reviewing the claims file, the Board observes that the
pre-adjudicatory VCAA notice issued in January 2006 informed
the veteran of the type of evidence necessary to establish
service connection, what is considered new and material
evidence, how VA would assist him in developing his claims,
and his and VA's obligations in providing such evidence for
consideration. This letter also advised him of the reasons
for the prior final denials of his claims, in accordance with
Kent.
With regard to the notice requirements under Dingess/Hartman,
a March 2006 letter provided proper notice as to disability
ratings and effective dates. Therefore, the Board finds that
the veteran was provided with all necessary notice under VCAA
prior to the initial adjudication of his claims, and that
further VCAA notice is not necessary prior to the Board
issuing a decision.
VA has also fulfilled its duty to assist the veteran in
making reasonable efforts to identify and obtain relevant
records in support of the veteran's claims and providing him
with a VA examination. The veteran's service treatment
records, VA medical records, private medical records, and the
reports of April 1989 and April 2000 VA examinations were
reviewed by both the AOJ and the Board in connection with
adjudication of his claims. The veteran has not identified
any additional, relevant records that VA needs to obtain for
an equitable disposition of the claims.
In light of the above, the Board concludes that the medical
evidence of record is sufficient to adjudicate the veteran's
claims without further development and additional efforts to
assist or notify the veteran in accordance with VCAA would
serve no useful purpose. See Soyini v. Derwinski, 1 Vet.
App. 540, 546 (1991) (strict adherence to requirements of the
law does not dictate an unquestioning, blind adherence in the
face of overwhelming evidence in support of the result in a
particular case; such adherence would result in unnecessarily
imposing additional burdens on VA with no benefit flowing to
the veteran). Therefore, the Board determines that the
veteran will not be prejudiced by the Board proceeding to the
merits of the claims.
II. Analysis
The veteran has advanced the following contentions:
* He fell into an oil pit while in service, could not
change his clothes for three weeks, and the lengthy
exposure to the fumes resulted in a current respiratory
disorder;
* He sustained a back injury while working KP in Fort
Hood, Texas leading to his current back disorder;
* He suffered frostbite of his feet while serving in Korea
during the Korean War, which has resulted in current
bilateral foot disorders; and
* He suffers a nose disorder, to include loss of sense of
smell, also as a result of the inhalation of oil fumes
he claims to have endured in service.
Thus, in accord with these contentions, he argues that
service connection is warranted for a respiratory disorder, a
back disorder, residuals of frozen feet, and a nose disorder.
In a February 2005 rating decision, the RO denied a claim to
reopen previously denied service connection claims for
asthma, COPD, a back disorder, and a nose disorder, to
include loss of sense of smell. Although the veteran had
submitted new evidence in the form of personal statements,
private treatment records, and VA treatment records, the RO
determined that the evidence submitted was not material.
Specifically, the claims with regard to asthma, COPD, and a
nose disorder were denied on the basis that the veteran had
not submitted evidence showing that he suffered the claimed
disorders in service or that they were related to his
military service. The claim to reopen the claim for a back
disorder was denied because no new evidence had been received
showing a relationship between the veteran's current back
disorder and his military service. The claim to reopen a
claim for service connection for frozen feet was denied on
the basis that the veteran had suffered a cold injury to his
feet prior to service and that there were no current findings
of a foot disorder related to a cold injury. Accordingly,
the RO denied reopening the veteran's claims of entitlement
to service connection for asthma, COPD, a back disorder, and
a nose disorder.
The next communication from the veteran with regard to these
claims, and the only communication from him within a year of
the February 2005 rating decision, was his January 2006
application to reopen his service connection claims for
breathing problems, a back disorder, a nose disorder, and
frozen feet, which are the subject of this appeal. The
veteran did not file a timely appeal with the February 2005
rating decision; therefore, that decision is final. 38
U.S.C.A. § 7105 (West 2002); 38 C.F.R. §§ 3.104, 20.302,
20.1103 (2004) [(2008)].
Generally, a claim which has been denied in an unappealed or
final RO decision or an unappealed Board decision may not
thereafter be reopened and allowed. 38 U.S.C.A. §§ 7104(b),
7105(c) (West 2002). The exception to this rule is
38 U.S.C.A. § 5108, which provides that if new and material
evidence is presented or secured with respect to a claim
which has been disallowed, VA shall reopen the claim and
review the former disposition of the claim.
The veteran filed his new and material claims in December
2005; thus, the definition of new and material evidence
applicable to the claim is as follows:
New evidence means existing evidence not
previously submitted to agency
decisionmakers. Material evidence means
existing evidence that, by itself or when
considered with previous evidence of
record, relates to an unestablished fact
necessary to substantiate the claim. New
and material evidence can be neither
cumulative nor redundant of the evidence
of record at the time of the last prior
final denial of the claim sought to be
reopened, and must raise a reasonable
possibility of substantiating the claim.
38 C.F.R. § 3.156(a).
For the purpose of establishing whether new and material
evidence has been submitted, the credibility of the evidence
is to be presumed. Justus v. Principi,
3 Vet. App. 510, 513 (1992).
Since the final February 2005 rating decision, the veteran
has submitted additional VA and private treatment records and
personal statements. However, this evidence is neither new
nor material, in that the information is cumulative and
redundant of the information of record in February 2005, and
it does not raise a reasonable possibility of substantiating
the veteran's claim.
Specifically, at the time of the February 2005 rating
decision, the veteran's service treatment records were of
record, as well as evidence of post-service treatment for
asthma, COPD, degenerative joint disease of the lumbar spine,
mild neuropathy of the lower extremities, and degenerative
changes in the bilateral feet and left ankle. There was no
medical evidence demonstrating either in-service or post-
service treatment for a current nose disorder, to include the
loss of sense of smell of record prior to that decision.
Since that decision, no competent evidence demonstrating
treatment or diagnosis of a respiratory disorder or a nose
disorder during service has been received. Further, the
veteran has also not submitted competent evidence showing a
relationship between his current respiratory or back
disorders and his military service or of a current diagnosis
of a nose disorder, to include the loss of sense of smell.
There is ample post-service evidence of chronic respiratory
disorders and a disorder of the veteran's back. However, the
only evidence that the veteran fell into an oil pit in
service and that exposure to the fumes from the oil pit
resulted in a chronic respiratory disorder or a disorder of
his nose remains the veteran's own statements. Similarly,
although there is evidence of in-service and post-service
treatment of the veteran's back, only his personal statements
address the question of etiology of the his current back
disorder.
With regard to the veteran's claim for residuals of frozen
feet, the veteran has received the Combat Infantryman Badge,
which denotes combat experience. Further, the Board
acknowledges the documented extreme temperatures endured by
the military stationed in Korea during the Korean War. Thus,
the veteran's cold injury to his feet during service is
conceded as consistent with the circumstances of combat. See
38 U.S.C.A. § 1154(b). However, no competent evidence has
been presented showing that he has a current disorder of his
feet that is related to a cold injury. The Board observes
that the veteran's current diagnosis of mild neuropathy of
the lower extremities has been associated with his diabetes
mellitus, and the only evidence to contradict this finding
and relate this bilateral foot disorder to service is the
statements of the veteran. Moreover, no relationship between
the degenerative changes of his bilateral feet and left ankle
and his cold injury has been documented by a competent
medical professional.
Laypersons are competent to speak to symptomology when the
symptoms are readily observable. Layno v. Brown, 6 Vet. App.
465, 469 (1994). However, only those with specialized
medical knowledge, training, or experience are competent to
provide evidence on the question of diagnosis and causation.
See Jones v. Brown, 7 Vet. App. 134, 137 (1994); Espiritu v.
Derwinski, 2 Vet. App. 492, 494 (1992). Moreover, lay
assertions of medical causation cannot suffice as new and
material evidence to reopen a claim. Moray v. Brown, 5 Vet.
App. 211 (1993). Thus, there remains no competent evidence
that the veteran has current respiratory, back, foot, and
nose disorders related to an event or injury during his
military service.
Therefore, the Board must conclude that the evidence added to
the record since the February 2005 denial is neither new nor
material in that it is both cumulative and redundant of the
evidence of record at the time of that decision and does not
raise a reasonable possibility of substantiating the
veteran's claims. As such, the Board finds that the evidence
received subsequent to the RO's February 2005 decision does
not qualify as new and material and that the requirements to
reopen the claims of entitlement to service connection for a
respiratory disorder, a back disorder, residuals of frozen
feet, and a nose disorder have not been met. Therefore, the
claims to reopen previously denied claims seeking service
connection for these disorders are denied.
ORDER
New and material evidence not having been received, the claim
to reopen a claim of entitlement to service connection for a
respiratory disorder, to include asthma and COPD, is denied.
New and material evidence not having been received, the claim
to reopen a claim of entitlement to service connection a back
disorder, to include degenerative arthritis, is denied.
New and material evidence not having been received, the claim
to reopen a claim of entitlement to service connection for
residuals of frozen feet is denied.
New and material evidence not having been received, the claim
to reopen a claim of entitlement to service connection a nose
disorder, to include loss of sense of smell is denied.
____________________________________________
ROBERT E. SULLIVAN
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Case 3:19-cv-00728-RCJ-CLB Document 37 Filed 06/29/20 Page 1 of 2
1. Steven E. Kroll, Esq.
2.
Nevada Bar #4309
550 Gonowabie Rd. Box 8
3.
Crystal Bay, Nv 89402
4. [email protected]
Tel. 6594039658
5.
6. Attorney for Plaintiffs
7.
8.
9.
10.
UNITED STATES DISTRICT COURT
11. DISTRICT OF NEVA D A
12.
13. RONALD L. CODE and STEVEN E. Case No. 3:19-CV-00728-RCJ-CLB
14.
KROLL,
Plaintiffs, Order for Dismissal with Prejudice
15.
vs.
16.
VAIL RESORTS, INC.,
17.
18.
Defendant.
19.
20.
Pursuant to Federal Rule of Civil Procedure 41, it is hereby stipulated be-
21.
tween Plaintiffs Ronald L. Code and Steven E. Kroll, by and through Counsel,
22.
23.
Steven E. Kroll for Plaintiffs, and Defendant Vail Resorts, Inc. ("VRI"), by and
24. through Counsel D. Lee Roberts, Jr. and Josephine E Groh (collectively referred to
25. as "the Parties"), that upon approval of the Court, the above-captioned action be,
and it thereby is, dismissed with prejudice, each party to bear their own fees and
27. costs.
28.
29.
Stipulation and Order for Dismissal, Page 1
Case 3:19-cv-00728-RCJ-CLB Document 37 Filed 06/29/20 Page 2 of 2
1.
2. DATED this J1:_ day of June, 2020.
3.
WEINBERG, WHEELER, HUDGINS,
4. GUNN & DIAL, LLC
5.
6.
7.
Steven E. Kroll D. ee oberts, Jr.
8. 550 Gonowabie Rd. Box 8 LR [email protected]
Crystal Bay, Nevada 89402 Josephine E. Groh, Esq.
9.
6594039658 [email protected]
10- [email protected] 6385 S. Rainbow Blvd., Suite 400
11. Las Vegas, Nevada 89118
Attorney for Plaintiffs
12.
Attorneys for Defendant Vail Resorts,lnc.
13.
14.
15. ORDER
16.
IT IS SO ORDERED.
17.
18.
19.
Dated June 29, 2020.
20.
UNITED STATES DISTRICT JUDGE
21.
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Stipulation and Order for Dismissal, Page 2
|
Name: Commission Regulation (EEC) No 134/88 of 19 January 1988 altering the import levies on products processed from cereals and rice
Type: Regulation
Subject Matter: character(0)
Date Published: nan
20 . 1 . 88 Official Journal of the European Communities No L 15/ 11 COMMISSION REGULATION (EEC) No 134/88 of 19 January 1988 altering the import levies on products processed from cereals and rice in the case of currencies which are maintained in rela tion to each other at any given moment within a band of 2,25 % , a rate of exchange based on their central rate, multiplied by the corrective factor provided for in . the last paragraph of Article 3 ( 1 ) of Regulation (EEC) No 1676/85, for other currencies, an exchange rate based on the arithmetic mean of the spot market rates of each of these currencies recorded over a given period in rela tion to the Community currencies referred to in the previous indent, and the aforesaid coefficient ; Whereas these exchange rates being those recorded on 18 January 1988 ; Whereas the aforesaid corrective factor affects the entire calculation basis for the levies, including the equivalence coefficients ; Whereas the levy on the basic product as last fixed differs from the average levy by more than 3,02 ECU per tonne of basic product ; whereas, pursuant to Article 1 of Commission Regulation (EEC) No 1579/74 (u ) the levies at present in force must therefore be altered to the amounts set out in the Annex hereto, HAS ADOPTED THIS REGULATION : Article 1 The import levies to be charged on products processed from cereals and rice covered by Regulation (EEC) No 2744/75 as fixed in the Annex to amended Regulation (EEC) No 4013/87 are hereby altered to the amounts set out in the Annex. Article 2 This Regulation shall enter into force on 20 January 1988 . THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to the Act of Accession of Spain and Portugal, Having regard to Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organization of the market in cereals ('), as last amended by Regulation (EEC) No 3989/87 (2), and in particular Article 14 (4) thereof, Having regard to Council Regulation (EEC) No 1418/76 of 21 June 1976 on the common organization of the market in rice (3), as last amended by Regulation (EEC) No 3990/87 (4), and in particular Article 12 (4) thereof, Having regard to Council Regulation No 1676/85 of 11 June 1985 on the value of the unit of account and the exchange rates to be applied for the purposes of the common agricultural policy (*), as last amended by Regu lation (EEC) No 1 636/87 (*), and in particular Article 3 thereof, Having regard to the opinion of the Monetary Committee, Whereas the import levies on products processed from cereals and rice were fixed by Commission Regulation (EEC) No 4013/87 Q, as last amended by Regulation (EEC) No 117/88 (8); Whereas Council Regulation (EEC) No 1906/87 (9) as amended by Council Regulation (EEC) No 2744/75 (10) as regards products falling within subheadings 2302 10, 2302 20 , 2302 30 and 2302 40 of the combined nomen clature ; Whereas, if the levy system is to operate normally, levies should be calculated on the following basis : This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 19 January 1988 . For the Commission Frans ANDRIESSEN Vice-President (') OJ No L 281 , 1 . 11 . 1975, p. 1 . (2) OJ No L 377, 31 . 12. 1987. 0 OJ No L 166, 25 . 6 . 1976, p. 1 . 0 OJ No L 377, 31 . 12 . 1987. 0 OJ No L 164, 24. 6 . 1985, p. 1 . ( «) OJ No L 153, 13 . 6 . 1987, p. 1 . 0 OJ No L 378 , 31 . 12. 1987, p. 13 .' (8) OJ No L '12, 16 . 1 . 1988 , p. 29 . O OJ No L 182, 3 . 7. 1987, p. 49 . (10) OJ No L 281 , 1 . 11 . 1975, p. 65 . (") OJ No L 168 , 25. 6 . 1974, p. 7. 20 . 1 . 88No L 15/ 12 Official Journal of the European Communities ANNEX to the Commission Regulation of 19 January 1988 altering the import levies on products processed from cereals and rice (ECU/tonne) CN code Import levies Third countries (other than ACP or OCT) ACP or OCT 1102 90 30 (2) 271,38 265,34 1103 12 00 0 271,38 265,34 1103 29 30 (2) 271,38 265,34 1104 12 10 0 153,38 150,36 1104 12 90 (2) 300,86 294,82 1104 22 10 (2) 268,36 265,34 1104 22 30 (2) 268,36 265,34 1104 22 50 (2) 238,88 235,86 1104 22 90 (2) 153,38 150,36 (2) For the purpose of distinguishing between products falling within heading Nos 1101 , 1102, 1103 and 1104 and those falling whithin subheadings 2302 10, 2302 20, 2302 30 and 2302 40, products falling within heading Nos 1101 , 1102, 1103 and 1104 shall be those meeting the following specifications : a starch content (determined by the modified Ewert polarimetric method), referred to dry matter, exceeding 45 % by weight, an ash content, by weight, referred to dry matter (after deduction of any added minerals), not exceeding 1,6 % for rice, 2,5 % for wheat, 3 % for barley, 4 % for buckwheat, 5 % for oats and 2 % for other cereals. Germ of cereals, whole, rolled, flaked or ground, falls in all cases within heading Nos 1103 and 1104. . |
603 P.2d 761 (1979)
Willie B. HALE, Appellant-Petitioner,
v.
The BOARD OF COUNTY COMMISSIONERS OF SEMINOLE COUNTY, Oklahoma, Appellee-Respondent.
Nos. 52533, 53576.
Supreme Court of Oklahoma.
November 27, 1979.
Valdhe F. Pitman, Eufaula, Robert J. Unruh, Jr., Oklahoma City, for appellant-petitioner.
Gordon R. Melson, Dist. Atty., Ada, for appellee-respondent.
OPALA, Justice:
In this matter, originally attempted to be prosecuted in the Court of Criminal Appeals as a misdemeanor appeal, the removed Sheriff [Sheriff] seeks review of an adverse judgment on a jury verdict in a proceeding by the Board of County Commissioners [Board], pursuant to 22 Ohio St. 1971 § 1194, to oust him from office. On the Board's motion to dismiss, the principal question to be answered is whether the Court of Criminal *762 Appeals or this court, either or both, may take cognizance of an appeal in which review is sought of a judgment rendered in a removal-from-office proceeding initially brought either upon a grand jury accusation pursuant to 22 Ohio St. 1971 § 1182 or, as in this case, upon a resolution of the board of county commissioners acting under the authority of 22 Ohio St. 1971 § 1194.[1] While we hold that this court has exclusive appellate jurisdiction in ouster-from-office cases, we allow this appeal to stand by giving our pronouncement prospective application and effect in accordance with the doctrine of Poafpybitty v. Skelly Oil Company, Okl., 394 P.2d 515, 520 [1964].
The chronology critical to our consideration here begins November 16, 1977 when the Sheriff was found guilty by a jury verdict on five different counts of misconduct in office. His motion for new trial, filed on November 28, was overruled and judgment on the verdict of conviction came to be imposed on December 6, 1977.[2] Within 10 days thereafter the Sheriff filed his "Written Notice of Intent to Appeal, Request for Transcript of Evidence, Request for Preparation of Record and Designation of Record on Appeal".[3] The petition-in-error was sought to be filed with the clerk of the Court of Criminal Appeals on March 23, 1978, within 120 days after judgment, as provided in 22 Ohio St. 1971 § 1054.[4] The record as a whole leaves us without the slightest doubt that the Sheriff's counsel, perhaps mindful of the terms of 22 Ohio St. 1971 § 1191, which require that an ouster proceeding be conducted "in all respects in the same manner as the trial of an indictment for a misdemeanor", has, from the very inception, attempted to prosecute this matter in strict compliance with the procedure applicable to misdemeanor appeals. He was stopped short of completing this task because the clerk, acting on orders of the Court of Criminal Appeals, refused to accept the tendered paperwork for filing as a criminal appeal in this case. Our attention to this problem was drawn some time later when the Sheriff sought here to command the filing of his appeal by mandamus to the Court of Criminal Appeals. On consideration of the Sheriff's plea this court directed the clerk to (a) treat this case "... as having been filed in the Court of Criminal Appeals ..." when the paperwork was originally tendered there on March 23, 1978 and (b) to transfer the case to this court "... where it shall be considered as an ordinary civil appeal brought on March 23, 1978 ..."
Although not without at least one attempt at critical reappraisal[5], Oklahoma case law from both this court and that of *763 criminal appeals did, between 1910 and 1977, treat the ouster judgment as "civil" and hence reviewable solely in the Supreme Court.[6] In 1977 State ex rel. Grand Jury etc. v. Pate[7] came for consideration. In that case this court held that the provisions of 22 Ohio St. 1971 § 1182 for ouster by grand jury accusation survived the 1971 amendment to Art. 2, § 18 Okl.Con., even though the amendment in question did not expressly authorize the inquisitorial body to exercise that power. The opinion concluded that an accusation under § 1182 "is an indictment charging the commission of a crime"[8] and "that an ouster proceeding has attributes and [is] in the nature of both a criminal action and civil action".[9] While these underlined phrases were no doubt used to acknowledge merely the hybrid nature of the applicable procedure which, since statehood, has required removal proceedings to be conducted as a misdemeanor trial,[10] their use has apparently created some uncertainty among lawyers as to the continued reviewability of the removal-from-office judgments in this court. Pate came to be perceived as a sharp break with precedent which placed ouster cases either in the category of criminal appeals or, at least, among sui generis proceedings[11] in which both courts may exercise reviewing cognizance.[12] Because of post-Pate doubt in the status of removal-from-office appeals, we invoke the powers vested in us by Art. 7, § 4 [adopted in 1967] to settle the jurisdictional question and prevent any recurrence of dispute over our appellate cognizance in these cases. We hold that in all district court proceedings for removal from office, no matter how instituted,[13] this court has exclusive jurisdiction on review and in original proceedings for a prerogative writ.
*764 Mindful of post-Pate uncertainty, we give our pronouncement prospective application. It will operate with effect from and after the date this opinion is promulgated. Poafpybitty v. Skelly Oil Company, supra.
This appeal will be treated as one falling in the sui generis class of proceedings over which either court of last resort may exercise jurisdiction. Since the case was timely brought in the other court, we reaffirm our previous order of transfer and deny the motion to dismiss.[14]
LAVENDER, C.J., IRWIN, V.C.J., and WILLIAMS, HODGES, BARNES, SIMMS and DOOLIN, JJ., concur.
HARGRAVE, J., disqualified.
NOTES
[1] Under the provisions of 22 Ohio St. 1971 § 1181 et seq. an ouster proceeding may be instituted either by a grand jury accusation or by action of the board of county commissioners. If the proceeding is brought upon grand jury accusation, it is variously styled as "State ex rel. Grand Jury of ____ Co. v. ____" [State ex rel. Grand Jury of McCurtain Co. v. Pate, Okl., 572 P.2d 226 [1977]], "State v. ____" [State v. Smith, 151 Okl. 183, 3 P.2d 178 [1931]] or "Grand Jury of ____ Co. v. ____" [Reubin v. Thompson, Okl., 406 P.2d 263, 264 [1965]]. If the proceeding is brought pursuant to a resolution of the board of county commissioners, it must be styled "The Board of County Commissioners of ____ Co. v. ____" [Smith v. State, 13 Okla. Crim. 619, 166 P. 463, 464 [1917]; Muskogee County, Oklahoma v. Lanning & McRoberts, 51 Okl. 343, 151 P. 1054 [1915]].
[2] Unless otherwise authorized by the judge, a motion for new trial in a criminal case must be filed before the date set for imposition of judgment. Rule 2.3B, Rules of the Court of Criminal Appeals, 22 Ohio St. 1971, Ch. 18, App.
[3] This procedure appears to be required in criminal appeals by Rules 2.3A and 2.7A, Rules of the Court of Criminal Appeals, 22 Ohio St. 1971, Ch. 18, App.
[4] Procedure in criminal appeals is governed largely by the Rules of the Court of Criminal Appeals which are given "the force of statute" by the provisions of 22 Ohio St. 1971 § 1051(b). The Sheriff complied both with the controlling statutes and the applicable rules. See Rule 2.3C, Rules of the Court of Criminal Appeals.
[5] Justice Riley, dissenting in McCasland v. Board of Com'rs, 126 Okl. 103, 258 P. 750, 753 [1927] appealed for a re-examination of the then extant exposition to relabel "a special proceeding in removal of officers" as "criminal in its nature". He called attention to the jurisdictions in which this view had been adopted. See annotation in 81 A.L.R. 1089 [1932].
[6] O'Bryan v. State, 26 Okl. 470, 109 P. 304 [1910]; State v. Alexander, 4 Okla. Crim. 370, 111 P. 655 [1910]; O'Bryan v. State, 4 Okla. Crim. 636, 112 P. 763 [1911]; Myers et al. v. State, 137 Okl. 272, 278 P. 1106 [1929]; State v. Scarth, 151 Okl. 178, 3 P.2d 446, 450 [1931], 81 A.L.R. 1082.
[7] Okl., 572 P.2d 226 [1977].
[8] 572 [email protected].
[9] 572 [email protected].
[10] 22 Ohio St. 1971 § 1191.
[11] Our research revealed at least one other [post-Pate] case in which the jurisdiction of the Court of Criminal Appeals was invoked in reliance on Pate to affect a pending removal proceeding by issuance of a writ of prohibition. George D. Snider, Petitioner v. Lloyd H. Henry, Respondent, P-78-395. A temporary order staying trial proceedings, issued 7-24-78, was later vacated on 3-6-79 by the decision not to assume original jurisdiction. In its decision the Court of Criminal Appeals recited:
"In State v. Scarth, 151 Okl. 178, 3 P.2d 446 (1931), the Oklahoma Supreme Court in its second Syllabus of the Court stated:
`An action to remove an official under a grand jury accusation is in its nature a civil and not a criminal action.'
"We realize that this case [was] criticized by the Oklahoma Supreme Court in State of Oklahoma ex rel. the Grand Jury of McCurtain County v. Pate, 572 P.2d 262 (1977), but until that court specifically designates ouster proceedings as one of a criminal nature we are without authority to assume jurisdiction."
[12] The dichotomous division of Oklahoma appeals into "civil" and "criminal" has never been perfectly airtight. Although case law expressions might reject the concept of "shared" power over any class of appeals by clinging to "undivided" and "exclusive" jurisdiction in each class, State v. Brown, 8 Okla. Crim. 40, 126 P. 245, 249 [1912] and Buck v. Dick, Warden, 27 Okl. 854, 113 P. 920 [1911], the marketplace reality contradicts such notion. Shared responsibility has been exercised in juvenile delinquency cases, Anderson v. Walker, Okl., 333 P.2d 570 [1958] and Killion v. Walker, Okl., 334 P.2d 454 [1959], and in direct contempt matters, Fulreader v. State, Okl., 408 P.2d 775, 776 [1965] and Sullivan v. State, Okl.Cr., 419 P.2d 559, 560 [1966]. Appeals in juvenile delinquency cases are now brought to the Court of Criminal Appeals, 10 O.S.Supp. 1979 § 1123, Carder v. Court of Criminal Appeals, Okl., 595 P.2d 416, 419 [1978], while direct contempt and habeas corpus matters remain a "mixed bag." Rule 1.10(c)(1) and (2), Rules on Perfecting a Civil Appeal, 12 O.S. Ch. 15 Ohio App. 2.
[13] Ouster proceedings may be instituted by grand jury accusation, 22 Ohio St. 1971 § 1182, by resolution of the board of county commissioners, 22 Ohio St. 1971 § 1194, or by the Attorney General, 51 Ohio St. 1971 § 94. Judicial removal proceedings before the Court on the Judiciary, though essentially "civil", are within the exclusive jurisdiction of that court. Sharpe v. State ex rel. Oklahoma Bar Association, Okl.Jud., 448 P.2d 301, 306 [1968].
[14] For appeals from sui generis proceedings our Rules 1.10(c)(1) and (2), as amended to become effective June 1, 1974, provide that if the case is brought timely in the wrong court, it shall be deemed timely in the proper forum.
|
DISSENTING OPINION.
I am unable to agree with the conclusion reached in this case by a majority of the court.
There is no contention concerning the facts. After appellant was willing to undergo the surgical operation for the relief of a right inguinal hernia resulting from an injury arising out of and in the course of his employment, he consulted two doctors selected by his employer and two doctors of his own choice. The doctors designated by the employer advised against the operation, and the doctors chosen by appellant advised him to undergo the operation.
Although appellee knew that its doctors had advised against the operation, appellee proffered the services of *Page 673
one of them to appellant. The offer was refused, and appellant submitted to the operation by a doctor of his own choosing.
The court, in its opinion, concedes that a refusal of such medical and surgical services by an employee does not bar his claim for compensation, unless the refusal is unreasonable, and refers to the case of Witte v. J. Winkler Sons, Inc.
(1934), 98 Ind. App. 466, 190 N.E. 72. In that case this court held that the burden of proving that the employee's failure to accept such services was unreasonable and without just cause is upon the employer.
There is no express provision in the Workmen's Compensation Act applicable to the facts here authorizing the employer to designate who the surgeon shall be, nor was such the intention of the Legislature. There is no provision in the statute denying the employee the privilege of choosing his own surgeon. The most that can be said of the statute is that it requires the employer to furnish the services in order to fix liability therefor within the period specified by the statute.
In the case of Witte v. J. Winkler Sons, Inc., supra,
this court very wisely stated (p. 475): "This question of the justification of an employee in refusing proffered services of a physician or surgeon tendered by his employer is one of great importance to this court as well as to the Industrial Board. . ..
"The question of whether an employee is justified in refusing to submit to a surgical operation proffered by his employer is one that has to do largely with the personal element. It is the employee upon whom the operation has to be performed, and his rights and interests should be seriously considered."
The question in the instant case is not whether the surgical services proffered by the employer were reasonable, but whether or not the refusal of the employee, *Page 674
under the facts and circumstances, was unreasonable. The bare fact that an employee desires to submit to the services of a physician or surgeon of his own choosing, and, by reason of that fact alone, all other facts being equal, refuses the same services proffered by his employer, is not of itself a sufficient basis to warrant the conclusion that such refusal was unreasonable.
It would be a harsh rule that bound an employee to submit to a surgical operation where life is at stake, at the hands of a surgeon, who, after diagnosing the case and consulting the patient, advised against the operation, simply because the surgeon is being furnished by the employer. Such is not the statutory law and was never intended to be. Any attempt to so make such a provision would not only be a travesty of justice but an unreasonable hardship upon employees.
To hold that the appellant, under the facts in the instant case, must be denied his compensation is not justified in fact or in law. Since the evidence is entirely lacking to sustain the conclusion reached by the Industrial Board, the award should be reversed. |
EXHIBIT CONSULTING AGREEMENT This Agreement is made effective as of December 1, 2008, by Applied NeuroSolutions, Inc. (APNS), of 50 Lakeview Parkway, Suite 111, Vernon Hills, IL60061 (the “Company”) and Peter Davies, Ph.D. (the “Consultant”).This Agreement is an amendment to and supercedes previous agreements between APNS (and its predecessor Molecular Geriatrics Corporation) and Dr. Davies dated October 13, 1992, October 13, 1992 and January 31, 1994, January 31, 2003 and renewed most recently on December 5, The Field of this Agreement shall be therapeutics for Alzheimer’s disease and precursor or related conditions, including any applications in other neurodegenerativediseases derived from the results of the research done under this Agreement, and the diagnosis of Alzheimer’s disease and precursor or related conditions and related proteins and reagents. The Consultant has a background in neurodegenerative disease research and is willing to provide services to the Company based on this background to assist, where necessary, in the advancement of the Company’s research and development of its Alzheimer’s disease (AD) diagnostic and therapeutic programs.The Company desires to have services provided by the Consultant. Therefore, the parties agree as follows: 1.DESCRIPTION OF SERVICES.The Consultant may be requested to provide the following services (collectively, the “Services”): (a) Assist in the implementation of an overall strategy for the development of the Company’s diagnostic and therapeutic programs. (b) Develop necessary research tools as requested by the Company. (c) Interact with Company management, staff, consultants, investors, etc., where needed. 2.PERFORMANCE OF SERVICES.The manner in which the Services are to be performed and the specific hours to be worked by the Consultant shall be determined by the mutual agreement of the Company and the Consultant. 3.PAYMENT.The Company will pay a fee to the Consultant for the other Services described in Section 1 of $9,000.00 per month in cash for the term of the agreement.Upon termination of this Agreement, payments under this paragraph shall cease; provided, however, that the Consultant shall be entitled to payments for periods or partial periods that occurred prior to the date of termination and for which the Consultant has not yet been paid. 4.EXPENSE REIMBURSEMENT.The Consultant shall be entitled to reimbursement from the Company for all “out-of-pocket” expenses incurred in the course of the Consultant’s service to the Company.Examples of such expenses are out-of-town transportation, lodging, parking, meals, phone, faxes, copying and postage.The Consultant must obtain the approval of the Company for any out-of-pocket expenses exceeding $500.00. 1 5.TERM/TERMINATION.This Agreement shall be effective for a period of 36 months.The Agreement is cancelable by either party without cause upon 30 days written notice to the other party.Termination of this Agreement shall not affect any rights or obligations which have accrued prior thereto. 6.RELATIONSHIP OF PARTIES.It is understood by the parties that the Consultant is an independent contractor with respect to the Company, and not an employee of the Company.The Company will not provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefit, for the benefit of the Consultant. 7.DISCLOSURE.The Consultant is required to disclose any outside activities or interests, including ownership or participation in the development of prior inventions, that conflict or may conflict with the best interests of the Company.Prompt disclosure is required under this paragraph if the activity or interest is related, directly or indirectly, to: - a development program of the Company -a product or product line of the Company -a manufacturing process of the Company 8.OWNERSHIP.Ownership of any information, inventions, or discoveries (whether patentableor not), improvements, innovations, suggestions, ideas, and reports, conceived, developed, or reduced to practice by Consultant as a result of Consultant's services under this Agreement, shall be governed by Paragraph 5.01 of Sponsored Research Agreement between Albert Einstein College of Medicine (A.E.C.O.M.) and Company, as amended. 2 9.CONSULTANT WARRANTIES.Consultant warrants and represents that execution and delivery hereof by Consultant and Consultant’s fulfillment of the terms of this Agreement are not inconsistent with other contractual obligations Consultant may have, or with the policies of the institution with which Consultant is associated, including, but not limited to, policies regarding the administration of grants and funded research. Consultant agrees that during the term of this Agreement, Consultant shall not become employed by, nor perform consulting services for, any person or entity reasonably determined by Company to constitute a competitor in Company’s field of business. If this Agreement is terminated by Company as a result of a breach hereof by Consultant, or is terminated by Consultant prior to the expiration of the term hereof, then Consultant shall not become employed by, nor perform consulting services for, any person or entity reasonably determined by Company to constitute a competitor in Company’s field of business for a period of one year after the termination, which agreement shall survive the termination. 10.INJURIES.The Consultant waives any rights to recovery from the Company for any injuries that the Consultant may sustain while performing services under this Agreement that are not a result of the gross negligence of the Company. 11.ASSIGNMENT.The Consultant’s obligations under this Agreement may not be assigned or transferred to any other person, firm, or corporation without the prior written consent of the Company.The Company may not assign this Agreement to a related or affiliated company without the prior written consent of the Consultant. 12.CONFIDENTIALITY.The Consultant shall exercise due care to prevent the unauthorized disclosure of Confidential Information.Confidential Information shall include all information concerning the Company and the field disclosed to Consultant or developed as a result of Consultant’s services under this Agreement, including, without limitation, the ideas, processes, methods, formulae, discoveries, inventions, procedures, techniques, software, designs, data and practices employed by the Company, except any portion thereof which is in the public domain or becomes part of the public domain through no breach by Consultant.Further, Consultant agrees not to use Confidential Information for any purpose other than that indicated in this Agreement without the Company’s prior written approval; response to which shall not be unduly delayed.Consultant agrees not to disclose any Confidential Information to any third party unless specifically authorized by the Company, or unless that party is bound by the same restrictions with respect to Confidential Information as the Consultant. 13.UNAUTHORIZED DISCLOSURE OF INFORMATION.If it appears that the Consultant has disclosed (or has threatened to disclose) Confidential Information in violation of this Agreement, the Company shall be entitled to an injunction to restrain the Consultant from disclosing, in whole or in part, such Confidential Information, or from providing any services to any party to whom such Confidential Information has been disclosed or may be disclosed.The Company shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages. 14.NOTICES.All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage prepaid, addressed as follows: IF for the Company: Applied NeuroSolutions, Inc. Ellen R.
|
91 F.3d 170
NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.BENJAMIN MOORE & CO., Appellant,v.DURON, INC., Appellee.
No. 96-1282.
United States Court of Appeals, Federal Circuit.
June 14, 1996.
ORDER
1
The appellant having failed to file the brief required by Federal Circuit Rule 31(a) within the time permitted by the rules, it is
2
ORDERED that the notice of appeal be, and the same hereby is, DISMISSED, for failure to prosecute in accordance with the rules.
|
Citation Nr: 0027400
Decision Date: 10/16/00 Archive Date: 10/26/00
DOCKET NO. 94-07 562 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Roanoke,
Virginia
THE ISSUES
1. Entitlement to an increased rating for chronic low back
pain with herniated nucleus pulposus at L5-S1, currently
evaluated at 40 percent.
2. Entitlement to service connection for a psychiatric
disability on a direct basis and as secondary to service
connected chronic low back pain.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESSES AT HEARING ON APPEAL
Appellant and friend
ATTORNEY FOR THE BOARD
M. Ferrandino, Associate Counsel
INTRODUCTION
The veteran had active service from August 1976 to August
1983.
By rating action of September 1983, service connection for
low back pain syndrome was granted. The veteran filed a
claim in September 1993 for an increased evaluation for
service connected lower back disability. This appeal arises
from the November 1993 rating decision from the Roanoke,
Virginia Regional Office (RO) that continued the evaluation
of the veteran's service connected back disability at 40
percent. A Notice of Disagreement was filed in December 1993
and a Statement of the Case was issued in January 1994. A
substantive appeal was filed in February 1994 with a request
for a hearing at the RO before a local hearing officer and a
request for a hearing at the RO before a member of the Board.
In March 1994, a hearing at the RO before a local hearing
officer was held.
This case was remanded in October 1996 for further
development.
In December 1996, the veteran withdrew his request for a
hearing at the RO before a member of the Board.
This appeal additionally arises from a March 1999 rating
decision from the Roanoke, Virginia RO that denied the
veteran's claim for service connection for depression as
secondary to the service connected chronic low back pain. A
Notice of Disagreement was filed in April 1999 and a
Statement of the Case was issued in June 1999. A substantive
appeal was filed in July 1999 with a request for a hearing
before a member of the Board in Washington, DC.
On August 9, 2000, a hearing was held at the RO before Iris
S. Sherman, who is a member of the Board rendering the final
determination in this claim and who was designated by the
Chairman of the Board to conduct that hearing, pursuant to 38
U.S.C.A. § 7102 (West Supp. 2000).
Additionally, the veteran, at the August 9, 2000 Board
hearing argued that his psychiatric disorder had its onset in
service. The issue of direct service connection will be
addressed in connection with the present appeal. He also
argued that he was unemployable due to his service connected
low back disability. The RO has not developed the issue of
entitlement to benefits based on individual unemployability
(TDIU). This issue is not inextricably intertwined with the
current appeal. As no action has been taken, it is referred
to the RO for the appropriate action.
The issue of an increased rating for chronic low back pain
with herniated nucleus pulposus at L5-S1 is the subject of
the Remand decision below.
FINDINGS OF FACT
1. The veteran has a diagnosis of a current psychiatric
disability.
2. A medical nexus opinion is of record concerning a
relationship between a psychiatric disability and service
connected low back disability.
3. The claim for service connection for a psychiatric
disability on a secondary basis is plausible.
4. The VA has a duty to assist in the development of the
claims of service connection for a back disability on a
direct and secondary basis.
CONCLUSION OF LAW
The claim of entitlement to service connection for a
psychiatric disability is well grounded. 38 U.S.C.A.
§ 5107(a) (West 1991); Caluza v. Brown, 7 Vet. App. 498
(1995), aff'd, 78 F.3d 604 (Fed. Cir. 1996) (per curiam)
(table).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Service connection means that the facts, shown by evidence,
establish that a particular injury or disease resulting in
disability was incurred in the line of duty in the active
military service or, if preexisting such service, was
aggravated by service. 38 U.S.C.A. § 1131 (West 1991); 38
C.F.R. § 3.303(a) (1999).
In Epps v. Gober, 126 F.3d 1464 (Fed. Cir. 1997), cert.
denied, 524 U.S. 940 (1998), the United States Court of
Appeals for the Federal Circuit (Federal Circuit) held that,
under 38 U.S.C. § 5107(a), the Department of Veterans Affairs
(VA) has a duty to assist only those claimants who have
established well grounded (i.e., plausible) claims. More
recently, the United States Court of Appeals for Veterans
Claims (Court or CAVC) issued a decision holding that VA
cannot assist a claimant in developing a claim which is not
well grounded. Morton v. West, 12 Vet. App. 477 (July 14,
1999), req. for en banc consideration by a judge denied, No.
96-1517 (U.S. Vet. App. July 28, 1999) (per curiam).
Once a claimant has submitted evidence sufficient to justify
a belief by a fair and impartial individual that a claim is
well-grounded, the claimant's initial burden has been met,
and VA is obligated under 38 U.S.C. § 5107(a) to assist the
claimant in developing the facts pertinent to the claim.
Accordingly, the threshold question that must be resolved in
this appeal is whether the appellant has presented evidence
that the claim is well grounded; that is, that the claim is
plausible.
In order for a claim to be well grounded, there must be (1) a
medical diagnosis of a current disability; (2) medical, or in
certain circumstances, lay evidence of in-service occurrence
or aggravation of a disease or injury; and (3) medical
evidence of a nexus between an in-service injury or disease
and the current disability. Epps, 126 F.3d at 1468; Caluza
v. Brown, 7 Vet. App. 498, 506 (1995), aff'd, 78 F.3d 604
(Fed. Cir. 1996) (per curiam) (table). Where the
determinative issue involves medical causation or etiology,
or a medical diagnosis, competent medical evidence to the
effect that the claim is "plausible" or "possible" is
required. Epps, 126 [email protected]. Further, in determining
whether a claim is well-grounded, the supporting evidence is
presumed to be true and is not subject to weighing. King v.
Brown, 5 Vet. App. 19, 21 (1993).
In regard to establishing a well-grounded claim, the second
and third Epps and Caluza elements (incurrence and nexus
evidence) can also be satisfied under 38 C.F.R. § 3.303(b)
(1999) by (1) evidence that a condition was "noted" during
service or during an applicable presumption period; (2)
evidence showing postservice continuity of symptomatology;
and (3) medical or, in certain circumstances, lay evidence of
a nexus between the present disability and the postservice
symptomatology. Savage v. Gober, 10 Vet. App. 488, 495-97
(1997).
Symptoms, not treatment, are the essence of any evidence of
continuity of symptomatology. Savage, 10 Vet. App. at 496.
Moreover, a condition "noted during service" does not
require any type of special or written documentation, such as
being recorded in an examination report, either
contemporaneous to service or otherwise, for purposes of
showing that the condition was observed during service or
during the presumption period. Id. at 496-97. However,
medical evidence is required to demonstrate a relationship
between the present disability and the demonstrated
continuity of symptomatology unless such a relationship is
one as to which a lay person's observation is competent. Id.
at 497.
In the case of a disease only, service connection also may be
established under section 3.303(b) by (1) evidence of the
existence of a chronic disease in service or of a disease,
eligible for presumptive service connection pursuant to
statute or regulation, during the applicable presumption
period; and (2) present disability from it. Savage, 10 Vet.
App. at 495. Either evidence contemporaneous with service or
the presumption period or evidence that is post service or
post presumption period may suffice. Id.
Service connection may also be granted for a disability that
is proximately due to or the result of a service connected
disease or injury. 38 C.F.R. § 3.310(a) (1999). Also, the
United States Court of Appeals for Veterans Claims has held
that secondary service connection on the basis of aggravation
is permitted under 38 C.F.R. § 3.310, and compensation is
payable for that degree of aggravation of a nonservice
connected disability caused by a service connected disorder.
Allen V Brown, 7 Vet. App. 430 (1995). A claim for secondary
service connection must, as must all claims, be well grounded
under 38 U.S.C. A. § 5107(a). Wallin v. West, 11 Vet. App.
509, 512 (1998). A claim for secondary service connection is
well grounded if there is medical evidence to connect the
asserted secondary condition to the service-connected
disability. See Velez v. West, 11 Vet. App. 148, 158 (1998).
In this case, a record from Denise L. Borden, M.D. from
January 1990 notes that the veteran was seen for low back and
neck pain and stiffness. It was additionally indicated that
the veteran had an element of mild depression associated with
the pain.
Also of record is a VA examination from February 1997,
wherein the diagnoses included past history of possible major
depressive episode which appeared to be in at least partial
remission and maybe some evidence of dysthymia. It was noted
that it was hard to say with certainty that the veteran's
depressive conditions were secondary to his back pain and it
was suspected that there was an element to his pain that was
above and beyond what was physically there, so a diagnosis of
somatoform pain disorder might also be tendered.
Therefore, the veteran has presented evidence of a current
psychiatric disability and evidence indicating that there is
a relationship between the service connected low back
disability and a psychiatric disability. Therefore, the
veteran's secondary service connection claim concerning a
psychiatric disability is well grounded. As the veteran has
established a well grounded claim for secondary service
connection, the claim for direct service connection will also
be considered well grounded. See Schroeder v. West, 212 F.3d
1265 (2000). Therein, the Court held that once a veteran has
established a well-grounded claim, the Secretary's duty to
assist pursuant to section 38 U.S.C.A. § 5107(a), includes
the "investigation of all possible in-service causes of that
current disability, including those unknown to the veteran."
Schroeder, 212 [email protected].
ORDER
The claim of entitlement to service connection for a
psychiatric disability is well grounded. To this extent
only, the appeal is granted.
REMAND
Because the claim of entitlement to service connection for a
psychiatric disability is well grounded, VA has a duty to
assist the appellant in developing facts pertinent to the
claim. 38 U.S.C.A. § 5107(a) (West 1991); 38 C.F.R. § 3.159
(1999); Murphy v. Derwinski, 1 Vet. App. 78 (1990).
The United States Court of Appeals for Veterans Claims
(Court) has held that the duty to assist includes obtaining
available records which are relevant to the claimant's
appeal. The duty to assist is neither optional nor
discretionary. Littke v. Derwinski, 1 Vet. App. 90 (1990).
In this case, the veteran reported at the August 2000 Board
hearing that sometime in the early 1990s a VA vocational
rehabilitation counselor made a connection between his
service connected low back disability and a psychiatric
disability. Further, the veteran reported treatment for a
psychiatric disability at the Boston VA Medical Center soon
after he separated from service and subsequently at the
Richmond, Virginia VA Medical Center. Therefore, these
records should be obtained.
The Court has also held that the duty to assist includes the
duty to obtain adequate and contemporaneous VA examinations.
Hyder v. Derwinski, 1 Vet. App. 221 (1991); Green v.
Derwinski, 1 Vet. App. 121 (1991). Where the record before
the Board is inadequate to render a fully informed decision,
a remand to the RO is required in order to fulfill the
statutory duty to assist. Ascherl v. Brown, 4 Vet. App. 371,
377 (1993). In this case, a VA examination is needed to
address the medical issues presented on appeal.
Further, the veteran contends that the RO erred by failing to
grant an increased rating for service connected low back
disability. He has thus stated a well-grounded claim for an
increased rating. A claim for an increased evaluation is
well grounded if the claimant asserts that a condition for
which service connection has been granted has worsened.
Proscelle v. Derwinski, 2 Vet. App. 629, 632 (1992).
In this case, another orthopedic examination of the veteran
should be ordered, as the medical evidence of record does not
adequately address the requirements of DeLuca v. Brown, 8
Vet. App. 202 (1995). In DeLuca, the United States Court of
Appeals for Veterans Claims (known as the United States Court
of Veterans Appeals prior to March 1, 1999) held that in
evaluating a service-connected joint, the Board erred by not
adequately considering functional loss due to pain under 38
C.F.R. § 4.40 and functional loss due to weakness,
fatigability, incoordination or pain on movement under 38
C.F.R. § 4.45. Thus, when considering the rating to be
assigned a service-connected joint, medical evidence must be
obtained as to any additional range of motion loss or
ankylosis due to pain on use, incoordination, weakness,
fatigability, or during flare-ups. DeLuca. When addressing
functional loss, the provisions of VAOPGCPREC 36-97 (December
1997) must be taken into account. This opinion provides that
Diagnostic Code (DC) 5293, intervertebral disc syndrome
(IDS), involves loss of range of motion and that 38 C.F.R. §§
4.40 and 4.45 must be considered when a disability is
evaluated under this diagnostic code. Thus, it must be
determined whether a higher rating is warranted under DC 5293
based on functional loss.
An additional neurological examination needs to be provided
as it was indicated at the February 1997 VA examination that
x-rays were not available for review. However, there is an
x-ray report from that same month as well as more recent MRI
reports located in the claims folder. The duty to assist a
veteran as provided for in 38 U.S.C.A. § 5107(a) has been
interpreted to require providing the veteran with a VA
examination that takes into account the records of prior
medical treatment. Green v. Derwinski, 1 Vet. App. 121
(1991). Therefore, as the veteran complains of radiating
pain, further examination is warranted so as to ensure that
the evaluation of the low back disability is a fully informed
one.
Finally, there is an indication in the record that the
veteran has been treated at the Richmond, Virginia VAMC for
the service connected low back disability. Treatment records
from these facilities should be requested prior to the VA
examination. Littke v. Derwinski, 1 Vet. App. 90 (1990).
The veteran's attention is directed to the following
regulations.
Sec. 3.655 Failure to report for
Department of Veterans Affairs
examination.
(a) General. When entitlement or
continued entitlement to a benefit cannot
be established or confirmed without a
current VA examination or reexamination
and a claimant, without good cause, fails
to report for such examination, or
reexamination, action shall be taken in
accordance with paragraph (b) or (c) of
this section as appropriate. Examples of
good cause include, but are not limited
to, the illness or hospitalization of the
claimant, death of an immediate family
member, etc. For purposes of this
section, the terms examination and
reexamination include periods of hospital
observation when required by VA.
(b) Original or reopened claim, or
claim for increase. When a claimant
fails to report for an examination
scheduled in conjunction with an original
compensation claim, the claim shall be
rated based on the evidence of record.
When the examination was scheduled in
conjunction with any other original
claim, a reopened claim for a benefit
which was previously disallowed, or a
claim for increase, the claim shall be
denied.
38 C.F.R. § 3.655 (1999).
Accordingly, the case is REMANDED to the RO for the
following:
1. The RO should contact the veteran
through his attorney and obtain the names
and addresses of all health care
providers who treated the veteran for the
service connected low back disability
since 1993 and for a psychiatric
disability since service. Thereafter,
the RO should obtain legible copies of
all records that have not already been
obtained, including from the Boston,
Massachusetts and Richmond, Virginia
VAMCs. The RO should obtain the
veteran's vocational rehabilitation file
and contact the veteran for assistance in
obtaining a statement from a vocational
rehabilitation counselor regarding a
connection between a psychiatric
disability and the service connected low
back disability.
2. Thereafter, the veteran should be
afforded a special psychiatric
examination regarding a psychiatric
disability and orthopedic and
neurological examinations to determine
the current severity of the chronic low
back pain with herniated nucleus pulposus
at L5-S1. Notification of the date, time
and place of the examination should be
sent to the veteran. The claims folder
must be made available to the examiners
for review prior to the examinations.
All necessary diagnostic testing should
be done to determine the full extent of
all disability present. All disability
should be evaluated in relation to its
history with emphasis on the limitation
of activity and functional loss due to
pain imposed by the disability at issue
in light of the whole recorded history.
Psychiatric examination: The examiner
should answer the following questions
below. In so doing, the examiner should
respond using any phrase appearing in
bold type in the question. Any such
phrase represents the standard of proof
that the Board uses in adjudicating
claims involving service connection. The
examiner should avoid using phrases like
"possibly", "may have", "could
have". If the physician agrees or
disagrees with any opinion of record
concerning the issue of secondary service
connection for a psychiatric disability,
he/she may, at his/her discretion,
comment on the reasons for any such
disagreement or agreement.
I. What is the current
diagnosis(es) of any existing
psychiatric disorder and when did
each have its onset?
II. Is it at least as likely as not
that any current psychiatric
disability is proximately due to or
the result of service connected low
back disability? If so, the
diagnosis of the particular
disability should be specified.
II. Is it at least as likely as not
that any current psychiatric
disability is being aggravated by
the service connected back
disability? If so, the diagnosis of
the back disability should be
specified and the degree of
aggravation should be quantified to
the extent feasible.
III. Is it at least as likely as
not that any current psychiatric
disability had its onset in the
veteran's service? If so, the
diagnosis of the particular
disability should be specified.
The orthopedic examiner should indicate
as follows: (The answers should be
numbered to correspond to the questions
posed.)
I. The ranges of motion of the
veteran's low back and the normal
ranges of motion.
II. Whether there is any muscle
spasm on extreme forward bending;
loss of lateral motion; abnormal
mobility on forced motion; listing
of whole spine to opposite side, or
positive Goldthwaite's sign.
III. Whether there is any pain,
weakened movement, excess
fatigability, or incoordination on
movement, and whether there is
likely to be additional range of
motion loss of the service connected
low back disability due to any of
the following: (1) pain on use,
including flare ups; (2) weakened
movement; (3) excess fatigability;
or (4) incoordination. The above
determinations must, if feasible, be
expressed in terms of the degree of
additional range of motion loss or
ankylosis (specify whether favorable
or unfavorable) due to pain on use
or during flare ups under § 4.45.
If the examiner is unable to make
such a determination, it should be
so indicated on the record.
The neurological examiner should
determine whether the veteran has any
neurological manifestations referable to
the service connected low back
disability. If so, all such
manifestations should be described in
detail. The discussion must include
notation as to whether the veteran has
persistent symptoms compatible with
sciatic neuropathy; characteristic pain;
demonstrable muscle spasm; or absent
ankle jerk or other neurological findings
appropriate to the site of any diseased
disc. If attacks of intervertebral disc
syndrome are present, the examiner should
note whether the attacks are recurrent,
whether there is intermittent relief or
whether there is little intermittent
relief. All factors upon which any
medical opinion is based must be set
forth for the record.
3. After the requested development has
been completed, the RO should again
review the veteran's claims for service
connection for a psychiatric disability
on a direct basis and as secondary to the
veteran's service connected low back
disability. This should include
consideration of the case of Allen v.
Brown, 7 Vet. App. 439 (1995) wherein the
Court held that service connection may be
warranted when aggravation of a
nonservice-connected condition is
proximately due to or the result of a
service connected condition. If any
benefit sought on appeal remains denied,
the veteran and his representative should
be furnished a supplemental statement of
the case and given the opportunity to
respond thereto.
3. The RO should additionally review the
veteran's claim for an increased rating
for service connected chronic low back
pain with herniated nucleus pulposus at
L5-S1 on the basis of all the evidence of
record. Consideration should be given to
38 C.F.R. §§ 4.40 and 4.45 and the
provisions of DeLuca. If any decision
remains adverse to the veteran, he and
his representative should be furnished a
Supplemental Statement of the Case. The
Supplemental Statement of the Case should
additionally include consideration and
discussion of 38 C.F.R. § 3.655 with
regard to the increased rating claim if
the veteran fails to appear for a
scheduled examination. If the veteran
fails to appear for a scheduled
examination, the RO should include
verification in the claims file as to the
date the examination was scheduled and
the address to which notification was
sent. The veteran and his representative
should then be afforded an opportunity to
respond.
Thereafter, the case should be returned to the Board, if in
order. The Vocational Rehabilitation file must accompany the
claims folder. The appellant has the right to submit
additional evidence and argument on the matter or matters the
Board has remanded to the regional office. Kutscherousky v.
West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West Supp. 2000) (Historical and
Statutory Notes). In addition, VBA's Adjudication Procedure
Manual, M21-1, Part IV,
directs the ROs to provide expeditious handling of all cases
that have been remanded by the Board and the Court. See M21-
1, Part IV, paras. 8.44-8.45 and 38.02-38.03.
Iris S. Sherman
Veterans Law Judge
Board of Veterans' Appeals
|
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS SEP 16 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
GANESH GAUTAM, No. 18-71657
Petitioner, Agency No. A089-313-544
v.
MEMORANDUM*
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted September 14, 2020**
San Francisco, California
Before: BADE and BUMATAY, Circuit Judges, and MÁRQUEZ,*** District
Judge.
Ganesh Gautam petitions for review of the Board of Immigration Appeals
(BIA) order dismissing his appeal from an Immigration Judge’s (IJ) denial of his
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Rosemary Márquez, United States District Judge for
the District of Arizona, sitting by designation.
applications for asylum and withholding of removal. We review the agency’s
factual findings for substantial evidence. Garcia-Milian v. Holder, 755 F.3d 1026,
1031 (9th Cir. 2014). Exercising jurisdiction under 8 U.S.C. § 1252, we deny the
petition for review.
1. Credibility determinations are based on the “totality of the
circumstances, and all relevant factors,” including “the consistency between the
applicant’s . . . written and oral statements.” 8 U.S.C. § 1158(b)(1)(B)(iii)
(asylum); 8 U.S.C. § 1231(b)(3)(C) (withholding of removal). When evaluating
discrepancies between statements, “an omission may form the basis for an adverse
credibility finding.” Lai v. Holder, 773 F.3d 966, 971 (9th Cir. 2014).
Substantial evidence supports the determination that Gautam was not
credible as to his testimony about a March 2008 encounter with the Maoists.
Gautam testified that a gun was held to his head during that incident, but he
omitted any mention of a gun in connection with that incident in the declaration
supporting his asylum application. This was a material detail that changed the
nature of the encounter and was more favorable to his position. See Zamanov v.
Holder, 649 F.3d 969, 973-74 (9th Cir. 2011).
The only explanation Gautam provided for that omission was that he “didn’t
know” that he needed to include it. In contrast, Gautam’s declaration mentioned a
gun in connection with a February 2008 incident. Because these factors
2
undermined Gautam’s credibility, substantial evidence supports the adverse
credibility determination and the BIA’s determination that Gautam failed to show
past persecution.
2. This court lacks jurisdiction to consider Gautam’s claim that the IJ
failed to undertake an individualized determination of his well-founded fear of
future persecution because Gautam did not exhaust that claim, and the BIA could
have remedied the alleged error. See Barron v. Ashcroft, 358 F.3d 674, 677-78
(9th Cir. 2004).
3. Additionally, substantial evidence supports the determination that
Gautam could safely and reasonably relocate within Nepal. See 8 C.F.R.
§§ 1208.13(b), 1208.16(b); see also Gonzalez-Hernandez v. Ashcroft, 336 F.3d
995, 999 (9th Cir. 2003).
Petitioner’s motion for judicial notice is denied.
PETITON DENIED.
3
|
KARLA KIMBRELL
Official Court Reporter, 380th District Court FILED IN
5th COURT OF APPEALS
2100 Bloomdale Road DALLAS, TEXAS
McKinney, Texas 75071 3/18/2015 1:25:27 PM
+1-219-940-6122 LISA MATZ
[email protected] Clerk
March 18, 2015
Lisa Matz, Clerk
Court of Appeals
Fifth District
600 Commerce Street
Dallas, Texas 75202
Re: In re: Stephen Bergenholtz, Relator; Cause No. 380-51444-2008, COA No. 05-15-
00350-CV
Clerk of the Court,
The Court has ordered the Reporter’s Record in the above case to be prepared by March
23, 2015.
There have been no payment arrangements made for the Reporter’s Record. Counsel for
Mr. Bergenholtz was notified on March 3, 2015 by email as to cost of the record. No
payment has been received.
Respectfully, please advise as to how this reporter should proceed regarding preparation
of the Reporter’s Record and as to responsibility for payment of such.
Thank you very much for your time and consideration.
Sincerely,
/s/
Karla Kimbrell
Official Court Reporter, 380th District Court
CC: Collin County District Clerk’s Office
|
986 F.2d 1428
2 A.D. Cases 880
NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.
Ivan C. REEDER, Plaintiff-Appellant,v.Anthony M. FRANK, Postmaster General of the United States,authorized representative of the United StatesPostal Service, Defendant-Appellee.
No. 92-4055.
United States Court of Appeals, Tenth Circuit.
Feb. 9, 1993.
Before JOHN P. MOORE, TACHA and BRORBY, Circuit Judges.
ORDER AND JUDGMENT*
TACHA, Circuit Judge.
1
After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed.R.App.P. 34(a); 10th Cir.R. 34.1.9. The case is therefore ordered submitted without oral argument.
2
Ivan C. Reeder is an employee of the United States Postal Service. After twice applying for and failing to receive a promotion, Reeder brought this suit against Anthony M. Frank, Postmaster General of the United States. In his lower court complaint, Reeder alleged causes of action for violation of §§ 501 and 504 of the Rehabilitation Act of 1973, 29 U.S.C. §§ 791, 794; for violation of the Postal Reorganization Act, 39 U.S.C. §§ 1001(b), 1103(b); and for breach of an implied employment contract and implied covenant of good faith and fair dealing. The district court granted summary judgment for the Postal Service on all of Reeder's claims. On appeal, Reeder contests only the disposition of the claims under the Rehabilitation Act. Reeder argues that summary judgment was improper for these claims because a genuine issue of material fact exists as to the § 501 claim and because the Tenth Circuit law precluding Reeder's § 504 claim is incorrectly decided.
3
As to Reeder's § 501 claim, we affirm for substantially the reasons given by the district court the conclusion that Reeder did not qualify as a handicapped person under the Act. See Memorandum [email protected]. Because Reeder's § 504 claim also requires an initial determination that the individual is handicapped, we dismiss as moot Reeder's request to reconsider our decision in Johnson v. United States Postal Service, 801 F.2d 1475 (10th Cir.1988), cert. denied, 439 U.S. 811 (1989).
4
AFFIRMED. The mandate shall issue forthwith.
*
This order and judgment has no precedential value and shall not be cited, or used by any court within the Tenth Circuit, except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel. 10th Cir.R. 36.3
|
498 So. 2d 1018 (1986)
Daryl Lee MEADOWS, Appellant,
v.
STATE of Florida, Appellee.
Nos. 85-1782, 85-1783.
District Court of Appeal of Florida, Second District.
December 12, 1986.
*1019 James Marion Moorman, Public Defender and Joseph Eugene Perrin, Asst. Public Defender, Bartow, for appellant.
Jim Smith, Atty. Gen., Tallahassee and Candance M. Sunderland, Asst. Atty. Gen., Tampa, for appellee.
RYDER, Judge.
Meadows appeals his conviction for armed burglary, his sentence for that count and five other counts, and the imposition of a public defender's lien. We affirm his conviction but remand for resentencing and a hearing on the public defender's lien.
Appellant's first point on appeal is without merit. Accordingly, we affirm his conviction for armed burglary.
Appellant's second point on appeal concerns the sentencing for armed burglary as well as other related charges. Prior to the imposition of appellant's sentence, the court held a hearing on appellant's violation of probation of an unrelated case. After finding appellant in violation of probation, sentence was imposed on all of the cases. The proper guidelines range for the applicable offenses was nine to twelve years. Appellant was sentenced to seventeen years on the armed burglary count, with concurrent sentences imposed for the remaining counts. The court listed violation of probation on the scoresheet and sentenced appellant to the maximum term for one cell above his recommended guidelines range. The trial court erred. A trial court has discretion to depart one cell for sentences imposed after a revocation of probation. Fla.R.Crim.P. 3.701(d)(14). The one cell discretionary increase refers to the sentence imposed for the offense for which probation was revoked. It does not authorize a one cell departure for the sentences of any other offenses which are pending at the time of the revocation of probation. Appellant was never on probation for the armed burglary and related charges. The unrelated case upon which defendant's probation was revoked was properly entered into the guidelines scoresheet as an assessment for legal constraint. Lewis v. State, 483 So. 2d 749, 750 (Fla. 2d DCA 1986). Accordingly, we vacate appellant's sentence in Case Nos. CF84-3836A1-XX and CF84-4488A1-XX and remand with instructions to resentence appellant within the guidelines unless valid written reasons for departure are set forth.
A review of the record indicates that appellant's third point on appeal has merit as well. Appellant argues that he was not given notice and an opportunity to be heard before the imposition of a public defender's lien at the close of trial. The *1020 record indicates that immediately after the imposition of sentences, the trial court asked the public defender if he had a lien. The public defender did not have one with him but told the court the amount he anticipated asking for. The public defender then asked appellant if he felt the fee was reasonable in light of his services, and appellant merely nodded his head. This dialogue does not comport with the mandate of section 27.56(7), Florida Statutes (1985), and Jenkins v. State, 444 So. 2d 947, 950 (Fla. 1984). The record does not indicate whether appellant had notice that a lien would be requested. Indeed, the public defender himself was unprepared for a hearing on a lien. Accordingly, we vacate the public defender's lien. Upon remand, we instruct the trial court that it is to impose a public defender's lien only after complying with the mandate of Jenkins.
Conviction affirmed. Sentence and public defender's lien vacated; remanded with instructions.
SCHEB, A.C.J., and SCHOONOVER, J., concur.
|
Exhibit 10.3
AGREEMENT OF SALE AND LEASEBACK
THIS AGREEMENT OF SALE AND LEASEBACK (this “Agreement”) made as of November 4,
2010 (the “Effective Date”), by and between THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC., a Maryland corporation (“A&P”), PATHMARK STORES, INC., a Delaware
corporation (“Pathmark”), PLAINBRIDGE LLC, a Delaware limited liability company
(“Plainbridge”), UPPER DARBY STUART, LLC, a Delaware limited liability company
(“UP STUART”), and LANCASTER PIKE STUART, LLC, a Delaware limited liability
company (“LP STUART”), each having an address at Two Paragon Drive, Montvale,
New Jersey 07645 (collectively referred to herein as “Seller”), and WE APP I
LLC, a Delaware limited liability company, having an address at c/o Winstanley
Enterprises LLC, 150 Baker Avenue Extension, Suite 303, Concord, Massachusetts
07142 (“Purchaser”).
W I T N E S S E T H:
WHEREAS, subject to the terms and conditions set forth below, Seller and
Purchaser desire to effectuate a “sale-leaseback” transaction;
WHEREAS, pursuant to the transaction, Seller agrees to sell, and Purchaser
agrees to purchase the “Properties” (defined below); and
WHEREAS, simultaneous with the sale of the Properties, Seller, as “Tenant,” and
Purchaser, as “Landlord” will enter into a lease for all or a portion of each of
the Properties, all on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS
1.1. Definitions.
As used herein the following terms shall have the following meanings:
“A&P” is defined in the Preamble to this Agreement.
“Applicable Law” means any laws, statutes, ordinances, codes, regulations,
rules, orders, or other requirements of any local, state or federal authority or
any other governmental entity or agency having jurisdiction over the Properties
or any part thereof, including, without limitation, any of the foregoing
affecting zoning, subdivision, building, health, traffic, environmental,
Hazardous Materials or flood control.
1
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“Business Day” means a day, other than Saturday or Sunday, on which commercial
banks in the State of New Jersey are open for the general transaction of
business.
“Closing” means (a) the transfer of the Properties from Seller to Purchaser;
(b) the Seller and Purchaser’s execution and delivery of the Supermarket Leases,
(c) the payment of the Purchase Price by Purchaser to Seller, and (d) the
delivery and performance of the other items and obligations to be delivered or
performed hereunder at the time the Properties are transferred and the Purchase
Price is paid.
“Closing Date” means November 8, 2010, subject to extension only as expressly
provided in this Agreement.
“Deeds” is defined in Section 3.4(a).
“Deposit” means the sum of Fourteen Million Dollars ($14,000,000.00), and any
interest or other earnings thereon.
“Escrow Agent” means the national office of Chicago Title Insurance Company
located at 265 Franklin Street, Boston, Massachusetts 02110.
“Environmental Report” means those certain Phase I Environmental Reports on the
Properties prepared by Whitestone Associates set forth on Exhibit I.
“Environmental Law” means any Applicable Law and binding administrative or
judicial interpretations thereof, relating directly to the exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, release or disposal of Hazardous Materials.
“Estoppel Requirement” is defined in Section 11.1(a).
“Existing Leases Assignment” is defined in Section 3.4(d).
“Existing Leases” means the existing leases on the Shopping Center Property set
forth on the Rent Roll. The Ground Leases shall not be considered Existing
Leases. At Closing, Purchaser shall purchase the Properties subject to the
Existing Leases.
“Existing Tenant Estoppels” means the estoppel certificates from the Existing
Tenants required pursuant to Section 11(a).
“Existing Tenants” means the tenants under the Existing Leases.
“Gas Station Lease” means that certain lease between Pathmark and the Gas
Station Tenant dated October 24, 1975 for certain space on the Lawnside
Property.
“Gas Station Tenant” means Leemilt’s Petroleum.
“Ground Landlord Estoppels” is defined in Section 11.1(b).
“Ground Landlords” means the landlords under the Ground Leases.
“Ground Lease Assignments” is defined in Section 3.4(e).
“Ground Leases” means the ground leases and basement lease applicable to the
Properties set forth on Exhibit C-2 attached hereto. At Closing, Seller shall
assign and Purchaser shall assume the tenant’s interest under each of the Ground
Leases.
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“Hazardous Materials” means all materials (including without limitation wastes,
pollutants and contaminants) in such quantity or concentration as to be subject
to regulation pursuant to Environmental Law, including oils, petroleum, and
petroleum products.
“HFF” is defined in Section 12.2(a).
“Improvements” means all buildings and other improvements located on the Parcels
and all fixtures attached or affixed, actually or constructively, to the
Parcels.
“Intangible Property” means all appurtenant easements, rights, and privileges
related to the Parcels and the Improvements (including, without limitation, all
approvals and development rights).
“Knowledge” means the actual knowledge of the present senior employees of the
Corporate Real Estate Department of the Seller, without any independent inquiry
other than the reading of this Agreement.
“Lawnside Property” means the Property located at 130 White Horse Pike,
Lawnside, New Jersey.
“Material Adverse Effect” means an effect that is materially adverse to the
physical or financial condition of the Properties, but shall exclude any effect
resulting from (i) any occurrence or condition generally affecting the retail
grocery industry; (ii) Acts of God and other force majeure events; (iii) the
public announcement of this Agreement or the transactions contemplated hereby;
and (iv) the acts or omissions of Purchaser or any of its Affiliates.
“Nemeroff” is defined in Section 12.2(a).
“Parcels” means the six (6) parcels of land described on Exhibits A-1 through
A-6 attached hereto (including, without limitation, all air rights and
subsurface rights).
“Partial Closing” means a Closing permitted to Purchaser under the provisions of
this Agreement with respect to less than all of the Properties. In the case of a
Partial Closing all of the provisions of this Agreement shall apply with respect
to the Properties subject to such Partial Closing and the Purchase Price in
connection with such Partial Closing shall be calculated based on the Purchase
Price allocated to the Properties subject to such Partial Closing as set forth
on Exhibit A (and the Deposit shall be applied to such Properties on a prorated
basis based on such allocation). If the matters affecting the Property or
Properties which have been removed from an initial Partial Closing (or Partial
Closings) are subsequently satisfied such that pursuant to this Agreement a
Partial Closing is to occur with respect to such Property or Properties, then
all provisions of this Agreement shall apply with respect to such Property or
Properties at the subsequent Partial Closing and the Purchase Price in
connection with such subsequent Partial Closing shall be calculated based on the
Purchase Price allocated to the Property or Properties subject to such
subsequent Partial Closing as set forth on Exhibit A.
“Permits” means all licenses permits, consents, authorizations, and approvals
with respect to the use, occupancy, possession and operation of the Parcels and
Improvements now or hereafter issued, approved or granted by any governmental
entity in connection with the Parcels and the Improvements.
“Permitted Encumbrances” is defined in Section 2.1.
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“Properties” means all of the Parcels, together with all of Seller’s right,
title or interest in the Improvements, Intangible Properties and the Permits
related to the Parcels, the Ground Leases and the Existing Leases and any
modifications or new leases made in accordance with the terms of this Agreement.
As the context so requires in this Agreement, a “Property” shall mean any one of
the six (6) Parcels and any Improvements, Intangible Properties, Permits, Ground
Leases and, with respect to the Shopping Center Property, the Existing Leases
related thereto.
“Purchase Price” means the sum of Eighty Nine Million Eight Hundred Thirty
Thousand Fifteen Dollars ($89,830,015.00). The Purchase Price shall be allocated
among the Properties in accordance with Exhibit A and is subject to adjustment
pursuant to the provisions of this Agreement.
“Purchaser” is defined in the Preamble to this Agreement.
“Rent Roll” means the rent roll regarding the Existing Leases set forth on
Exhibit C-1 attached hereto.
“Seller” is defined in the Preamble to this Agreement. “Settlement Statement” is
defined in Section 3.3.
“Shopping Center Property” means the Property located at 9210 Atlantic Avenue,
Queens (Ozone Park), New York.
“Stand Alone Properties” means the Properties other than the Shopping Center
Property.
“Supermarket Leases” means the six (6) supermarket leases to be entered into at
Closing between Seller, as “Tenant”, and Purchaser, as “Landlord”. For the
Shopping Center Property, the Supermarket Lease for that Property will have a
Demised Premises consisting of the current supermarket space on the Property;
for the Stand Alone Properties, the Demised Premises will be the entire Parcel.
The Supermarket Leases will be substantially in the forms attached hereto as
Exhibit B-1 through B-6 (including the guarantees attached thereto) and as
described in Section 9.1 below. Purchaser acknowledges and agrees that Seller
may designate either Pathmark or A&P to serve as the tenants under the
Supermarket Leases so long as A&P is either the tenant or guarantor under all of
the Supermarket Leases.
“Surveys” means the ALTA/ACSM surveys of the Properties listed on the attached
Exhibit C-3.
“Title Conditions” means the “Schedule B” conditions and requirements and other
title matters to be satisfied by Seller at or prior to the Closing as set forth
on the attached Exhibit C4.
“Unlimited Representations” means the representations and warranties of Seller
set forth in Sections 7.1(g) and 7.1(q).
“Utility Deposits” is defined in Section 3.3(c).
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ARTICLE 2 - SALE OF THE PROPERTY.
2.1. Properties to be Sold and Conveyed.
Subject to the terms, conditions and covenants of this Agreement, Seller agrees
to sell, convey and transfer good and marketable fee title (except with respect
to the portions of the Properties subject to the Ground Leases, for which
leasehold title shall be conveyed) and Purchaser agrees to purchase and accept
all of Seller’s right, title and interest in and to the Properties. The
Properties shall be sold subject only to (a) such easements, covenants,
restrictions, agreements, encumbrances and other matters of title of as
enumerated on Exhibit C5 attached hereto, (b) all present and future zoning and
other governmental laws and regulations, (c) all facts revealed by the Surveys,
and (d) the Existing Leases (the items enumerated in (a), (b), (c) and (d) are
hereinafter collectively referred to as the “Permitted Encumbrances”). Further,
in regard to the Lawnside Property, Seller will retain, and shall not assign,
the Gas Station Lease (that is, following the Closing the Gas Station Lease
shall be a sublease between the tenant under the applicable Supermarket Lease
and the Gas Station Tenant).
2.2. Payment of the Purchase Price.
The Purchase Price shall be paid as follows:
(a) The Deposit, to be paid by certified
check, bank check or wire transfer by Purchaser to Escrow Agent on the Effective
Date. The Deposit shall be held in a trust account in accordance with
Article 10. The Deposit shall be non-refundable to Purchaser, except as
expressly set forth in this Agreement, but shall be credited against the
Purchase Price at Closing; and
(b) The Purchase Price, at Closing, by wire
transfer to a bank and account designated by Seller, decreased by the Deposit,
and increased or decreased by the closing adjustments described in Article 3
below.
ARTICLE 3 - CLOSING
3.1. Closing Date.
The parties agree that the Closing shall take place on the Closing Date. TIME IS
OF THE ESSENCE of this Agreement and all covenants and deadlines hereunder.
3.2. Closing Place.
The Closing shall take place by escrow through the Escrow Agent or Purchaser’s
title insurance company.
3.3. Apportionments.
At the Closing, the following items shall be apportioned for the Properties as
of 11:59 p.m. on the day preceding the Closing Date (provided, however, that no
such items shall be apportioned with respect to the Stand Alone Properties
except for the Annual Fixed Rent to be paid under the applicable Supermarket
Leases):
(a) Taxes, water, sewer and any other cost or expense customarily apportioned in
a shopping center closing will be apportioned on the basis of a 30-day month and
on the basis of the accrual method of accounting. All such items attributable to
the period prior
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to the Closing Date shall be credited to Seller, and all such items attributable
to the period commencing on the Closing Date shall be credited to Purchaser;
(b) All real estate taxes assessed against
the Shopping Center Property shall be prorated between Seller and Purchaser on
an accrual basis based upon the actual current tax bills. If the most recent tax
bills received by Seller before the Closing Date are not the actual current tax
bills, then Seller and Purchaser shall initially prorate the taxes at closing by
applying 100% of the tax rate for the period covered by the most current
available tax bill to the latest assessed valuation, and shall reprorate the
taxes retroactively when the actual current tax bill is then available. All real
estate taxes accruing before the Closing Date shall be the obligation of Seller
and all such taxes accruing on and after the Closing date shall be the
obligation of Purchaser;
(c) The actual or estimated charges for
utilities accrued and payable by Seller shall be prorated between Seller and
Purchaser, provided Purchaser is required by law or elects to assume Seller’s
utility accounts. Deposits for utilities (the “Utility Deposits”), plus any
interest on the Utility Deposits to which Seller are or will be entitled that
are held by the provider of the utilities and which are freely transferable to
Purchaser, shall at the election of the Purchaser be assigned by Seller to
Purchaser and Purchaser shall pay Seller the full amount [email protected].
Seller shall retain the right to obtain a refund of any Utility Deposits which
are not required to be assigned to Purchaser, and Purchaser will cooperate with
Seller as reasonably requested in obtaining any refund. With respect to water,
sewer, electric and gas charges, Seller shall make reasonable efforts to obtain
a reading of the meter or other consumption measuring device as of the Closing
Date. If the Seller is unable to obtain such a reading, Seller shall furnish a
reading as of a date not more than thirty (30) days prior to the Closing Date
and the unknown charges shall be apportioned on the basis of an estimate
computed by utilizing such reading and the most recent bill from the utility
provider;
(d) Rent and all other amounts due under
the Ground Leases shall be prorated between Seller and Purchaser as of the
Closing Date based on the actual number of days in the month during which the
Closing Date occurs. Seller shall be entitled to a credit for any pre-paid rent
under any of the Ground Leases with respect to the month in which the Closing
Date occurs;
(e) The prorated Fixed Annual Rent under
the Supermarket Leases shall be credited to Purchaser as provided in Section 9.1
below; and
(f) The rent and any security deposit under the Existing Leases shall be
apportioned/credited as provided in Section 9.2 below. Any prepaid rents, rent
concessions, tenant improvement allowances or deposits on account of expenses
relating in whole or part to any period after the Closing shall be credited to
[email protected].
At Closing, the parties shall jointly execute a settlement statement (the
“Settlement Statement”) setting forth all adjustments and the basis for same.
Seller shall deliver to Purchaser a draft of the Settlement Statement with
appropriate back up information at least two (2) Business Days prior to the
Closing Date. All apportionments shall be subject to reconciliation for a period
of one (1) year following Closing.
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3.4. Seller’s Deliveries.
At the Closing, Seller shall, on compliance by Purchaser with the obligations of
Purchaser to be complied with under this Agreement prior to or at the Closing,
deliver to Purchaser each of the following:
(a) Deeds in the forms attached as
Exhibit D-1 through D-3, duly executed by Seller and in recordable form, to
convey to Purchaser title to the Properties, subject only to the Permitted
Encumbrances (the “Deeds”) together with such other instruments that are
required or customary for the Deeds to be recorded (including, without
limitation, any forms to be filed in connection with realty transfer fees,
transfer taxes, document stamps or similar charges);
(b) (i) A standard form affidavit of title
together with such other reasonable instruments or certifications reasonably
requested by Purchaser’s title insurer so that Purchaser may obtain title
policies for the Properties subject only to the Permitted Exceptions and
(ii) any reasonable instruments, certifications or funds required in connection
with the satisfaction of the Title Conditions;
(c) The Supermarket Leases, duly executed;
(d) An Assignment and Assumption of Leases
for the Existing Leases for the Shopping Center Property in the form attached
hereto as Exhibit E (the “Existing Leases Assignment”);
(e) An Assignment and Assumption of Ground
Lease for each of the Ground Leases in the form attached hereto as Exhibit F
(the “Ground Lease Assignments”);
(f) The Existing Tenant Estoppels and
the Ground Landlord Estoppels;
(g) Tenant attornment letters from Seller
to the Existing Tenants in the form of Exhibit G attached hereto;
(h) Affidavits sworn to by each party that
constitutes Seller, in the form attached hereto as Exhibit H, stating under
penalty of perjury that such Seller is not a foreign person as defined in
Section 1445 of the Internal Revenue Code and stating such Seller’s United
States taxpayer identification number;
(i) A Secretary’s Certificate from A&P
evidencing the necessary corporate approvals and authority of the Seller
hereunder and of the tenant(s) and guarantor under the Supermarket Leases in the
form attached hereto as Exhibit M and, if applicable, such other evidence of
authority as may be reasonably required by Purchaser’s title insurer in
connection with the transactions contemplated herein;
(j) The Settlement Statement;
(k) Original lease files for the Existing
Leases and the Ground Leases (including, without limitation, fully-executed
originals (if available) of the Existing Leases and the Ground Leases); and
(l) All books, records and other
documents, databases, computer files and other materials in the possession or
control of Seller and material to Purchaser’s ownership or
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operation of the Properties, including correspondence, Permits, licenses and
approvals, as-built drawings, plans and specifications, and guaranties and
warranties.
3.5. Purchaser’s
Deliveries.
At the Closing, Purchaser shall, on compliance by Seller with the obligations of
Seller to be complied with under this Agreement prior to or at Closing, and
satisfaction (or waiver by Purchaser) of all conditions set forth in Article 11
of this Agreement to Purchaser’s obligation to close, deliver to Seller each of
the following:
(a) The Purchase Price (subject to
Section 2.2(b));
(b) The Supermarket Leases;
(c) The Existing Leases Assignment;
(d) The Ground Lease Assignments; and
(e) The Settlement Statement.
3.6. Pre-submission.
Each party agrees to submit to the other party’s attorneys copies of all
documents to be delivered by such party at the Closing at least two (2) Business
Days prior to Closing to the extent available, or if same are not available at
said time, at such other time in as far in advance of the Closing as possible.
3.7. Realty Transfer Fee and Other Fees and Taxes.
(a) The realty transfer fee, transfer tax,
document stamps or similar charges imposed on or in connection with the transfer
of the Properties pursuant to this Agreement shall be paid by Seller. Any
mortgage recording tax incurred with respect to any financing of Purchaser or
commercial mansion fees shall be paid by Purchaser.
(b) Seller shall pay its own counsel fees.
(c) All fees of Purchaser’s counsel,
survey, due diligence, recording fees, and title insurance premiums with respect
to the transaction hereunder shall be paid by Purchaser.
(d) All other governmental fees and taxes,
if any, which are not otherwise addressed herein shall be paid in accordance
with local custom in the county where the respective Property is located.
3.8. Assessments.
If, on the Closing Date, the Properties or any part thereof shall be or shall
have been affected by an assessment or assessments which are or may become
payable in annual installments of which the first installment is then due or has
been paid, then for the purposes of this Agreement, the unpaid installments of
any such assessments shall all be considered due and payable and shall be
credited to Purchaser at or prior to Closing. Any other such assessments shall
be Purchaser’s responsibility to pay directly. Notwithstanding the foregoing,
this Section 3.8 shall not be applicable to the Stand Alone Properties.
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ARTICLE 4 - TITLE AND CONDITION OF PROPERTY
4.1. Title, Permitted Encumbrances.
Title to the Properties shall be delivered at the Closing, subject only to the
Permitted Encumbrances. Seller covenants and agrees (a) not to encumber the
Properties in any way during the pendency of this Agreement, (b) to deliver
title to the Properties subject only to the Permitted Encumbrances and (c) to
cause all Title Conditions to be satisfied on or prior to the Closing Date.
Without limiting the generality of the foregoing, Seller hereby agrees that on
or prior to the Closing Date Seller shall satisfy or cure all taxes, mortgages,
deeds of trust, judgments, attachments, mechanic’s or materialmen’s liens or
other such monetary encumbrances on the Properties.
4.2. Condition of Properties.
PURCHASER REPRESENTS, WARRANTS AND ACKNOWLEDGES TO AND AGREES WITH SELLER THAT
PURCHASER IS PURCHASING THE PROPERTIES IN THEIR “AS-IS”, “WHERE IS” CONDITION
“WITH ALL FAULTS” AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES,
REPRESENTATION OR GUARANTEES, EITHER EXPRESS OR IMPLIED, OF ANY KIND, NATURE, OR
TYPE WHATSOEVER FROM OR ON BEHALF OF THE SELLER, EXCEPT AS EXPRESSLY SET FORTH
HEREIN. Purchaser acknowledges that Purchaser has not relied, and is not
relying, upon any information, document, sales brochures or other literature,
maps or sketches, projection, proforma, statement, representation, guarantee or
warranty (whether express or implied, or oral or written, or material or
immaterial) that may have been given by or made by or on behalf of the Seller
except as expressly set forth herein.
ARTICLE 5 — PRE- CLOSING OBLIGATIONS
5.1 Covenants of Seller Pending Closing.
(a) From and after the Effective Date
through the Closing Date, except as otherwise provided by this Agreement, Seller
shall not enter into any contracts for services or otherwise that may be binding
upon the Properties or upon Purchaser, nor shall any easements be created or any
licenses given on the Properties, nor shall any legal action be taken with
respect to the Properties, nor enter into any new lease of space in the
Properties, amend, modify or waive any right under an Existing Lease (except as
provided in Section 9.2 below) or drawdown on any lease deposit or give a notice
of default or commence or threaten to commence any action against any tenant or
other third party having an interest in the Properties, or amend or take any
other action with respect to any of the Ground Leases, without the express prior
written consent of Purchaser in each instance, which consent shall be granted or
withheld in Purchaser’s sole discretion;
(b) From the Effective Date through the
Closing Date, except as otherwise provided by this Agreement, Seller shall
continue to operate the Properties in substantially the same manner as Seller
has prior to the Effective Date;
(c) From the Effective Date through the
Closing Date, except as otherwise provided by this Agreement, Seller shall not
initiate, consent to, approve or otherwise take any
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action with respect to a change in any Permit or applicable zoning or any other
governmental rules or regulations presently applicable to all or any part of the
Properties;
(d) From the Effective Date through the
Closing Date, Seller shall promptly give Purchaser a reasonably detailed written
notice of: (i) any fire, flood or other material adverse change with respect to
the Properties; (ii) any actual or proposed condemnation (or proceeding in lieu
thereof) of which Seller obtains Knowledge; (iii) any written notice received by
Seller claiming that the Property or the use and operation thereof fails to
comply with Applicable Law; (iv) any written notice given or received by or on
behalf of Seller claiming that Seller or any Existing Tenant is in default under
an Existing Lease; (v) any written notice given or received by or on behalf of
Seller claiming that Seller or any Ground Landlord is in default under any of
the Ground Leases; and (vi) any written notice received by any Seller concerning
any pending or threatened litigation or administrative proceeding affecting any
of the Properties; and
(e) From the Effective Date through the
Closing Date, Seller shall not sell or encumber all or any portion the
Properties or any direct or indirect interest therein or enter into any
agreement relating thereto.
ARTICLE 6 - CASUALTY AND CONDEMNATION
6.1 Casualty.
The risk of loss or damage to the Properties by fire or otherwise, beyond
ordinary wear and tear, shall be upon Seller until the Closing, provided
however, that, in the event of a casualty, Purchaser shall accept the Properties
in their then “as is” condition at Closing (which shall not be delayed as a
result of the casualty) and with respect to any casualty applicable to any
portion of the Shopping Center Property subject to an Existing Lease, Seller
shall, at the Closing, assign to Purchaser its rights under all insurance
proceeds as a result of such casualty (to the extent applicable to such
portion(s) of the Properties) and shall pay to Purchaser all insurance proceeds
received by Seller with respect thereto, and Purchaser shall receive a credit at
Closing in an amount equal to the deductibles under the insurance policies
applicable thereto (provided, however, that with respect to any of the Stand
Alone Properties or any portion of the Shopping Center Property that will be
subject to a Supermarket Lease upon the Closing, Seller shall not so assign such
rights, and Purchaser’s and Seller’s rights and obligations following the
casualty shall be governed by the applicable Supermarket Lease). Notwithstanding
the foregoing, in the event that any casualty at a Property affects more than
ten percent (10%) of the Improvements for such Property or entitles an Existing
Tenant to terminate its Existing Lease or cease paying all or some of its rent
or entitles a Ground Landlord to terminate its Ground Lease or would entitle a
tenant under a Supermarket Lease (under the provisions of the applicable
Supermarket Lease to be delivered at Closing) to terminate the applicable
Supermarket Lease or cease paying all or some of its rent, then Purchaser shall
have the right to remove such Property from this Agreement by giving notice of
same to Seller within ten (10) Business Days after the casualty, and the parties
shall proceed to a Partial Closing without such Property.
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6.2 Condemnation.
(a) In the event that a permanent (or
temporary that exceeds thirty (30) days) public condemnation, eminent domain or
other taking proceeding shall be completed, commenced or threatened against an
entire Property, or a material portion of any Property, prior to Closing, such
that the Property cannot, in Purchaser’s reasonable judgment, be used for its
intended purpose or which will impact access or parking, permit an Existing
Tenant to terminate its Existing Lease or stop paying full rent, permit a Ground
Landlord to terminate its Ground Lease, entitle a tenant under a Supermarket
Lease (under the provisions of the applicable Supermarket Lease to be delivered
at Closing) to terminate the applicable Supermarket Lease or stop paying full
rent or reduce the value of any of the Properties by more than ten percent
(10%), then Purchaser shall have the right to remove such Property from this
Agreement by giving notice of same to Seller within ten (10) Business Days after
the condemnation notice or other event giving Purchaser such termination right,
and the parties shall proceed to a Partial Closing without such Property.
(b) In the event of a permanent public
condemnation, eminent domain or other taking proceeding of a portion of the
Properties prior to Closing, which is not described in Section 6.2(a), Purchaser
shall complete the sale without any adjustment to the Purchase Price or other
compensation for such condemnation except that any proceeds received by the
Seller before the Closing on account thereof shall be paid over to Purchaser at
Closing as a Closing adjustment, and Seller shall transfer and assign to
Purchaser at Closing all of Seller’s rights and interests in and to such award
and proceeds and any proceeds received by the Seller after Closing on account
thereof shall be paid over to Purchaser as a post-closing adjustment.
(c) The provisions of this Section 6.2 shall survive the Closing; provided,
however, in the event of any inconsistency between the provisions of this
Section 6.2 and any applicable provisions of any of the Supermarket Leases, the
applicable provisions of the applicable Supermarket Lease or Supermarket Leases
shall govern and control.
ARTICLE 7- REPRESENTATIONS AND WARRANTIES
7.1 Warranties and Representations of Seller.
Seller represents and warrants to, and covenants and agrees with, Purchaser as
of the Effective Date (and on the Closing Date shall be deemed to reaffirm all
such representations, covenants and warranties as of that date) that:
(a) Seller is duly organized, validly
existing and in good standing under the laws of the state of its
incorporation/formation and authorized to do business in the jurisdictions where
the Properties are situate. The execution, delivery and performance by Purchaser
of the terms of this Agreement have been duly authorized by all necessary
corporate action and do not conflict with the organizational/formation documents
of Seller or any agreement to which Seller is bound or is a party or requires
the consent of any party;
(b) Seller has the legal right, power and
authority to enter into this Agreement and to perform all of its obligations
hereunder, and this Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable in accordance with its terms. The execution
and delivery by Seller of this Agreement and the Seller’s performance hereunder
will
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not conflict with, or result in a breach of, any of the terms, covenants and
provisions of any agreement or instrument to which Seller is a party or by which
it is bound, or, to Seller’s Knowledge, any Governmental Regulation, or
judgment, writ, injunction or decree of any court or governmental authority
affecting Seller. The individual executing this Agreement on Seller’s behalf has
been duly authorized to do so by all necessary all corporate action;
(c) Seller does not have Knowledge of any
pending or threatened condemnation, eminent domain or similar proceeding
affecting the Properties or any portion thereof;
(d) To Seller’s Knowledge and except as
would not have a Material Adverse Effect, there are no suits, actions, claims or
proceedings pending or threatened against or affecting the Properties, the
Permits or any of the transactions provided for herein before any court or
administrative agency or officer (including, without limitation, any bankruptcy,
insolvency or similar proceeding) seeking to restrain, enjoin or otherwise
prohibit the consummation of any of the transactions contemplated by this
Agreement, and Seller has not breached or otherwise failed to perform with
respect to any judgment, order, writ, injunction, rule or regulation of any
court or governmental agency or office to which Seller is subject in any way
affecting the Seller (but only to the extent that any such breach or failure to
perform could reasonably be expected to have a Material Adverse Effect on
Purchaser following the Closing), the Properties, the Permits or any of the
transactions provided for herein;
(e) Seller does not have Knowledge of any
pending or threatened special assessments affecting the Properties or any
portion thereof. There is no application or proceeding pending with respect to
the reduction of the assessed valuation of any portion of the Properties;
(f) Seller is familiar with the
provisions of Sections 897 and 1445 of the Internal Revenue Code (the “Code”),
and Seller is not a “foreign person” or “disregarded entity” as those terms are
defined in Section 1445(f)(3) of the Code;
(g) No bankruptcy or insolvency proceeding or petition under the U.S. Bankruptcy
Code or any state bankruptcy or insolvency law filed by or against Seller is
pending, or, to Seller’s Knowledge, threatened. Seller has not caused, suffered
or consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator or similar official in any federal, state or foreign
judicial or non judicial proceeding, to hold, administer and/or liquidate all or
substantially all of its assets, or made an assignment for the benefit of
creditors. Seller is solvent, and Seller will not be made insolvent by the
consummation of the transactions contemplated by this Agreement, nor does Seller
contemplate any pending insolvency or believe or have reason to believe that it
will not be able to pay its debts and other obligations as they become due (the
parties acknowledge and agree that the terms and phrases used in this sentence
shall be interpreted in accordance with Section 548 of the U.S. Bankruptcy
Code). Seller did not enter into this Agreement and the Seller will not
consummate the transactions contemplated by this Agreement with any intent to
hinder, delay or defraud any creditors. The Purchase Price is good and valuable
consideration for the Properties and has been negotiated in an arm’s length
transaction between Seller and Purchaser; without limitation of the foregoing,
Seller continued to market the Properties until immediately prior to the
execution of this Agreement upon a separate
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understanding between Purchaser and Seller, which understanding is terminated by
the execution of this Agreement, that Purchaser would have the right to match
any materially higher offers received by Seller in connection with the sale of
the Properties;
(h) To Seller’s Knowledge, except as
disclosed in the Environmental Reports, (i) there has never been any release of
Hazardous Materials into the environment from the Properties, or in, on or under
the Properties, that has not been remediated in accordance with all
Environmental Laws; and (ii) there are no underground fuel or oil storage tanks
located at the Properties;
(i) Other than the Existing Leases (and
one (1) lease at the Property located in Lawnside, New Jersey that will be a
sublease under the Supermarket Lease at such Property following the Closing in
respect of which Purchaser shall have no responsibility, obligation or
liability), there are no leases or other agreements (written or verbal) that
grant any possessory interest in and to any space situated on or in the
Properties or that otherwise give rights with regard to use of the Properties
for occupancy of any kind affecting the Properties;
(j) To Seller’s Knowledge, there are no
service, maintenance, supply or other similar contracts affecting the Properties
that will be binding on Purchaser; and in the event that any such contracts are
discovered after the Closing, Seller shall satisfy all obligations thereunder
and terminate such agreements and within ten (10) Business Days following
Purchaser’s written demand, and pay in full any cost, demand, claim or other
expense of any kind or nature related thereto;
(k) Seller has not received written notice
of any uncured claims, demands, suits, orders, decrees or judgments relative to
violations of (i) any of the Permits or any conditions thereof, or (ii) or any
easement, restrictive covenant or other matter of record affecting the
Properties;
(l) The Existing Leases are in full force and effect and have not been modified,
amended, extended or assigned, except as expressly set forth in the Rent Roll.
With respect to the Existing Leases: (i) the rents and other charges payable by
the Existing Tenants under the Lease are being paid on a current basis and there
are no arrearages; (ii) there are no existing defaults by either Seller as the
landlord, or to Seller’s Knowledge, the Existing Tenants, nor to Seller’s
Knowledge are there any existing state of facts or conditions which, upon
passage of time and/or giving of notice, could give rise to a default by either
Seller as the landlord or the Existing Tenants; (iii) no rent under the Existing
Leases have been paid more than thirty (30) days in advance; (iv) there are no
security deposits under any Existing Leases except as shown on the Rent Roll,
and any such security deposits are cash security deposits; and (v) all brokerage
commissions and tenant improvement allowance (and any other amount payable to a
tenant) payable by Seller as landlord (whether or not then due and payable)
under or with respect to the Existing Leases, including, without limitation, any
renewal or extension thereof have been paid in full or will be as of the Closing
or credited to Purchaser against the Purchase Price. Seller has properly
performed all work required to be performed by landlord under each of the
Existing Leases in accordance with provisions of the Existing Leases and, as the
landlord under the Existing Leases, Seller has no further construction
obligations, whether for initial construction or with respect to any expansion
options, and has paid in full any tenant improvement contributions
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or other allowances. To Seller’s Knowledge, any documents, test results or other
submissions required to be delivered to the Existing Tenants under the Existing
Leases have been delivered. Seller has no Knowledge that any Existing Tenant
intends to vacate its space, cease operating for business or request protection
under any bankruptcy laws, insolvency laws or other similar laws. The
information on the Rent Roll is materially true and accurate and Seller has
provided true, correct and complete copies of the Existing Leases to Purchaser.
No lease security deposit has been drawdown on;
(m) Seller has not given or received a notice
of any violation of any Applicable Law governing either of the Properties or any
covenant, condition or restriction or any agreement contained in any instrument
encumbering or benefiting either of the Properties that remains uncured;
(n) No person, firm, corporation or other
entity has any right or option (including, without limitation, any right of
first refusal or first offer) to purchase the Properties or any portion thereof;
(o) Seller has delivered to Purchaser true,
correct and complete copies of the Ground Leases. The Ground Leases are in full
force and effect, have not been amended, modified or supplemented, and each
constitutes the entire agreement between Seller and the applicable Ground
Landlord. There is no default by Seller, nor to Seller’s Knowledge any Ground
Landlord under any of the Ground Leases and, to Seller’s Knowledge, no condition
or event that, with the passage of time or giving of notice, or both, has
occurred that would constitute such a default. No security deposit has been
provided in connection with any of the Ground Leases. No brokerage or leasing
commission or fee payable by the tenant under any the Ground Leases is or will
hereafter be due, and there are no agreements that will obligate Purchaser to
pay any such amount on or after Closing in connection with any renewals or
extensions or amendments of any of the Ground Leases;
(p) The sales and EBITDA information
attached as Exhibit J is true, correct and accurate in all material respects;
and
(q) At Closing there shall not be any collective bargaining agreements,
management agreements or other employee agreements binding on Purchaser and
Purchaser shall have no obligation with respect to any employees, and the only
employees at the Properties shall be the employees of the tenants under the
Existing Leases and the Supermarket Leases (and the only such collective
bargaining agreements, management agreements or other employee agreements shall
be binding on such tenants, but not Purchaser).
7.2 Survival.
The representations and warranties made by Seller in Section 7.1 are true and
correct as of the date of this Agreement and shall be true and correct and
deemed repeated as of Closing, and shall survive Closing for a period of twelve
(12) months, provided however, the Unlimited Representations shall survive
closing indefinitely without any such limitation on survival.
7.3 Warranties and Representations of
Purchaser.
Purchaser warrants and represents to, and covenants and agrees with, Seller as
follows:
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(a) Purchaser is a limited liability
company, has full power and authority to execute, deliver and carry out its
obligations under this Agreement and all documents to be executed in connection
herewith and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement and all documents to be executed in connection
herewith. All persons executing this Agreement on behalf of the Purchaser have
been duly authorized to do so;
(b) This Agreement is the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms;
(c) The execution, delivery and
performance of this Agreement by Purchaser in accordance with its terms, will
not violate, conflict with or result in the breach of any agreement or any law,
regulation, contract, agreement, commitment, order, judgment or decree to which
Purchaser is a party or by which it is or may be bound;
(d) No bankruptcy or insolvency proceeding
or petition under the U.S. Bankruptcy Code or any state bankruptcy or insolvency
law filed by or against Purchaser is pending, or, to Purchaser’s knowledge,
threatened. Purchaser has not caused, suffered or consented to the appointment
of a receiver, trustee, administrator, conservator, liquidator or similar
official in any federal, state or foreign judicial or non judicial proceeding,
to hold, administer and/or liquidate all or substantially all of its assets, or
made an assignment for the benefit of creditors; and
(e) Purchaser has funds sufficient for the Purchase Price. Purchaser
acknowledges and agrees that this transaction is not contingent upon financing
of any kind or the availability of any specific funding source.
7.4 Survival.
The representations made by Purchaser in Section 7.3 are true and correct as of
the date of this Agreement and shall be true and correct and deemed repeated as
of Closing, but shall not survive Closing.
ARTICLE 8- DEFAULT
8.1 Default by Purchaser.
In the event that Purchaser defaults under this Agreement and such default
continues for five (5) days after written notice from Seller to Purchaser
specifying such default, Seller shall have as its sole and exclusive remedy the
right to terminate this Agreement and retain the Deposit without the necessity
of proving actual damages due to the difficulty of proving actual damages
resulting from the breach of this Agreement by Purchaser. In the event that
litigation ensues regarding Seller’s right to retain the Deposit and Seller
ultimately prevails, Purchaser hereby waives any right to challenge the
enforceability of this Section 8.1 or its reasonability.
8.2 Default by Seller.
In the event that Seller defaults under this Agreement and such default
continues for five (5) days after written notice from Purchaser to Seller
specifying such default, the Deposit shall immediately be refunded to Purchaser
following Purchaser’s written demand and Purchaser
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shall, as its sole and exclusive remedy, have the right either (a) to seek
specific performance of this Agreement, or, in the alternative (or if Purchaser
sought specific performance and such remedy was denied or otherwise not
available to Purchaser for any reason), (b) to terminate this Agreement and
receive liquidated damages of $2,000,000 from Seller without the necessity of
proving actual damages due to the difficulty of proving actual damages resulting
from the breach of this Agreement by Seller. In the event that litigation ensues
regarding such liquidated damages or the amount thereof, Seller hereby waives
any right to challenge the enforceability of this Section 8.2 or its
reasonability. The parties agree that except as expressly set forth in this
Section 8.2 no damages of any kind whatsoever (including, without limitation,
compensatory, special or consequential damages) shall be awarded as a result of
Seller’s default. Purchaser may, in its sole and absolute discretion, extend any
time for performance of any obligation of Seller under this Agreement by written
notice of such election given to Seller for one or more periods of up to thirty
(30) days in total to provide additional time for the performance of any such
obligation.
8.3 Partial Closing.
In addition to Purchaser’s remedies set forth in Section 8.2 above, if any
default by Seller under this Agreement affects less than all of the Properties,
Purchaser may, in its sole and absolute discretion, by written notice of such
election given to Seller, elect to proceed to a Partial Closing with respect to
the Properties that are not affected by such default. In connection with such an
election Purchaser may, in its sole and absolute discretion, by written notice
of such election given to Seller, elect to consummate a Partial Closing with
respect to the Property or Properties subject to Seller’s default following
Seller’s cure thereof.
ARTICLE 9 — SUPERMARKET LEASES
9.1 Supermarket Leases.
(a) At Closing, the parties shall mutually
execute and deliver the Supermarket Leases for the Properties in the forms
attached as Exhibits B-1 through B-6.
(a) At the Closing, Seller, as “Tenant,” shall pay the Fixed Annual Rent
described in Section 5 of the Supermarket Leases, plus, with respect to the
Supermarket Lease for the Shopping Center Property its proportionate share of
estimated monthly CAM, Real Estate Taxes, and insurance, on a prorated basis as
of 11:59 p.m. on the day preceding the Closing Date.
9.2 Existing Leases.
(a) At the Closing, base rent and additional rent under the Existing Leases
shall be apportioned for the Property as of 11:59 p.m. on the day preceding the
Closing Date. After Closing, any rent under the Existing Leases collected by
either party shall be first credited to Purchaser for any rents then due and
payable, next to Seller and Purchaser for the rent payable in the month in which
the Closing occurs and then against any pre-closing arrearages due to Seller. In
the first twelve (12) months following the Closing, Seller may not commence a
legal action against any Existing Tenant. Thereafter, Seller may, but shall have
no obligation to, commence a legal action to recover pre-closing arrearages from
an Existing Tenant (provided,
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however, in no event shall Seller seek to terminate an Existing Lease or evict
any Existing Tenant in connection with any such action).
(b) Existing Tenants’ payments on account of
“CAM” and percentage rent under the Existing Leases and the basis for billing
therefor will be accounted for at Closing based on information available at such
time, and Seller and Purchaser shall cooperate with respect thereto during the
twelve (12) month period following the Closing such that all amounts accruing
with respect thereto prior the Closing Date are paid or otherwise credited to
Seller and all amounts accruing with respect thereto on or after the Closing
Date are paid or otherwise credited to Purchaser.
(c) At Closing, Purchaser shall receive a
credit against the Purchase Price for any and all security deposits held by
Seller pursuant to the Existing Leases.
ARTICLE 10 - ESCROW AGENT
10.1 Deposit in Escrow.
The Deposit and any interest earned thereon shall be held by the Escrow Agent,
in trust and on the terms hereinafter set forth. The term “Deposit” shall
include any interest earned thereon.
10.2 Deliveries by Escrow Agent.
If Purchaser demands the Deposit pursuant to Section 8.1 or terminates this
Agreement pursuant to Section 11.2(a), Escrow Agent shall immediately return the
Deposit to Purchaser. Except as provided in the previous sentence or at Closing,
when the entire Deposit shall be paid to Seller, Escrow Agent shall not make any
disbursements of the Deposit unless instructed by written instructions jointly
signed by Seller and Purchaser directing Escrow Agent to disburse funds
otherwise.
10.3 Disputes.
In the event of a dispute that results in litigation between Seller and
Purchaser, the Escrow Agent shall deliver the monies held in the escrow to the
Clerk of the Court in which such litigation is pending, or in the event of a
dispute not then resulting in litigation, the Escrow Agent may continue to hold
the monies in escrow or take such affirmative steps as the Escrow Agent may, at
the Escrow Agent’s option, elect in order to terminate the Escrow Agent’s
duties, including, but not limited to, depositing the monies held in the escrow
in any court which the Escrow Agent shall select in New Jersey, and an action
for interpleader, the costs thereof to be borne by whichever of Seller or
Purchaser is the losing party.
10.4 Release and Indemnity.
(a) It is agreed that the duties of the Escrow Agent are only as herein
specifically provided and are purely ministerial in nature, and that the Escrow
Agent shall incur no liability whatsoever except for willful misconduct or gross
negligence, as long as the Escrow Agent has acted in good faith. The Seller and
Purchaser each release the Escrow Agent from any act done or omitted to be done
by the Escrow Agent in good faith in the performance of its duties hereunder.
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(b) Seller and Purchaser shall jointly and severally hold Escrow Agent harmless
from and against any loss, damage, liability or expense incurred by Escrow Agent
not caused by its willful misconduct or gross negligence, arising out of or in
connection with its entering into this Agreement and the carrying out of its
duties hereunder, including the reasonable costs and expenses of defending
itself against any claim of liability or participating in any legal proceeding.
Escrow Agent may consult with counsel of its choice, and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
10.5 Stakeholder Only.
(a) The Escrow Agent is acting as a
stakeholder only with respect to the monies to be deposited in the escrow. Upon
making delivery of such monies in the manner herein provided, the Escrow Agent
shall have no further liability hereunder.
(b) Escrow Agent may resign at will and be
discharged from its duties or obligations hereunder by giving notice in writing
of such resignation specifying a date when such resignation shall take effect;
provided, however, that (i) prior to such resignation a substitute escrow agent
is approved in writing by Seller and Purchaser, which approval shall not be
unreasonably withheld or delayed, or (ii) Escrow Agent shall deposit the Deposit
with a court of competent jurisdiction in New Jersey. After such resignation,
Escrow Agent shall have no further duties or liability hereunder.
ARTICLE 11 — CONDITIONS TO CLOSING
11.1 Conditions Precedent.
Purchaser’s obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 11.1 on or before the
Closing Date:
(a) Purchaser shall have received an estoppel certificate from Fashion Bug (the
“Estoppel Requirement”). All Tenant estoppel certificates required under this
Section 11.1(a) shall be substantially in the form attached hereto as Exhibit K.
No tenant estoppel certificate shall count toward the Estoppel Requirement if it
discloses: (i) any material default by landlord or tenant or condition that,
with the giving of notice, the passage of time, or both, would become a default,
unless Seller actually cures the alleged default or condition prior to Closing
to Purchaser’s reasonable satisfaction; (ii) any materially adverse amendment,
modification or supplement to the Existing Lease in question that was not
provided to Purchaser before the Effective Date; (iii) any outstanding tenant
improvement allowances or obligations, moving allowances, free rent or other
inducements or concessions owed to any Existing Tenant that were not disclosed
in writing to Purchaser before the Effective Date, unless, with respect to any
payment obligation to an Existing Tenant, Seller agrees to credit the amount of
the obligation to Purchaser at Closing; or (iv) any other information that is
inconsistent in any material adverse respect with the Rent Roll or the copies of
the Existing Leases provided to Purchaser before the Effective Date. (Although
not a condition to Closing, Seller, as a post-Closing requirement shall use good
faith, commercially reasonable efforts to obtain an estoppel certificate from
each tenant under each of the Existing Leases, and shall deliver copies such
estoppels to Purchaser promptly upon receipt thereof by Seller);
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(b) Purchaser shall have received an
estoppel certificate from each Ground Landlord reflecting the terms of each
Ground Lease and otherwise substantially in the form attached hereto as
Exhibit L (the “Ground Landlord Estoppels”). This condition shall not be
satisfied if any of the Ground Landlord Estoppels discloses: (i) any default
under any of the Ground Leases or condition that, with the giving of notice, the
passage of time, or both, would become a default unless Seller actually cures
the alleged default or condition prior to Closing to Purchaser’s reasonable
satisfaction; (ii) any material amendment, modification or supplement to any of
the Ground Leases that was not provided to Purchaser before the Effective Date;
or (iii) any other information that is inconsistent in any material respect with
the Ground Leases or related information as provided to Purchaser before the
Effective Date. Seller shall use good faith, commercially reasonable efforts to
obtain the Ground Landlord Estoppels from each of the Ground Landlords, and
shall deliver a copy of such estoppels to Purchaser promptly upon receipt
thereof;
(c) On the Closing Date title to the
Properties shall be conveyed to Purchaser in the condition required pursuant to
Section 2.1 and Section 4.1; and
(d) Seller shall prepare and Purchaser shall cooperate in good faith in the
filing with the State of New Jersey Division of Taxation of a Notice of Sale
(C-9600) (and a copy of this Agreement shall be submitted therewith) and Asset
Transfer Tax Declaration (TTD) and Seller shall obtain a so-called “Bulk Sales
Letter” before the Closing assuring that Purchaser shall not be personally
liable for the payment to the State of New Jersey of taxes determined to be due
from Seller as a result of the sale of the Lawnside Property. In connection
therewith and without limiting the generality of the foregoing, the Closing
shall not occur until the State of New Jersey has issued such a so-called “bulk
sales letter” and, if such letter requires the withholding of Seller’s proceeds
from the Closing, an escrow therefor shall be established with the Escrow Agent
and the funds held thereunder shall not be released to Seller except in
accordance with instructions from the New Jersey Division of Taxation.
11.2 Failure of Condition Precedent.
(a) If any condition precedent set forth
in Section 11.1 has not been satisfied on the Closing Date then Purchaser may
terminate this Agreement by written notice to Seller, in which event the Deposit
shall immediately be returned to Purchaser and the parties shall have no further
obligations hereunder.
(b) Notwithstanding the foregoing, if the
conditions set forth in Section 11.1 shall not have been fulfilled on or before
the Closing Date, either Purchaser or Seller shall have the right, exercisable
by written notice to the other party on or prior to the Closing Date, to extend
the Closing Date (subject to Purchaser’s termination right set forth in the
following sentence) for a period of thirty (30) days to provide additional time
for the fulfillment of such conditions (and, if all such conditions are so
fulfilled, the Closing Date shall be the date that is two (2) Business Days
thereafter). Notwithstanding the foregoing, commencing on the date that is
fifteen (15) days following the commencement of such thirty (30) day period,
Purchaser may elect, in its sole discretion, to terminate this Agreement
pursuant to Section 11.2(a) above or proceed to a Partial Closing pursuant to
Section 11.2(c) below. At the end of such thirty (30) day
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period, Seller may elect, in its sole discretion, to terminate this Agreement
pursuant to Section 11.2(a) above or proceed to a Partial Closing pursuant to
Section 11.2(c) below.
(c) Without limitation of and in addition
to the provisions of Sections 11.2(a) and (b) above, if any failure of condition
precedent affects less than all of the Properties, Purchaser may, in its sole
and absolute discretion, by written notice of such election given to Seller,
elect to proceed to a Partial Closing with respect to the Properties that are
not affected by such failure.
(d) The parties acknowledge and agree that
the “Bulk Sales Letter” described in Section 11.1(d) will not be available by
the Closing Date. Therefore, this Section 11.2(d) shall constitute Seller’s
written notice to extend the Closing Date for the Lawnside Property, subject to
and in accordance with the provisions of Section 11.2(b) (provided, however,
that the fifteen (15) day period generally provided to Purchaser pursuant to
Section 11.2(b) shall be thirty (30) days with respect to the condition
described in Section 11.1(d)). Subject to all applicable provisions of the
Agreement, the Closing Date for the Lawnside Property will be on the second
(2nd) Business Day following Purchaser’s receipt of the Bulk Sales Letter that
satisfies the requirements of Section 11.1(d).
ARTICLE 12 - MISCELLANEOUS
12.1 Entire Agreement.
This Agreement, including all exhibits, schedules and documents attached hereto,
contains the entire understanding of the parties hereto with respect to the
subject matter hereof, and no prior or other writing or oral agreement or
undertaking pertaining to any such matter shall be effective for any purpose.
This Agreement may not be changed or modified, nor any provision hereof waived,
except in writing by the party to be charged thereby.
12.2 Broker.
(a) Purchaser and Seller represent and
warrant to each other that neither has dealt with any broker, finder or agent in
connection with this transaction other than Holliday Fenoglio Fowler, L.P
(“HFF”) and Andy Nemeroff of the Imperial Capital Company (“Nemeroff”).
(b) Seller shall pay HFF a commission
pursuant to a separate commission agreement. Purchaser shall pay Nemeroff a
commission pursuant to a separate commission agreement.
(c) Seller shall defend, indemnify and
hold Purchaser and Nemeroff harmless from and against any claims of or
liabilities to any broker, finder or agent based upon dealings or alleged
dealings with Seller. Purchaser shall defend, indemnify and hold Seller and HFF
harmless from and against any claims of or liabilities to any broker, finder or
agent based upon dealings or alleged dealings with Purchaser.
(d) Without limiting the generality of the
Section 12.2(c) above, Purchaser shall defend, indemnify and hold Seller and HFF
harmless from and against any claims or
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liabilities to Morris Harary and A&H Acquisitions, and any claim from such
brokers shall not be a default under this Agreement or a basis to postpone the
Closing Date.
(e) The obligations of Purchaser and Seller under this Section shall survive
whether or not title closes hereunder and notwithstanding any release of either
party pursuant to any other provisions of this Agreement.
12.3 Notices.
(a) All notices, elections, consents, approvals, demands, objections, requests
or other communications which Seller, Purchaser or Escrow Agent may be required
or desire to give pursuant to, under or by virtue of this Agreement shall be in
writing and sent by (i) first class U.S. certified or registered mail, return
receipt requested, with postage prepaid, or (ii) nationally recognized overnight
courier (for next business day delivery), addressed as follows:
If to Seller:
Pathmark Stores, Inc.
Two Paragon Drive
Montvale, NJ 07645
Attention: Senior Vice President – Real Estate
With a copy to:
Pathmark Stores, Inc.
Two Paragon Drive
Montvale, NJ 07645
Attention: Senior Counsel, Real Estate
If to Purchaser:
c/o Winstanley Enterprises LLC
150 Baker Avenue Extension
Suite 303
Concord, Massachusetts 07142
Attention: Adam D. Winstanley
With a copy to:
Daniel A. Taylor, Esq.
DLA Piper LLP (US)
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33 Arch Street, 26th Floor
Boston, MA 02110-1147
If to Escrow Agent
Chicago Title Insurance Company
265 Franklin Street, 8th floor
Boston, Massachusetts 02110
Attention: David Buczkowski
(b) Seller, Purchaser or Escrow Agent may designate another addressee or change
its address for notices and other communications hereunder by a notice given to
the other parties in the manner provided in this Section 12.3. A notice or other
communication sent in compliance with the provisions of this Section 12.3. shall
be deemed given and received on (i) the third (3rd) day following the date it is
deposited in the U.S. mail, or (ii) the date it is delivered (or delivery is
refused) to the other party if sent by nationally recognized overnight courier.
Notices or receipts signed by the respective attorneys for the parties shall be
deemed sufficient within the meaning of this Section without the signature of
the parties themselves.
12.4 Governing Law.
This Agreement shall be governed by and construed under the laws of the State of
New Jersey, without regard to conflict of law principles. The exclusive
jurisdiction for any disputes concerning this Agreement shall be the Superior
Court of New Jersey, Bergen County, and the parties hereby personally submit to
such jurisdiction and waive all defenses relating to jurisdiction, venue and
forum non convenience.
12.5 Interpretation.
The parties hereto agree that the terms, covenants and language of this
Agreement were the result of negotiations between the parties and, as a result,
there shall be no presumption that ambiguities in this Agreement, if any, shall
be resolved against either party. The parties hereto further agree that any
controversy over the construction of this Agreement shall be decided neutrally,
and without regard to events of authorship or negotiation and shall be construed
reasonably to carry out its intent. If any provision hereof shall be declared
invalid by a court or in any administrative proceedings, then the provisions of
this Agreement shall be construed in such manner so as to preserve the validity
hereof and the substance of the transaction herein contemplated to the extent
possible. The article, paragraph and/or section headings and the arrangement of
this Agreement is for the convenience of the parties hereto and do not in any
way affect, limit, amplify or modify the terms and provisions hereof.
12.6 Singular, Plural, Etc.
Wherever herein the singular is used the same shall include the plural and the
masculine gender shall include the feminine and neuter genders and vice versa,
as the context shall require.
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12.7 Counterparts/Signatures.
This Agreement may be executed in several counterparts, which shall constitute
one and the same instrument. A facsimile, email, pdf or electronic signature
shall be deemed an original signature.
12.8 Computation of Time.
Any time period provided for in this Agreement which ends on a Saturday, Sunday
or legal holiday of the State of New Jersey shall be extended to the end of
business on the next full Business Day.
12.9 Successors and Assigns.
This Agreement may not be assigned by Purchaser, except upon the express written
consent of Seller, which Seller may withhold in its sole and absolute
discretion; provided, however, that Purchaser shall have the right, on written
notice to Seller, to assign all of its rights and obligations under this
Agreement to any party or parties affiliated with Purchaser. Purchaser shall
also have the right to assign all of its rights under this Agreement with
respect one of the Properties to one entity and all of its rights with respect
to the other of the Properties to another entity in which event Seller shall
deliver separate closing documents for each such entity (that is, Purchaser may
assign [and intends to so assign] its rights to multiple entities such that, at
Closing, each Property shall be transferred to a separate entity as
“Purchaser”). Any attempted assignment in breach of this Section 12.9 shall be
null, void and of no legal effect. This Agreement shall inure to the benefit of
and be binding upon Seller and Purchaser and to Seller’s and Purchaser’s
respective heirs, personal representatives, successors and permitted assigns. If
multiple parties have executed this Agreement as the “Seller” hereunder, then
such parties shall be jointly and severally liable for all obligations of the
Seller under this Agreement and the documents [email protected]. If Purchaser
assigns its rights under this Agreement to multiple parties, then such parties
shall be jointly and severally liable for all obligations of the Purchaser under
this Agreement and the documents [email protected].
12.10 Exhibits.
Each of the Exhibits referred to herein and attached hereto is incorporated
herein by this reference.
12.11 No Recording.
Neither this Agreement nor any memorandum hereof may be recorded without the
express written consent of both parties. In the event that either party records
this Agreement or any memorandum hereof without first obtaining such consent,
such party shall be in material breach of this Agreement and the non-breaching
party shall be entitled to pursue any and all of its remedies pursuant to this
Agreement or as otherwise provided by law.
12.12 Termination.
Notwithstanding anything to the contrary herein, upon termination of this
Agreement neither party shall have any further rights or obligations, except
those rights and obligations arising under any sections of this Agreement which
expressly survive termination of this Agreement.
23
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12.13 Confidentiality.
The parties hereto agree that the terms of this Agreement and all materials
obtained or information learned by Purchaser in connection with the transaction
contemplated hereby will be used solely for Purchaser and Purchaser’s agents in
evaluating and closing the transaction and the Properties and all such
information and materials (which is not available from third parties) will be
kept confidential and shall not be disclosed to any other persons or entities
other than as may be required by Purchaser to evaluate and/or close on the
Properties or as may be required by law or court order. The provisions of this
Section shall survive the Closing or termination of this Agreement.
12.14 No Waiver.
The failure of either party to this Agreement to insist upon the performance of
any of the terms and conditions of this Agreement, or the waiver of any breach
of any of the terms and conditions of this Agreement, shall not be construed as
thereafter waiving any such terms and conditions, but the same shall continue
and remain in full force and effect as if no such forbearance or waiver had
occurred.
12.15 Exculpation.
None of the officers, directors, shareholders, partners, employees, agents,
trustees or representatives (cumulatively, “Representatives”) of either party or
any of their respective affiliated entities shall be liable, accountable, or
subject to any suit, action, proceeding or claim of any of the costs, expenses,
or liability arising directly or indirectly, out of the party’s failure or
refusal to satisfy its obligations hereunder or out of the transactions
contemplated by this Agreement.
12.16 Waiver of Right to Jury Trial.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY, VOLUNTARILY, KNOWINGLY AND
IRREVOCABLY WAIVES ANY CONSTITUTIONAL OR OTHER RIGHT EACH MAY HAVE TO A TRIAL BY
JURY IN THE EVENT OF LITIGATION CONCERNING ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING UNDER THIS AGREEMENT, THE PARTIES PERFORMANCE THEREUNDER OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
THEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY INSTRUMENT,
DOCUMENT OR AGREEMENT RELATED IN ANY WAY WHATSOEVER TO THE SUBJECT MATTER OF
THIS AGREEMENT; AND IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING AND
WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY. EACH PARTY REPRESENTS THAT IT HAS CONSULTED WITH COUNSEL
SPECIFICALLY WITH REFERENCE TO THIS CLAUSE.
24
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12.17 Attorney Fees.
In the event litigation ensues under this Agreement, the substantially
prevailing party shall be entitled to all reasonable attorney fees and all other
reasonable out-of-pocket litigation costs incurred by such prevailing party.
12.18 Exclusivity.
In consideration of the significant time and expense devoted and to be devoted
by Purchaser in connection with the acquisition of the Properties, Seller agrees
that, during the term of this Agreement, it will not market the Properties or
any portion thereof for sale or allow other potential purchasers to inspect or
tour the Properties, and have not and will not enter into any agreement to sell
the Properties or any portion thereof to any party other than Purchaser.
Notwithstanding anything to the contrary in this Agreement, and in addition to
the other rights and remedies of Purchaser set forth in this Agreement, if
Seller breaches its obligations under this Section 12.18, Purchaser shall have
the right, at Purchaser’s election, to injunctive or other equitable relief.
12.19 Tort Indemnity.
Seller shall indemnify and hold Purchaser harmless from and against all costs,
expenses, and claims asserted against, or incurred by Purchaser, by reason of
any tort claim or any other claim regarding bodily injury or property damage
relating to Seller’s ownership and/or use and occupancy of the Properties for
the period prior to Closing. This provision shall survive the Closing.
[SIGNATURES FOLLOW]
25
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
WITNESS:
SELLER:
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation
BY:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
PATHMARK STORES, INC., a Delaware corporation
BY:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Vice President and Secretary
PLAINBRIDGE LLC, a Delaware limited liability company
BY:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: President
UPPER DARBY STUART, LLC, a Delaware limited liability company
BY:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: President
26
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LANCASTER PIKE STUART LLC, a Delaware limited liability company
BY:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: President
27
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WITNESS:
PURCHASER:
WE APP I Holdings LLC, a Delaware limited liability company
By:
WP APP I, LLC, its sole member
By:
WE APP I Manager, LLC, its
Name:
Manager
By:
Winstanley Enterprises LLC, its
Manager
By:
Adam Winstanley
Its:
Manager
WITNESS:
ESCROW AGENT
CHICAGO TITLE INSURANCE COMPANY
Name:
Name:
Title:
28
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LIST OF EXHIBITS
[see Document # 43769357 for exhibits]
Exhibit A
Property Information and Purchase Price Allocation
Exhibit A-1
Legal Description of 421 South 29th Boulevard, Upper Darby, Pennsylvania
Exhibit A-2
Legal Description of 130 White Horse Pike, Lawnside, New Jersey
Exhibit A-3
Legal Description of 4055 Merrick Road, Seaford, New York
Exhibit A-4
Legal Description of 1764 Grand Avenue, Baldwin, New York
Exhibit A-5
Legal Description of 92 1 0 Grand Avenue, Queens, New York
Exhibit A-6
Legal Description of 3901 Lancaster Pike, Wilmington, Delaware
Exhibit B-1
Form of Supermarket Lease for 421 South 29th Boulevard, Upper Darby,
Pennsylvania
Exhibit B-2
Form of Supermarket Lease for 1 30 White Horse Pike, Lawnside, New Jersey
Exhibit B-3
Form of Supermarket Lease for 4055 Merrick Road, Seaford, New York
Exhibit B-4
Form of Supermarket Lease for 1764 Grand Avenue, Baldwin, New York
Exhibit B-5
Form of Supermarket Lease for 9210 Grand Avenue, Queens, New York
Exhibit B-6
Form of Supermarket Lease for 3901 Lancaster Pike, Wilmington, Delaware
Exhibit C-1
Rent Roll
Exhibit C-2
Ground Leases
Exhibit C-3
Surveys
Exhibit C-4
Title Conditions
Exhibit C-5
Partial List of Permitted Encumbrances
Exhibit D-1
Form of New Jersey Deed
Exhibit D-2
Form of New York Deed
Exhibit D-3
Form of Pennsylvania Deed
Exhibit D-4
Form of Delaware Deed
Exhibit E
Form of Existing Leases Assignment
Exhibit F
Forms of Ground Lease Assignment
Exhibit G
Form of Existing Tenant Attornment Letter
Exhibit H
Form of FIRPTA Certificate
Exhibit I
List of Environmental Reports
Exhibit J
Sales and EBITDA Information
Exhibit K
Form of Existing Tenant Estoppel
Exhibit L
Forms of Ground Landlord Consent and Estoppel
Exhibit M
Form of Secretary’s Certificate
29
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Agreement of Sale and Leaseback
EXHIBITS
30
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EXHIBIT A
PROPERTY INFORMATION AND PURCHASE PRICE ALLOCATION
[g36891mq007i001.jpg]
31
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EXHIBIT A-1
Legal Description
421 South 69th Blvd.
Upper Darby, PA
PREMISES A:
ALL THAT CERTAIN lot or piece of ground with the improvements thereon erected,
Situate in the Township of Upper Darby, County of Delaware and State of PA and
described according to Property Topographic Plan made for Supermarkets General
Corporation by H. Gilroy Damon Associates, Inc., Civil Engineers, Sharon Hill,
PA, dated 5/10/1985 as follows, to wit:
BEGINNING at a point in the center line of Heather Road (40 feet wide) at the
distance of 120.13 feet measured South 26 degrees 8 minutes 15 seconds West from
the center line of Marshall Road (60 feet wide) and the extended center line of
Heather Road; thence extending along the center line of Heather Road, South 26
degrees 8 minutes 15 seconds West 208.40 feet to a point; thence leaving the
said center line of Heather Road and extending North 73 degrees 32 minutes 1
second West 76.61 feet to a point; thence extending South 33 degrees 56 minutes
52 seconds West 45.89 feet to a point; thence extending North 60 degrees 17
minutes 3 second West 95.59 feet to a point; thence extending North 18 degrees
41 minutes 45 seconds West 159.16 feet to a point; thence extending North 1
degree 51 minutes 53 seconds East 44.50 feet to a point in the center line of a
10 feet wide alley; thence extending along center line of said 10 feet wide
alley; North 59 degrees 30 minutes 15 seconds East 33.53 feet to a point of
curve; thence still along said center line of said alley on a line curving to
the right with a radius of 160 feet, the arc distance of 150.80 feet to a point
of tangency; thence still further along the center line of said alley South 66
degrees 29 minutes 45 seconds East 163.13 feet to a point in the center line of
Heather Road being the first mentioned point and place of beginning.
TOGETHER with and subject to the use of Heather Road as proposed (40 feet wide).
TOGETHER with the free and common use, right, liberty and privilege of the
aforesaid alley, as and for an alley passageway and watercourse at all times
hereafter, forever in common with the owners, tenants and occupiers of the other
lots of ground bounding thereon and entitled to the use thereof.
SUBJECT however, to the proportionate part of the expense of keeping said alley
in good order, condition and repair.
PREMISES B:
ALL THAT CERTAIN lot or piece of ground with the buildings and improvements
thereon erected, Situate in the Township of Upper Darby, County of Delaware and
Commonwealth of PA, described according to a Plan made for Supermarkets General
32
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Corporation by H. Gilroy Damon Associates, Inc., Civil Engineers, Sharon Hill,
PA, dated 10/14/1977 and last revised 5/2/1978 as follows, to wit:
BEGINNING at a point on the Northeast side of Sixty Ninth Street (70 feet wide)
at the distance of 90.48 feet measured South 36 degrees 24 minutes 12 seconds
East along the said side thereof from its intersection with the Southeast side
of Marshall Road (60 feet wide); thence along the middle of a 10 feet wide
alley; North 59 degrees 30 minutes 15 seconds East 240.27 feet to a spike;
thence North 30 degrees 29 minutes 45 seconds West crossing an iron pipe on the
Southeast side of Marshall Road 90 feet from said last mentioned point the
distance of 126.27 feet to a point in the bed of Marshall Road; thence along the
title line in the bed of Marshall Road, North 62 degrees 32 minutes 15 seconds
East 102.72 feet to a point; thence still along the title line in the bed of
Marshall Road, North 59 degrees 47 minutes 15 seconds East 68.06 feet to a
point; thence leaving the bed of Marshall Road and extending on a course of
South 1 degree 51 minutes 53 seconds West crossing said 10 feet wide alley,
187.06 feet to a monument; thence South 18 degrees 41 minutes 45 seconds East
159.72 feet to a stone; thence South 60 degrees 17 minutes 3 seconds East 95.08
feet to a stone; thence North 33 degrees 56 minutes 52 seconds East 45.89 feet
to a marble stone; thence South 73 degrees 32 minutes 1 second East 52.66 feet
to a spike in a tree; thence South 55 degrees 19 minutes 25 seconds East 166.46
feet to a concrete monument; thence South 42 degrees 57 minutes 45 seconds West
80 feet to a pipe; thence South 47 degrees 2 minutes 15 seconds East 101.17 feet
to a point on the Northwest side of Kent Road; thence along the side of the
cul-de-sac at the end of Kent Road, the two following courses and distances
(1) South 87 degrees 37 minutes 37 seconds West 35.86 feet to a spike (2) on the
arc of a circle curving to the left with a radius of 30 feet the arc distance of
112.07 feet the chord of said arc bearing South 19 degrees 23 minutes 35 seconds
East and distance being 57.37 feet to a pipe; thence South 53 degrees 35 minutes
18 seconds West 36.94 feet to a pipe; thence North 36 degrees 24 minutes 12
seconds West 65 feet to a pipe; thence South 53 degrees 35 minutes 18 seconds
West 30 feet to a pipe; thence North 36 degrees 24 minutes 12 seconds West 125
feet to a pipe; thence South 53 degrees 35 minutes 18 seconds West 250 feet to a
pipe on the Northeast side of Sixty Ninth Street; thence along the Northeast
side thereof, North 36 degrees 24 minutes 12 seconds West 451.31 feet to the
first mentioned point and place of beginning.
TOGETHER with and subject to the free and common use of the aforesaid 10 feet
wide driveway which extends Eastward and Westward into and from Sixty Ninth as
and for a driveway and passageway at all times hereafter, forever in common with
the other owners, tenants and occupiers of the premises adjoining thereof.
SUBJECT to the proportionate part of the expense of maintaining and keeping the
same in good order and repair.
33
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Tax ID / Parcel No. 16-01-01572-01
AS SURVEYED DESCRIPTION:
METES AND BOUNDS DESCRIPTION
FOLIO #16-01-00907-00
PREMISES “A”
LANDS NOW OR FORMERLY
UPPER DARBY STUART, INC.
UPPER DARBY TOWNSHIP, DELAWARE COUNTY
COMMONWEALTH OF PENNSYLVANIA
BEGINNING AT A POINT AT THE PROPOSED CENTER LINE OF HEATHER ROAD (40 FOOT WIDE
RIGHT-OF-WAY, UNOPENED) AT THE INTERSECTION OF THE DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A”, LANDS NOW OR FORMERLY UPPER DARBY STUART, INC.
AND FOLIO #16-01-00906-00, LANDS NOW OR FORMERLY GULER AND GULER SAID POINT
BEING DISTANT 120.13 FEET ON A COURSE OF SOUTH 26 DEGREES 08 MINUTES 15 SECONDS
WEST FROM THE INTERSECTION OF THE CENTER LINE OF HEATHER ROAD AND THE CENTER
LINE OF MARSHALL ROAD (60 FOOD WIDE RIGHT-OF-WAY) AND FROM SAID POINT OF
BEGINNING RUNNING, THENCE;
1. ALONG THE DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A” AND FOLIO #16-01-00906-00, SOUTH 26 DEGREES 08
MINUTES 15 SECONDS WEST, A DISTANCE OF 208.40 FEET TO A POINT, THENCE;
2. ALONG THE COMMON DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A”; FOLIO #16-01-01572-01, PREMISES “B”, LANDS NOW OR
FORMERLY UPPER DARBY STUART, LLC AND FOLIO #16-01-01572-04, LANDS NOW OR
FORMERLY GULER, NORTH 73 DEGREES 32 MINUTES 01 SECONDS WEST, A DISTANCE OF 76.61
FEET TO A POINT, THENCE;
THE FOLLOWING FOUR (4) COURSES AND DISTANCES ALONG THE DIVIDING LINE BETWEEN
FOLIO #16-01-00907-00, PREMISES “A” AND FOLIO #16-01- 01572-01, PREMISES “B”:
3. SOUTH 33 DEGREES 56 MINUTES 52 SECONDS WEST,
A DISTANCE OF 45.89 FEET TO A POINT, THENCE;
4. NORTH 60 DEGREES 17 MINUTES 03 SECONDS WEST,
A DISTANCE OF 95.59 FEET TO AN ANGLE POINT, THENCE;
5. NORTH 18 DEGREES 41 MINUTES 45 SECONDS WEST,
A DISTANCE OF 159.16 FEET TO AN ANGLE POINT, THENCE;
34
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6. NORTH 01 DEGREES 51 MINUTES 53 SECONDS EAST,
A DISTANCE OF 44.50 FEET TO A P.K. NAIL, THENCE;
7. ALONG THE DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A” FOLIO #16-01-00922-00, LANDS NOW OR FORMERLY
FELICE, NORTH 59 DEGREES 30 MINUTES 15 SECONDS EAST, A DISTANCE OF 33.53 FEET TO
A POINT OF CURVATURE, THENCE;
8. ALONG THE COMMON DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A”; FOLIO #16-01-00922-00; FOLIO #16-01-00921-00,
LANDS NOW OR FORMERLY AMBROSE; FOLIO #16-01-00920-00, LANDS NOW OR FORMERLY
JEFFKIN; FOLIO #16-01-00919-00, LANDS NOW OR FORMERLY OGUNKORODE; FOLIO
#16-01-00918-00, LANDS NOW OR FORMERLY GERMICHALOS; FOLIO #16-01-00917-00, LANDS
NOW OR FORMERLY SINGH; FOLIO #16-01-00916-00, LANDS NOW OR FORMERLY JOHNSON;
FOLIO #16-01- 00915-00, LANDS NOW OR FORMERLY JOHNSON AND FOLIO #16-01-00914-00,
LANDS NOW OR FORMERLY AHMED, ALONG THE ARC OF A CIRCLE CURVING TO THE RIGHT,
HAVING A RADIUS OF 160.00 FEET, A CENTRAL ANGLE OF 54 DEGREES 00 MINUTES 05
SECONDS, AN ARC LENGTH OF 150.80 FEET, A CHORD BEARING NORTH 86 DEGREES 30
MINUTES 13 SECONDS EAST AND A CHORD DISTANCE OF 145.28 FEET TO A POINT OF
TANGENCY, THENCE;
9. ALONG THE COMMON DIVIDING LINE BETWEEN FOLIO
#16-01-00907-00, PREMISES “A”; FOLIO #16-01-00914-00; FOLIO #16-01-00913-00,
LANDS NOW OR FORMERLY ANAM AND AHMED; FOLIO #16-01-00912-00, LANDS NOW OR
FORMERLY DAVIS; FOLIO #16-01-00911-00, LANDS NOW OR FORMERLY SCOTT; FOLIO
#16-01-00910-00, LANDS NOW OR FORMERLY IQBAL; FOLIO #16-01-00909-00, LANDS NOW
OR FORMERLY HOSSAIN; FOLIO #16-01-00908- 00, LANDS NOW OR FORMERLY GULER AND A
LOT WHERE OWNER INFORMATION IS NOT AVAILABLE, SOUTH 66 DEGREES 29 MINUTES 45
SECONDS EAST, A DISTANCE OF 163.13 FEET TO THE POINT AND PLACE OF BEGINNING.
CONTAINING 62,068 SQUARE FEET OR 1.425 ACRES
35
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METES AND BOUNDS DESCRIPTION
FOLIO #16-01-01572-01
PREMISES “B”
LANDS NOW OR FORMERLY
UPPER DARBY STUART, LLC
UPPER DARBY TOWNSHIP, DELAWARE COUNTY
BEGINNING AT A POINT ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF SIXTY-NINTH
STREET (70 FOOT WIDE RIGHT-OF-WAY) AT ITS INTERSECTION WITH THE DIVIDING LINE
BETWEEN FOLIO #16-01-01572-0 1, PREMISES “B”, LANDS NOW OR FORMERLY UPPER DARBY
STUART, LLC. AND FOLIO #16-01-00924-00, LANDS NOW OR FORMERLY DAVIDART CORP.
SAID POINT BEING DISTANT 90.48 FEET ON A COURSE OF SOUTH 36 DEGREES 24 MINUTES
12 SECONDS EAST FROM A POINT CONNECTING THE NORTHEASTERLY RIGHT-OF-WAY LINE OF
SIXTY-NINTH STREET WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF MARSHALL ROAD (60
FOOT WIDE RIGHT-OF-WAY) AND FROM SAID POINT OF BEGINNING RUNNING, THENCE;
THE FOLLOWING TWO (2) COURSES AND DISTANCES ALONG THE DIVIDING LINE BETWEEN
FOLIO #16-01-01572-01, PREMISES “B” AND FOLIO #16-01-00924-00:
1. NORTH 59 DEGREES 30 MINUTES 15 SECONDS EAST,
A DISTANCE OF 239.12 FEET TO A REBAR, THENCE;
2. NORTH 30 DEGREES 29 MINUTES 45 SECONDS WEST,
A DISTANCE OF 126.27 FEET TO A P.K. NAIL ON THE SOUTHERLY RIGHT-OF-WAY LINE OF
MARSHALL ROAD, THENCE;
THE FOLLOWING TWO (2) COURSES AND DISTANCES ALONG THE SOUTHERLY RIGHT-OF-WAY
LINE OF MARSHALL ROAD:
3. NORTH 62 DEGREES 32 MINUTES 15 SECONDS EAST,
A DISTANCE OF 102.72 FEET TO A P.K. NAIL, THENCE;
4. NORTH 59 DEGREES 47 MINUTES 15 SECONDS EAST,
A DISTANCE OF 68.06 FEET TO A P.K. NAIL, THENCE;
5. ALONG THE COMMON DIVIDING LINE BETWEEN FOLIO #16-01-01572-01, PREMISES “B”;
FOLIO #16-01-00922-00, LANDS NOW OR FORMERLY FELICE AND FOLIO #16-01-00907-00,
PREMISES “A”, LANDS NOW OR FORMERLY UPPER DARBY STUART, INC., SOUTH 01 DEGREES
51 MINUTES 53 SECONDS WEST A DISTANCE OF 187.06 FEET TO AN ANGLE POINT, THENCE;
THE FOLLOWING FOUR (4) COURSES AND DISTANCES ALONG THE DIVIDING LINE BETWEEN
FOLIO #16-01-01572-01 PREMISES “B” AND FOLIO #16-01- 00907-00, PREMISES “A”:
36
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6. SOUTH 18 DEGREES 41 MINUTES 45 SECONDS EAST,
A DISTANCE OF 159.16 FEET TO AN ANGLE POINT, THENCE;
7. SOUTH 60 DEGREES 17 MINUTES 03 SECONDS EAST,
A DISTANCE OF 95.59 FEET TO A POINT, THENCE;
8. NORTH 33 DEGREES 56 MINUTES 52 SECONDS EAST,
A DISTANCE OF 45.89 FEET TO A POINT, THENCE;
9. SOUTH 73 DEGREES 32 MINUTES 01 SECONDS EAST,
A DISTANCE OF 52.66 FEET TO A REBAR, THENCE;
10. ALONG THE DIVIDING LINE BETWEEN FOLIO
#16-01-01572-01, PREMISES “B” AND FOLIO #16-01-01572-04, LANDS NOW OR FORMERLY
GULER, SOUTH 55 DEGREES 19 MINUTES 25 SECONDS EAST, A DISTANCE OF 166.46 FEET TO
A POINT, THENCE;
11. ALONG THE COMMON DIVIDING LINE BETWEEN FOLIO
#16-01-01572-01, PREMISES “B”; FOLIO #16-01-00746-00, LANDS NOW OR FORMERLY
GULER AND FOLIO #16-01-00747-00, LANDS NOW OR FORMERLY SUKUEN, SOUTH 42 DEGREES
57 MINUTES 45 SECONDS WEST, A DISTANCE OF 80.00 FEET TO A POINT, THENCE;
12. ALONG THE DIVIDING LINE BETWEEN FOLIO
#16-01-01572-01, PREMISES “B” AND FOLIO #16-01-00747-00, SOUTH 47 DEGREES 02
MINUTES 15 SECONDS EAST, A DISTANCE OF 101.17 FEET TO A POINT ON THE NORTHERLY
RIGHT-OF-WAY LINE OF KENT ROAD (VARIABLE WIDTH RIGHT-OF-WAY), THENCE;
13. ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF KENT
ROAD, SOUTH 87 DEGREES 37 MINUTES 37 SECONDS WEST, A DISTANCE OF 35.86 FEET TO A
POINT CONNECTING THE NORTHERLY RIGHT-OF-WAY LINE OF KENT ROAD WITH THE SOUTHERLY
RIGHT-OF-WAY LINE OF KENT ROAD, THENCE;
14. ALONG THE ARC OF A TANGENT CIRCLE CURVING TO
THE LEFT HAVING A RADIUS OF 30.00 FEET, A CENTRAL ANGLE OF 214 DEGREES 02
MINUTES 24 SECONDS, AN ARC LENGTH OF 112.07 FEET, A CHORD BEARING SOUTH 19
DEGREES 23 MINUTES 35 SECONDS EAST AND A CHORD DISTANCE OF 57.37 FEET TO A POINT
OF CUSP, THENCE;
THE FOLLOWING THREE (3) COURSES AND DISTANCES ALONG THE DIVIDING LINE BETWEEN
FOLIO #16-01-01572-01, PREMISES “B” AND FOLIO #16-01- 01572-02, LANDS NOW OR
FORMERLY KR 69TH STREET:
15. SOUTH 53 DEGREES 35 MINUTES 18 SECONDS WEST, A
DISTANCE OF 36.94 FEET TO A P.K. NAIL, THENCE;
16. NORTH 36 DEGREES 24 MINUTES 12 SECONDS WEST, A
DISTANCE OF 65.00 FEET TO A PIPE, THENCE;
37
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17. SOUTH 53 DEGREES 35 MINUTES 18 SECONDS WEST, A
DISTANCE OF 30.00 FEET TO A P.K. NAIL, THENCE;
THE FOLLOWING TWO COURSES AND DISTANCES ALONG THE DIVIDING LINE BETWEEN FOLIO
#16-01-01572-01, PREMISES “B” AND FOLIO #16-01-01572-05, LANDS NOW OR FORMERLY
K & C REAL ESTATE HOLDINGS COMPANY:
18. NORTH 36 DEGREES 24 MINUTES 12 SECONDS WEST, A
DISTANCE OF 125.00 FEET TO A P.K. NAIL, THENCE;
19. SOUTH 53 DEGREES 35 MINUTES 18 SECONDS WEST, A
DISTANCE OF 250.00 FEET TO A POINT ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF
SIXTY-NINTH STREET, THENCE;
20. ALONG THE NORTHEASTERLY RIGHT-OF-WAY LINE OF
SIXTY-NINTH STREET, NORTH 36 DEGREES 24 MINUTES 12 SECONDS WEST, A DISTANCE OF
451.26 FEET TO THE POINT AND PLACE OF BEGINNING.
CONTAINING 172,289 SQUARE FEET OR 3.955 ACRES
Being part of the same premises which Pathmark Stores, Inc., a Delaware
Corporation by Deed dated 9-18-98 and recorded 10-27-98 in Delaware County in
Volume 1787 Page 64 conveyed unto Upper Darby Stuart, Inc., a Delaware
Corporation, in fee.
As to Premises “B”
BEING the same premises which Upper Darby Stuart, Inc., a Delaware Corporation,
by Indenture bearing date 2/15/2000 and recorded 3/14/2000 in the Office of the
Recorder of Deeds, in and for the County of Delaware in Volume 1991 page 213
etc., granted and conveyed unto Upper Darby Stuart, LLC, a Limited Liability
Company, in fee.
38
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EXHIBIT A-2
Legal Description
130 White Horse Pike
Lawnside, NJ
ALL that certain tract, lot and parcel of land lying and being in the Borough of
Lawnside, County of Camden and State of New Jersey, being more particularly
described as follows:
BEGINNING at a point on the northerly line of Gloucester Pike a.k.a. CR 659,
said point being at the southerly end of the property line connecting the said
line of the Gloucester Pike and the southeasterly line of White Horse Pike
a.k.a. NJSH Rt 30 and continuing; thence
(1) Along Gloucester Pike, North 89 degrees 56 minutes 00 seconds West
distance of 690.56 feet to a point; thence
(2) North 00 degrees 04 minutes 28 seconds West distance of 123.11 feet to a
point and corner of an existing building; thence
(3) Along said building, South 89 degrees 56 minutes 44 seconds East a
distance of 19.25 feet to a point and corner of the aforementioned building;
thence
(4) Along said building, North 00 degrees 03 minutes 16 seconds East a
distance of 84.09 feet to a point and corner of the aforementioned building;
thence
(5) Along said building, South 89 degrees 56 minutes 00 seconds East a
distance of 4.65 feet to a point and corner of the aforementioned building;
thence
(6) North 00 degrees 21 minutes 02 seconds East a distance of 253. 12 feet
to a point; thence
(7) North 50 degrees 17 minutes 40 seconds East a distance of 222.76 feet to
a point on the southwesterly line of White Horse Pike; thence
(8) Along the White Horse Pike, South 39 degrees 42 minutes 20 seconds East
a distance of 468.40 feet to a point; thence
(9) South 50 degrees 17 Minutes 40 seconds West a distance of 138.00 feet to
a point; thence
(10) South 39 degrees 42 minutes 20 seconds East a distance of 150.00
feet to a point; thence
(11) North 50 degrees 17 minutes 40 seconds East a distance of 150.00
feet to a point on the southwesterly line of White Horse Pike; thence
(12) Along the White Horse Pike, South 39 degrees 42 minutes 20 seconds
East a distance of 150 feet to a point; thence
39
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(13) South 17 degrees 05 minutes 10 seconds West a distance of 21 .46 feet to
the point and place of BEGINNING.
Being further described as follows:
BEGINNING at a P.K. nail & washer set in the northerly line of Gloucester Pike
(A.K.A. Browning Road, Sandy Lane, County Route 659-Variable width
right-of-way), said point of beginning being located on the bearing and distance
of North 89 Degrees 36 minutes 00 seconds, a distance of 72.60 feet from the
original point of beginning for this tract as previously set forth in Deed Book
4657, Page 154 and from said beginning point running; thence
1. Along the northerly line of said Gloucester Pike, North 89 degrees 56
minutes 00 seconds West, a distance of 617.96 feet to a P.K. nail & washer set
in line of the same; thence
2. Along the dividing line between Lot 5 & Lot 4.02, Block 1401, following
along or near that portion of a partition wall, North 00 degrees 04 minutes 28
seconds West, a distance of 123.71 feet to a point; thence
3. Along or near the same, South 89 degrees 56 minutes 44 seconds East, a
distance of 19.25 feet to a point; thence
4. Along or near the same, North 00 degrees 03 minutes 16 seconds East, a
distance of 84.09 feet to a point; thence
5. Along or near the northerly face of a masonry building, South 89 degrees
56 minutes 00 seconds East, a distance of 4.65 feet to a point; thence
6. Along the dividing line between Lot 5 & Lot 4.02, Block 1401, North 00
degrees 21 minutes 02 seconds East, a distance of 253.12 feet to a P.K. nail &
washer set; thence
7. Along the dividing line between Lot 5 & Lot 4, Block 1401, North 50
degrees 17 minutes 40 seconds East, a distance of 222.76 feet to a rebar with
cap set; thence
8. Along the southwesterly line of White Horse Pike (A.K.A. New Jersey State
Highway U.S. Route 30, variable width right-of-way), South 39 degrees 42 minutes
20 seconds East, a distance of 468.40 feet to a point; thence
9. Along the dividing line between Lot 5 & Lot 6, Block 1401, South 50
degrees 17 minutes 40 seconds West a distance of 138.00 feet to a P.K. nail &
washer set; thence
10. Along the same, South 39 degrees 42 minutes 20 seconds East, a
distance of 150.00 feet to a P.K. nail & washer set; thence
11. Along the same, North 50 degrees 17 minutes 40 seconds East, a distance of
150.00 to a P.K. nail & washer set; thence
40
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12. Along the southwesterly line of the aforementioned White Horse Pike,
South 39 degrees 42 minutes 20 seconds East, a distance of 91.44 feet to a P.K.
nail & washer set at a point of curvature in the same; thence
13. Along the same, on a curve to the right, having a radius of 80.00
feet turning a central angle of 25 degrees 35 minutes 24 seconds, an arc length
of 35.73 feet, the cord of which bears South 26 degrees 54 minutes 38 seconds
East, a chord distance of 35.43 feet to a P.K. nail & washer set at a point of
compound curvature in the same; thence
14. Along the same, on a curve to the right, having a radius of 20.00
feet, turning a central angle of 85 degrees 39 minutes 58 seconds an arc length
of 29.90 feet, the chord of which bears South 28 degrees 43 minutes 03 seconds
West, a chord distance of 27.19 feet to a P.K. nail & washer set at a point of
compound curvature in the same; thence
15. Still running along the same, on a curve to the right, having a
radius of 140.00 feet turning a central angle of 18 degrees 30 minutes 58
seconds, an arc length of 45.24 feet, the chord of which bears South 80 degrees
48 minutes 31 seconds West, a chord distance of 45.05 feet to a P.K. nail &
washer set at a point of tangency in the same; thence
16. Along the same, South 00 degrees 03 minutes 04 seconds East, a distance of
2.83 feet to the point and place of beginning.
Together with the benefit and burden of:
(a) that certain Party Wall Agreement as
contained in Deed Book 3117, Page 1150 dated July 9, 1969 and recorded July 15,
1969 between Supermarkets General Corporation and Bridge Stuart, Inc.
(b) Terms and provisions of agreement
between Bridge Stuart Inc., Jersey Stuart, Inc., John Hancock Mutual Life
Insurance, Connecticut General Life Insurance and Supermarkets General
Corporation dated August 27, 1970 and recorded September 1, 1970 in Deed Book
3164, Page 1194, Modification of Cross- Easement Agreement between Bridge Stuart
Inc., Jersey Stuart, Inc., John Hancock Mutual Life Insurance, Connecticut
General Life Insurance and Supermarkets General Corporation dated December 3,
1980 and recorded August 5, 1981 in Deed Book 3791, Page 418 and Amendment of
Cross-Easement Agreement by Plainbridge, Inc. dated August 10, 2000 and recorded
in Deed Book 5113, Page 168.
For Information Only:
The land referred to herein is commonly known as Lot(s) 5, Block 1401 on the Tax
Map of the Borough of Lawnside, in the County of Camden.
41
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EXHIBIT A-3
Legal Description
4055 Merrick Road
Seaford, NY
SECTION 57 BLOCK G LOT(s) 323 ON THE TAX MAP OF NASSAU COUNTY
ALL that certain plot, piece or parcel of land, situate, lying and being at
Seaford, Town of Hempstead, County of Nassau and State of New York, bounded and
described as follows:
BEGINNING at a point lying in the easterly side of Washington Avenue, distant
82.03 feet northerly from the corner formed by the intersection of the easterly
side of Washington Avenue with the northerly side of Merrick Road, as widened;
RUNNING THENCE along the easterly side of Washington Avenue, North 6 degrees 30
minutes 00 seconds East for a distance of 204.12 feet to land formerly of Graef;
THENCE along land formerly of Graef and formerly of J.C. Baylis, the following
four courses and distances:
1. South 84 degrees 31 minutes 50 seconds East for 316.39 feet.
2. South 84 degrees 37 minutes 10 seconds East for 50.04 feet.
3. South 84 degrees 19 minutes 00 seconds East for 45.00 feet.
4. South 84 degrees 19 minutes 30 seconds East for 139.44 feet to land of
the County of Nassau;
THENCE along land of the County of Nassau, South 2 degrees 51 minutes 45 seconds
West for a distance of 224.20 feet to the northerly side of Merrick Road as
widened;
THENCE along the northerly side of Merrick Road as widened, South 88 degrees 04
minutes 36 seconds West for a distance of 214.58 feet to a point;
THENCE still along the northerly side of Merrick Road as widened, South 87
degrees 32 minutes 33 seconds West for a distance of 128.43 feet to a point;
THENCE still along the northerly side of Merrick Road as widened, along the arc
of a curve bearing to the left with a radius of 1882.00 feet for a distance of
81.61 feet to a point being 121.53 feet easterly from the corner formed by the
intersection of the easterly side of Washington Avenue with the northerly side
of Merrick Road, as widened;
THENCE North 01 degree 45 minutes 00 seconds West for a distance of 80.22 feet
to a point;
THENCE South 88 degrees 15 minutes 00 seconds West for a distance of 26.10 feet
to a point;
THENCE North 06 degrees 44 minutes 20 seconds East for a distance of 3.17 feet
to a point;
THENCE North 84 degrees 53 minutes 20 seconds West for a distance of 108.29 feet
to the easterly side of Washington Avenue and the point or place of BEGINNING.
42
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EXHIBIT A-4
Legal Description
1764 Grand Avenue
Baldwin, NY
SECTION 36 BLOCK 409 LOT(s) 580, 592-595, 597, 598, 598 and 600 ON THE TAX MAP
OF NASSAU COUNTY
ALL that certain plot, piece or parcel of land with the buildings and
improvements thereon erected, situate lying and being at Baldwin, in the Town of
Hempstead, County of Nassau, and the State of New York, bounded and described as
follows:
BEGINNING at a point on the westerly side of Grand Avenue, distant 115.04 feet
southerly from the corner formed by the intersection of the westerly side of
Grand Avenue with the southerly side of Stowe Avenue;
RUNNING THENCE South 12 degrees 19 minutes 10 seconds East along the westerly
side of Grand Avenue, 172.96 feet;
RUNNING THENCE South 78 degrees 54 minutes West, 145.29 feet;
RUNNING THENCE South 12 degrees 30 minutes East, 45.71 feet;
RUNNING THENCE North 80 degrees 32 minutes East 145.29 feet to the westerly side
of Grand Avenue;
RUNNING THENCE South 12 degrees 19 minutes 10 seconds East along the westerly
side of Grand Avenue, 214.81 feet;
RUNNING THENCE South 82 degrees 10 minutes West, 242.74 feet;
RUNNING THENCE South 12 degrees 19 minutes 10 seconds East, 111.16 feet;
RUNNING THENCE North 30 degrees 18 minutes West, 101.14 feet;
RUNNING THENCE South 50 degrees 33 minutes West, 61.34 feet;
RUNNING THENCE South 58 degrees 36 minutes West, 76.98 feet to land of the
County of Nassau;
43
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RUNNING THENCE along said land of the County of Nassau the following four
courses and distances:
1. North 23 degrees 17 minutes West, 119.76 feet;
2. North 12 degrees 26 minutes 20 seconds West, 39.96 feet;
3. North 1 degree 39 minutes 50 seconds West, 105.90;
4. North 22 degrees 13 minutes 53 seconds West, 231.13 feet;
RUNNING THENCE North 77 degrees 56 minutes East, 443.63 feet to the westerly
side of Grand Avenue, at the point or place of BEGINNING.
44
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EXHIBIT A-5
Legal Description
92-10 Atlantic Avenue
Queens, NY
BLOCK 9027 LOT 11 AND BLOCK 9028 LOT 1 ON THE TAX MAP OF QUEENS COUNTY
Parcel 1 and 2 (Composite Description)
All that certain plot, piece or parcel of land with the buildings or
improvements thereon, erected, situate, lying and being in the Borough and
County of Queens, City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the northwesterly line of
95th Avenue (a/k/a University Place, f/k/a Chichester Avenue) (60 feet wide)
with the southwesterly line of 93rd Street (a/k/a Clinton Place, f/k/a Woodhaven
Avenue) (60 feet wide) and from said point of BEGINNING;
RUNNING THENCE along said northwesterly line of 95th Avenue, South 40 degrees 26
minutes 58 seconds West, a distance of 299.96 feet to a point;
THENCE along the dividing line between Lot 1, Block 9028 and Lot 51 (n/f reputed
owner 7 Horizon Corp.), Block 9027, the following three (3) courses and
distances:
1. NORTH 49 degrees 33 minutes 02 seconds West, a distance of
74.03 feet to a point;
2. THENCE South 40 degrees 26 minutes 58 seconds West, a distance
of 3.85 feet to a point;
3. THENCE North 49 degrees 33 minute 02 seconds West, a distance of 24.97 feet
to a point;
THENCE along the dividing line between Lot 11, Lot 51 and Lot 65 (n/f reputed
owner 7 Horizon Corp.), Block 9027, South 40 degrees 26 minutes 58 seconds West,
a distance of 466.97 feet to a point;
THENCE along the dividing line between Lot 11 and Lot 80 (n/f reputed owner
Realex Development Corporation) and Lot 8 (n/f reputed owner Sutton
Associates, Inc.), Block 9027, North 49 degrees 33 minutes 02 seconds West, a
distance of 301.65 feet the southeasterly line of Atlantic Avenue (LIRR
division, 120.01 feet wide);
THENCE along said southeasterly line of Atlantic Avenue, North 40 degrees 26
minutes 58 seconds East, a distance of 50.48 feet to a point;
45
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THENCE along the dividing line between Lot 11 and Lot 102 (n/f reputed owner
Jack Sloane), Block 9027, the following five (5) courses and distances:
1. SOUTH 49 degrees 33 minutes 02 seconds East, a distance of
38.53 feet to a point;
2. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 19.75 feet to a point;
3. THENCE South 49 degrees 33 minutes 02 seconds East, a distance
of 15.00 feet to a point;
4. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 45.00 feet to a point;
5. THENCE North 49 degrees 33 minutes 02 seconds West, a distance
of 15.00 feet a point;
THENCE continuing along the dividing line between Lot 11, Lot 102 and Lot 12
(n/f reputed owner Plainbridge, Inc.,) Block 9027, North 40 degrees 26 minutes
58 seconds East, a distance of 314.94 feet to a point;
THENCE continuing along the dividing line between Lot 11 and Lot 12, Block 9027,
the following four (4) courses and distances:
1. SOUTH 49 degrees 33 minutes 02 seconds East, a distance of
11.67 feet to a point;
2. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 14.00 feet to a point;
3. THENCE North 49 degrees 33 minutes 02 seconds West, a distance
of 11.67 feet to a point;
4. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 66.31 feet to a point;
THENCE along the dividing line between Lot 1, Block 9028 and Lot 12, Block 9027,
North 49 degrees 33 minutes 02 seconds West, a distance of 38.53 feet to a point
of the aforementioned southeasterly line of Atlantic Avenue;
THENCE along said southeasterly line of Atlantic Avenue, North 40 degrees 26
minutes 58 seconds East, a distance of 260.30 feet to a point on the
aforementioned southwesterly line of 93rd Street;
46
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THENCE along said southwesterly line of 93rd Street, South 49 degrees 33 minutes
02 seconds East, a distance of 400.65 feet to the corner aforesaid, the point or
place of BEGINNING.
Together with the benefit and burden of that certain Declaration of Easement by
Plainbridge, Inc. dated as of 1/11/1996 recorded 2/16/1996 in Reel 4278
Page 358. (affects Parcels 1 and 2)
47
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BLOCK 9027, LOT(S) 51 AND 65 ON THE TAX MAP OF QUEENS COUNTY
Parcel 3
ALL that certain lot, piece or parcel of land, situate, lying and being at
Woodhaven in the Fourth Ward of the Borough and County of Queens, City and State
of New York, bounded and described as follows:
BEGINNING at a point on the northerly side of 95th Avenue, formerly University
Place and Chichester Avenue distance 39.66 feet westerly from the corner formed
by the intersection of the northerly side of 95th Avenue with the former
westerly side of 92nd Street, discontinued and closed, (formerly Bigelow Avenue
or Place);
RUNNING THENCE northerly at right angles to 95th Avenue, 74.03 feet;
THENCE westerly and parallel with 95th Avenue, 3.85 feet;
THENCE northerly at right angles to 95th Avenue, 24.97 feet;
THENCE westerly parallel with 95th Avenue, 466.97 feet;
THENCE southerly at right angles to 95th Avenue and part of the distance through
a party wall, 99 feet to the northerly side of 95th Avenue;
THENCE easterly along said northerly side of 95th Avenue, 470.82 feet to the
point or place of BEGINNING.
ALL the herein distances and dimensions being according to the United States
Standard of Measurement.
Together with the benefit and burden of that certain Declaration of Easement by
and between Supermarkets General Corporation and 7 Horizon Corp., dated as of
August 7, 1987 and recorded November 17, 1987 in Reel 2494, Page 1380. (affects
Parcels 1, 2 and a portion of Parcel 3)
48
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EXHIBIT A-6
Legal Description
3901 Lancaster Pike
Wilmington, DE
Premises A:
ALL that certain lot, piece or parcel of land with the improvements erected
thereon, situate in Christiana Hundred, New Castle County and State of Delaware,
being more particularly bounded and described in accordance with that certain
ALTA/ACSM Land Title Survey prepared by Van DeMark & Lynch, Inc. for Pathmark
Stores, Inc. dated July 6, 1998, as revised (File No 333I6-L) as follows to wit:
BEGINNING at a monument found on the northeasterly side of the Lancaster Pike,
(S.R. 48) said point being a corner for lands now or formerly of Pennmark Real
Estate Group, L.L.C. (Deed Record 1848, Page 87), leased by Supermarkets General
Corporation Deed Record X, Volume 110, Page 272, said northeasterly side of
Lancaster Pike being distant northeasterly 53 feet therefrom at right angles
thereto the centerline, said point Beginning distant the three following
described courses and distances measured along the sides of the said Lancaster
Pike from a corner of lands now or formerly of E.I. DuPont DeNemours & Company:
(1) North 62 degrees 13 minutes 60 seconds West, 242.24 feet to a point,
(2) North 27 degrees 08 minutes 30 seconds East, 5.63 feet to a set drill
hole; and
(3) North 48 degrees 21 minutes 59 seconds West, 51.64 feet to the point of
Beginning
THENCE from said point of Beginning and continuing along the various courses of
the said northeast side of Lancaster Pike, the three following described courses
and distances:
(1) North 62 degrees 13 minutes 50 seconds West, 197.03 feet to a found
monument;
(2) North 70 degrees 23 minutes 36 seconds West, 53.52 feet to a found
monument; and
(3) North 64 degrees 24 minutes 10 seconds West, 141.71 feet to a found
monument in the line of lands said point being distant northeasterly 40.10 feet
therefrom measured at right angles thereto the said centerline of the Lancaster
Pike;
THENCE partially along the southeasterly line and along the northeasterly line
of said lands now or formerly of Shellhorn & Hill Incorporated, the two
following courses and distances: (1) North 18 degrees 18 minutes 30 seconds
East, 106.42 feet to a set iron pin; and (2) North 62 degrees 13 minutes 50
seconds West 130.35 feet to a found monument in the line of lands now or
formerly of Mother African UFCMP Church (Deed Record 1649, Page 27);
THENCE along lines of said lands now or formerly of Mother African UFCMP Church
the three following described courses and distances;
49
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(1) North 28 degrees 21 minutes 00 seconds East, 40.00 feet to a found
monument;
(2) North 62 degrees 13 minutes 50 seconds West, 3.02 feet to a found
monument; and
(3) North 27 degrees 35 minutes 03 seconds East, 250.00 feet to a point, a
corner for lands now or formerly of Bellevue Office Plaza as shown on a Record
Land Development Plan recorded in the Office of the Recorder of Deeds in and for
New Castle County on Microfilm No. 6686;
THENCE, partially along the southwesterly line of said lands now or formerly of
Bellevue Office Plaza, South 62 degrees 13 minutes 50 seconds East, 538.93 feet
to a set nail, a corner for said lands leased by Supermarkets General
Corporation;
THENCE THEREBY, South 27 degrees 08 minutes 30 seconds West, 382.02 feet to a
point on the said northeasterly side of Lancaster Pike and the point and place
of Beginning.
Premises B:
ALL that certain parcel of land situate in Christiana Hundred, New Castle County
and State of Delaware, being more particularly bounded and described as follows,
to wit:
Beginning at a point on the northeasterly side of Lancaster Turnpike, at 70 feet
wide, said point of Beginning being North 62 degrees 13 minutes 50 seconds West
242.24 feet measured along the said northeasterly side of Lancaster Turnpike
from a corner common to lands of Commonwealth Trust Co., and lands now or
formerly of E.I. DuPont deNemours & Co.; thence from said point of Beginning and
along said northeasterly side of the Lancaster Turnpike, North 62 degrees 13
minutes 50 seconds West, 50.00 feet to a point, a corner for lands now or
formerly of Lancaster Investments, Inc.; thence thereby North 27 degrees 08
minutes 30 seconds East 400.02 feet to a corner; thence continuing along the
said line of lands of Lancaster Investments, Inc., South 62 degrees 13 minutes
50 seconds East 50.00 feet to a point; thence by a new line through lands of
Commonwealth Trust Co. South 27 degrees 08 minutes 30 seconds West 400.02 feet
to the first mentioned point and place of Beginning. Be the contents thereof
what they may.
50
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EXHIBITS B-1 THROUGH B-6
SUPERMARKET LEASE FORMS
(Attached)
51
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EXHIBIT B-1
LEASE FORM FOR UPPER DARBY, PA
52
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KEY NO:
LEASE
BY AND BETWEEN
WE APP UPPER DARBY LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
421 SOUTH 69TH BOULEVARD, UPPER DARBY, PENNSYLVANIA
53
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
8
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
10
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
15
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
16
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
16
26.
DESTRUCTION
19
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
54
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TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
27
45.
INVALIDITY OF CERTAIN PROVISIONS
27
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
28
51.
COUNTERPARTS
29
52.
INCORPORATION OF STATE LAW PROVISIONS
29
55
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP UPPER DARBY LLC, a Delaware limited liability
company with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue
Extension, Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley
(hereinafter called “Landlord”), and PATHMARK STORES, INC., a Delaware
corporation, having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”). This Lease is guaranteed by The Great Atlantic &
Pacific Tea Company, Inc., a Maryland corporation (“Guarantor”) pursuant to a
guaranty of even date herewith (as the same may be amended, supplemented or
modified from time to time, the “Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made a part
hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Local Law Addendum; and
K. Exhibit J, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from Landlord that
certain parcel of land (hereinafter called “Land”) commonly known as 421 South
69th Boulevard, Upper Darby, Pennsylvania and more particularly described on
Exhibit B1 and the buildings and other improvements now or hereafter erected on
the Land together with the benefit of and subject to any and all easements,
appurtenances, rights and privileges and other matters of record now or
hereafter arising including those described in Exhibit B2. The land is currently
56
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improved by an existing building consisting of approximately 52,791 square feet
of space (the “Building”), as more particularly shown on the Site Plan attached
hereto as Exhibit A. The Building and any other buildings and improvements now
or hereafter erected on the Land shall be hereinafter called “Improvements.” The
Land and any Improvements are hereinafter collectively called the “Demised
Premises.”
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the “Commencement
Date”) on the Effective Date and shall continue to and include the date (the
“Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 12 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten
(10) separate consecutive renewal periods of five (5) years each (each such
period being hereinafter called a “Renewal Period”) upon the same terms and
conditions as are herein set forth except the rent for such Renewal Period shall
be as provided in Section 5 below; provided, however, that at the time of so
electing to extend and also at the time any Renewal Period commences Tenant is
not in default beyond any applicable notice and cure period, and this Lease is
then in full force and effect. If Tenant fails timely so to exercise its option
for any Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the
57
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Term of this Lease shall be automatically extended for the Renewal
Period(s) covered by the Renewal Notice without execution of an extension or
renewal lease. If Tenant shall not have given notice of such election to
Landlord by such date in respect of any Renewal Period, Landlord shall (unless
notice shall have been given as hereinafter specifically permitted) give notice
to Tenant that Tenant has failed to give notice of such election to Landlord
(hereinafter called the “Option Notice”). Tenant’s time to give notice of such
election shall continue until the date which is sixty (60) days after receipt of
the Option Notice. Landlord shall not give the Option Notice prior to the date
which is four hundred twenty-five (425) days before the Expiration Date. If
Landlord shall not have given the Option Notice prior to the date which is four
hundred twenty-five (425) days before the beginning of the next succeeding
Renewal Period, the term of this Lease shall be extended beyond the Expiration
Date to the date which is four hundred twenty-five (425) days after the date on
which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
1,059,420.00
$
88,285.00
6-10
$
1,112,391.00
$
92,699.25
11-15
$
1,168,010.55
$
97,334.21
16-20
$
1,226,411.08
$
102,200.92
First Renewal Period
21-25
$
1,287,731.63
$
107,310.97
Second Renewal Period
26-30
$
1,352,118.21
$
112,676.52
Third Renewal Period
31-35
$
1,419,724.12
$
118,310.34
Fourth Renewal Period
36-40
$
1,490,710.33
$
124,225.86
Fifth Renewal Period
41-45
$
1,565,245.85
$
130,437.15
Sixth Renewal Period
46-50
$
1,643,508.14
$
136,959.01
Seventh Renewal Period
5 1-55
$
1,725,683.55
$
143,806.96
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Eighth Renewal Period
56-60
$
1,811,967.72
$
150,997.31
Ninth Renewal Period
61-65
$
1,902,566.11
$
158,547.18
Tenth Renewal Period
66-70
$
1,997,694.41
$
166,474.53
B. All Fixed Annual Rent shall be payable by Tenant in equal
monthly installments in advance on the first day of every calendar month during
the Term of this Lease (and any Renewal Periods), and shall be payable at the
office of the Landlord first above set forth or at such other address as
Landlord shall have given in a notice to Tenant) in current U.S. currency by
check drawn on a clearinghouse bank and payable directly to Landlord (or, if
requested by Landlord from time to time by electronic fund transfer, to an
account designated by Landlord). Rent for a part of a month shall be prorated on
a daily basis and paid on the Commencement Date. Further, the rent for the first
full month shall be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water, sewer, telephone, refuse
disposal, and other charges for utilities and services supplied to the Demised
Premises, insurance costs, amounts due under any title encumbrance matter
described in Exhibit B2, and all costs of cleaning, maintaining, repairing and
replacing the Demised Premises or any portion thereof and of complying with all
laws now existing or hereafter enacted including all Environmental Laws (defined
below). Any cost, expense or obligation directly relating to the Demised
Premises that is not expressly declared in this Lease to be that of Landlord
shall be deemed to be an obligation of Tenant to be performed by Tenant at
Tenant’s sole expense, and to the greatest extent permitted by law Tenant shall
indemnify and defend Landlord against, and hold Landlord harmless from, the
same, and Tenant’s liability for the payment and performance of such amounts and
obligations that shall arise during the Term is
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hereby expressly provided to survive the expiration of the Term or early
termination of this Lease. Fixed Annual Rent, Additional Rent, and all other
sums payable hereunder by Tenant, shall be paid without notice or demand, and
without set off, counterclaim, recoupment, abatement, suspension, deduction, or
defense (other than payment) whatsoever. Except as otherwise expressly set forth
in this Lease with respect to certain events of casualty in Section 26 or
condemnation in Section 27, Tenant shall in no event have any right to terminate
this Lease, and any right so to terminate (or to abate, suspend, set off or
otherwise deduct from Fixed Annual Rent or Additional Rent) under applicable law
is hereby waived to the greatest extent permitted by law. It is the intention of
the parties that the obligations of Tenant hereunder shall be separate and
independent covenants and shall not be discharged or otherwise affected by any
law or regulation now or hereafter applicable to the Demised Premises or any
other restriction on Tenant’s use, and that Fixed Annual Rent, Additional Rent,
and all other sums payable by Tenant hereunder shall continue to be payable in
all events, and that the obligations of Tenant hereunder shall continue
unaffected throughout the Term. Landlord, at its sole cost and expense, shall be
responsible for the following: (i) payment of any amounts relating to Fee
Mortgages or other encumbrances or liens created by Landlord, (ii) management
fees, administrative costs, professional fees and any other costs incidental to
its fee ownership of the Demised Premises; and (iii) and cost, expense, or
liability resulting from the negligent or willful misconduct of Landlord, its
employees or agents.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of a
supermarket, drugstore, automated teller machine, bank, all other uses customary
and incidental to a supermarket and, so long as the Minimum Credit Test (defined
in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised Premises
or Tenant or both, foreseen or unforeseen, and whether or not the same interfere
with Tenant’s occupancy. Tenant shall procure all approvals, licenses and
permits, in each case promptly giving Landlord true and complete copies of the
same and all applications therefor. Tenant shall never overload any of the
Building systems, including the floors and mechanical, electrical and structural
systems, and shall also keep the Demised Premises equipped with appropriate
safety appliances and comply with all requirements of insurance and of insurance
inspection or rating bureaus. Tenant shall not itself, nor shall Tenant permit
or suffer persons acting under Tenant to, either with or without negligence,
injure, overload, deface, damage or otherwise harm the Demised Premises or any
part thereof or use the Demised Premises contrary
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to any law or in a manner likely to create any nuisance. It is intended that
Tenant bear the sole risk of all present or future laws affecting the Demised
Premises, and Landlord shall not suffer any reduction in any rent on account of
the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land. Landlord further covenants and
agrees, upon request of tenant, to convey without compensation therefor,
insubstantial perimeter portions of the Land for highway or roadway purposes, to
the state in which the demised premises are situate or any other municipal or
governmental body, provided, however, that any such conveyance shall not
constitute a taking (as defined in section 28 below) nor constitute grounds for
tenant to terminate this Lease. Notwithstanding anything to the contrary or
otherwise set forth herein, any encumbrance on the Demised Premises shall be
subject to any requirements imposed by any Fee Mortgage (provided that Landlord
shall reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s intention to discontinue permanently the operation of its
business in the Demised Premises or any part of the Demised Premises or
discontinues the operation of its business in the Demised Premises or any part
of the Demised Premises for a period of one (1) year for any reason (other than
Destruction or Taking that pursuant to the applicable provisions of this Lease
entitles Tenant to terminate this Lease), then Landlord may terminate this Lease
as to the Demised Premises, or if applicable, the part of the Demised Premises
with respect to which Tenant has given notice of its intention to discontinue,
or in which Tenant has discontinued, its operations, by thirty (30) days’
written notice to Tenant of Landlord’s election to terminate this Lease (or, if
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as applicable, resuming operations of
its business in the Demised Premises within twenty-five (25) days after receipt
of Landlord’s notice or by rescinding its notice of its intention to discontinue
its business in writing to Landlord delivered within twenty-five (25) days after
receipt of Landlord’s notice.
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7. TAXES.
A. Tenant shall, during the term of this Lease, as Additional Rent,
pay and discharge punctually, as and when the same shall become due and payable,
all taxes, special and general assessments, water rents, rates and charges,
sewer rents and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, including rent and/or
occupancy taxes (hereinafter collectively referred to as “Taxes”), and each and
every installment thereof that shall or may during the term of this Lease,
become due and payable, or liens upon the Demised Premises or any part thereof,
together with all interest and penalties thereon, under or by virtue of all
present or future laws, ordinances, requirements, orders, directives, rules or
regulations of the Federal, State, County, Town and City Governments and of all
other governmental authorities whatsoever (all of which shall also be included
in the term “Taxes” as heretofore defined).
B. To the extent permitted by law, Tenant or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installments. Landlord agrees to permit the application
for the foregoing conversion to be filed in Landlord’s name, if necessary, and
shall execute any and all documents, instruments or certificates reasonably
requested by Tenant to accomplish the foregoing.
C. Tenant shall be deemed to have complied with the covenants of
this Lease if payment of Taxes shall have been made either within any period
allowed by law or by the applicable governmental authority during which payment
is permitted without penalty so long as the Taxes shall never become subject to
a tax sale on the Demised Premises or subject Landlord to any civil or criminal
liability. Tenant shall produce and exhibit to Landlord satisfactory evidence of
payment prior to the expiration of any such period.
D. All Taxes shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of such year during which the
Term shall be in effect. Notwithstanding anything to the contrary contained
herein, if the Term hereof terminates prior to the date which would have been
the expiration thereof but for the earlier termination, then Tenant shall pay
those Taxes which would have been paid by Tenant to and including the term
expiration date and this obligation shall expressly survive such termination.
E. So long as the requirements of Paragraph C of this Section are complied with,
Tenant or its designees shall have the right to contest or review all Taxes by
legal proceedings, or in such other manner as it may deem suitable. Tenant or
its designees shall inform Landlord of any such proceedings and conduct such
proceedings promptly at its own cost and expense, and free of any expenses to
Landlord, and if necessary, in the name of and with the cooperation of Landlord
(so long as Landlord’s cooperation does not involve incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant). Landlord
shall execute all documents, instruments or certificates reasonably necessary
and correct to accomplish the foregoing. Notwithstanding anything to the
contrary or otherwise set forth herein, any such contest shall be subject to
compliance with all applicable provisions of any Fee Mortgage (provided that
Landlord shall reasonably cooperate with Tenant, at no material out of pocket
cost to Landlord, in connection with such compliance).
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F. Landlord covenants and agrees that any refunds or rebates on
account of Taxes paid by Tenant pursuant to the provisions of this Lease shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and as such are to be received by Landlord in trust and paid to Tenant
forthwith. Landlord will, upon the request of Tenant, sign any receipts that may
be necessary to secure the payment of any such refund or rebate, directly to
Tenant and/or will pay over to Tenant such refund or rebate as received by
Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant’s application (if
legally required) for separate tax assessments for such portions of the Demised
Premises as Tenant shall at any time, and from time to time, reasonably
designate. Landlord hereby agrees, upon request of Tenant, to execute all
documents, instruments or certificates as shall reasonably be required by Tenant
(so long as the same impose no material obligations on Landlord or expose
Landlord to any liability).
G. Nothing herein or in this Lease otherwise contained shall
require or be construed to require Tenant to pay any inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, that are or may
be imposed upon Landlord, its successors or assigns, whether arising out of
Landlord’s ownership of the Demised Premises, this Lease or otherwise; provided,
however, that if at any time hereafter there is levied any tax on Landlord in
lieu of real estate taxes based solely upon the ownership of real property, by
property owners, in general, within the tax jurisdiction within which the
Demised Premises are located, then such tax shall be considered to be an item of
Taxes but for purposes of computing the amount of such tax payable by Tenant,
the Demised Premises shall be deemed to be the sole real property owned by
Landlord.
H. In the event that any fee mortgagee (“Fee Mortgagee”) requires the escrow of
Real Estate Taxes or insurance premiums, Tenant shall pay to such Fee Mortgagee
in escrow, on the first day of each and every month during the term of this
Lease, one twelfth (1/12) of all estimated charges for the ensuing twelve (12)
month period as reasonably estimated by the Fee Mortgagee based on current bills
for same. Tenant shall deposit at least ten (10) days prior to the first date on
which any interest or penalty will accrue such additional amounts as may be
necessary so that there shall at all times be sufficient funds in escrow to pay
such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall
have the right to install, maintain and replace in, on or in front of any
Improvement or location on the Demised Premises or in any part thereof such
signs and advertising matter as Tenant, and with Tenant’s consent, any such
assignee or subtenant of Tenant may desire, provided that Tenant shall comply
with any applicable requirements of governmental authorities having jurisdiction
and shall obtain any necessary permits for such purposes. As used in this
Section, the word “sign” shall be construed to include any placard, pylon, logo,
light or other advertising symbol or object, irrespective or whether same be
temporary or permanent. All signs shall be Tenant’s personal property and shall
be maintained and removed by Tenant upon termination of this Lease at Tenant’s
sole expense.
9. TRUE LEASE. It is the intent of Landlord and Tenant and the
parties agree that this Lease is a true lease and that this Lease does not
represent a financing agreement. Each party shall reflect the transaction
represented hereby in all applicable books, records, and reports
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(including income tax filings) in a manner consistent with “true lease”
treatment rather than “financing” treatment.
10. REPAIRS. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, keep and maintain or cause to be kept
and maintained in repair and good condition the Building and improvements at any
time erected on the Demised Premises. Without limitation, Tenant shall perform
the Remedial Work described in Exhibit C. Landlord shall not be required to
furnish services or facilities or to make any improvements, repairs,
replacements or alterations in or to the Demised Premises whatsoever during the
Term of this Lease. Without limiting the generality of the foregoing, Tenant
shall be responsible for the entire Demised Premises and shall manage, maintain,
repair, replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment serving the Demised Premises,
keeping the Demised Premises and all improvements and appurtenances in at least
as good condition as on the Commencement Date. Without limitation, Tenant shall
provide all cleaning, painting, janitorial services, rubbish disposal, periodic
exterior waterproofing treatments to the Building, window caulking, maintenance
of all gas, water, electric and other utility lines from public ways to the
Demised Premises, and shall repair, maintain and replace all landscaping, roads,
parking areas, and walkways appurtenant to the Demised Premises, and shall
provide all snowplowing services thereto. Tenant shall provide a copy of all
current vendor contracts, if any, relating to the foregoing to Landlord at least
annually and from time to time otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost and expense insurance
policies insuring against loss by fire, lightning, the perils of extended
coverage and malicious mischief covering the Demised Premises and the other
Improvements in the Demised Premises and other perils as more fully described in
Exhibit G.
B. So long as Tenant performs its obligations in Paragraph A of
this Section, Landlord hereby waives all rights of recovery against Tenant and
any other occupant(s) of the Demised Premises and any of their agents and
employees for damage or destruction to any and all of the Improvements,
including without limitation, the Building, arising out of fire or other
casualty whether or not caused by acts or negligence of the aforementioned
persons. Tenant hereby waives all rights of recovery against Landlord, its
agents and employees for damage or destruction to any and all of the
Improvements, including without limitation, the Building and to Tenant’s trade
fixtures, equipment and inventory arising out of fire or other casualty whether
or not caused by the acts or negligence of Landlord, its agents or employees.
C. Tenant shall maintain at its own cost and expense public
liability and other insurance in accordance with the requirements of Exhibit G.
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D. Any insurance required to be provided by Tenant pursuant to this
Lease may be provided by blanket insurance covering the Demised Premises and
other locations of Tenant, provided such blanket insurance complies with all of
the other requirements of this Lease with respect to the type of insurance
covered by blanket policies. If Tenant elects to insure the Demised Premises
under any blanket insurance policy, Tenant shall furnish to Landlord a
certificate of insurance showing the Demised Premises as a location insured
under any such blanket insurance policy to the extent of the limits required in
Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as to which
Tenant has received a notice containing such mortgagee’s name and address a
duplicate original copy or certificate of the policies of insurance required to
be carried by Tenant.
E. Notwithstanding anything to the contrary contained herein,
Tenant may carry any required insurance on trade fixtures and equipment
described in Section 17 under a program of self-insurance or to carry insurance
with deductibles in excess of part or all of the amounts of insurance required
under Exhibit G hereunder.
F. If Tenant fails to perform any covenant in this Section and such failure
continues for more than three (3) days after written notice, then, without
limiting any of Landlord’s other rights and notwithstanding any other provision
of this Lease concerning notice and cure of defaults, Landlord may but need not
obtain such insurance, and Tenant shall pay the cost thereof upon demand as
Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with
and shall from time to time conform the Demised Premises to every applicable
requirement of law, duly constituted authority, Board of Fire Underwriters
having jurisdiction or of the carriers of all insurance on the Demised Premises
(all of the foregoing being hereinafter called “Legal Requirements”). Tenant
shall have the right upon giving notice to Landlord to contest any obligations
imposed upon Tenant pursuant to the provisions of this Section and to defer
compliance during the pendency of such contest, if the failure of Tenant to so
comply will not subject Landlord to civil or criminal penalty or liability.
Landlord shall cooperate with Tenant in such contest (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall execute any documents
reasonably required in furtherance of such purpose. Tenant shall not apply for
any change in zoning applicable to the Land or the Demised Premises without
Landlord’s prior written consent, not to be unreasonably withheld, conditioned
or delayed.
13. ALTERATIONS. Tenant may at its own expense from time to time,
during the term hereof, make such alterations, additions, improvements and
changes, structural or otherwise (hereinafter called “Alterations”), in and to
the Demised Premises which it may deem necessary or desirable, provided such
Alterations shall not reduce the value of the Demised Premises. Tenant, in
making any Alterations, shall use materials of equal or better quality than
those used in the construction of the Demised Premises and comply with all Legal
Requirements. Tenant shall obtain or cause to be obtained all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals that may be required in connection with the making of
Alterations. Landlord shall cooperate with Tenant in the obtaining thereof (so
long as Landlord’s cooperation does not involve (a) incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant or (b) breach
of any covenants binding on
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Landlord or the Demised Premises, including, without limitation, any mortgage)
and shall execute any documents required in furtherance of such purpose. Tenant
may, but shall not be obligated to, remove any Alteration so long as such
removal does not materially and adversely affect any heating, ventilating,
mechanical, electrical, structural, roof or life safety elements of the Building
and Tenant shall repair all damage that results from such removal and restore
the Demised Premises to a functional condition (including the filling of all
floor and wall holes, the removal of all disconnected wiring back to junction
boxes and the replacement of all damaged ceiling tiles). Upon completion of any
Alteration that is not Cosmetic Work, Tenant shall promptly deliver to Landlord
plans showing such Alteration as built. “Cosmetic Work” shall mean painting,
carpeting and wall coverings and the like and the addition or deletion of
interior non structural partitions, provided such work does not materially and
adversely affect any roof, structural, mechanical, electrical, utility, fire
protection or life safety systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall permit Landlord to enter
upon the Demised Premises at all reasonable times approved by Tenant to examine
the Demised Premises, and during the six (6) month period preceding the
Expiration Date, to exhibit the Demised Premises to prospective tenants,
provided that Landlord shall not unreasonably interfere with the conduct of
business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any and all utility services to
the Demised Premises, including, without limitation, telecommunications, water,
gas, electricity and fuel used by it in the Demised Premises. Tenant shall pay
all sewer charges assessed by the municipal authority having jurisdiction. The
failure or interruption of any utility services shall be at Tenant’s sole risk
and Landlord shall not suffer any reduction in any rent on account thereof.
B. Tenant shall have the sole right to apply for, claim and receive
any rebate, reimbursement, credit, or payment from any utility company providing
service to the Building resulting from Tenant’s installation of energy saving
equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall
become subject and subordinate to the lien of any Fee Mortgagee of the entire
fee interest of the Demised Premises, and any renewals, modifications or
extensions thereof, provided that a Subordination, Non Disturbance and
Attornment Agreement (“SNDA”) substantially in the form annexed hereto as
Exhibit D (or a reasonably equivalent form that is reasonably acceptable to
Tenant and the applicable Fee Mortgagee) is executed, acknowledged and delivered
by such Fee Mortgagee to Tenant. If the Fee Mortgagee requires that this Lease
have priority over such mortgage, Tenant shall, upon request of the Fee
Mortgagee, execute, acknowledge and deliver to the Fee Mortgagee an agreement
acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment whether owned by Tenant or
leased by Tenant from a Lessor/Owner (hereinafter called the “Equipment Lessor”)
installed in the
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Demised Premises, regardless of the manner or mode of attachment, shall be and
remain the property of Tenant or any such Equipment Lessor and may be removed by
Tenant or any such Equipment Lessor at any time. In no event (including a
default under this Lease) shall Landlord have any liens, rights or claims in
Tenant’s or Equipment Lessor’s trade fixtures and equipment and Landlord agrees
to execute and deliver to Tenant and Equipment Lessor, within ten (10) days
after request therefor, any document reasonably required by Tenant or Equipment
Lessor in order to evidence the foregoing, so long as the same is reasonably
acceptable to Landlord and any Fee Mortgagee. Tenant shall promptly repair all
damage to the Building caused by the removal of any such trade fixtures or
equipment. Notwithstanding anything to the contrary in this Lease, the following
shall not constitute trade fixtures or equipment for purposes of this Lease and
neither Tenant nor any Equipment Lessor shall own or have any right to remove
the same (and, without limiting the generality of the foregoing, the following
shall not be subject to the provisions of this Paragraph A or Paragraph B of
this Section 17): (i) the HVAC system, plumbing, alarm, electric, life safety
and other building systems used to operate the Building or maintain the
certificate of occupancy, and (ii) any “fixtures” as such term is defined in the
applicable Uniform Commercial Code.
B. In the event Tenant shall enter into any arrangement to finance
all or any portion of its trade fixtures or equipment either before or after the
installation thereof in the Demised Premises and whether such financing shall be
in the form of a mortgage, financing agreement, equipment lease, equipment sale
leaseback or otherwise and in the event the lessor or secured party thereunder
shall provide written notice to Landlord that it requires a copy of any default
sent by Landlord to Tenant under this Lease also to be sent to such person
(hereinafter called the “Owner/Secured Party”), then Landlord upon receipt of
such requirement shall simultaneously send a copy of any default notice to such
Owner/Secured Party at the address furnished to Landlord; provided that
Landlord’s failure to deliver any such copy to the Owner/Secured Party shall not
affect Landlord’s exercise of any right or remedy under this Lease in any way
whatsoever. The copy of any such default notice shall be sent to such
Owner/Secured Party in the same manner as notices are required to be sent and in
the same manner as such notice is being sent to Tenant hereunder. Landlord
further agrees that any such Owner/Secured Party shall have the right, but not
the obligation, to remedy or cure any default of Tenant under this Lease within
the same period of time granted to Tenant to remedy or cure any such default
under this Lease.
C. All trade fixtures and other personal property (which term shall
include without limitation food and inventory) of any person that is located on
the Demised Premises shall be at the sole risk of Tenant. Landlord shall not be
liable for any loss or damage to person or property resulting from any accident,
theft, vandalism or other occurrence on the Demised Premises, including damage
resulting from water, wind, ice, steam, explosion, fire, smoke, chemicals, the
rising of water or leaking or bursting of pipes or sprinklers, defect, failure
or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this Section, Tenant may sublet all or any part
of the Demised Premises, or license the use of any portion thereof or assign
this Lease, but Tenant and Guarantor shall nevertheless continue to remain
liable hereunder. Any assignee of
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the Lease and any sublessee or licensee of all or substantially all of the
Demised Premises shall become jointly and severally liable to Landlord, and any
such transferee shall upon Landlord’s request execute and deliver an instrument
in confirmation thereof. In the case of any assignment of this Lease or any
sublease or licensee of all or substantially all of the Demised Premises, Tenant
shall promptly deliver to Landlord a true and complete copy of the transfer
instruments. No transfer of all or any portion of the Demised Premises or
Landlord’s consent thereto shall be deemed a waiver of the provisions of this
Section, or a release of Tenant or any Guarantor.
B. So long as the Minimum Credit Test is not met (however the
following provisions of this paragraph B shall not apply at any time when the
Minimum Credit Test is met), Tenant shall not assign this Lease or sublet or
license all or substantially all of the Demised Premises to any transferee
unless (x) such transferee (1) operates at least five (5) other grocery stores
and (2) has Tangible Net Worth” (as defined in Section 25 below) of at least One
Hundred Million Dollars ($100,000,000) or (y) if such transferee does not meet
the requirements of (1) and (2) then such transferee must be approved by
Landlord, such approval not to be unreasonably withheld, conditioned or delayed.
If Tenant desires to so transfer this Lease to a person who does not meet the
requirements of (1) and (2) in the preceding sentence, then Tenant shall give
notice of such intended transfer to Landlord together with reasonable
information on its grocery store business and its audited financial statements
for the three most recent years showing the credit of the proposed transferee
and the proposed terms of the transfer. Upon receiving such information Landlord
shall have thirty (30) days to elect by written notice to Tenant to do one of
the following (and any failure of Landlord to affirmatively elect one or the
other shall be deemed to be an election by Landlord to consent to such transfer:
(a) approve such transfer, (b) disapprove such transfer, or (c) terminate the
Term of this Lease on any date which is no sooner than one-hundred twenty (120)
days after such election notice and no later than one-hundred eighty (180) days
after such election. If Landlord elects to terminate this Lease and thereafter
within one-hundred twenty (120) days enters into a lease or other agreement with
Tenant’s proposed transferee, any transfer payment that was to have been made to
Tenant by such transferee as specifically disclosed in writing as such to
Landlord in the proposed terms of the transfer furnished to Landlord as provided
above shall be paid by Landlord to Tenant out of the first rent amounts received
by Landlord from such transferee until the transfer payment is paid to Tenant in
full. For purposes of the previous sentence, a “transfer payment” shall include
proposed sublease income in excess of the rent under this Lease, and in such
cases Landlord’s payment to Tenant shall be a liquidated amount equal to such
excess rent at a discount rate of ten percent (10%).
C. If Tenant assigns this Lease, Landlord, when giving notice to
said assignee with respect to any default, shall also give a copy of such notice
upon Tenant originally named herein or its successor of whom Landlord shall have
been given written notice (being herein called “Original Tenant”), and no notice
of default shall be effective as against a Tenant until a copy thereof is given
to the Original Tenant. The Original Tenant shall have the same period after the
giving of such notice to cure such default as is given to Tenant under this
Lease. If this Lease terminates or this Lease and the Term hereof cease and
expire because of a default of such assignee, Landlord shall promptly give the
Original Tenant notice thereof. The Original Tenant shall have the option, to be
exercised by notifying Landlord in writing within thirty (30) days after receipt
by the Original Tenant of Landlord’s notice, to cure any default and become
Tenant under a new lease for the remainder of the term of this Lease (including
any Renewal Periods if
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applicable) upon all of the same terms and conditions of this Lease as it may
have been amended by agreement between Landlord and Original Tenant, provided,
however, that at the time of making any such election Original Tenant cures all
defaults under the Lease. In the event Original Tenant assigns this Lease and it
shall thereafter be rejected in a bankruptcy or similar proceeding brought by or
against such assignee, a new lease identical to this Lease shall be entered into
between Landlord and Original Tenant, provided that Original Tenant cures any
monetary defaults and any other defaults that are capable of being cured. Any
new lease created under this Section shall commence on the date of termination
or rejection of this Lease, as applicable. Notwithstanding the foregoing, if
Landlord, in its sole discretion delivers to the Original Tenant and Guarantor a
release as to all liability under this Lease as theretofore amended, the
Original Tenant shall not have the foregoing option.
D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test or the
requirements of Section 1 8B are met, Landlord shall, within thirty (30) days
following Tenant’s request, deliver to Tenant a recognition and attornment
agreement following the form attached hereto as Exhibit D and otherwise subject
to Landlord’s reasonable approval, executed and acknowledged by Landlord, for
the benefit of such subtenant; provided that such subtenant executes and
delivers an instrument reasonably satisfactory to Landlord confirming that such
subtenant is jointly and severally liable under this Lease. Further, Landlord
shall, within ten (10) days after Tenant’s request, shall request its Fee
Mortgagee to deliver to Tenant an SNDA for the benefit of any such subtenant
(and Landlord shall reasonably cooperate with Tenant, at no out of pocket cost
to Landlord, in connection with obtaining any requisite consent from any Fee
Mortgagee).
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that Landlord is the owner of
the fee simple of the Demised Premises and that other than any mortgages held by
Fee Mortgagees that have provided an SNDA to Tenant in accordance with this
Lease or such other liens or encumbrances that do not interfere with Tenant’s
use of the Demised Premises or liens or encumbrances arising on account of any
act or omission by Tenant or persons acting under Tenant or on account of
Tenant’s failure to perform its obligations under this Lease, or matters set
forth in Exhibit B 1, Landlord shall not voluntarily impose any other lien or
encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and represent to the other that
(a) each is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which such entity was organized; (b) each has the
authority to own its property and to carry on its business as contemplated under
this Lease; (c) each has duly executed and delivered this Lease; (d) the
execution, delivery and performance by each of this Lease (i) are within its
powers, (ii) have been duly authorized by all requisite action, (iii) will not
violate any provision of law or any order of any court or agency of government,
or any agreement or other instrument to which it is a party or by which it or
any of its property is bound, (iv) will not render it insolvent or (v) will not
result in the imposition of any lien or charge on any of its property, except by
the provisions of this Lease; and (e) the Lease is a valid and binding
obligation of each in accordance with its terms.
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C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no
default remains uncured beyond any applicable notice and cure period, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises and all
rights, easements, appurtenances and privileges belonging or in anyway
appertaining thereto during the full term of this Lease and any extension
thereof subject always to the terms of this Lease, provisions of law, and
matters of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other so called quiet enjoyment covenant, whether
express or implied.
21. UNAVOIDABLE DELAYS. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any condition under this
Lease by any strike, lockout, labor dispute, inability to obtain labor or
material, Act of God, governmental restriction, regulation or control, enemy or
hostile governmental action, civil commotion, insurrection, sabotage, fire or
other casualty or by any other event similar to the foregoing and beyond the
control of such party, then the time to perform such obligation or to satisfy
such condition shall be postponed by the period of time consumed by the delay.
Time is of the essence for the performance of all monetary obligations under
this Lease and the foregoing shall never apply to the performance of monetary
obligations.
22. END OF TERM. Upon expiration or other termination of the term of this Lease,
Tenant shall peaceably and quietly quit and surrender the Demised Premises and
all Alterations in the good order and condition Tenant is required to maintain
the same and remove all trade fixtures, equipment and other personal property
whether or not bolted or otherwise attached and all of Tenant’s signs wherever
located; and in all cases shall repair damage that results from such removal.
Any fixtures and equipment that Tenant or Owner/Secured Party does not remove
following the expiration or other termination of the Term of this Lease shall be
deemed to be abandoned by Tenant, shall at once become the property of Landlord,
and may be disposed of in such manner as Landlord shall see fit; and Tenant
shall pay the cost of removal and disposal to Landlord within thirty (30) days
after demand; provided, however, that if this Lease shall be terminated as the
result of a default by Tenant, then trade fixtures and equipment shall not be
deemed abandoned until sixty (60) days after notice of such termination is given
to Owner/Secured Party. Tenant or Owner/Secured Party shall have the right at
any time prior to the date such fixtures and equipment shall be deemed abandoned
to remove the same from the Demised Premises. Should Tenant or anyone claiming
by, through or under Tenant hold over in possession after the Expiration Date or
earlier termination of this Lease, such holding over shall not be deemed to
extend the Term or to renew this Lease, but without limiting Landlord’s other
rights and remedies on account of such breach the tenancy thereafter shall
continue as a tenancy at sufferance from month-to-month upon the terms and
conditions herein contained, provided, however that rent shall be charged and
paid at one hundred fifty percent (150%) of the Fixed
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Annual Rent and Additional Rent in effect during the twelve (12) month period
immediately preceding the Expiration Date or earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply
with any of its express obligations set forth in this Lease within thirty (30)
days following written notice and opportunity to cure; provided, however,
Landlord will not be in default if said default could not reasonably be cured
within such period of thirty (30) days, and Landlord promptly commences and
thereafter proceeds with due diligence and in good faith to cure such default.
B. In the event that a Fee Mortgagee shall have given written
notice to Tenant that it is the holder of a mortgage covering the Demised
Premises, and provided such notice includes the address to which notices to the
Fee Mortgagee are to be sent, Tenant agrees that in the event it shall give
written notice to Landlord to cure a default of Landlord as provided for in this
Section, Tenant shall give a copy of said notice to the Fee Mortgagee. Tenant
agrees that the Fee Mortgagee may cure or remedy such default within the time
permitted to Landlord pursuant to this Section; provided that in addition the
Fee Mortgagee shall be entitled to such further time as may be reasonably
necessary for the Fee Mortgagee to remove any stay in bankruptcy and/or to
commence and complete foreclosure proceedings or remove any cause beyond the Fee
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in default hereunder, Landlord, after
thirty (30) days notice that Landlord intends to cure such default (but only ten
(10) days notice if such default concerns any breach of Tenant’s insurance
obligations under Section 11), shall have the right, but not the obligation, to
cure such default and Tenant shall pay to Landlord, upon demand, as Additional
Rent, the reasonable cost thereof. Other than such insurance defaults, Landlord
shall not commence to cure any default of such a nature that it could not
reasonably be cured within such period of thirty (30) days, if Tenant commences
to cure same within said period, and thereafter proceeds with reasonable
diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of this Section; or if a petition is filed by Tenant
(or Guarantor) for insolvency or for appointment of a receiver, trustee or
assignee or for adjudication, reorganization or arrangement under any bankruptcy
act or other applicable law or if any similar petition is filed against Tenant
(or Guarantor) and such petition is not dismissed within sixty (60) days
thereafter; or if Tenant fails to perform any other covenant or condition under
this Lease, Landlord may give Tenant a written notice specifying the nature of
the default of such other covenant or condition and if Tenant does not, within
thirty (30) days after receipt of such written notice (but only three (3) days
in the case of failure to perform Tenant’s insurance obligations under
Section 11), cure such other default
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or, if such default is of such a nature that it could not reasonably be cured
within such period of thirty (30) days, and Tenant does not commence and proceed
with reasonable diligence and in good faith to cure such default then, after the
expiration of such thirty (30) day period (or longer period if such default
cannot reasonably be cured within said thirty (30) day period), Landlord shall
have the right, in addition to the rights set forth in the preceding sentence,
to seek damages or an injunction as to such failure to perform, or after the
expiration of such thirty (30) day period Landlord may, but only during the
continuance of such default, send a notice to Tenant terminating this Lease and
reenter the Demised Premises and dispossess Tenant and any other occupants
thereof, remove their effects not previously removed by them, and hold the
Demised Premises as if this Lease had not been made; and Tenant waives the
service of any additional notice of intention to reenter or to institute legal
proceedings to that end. If any payment of Fixed Annual Rent, Additional Rent,
or other sum owing Landlord is not paid within five (5) days after the same is
due, then in addition to all other remedies hereunder Tenant shall pay an
administrative late charge to Landlord equal to five percent (5%) of the overdue
amount in question, which late charge will be due upon demand as Additional
Rent.
B. After a termination, dispossess or removal in accordance with this Section,
(1) the Fixed Annual Rent and Additional Rent shall be paid up to the date of
such dispossess or removal, (2) Landlord may re-let the Demised Premises or any
part or parts thereof either in the name of Landlord or otherwise, for a term or
terms which may, at the option of Landlord, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease,
and (3) Tenant shall pay to Landlord, as liquidated damages, any deficiency
between the Fixed Annual Rent and Additional Rent due hereunder and the amount,
if any, of the rents actually collected by Landlord on account of the new lease
or leases of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the term of this Lease (not including
any Renewal Periods, the commencement of which shall not have occurred prior to
such dispossess or removal). In computing such liquidated damages there shall be
added to said deficiency the expenses which Landlord incurs in connection with
re-letting the Demised Premises, including reasonable attorneys’ and brokerage
fees, tenant inducements such as free rent, moving expense reimbursements,
tenant improvement allowances, brokerage commissions, fees for legal services,
and other expenses of preparing the Demised Premises for reletting (“Reletting
Expenses”). Such Reletting Expenses shall be paid to Landlord within ten
(10) days of demand and all other liquidated damages shall be paid by Tenant in
monthly installments on the dates specified in this Lease for payment of Fixed
Annual Rent and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord shall not
be liable for failure to re-let the Demised Premises or, in the event that the
Demised Premises are re-let, for failure to collect the rent under such
re-letting, unless Landlord shall not have used its commercially reasonable
efforts to re-let the Demised Premises for the reasonable rental value thereof
and to collect the rent under such re-letting. Landlord shall use its
commercially reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any and all rights granted by or under any
present or future laws to reenter the Demised Premises, to dispossess Tenant or
any other occupant thereof or to remove their effects not previously removed by
them, or to terminate this Lease for any reason or in any manner other than as
set forth in this Section 25. Tenant hereby expressly waives any and all rights
granted by or under any present or future laws to remain in
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possession, cure any defaults or redeem its leasehold for any reason or in any
manner other than as set forth in this Section 25. The provisions of this
Section 25 shall survive the early termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five
(5) days after the same is due, such amount shall bear interest from the date
due at the rate of one and one-half (11/2%) percent for each month (or ratable
portion thereof) the same remains unpaid. Nothing in this Lease shall limit the
right of Landlord to prove and obtain in proceedings for bankruptcy or
insolvency an amount equal to the maximum allowed by any statute or rule of law
in effect at the time; and Tenant agrees that the fair value for occupancy of
all or any part of the Demised Premises at all times shall never be less than
the Fixed Annual Rent and all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material
inducement to Landlord’s entering into this Lease. If at any time the Guarantor
of this Lease shall sell all or a material portion of its assets or shall merge
or consolidate with another entity and, in either case, if (1) Guarantor
(including the resulting entity of any merger or consolidation) has a tangible
net worth immediately after the transaction that is less than Guarantor’s
tangible net worth immediately prior to the transaction, and (2) Guarantor’s
tangible net worth immediately after the transaction is less than the Minimum
Credit Test, then the transaction shall be a default under this Lease for which
there is no cure period entitling Landlord to exercise all of the rights and
remedies under this Section. If at any time the existing Guarantor desires to
assign the Guaranty to another person and for such person to assume all of the
obligations and liabilities under the Guaranty, and if the proposed successor
Guarantor’s tangible net worth is greater than the Minimum Credit Test, Tenant
may present evidence of such proposed successor Guarantor’s tangible net worth
to Landlord in the form of financial statements for (A) the most recent fiscal
year of the proposed successor Guarantor audited by a nationally recognized firm
of certified public accountants and (B) the most recent fiscal quarters since
such fiscal year certified to by Guarantor’s chief financial officer, together
with a form of Guaranty identical in form to the form of Guaranty attached to
this Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial statements to Landlord demonstrating that it continues
to meet the Minimum Credit Test for those provisions of this Lease requiring
such as a condition of being relieved from certain Lease obligations otherwise
applicable. As used in this Lease “Guarantor” means the Guarantor then fully
liable under its Guaranty to Landlord. “Tangible net worth” means the net worth
as shown on such financial statements prepared in accordance with generally
accepted accounting principles consistently applied and disregarding any value
attributable to good will or other intangible assets and amounts owed by
shareholders, officers or Affiliates except to the extent such amounts owed by
Affiliates would ordinarily and customarily be consolidated on Tenant’s
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financial statements. “Minimum Credit Test” means a tangible net worth as shown
on such fiscal year and fiscal quarter financial statements of at least Five
Hundred Million Dollars ($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements,
or casualty (hereinafter called “Destruction”) to all or any part of the
Building or any other Improvements in the Demised Premises, Tenant shall
commence promptly, and with due diligence continue to restore same to
substantially the same condition as existed immediately preceding the
Destruction, except as otherwise provided in paragraph B of this Section. If the
Destruction is partial, Tenant shall complete the restoration within two hundred
seventy (270) days after the Destructions, subject to Unavoidable Delays. If the
Destruction is total, Tenant shall complete the restoration within eighteen (18)
months following the Destruction, subject to Unavoidable Delays. In no event
shall Fixed Annual Rent or any Additional Rent abate on account of any
Destruction.
B. If, as a result of any Destruction, fifty percent (50%) or more
of the total floor area of the Building is damaged, destroyed or, in Tenant’s
reasonable opinion rendered untenantable, during the last two (2) years of the
Initial Term or during any Renewal Term (but this shall not apply at any other
time), Tenant may elect to terminate this Lease by giving notice to Landlord of
such election on or before the date that is ninety (90) days after the
Destruction, stating the date of termination, which shall be not more than
thirty (30) days after the date on which such notice of termination shall have
been given, and (1) upon the date specified in such notice this Lease and the
term hereof shall cease and expire and (2) any Fixed Annual Rent and Additional
Rent shall be paid until such date of termination and any such amounts paid for
a period after such date of termination shall be promptly refunded to Tenant. In
the event that Tenant elects to terminate this Lease as a result of the
Destruction referenced above, Tenant shall cause all insurance proceeds to be
paid to Landlord including business interruption insurance proceeds.
C. Except in the case of paragraph B of this Section, Insurance proceeds shall
be deposited with a bank or trust company acceptable to Landlord and Tenant and
under the control of Landlord and Tenant, as trustees, or, if the Fee Mortgagee
shall be a bank, trust company, insurance company or other entity engaged in
mortgage lending then such proceeds shall be deposited with such Fee Mortgagee
and shall be held and disbursed by it, as trustee, for restoration in accordance
with customary construction lending practice and procedures. Any excess
insurance proceeds shall be paid to Tenant at the conclusion of the restoration
so long as Tenant is not then in default beyond any applicable cure period.
27. EMINENT DOMAIN.
A. In the event of an actual taking for any public or quasi-public use by any
lawful power or authority by exercise of the right of condemnation or of eminent
domain or by agreement between Landlord and those having the authority to
exercise such right (hereinafter called “Taking”) of the entire Building, then
(1) this Lease and the Term shall cease and expire as of the date of vesting of
title or transfer of possession, whichever occurs earlier, as a result of
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the Taking, and (2) any Fixed Annual Rent and Additional Rent shall be paid
until such termination and any such amounts paid for a period after such date of
termination shall be promptly refunded to Tenant.
B. (1) In the event of a Taking of twenty (20%) or more of the
Demised Premises, or in the event of a Taking resulting in a reduction of twenty
(20%) percent or more of the parking spaces (unless Landlord provides adequate
and sufficient additional contiguous parking areas in substitution therefor
reasonably acceptable to Tenant), or in the event of a Taking resulting in a
divided Building or parking area such that passage between the divided portions
of the parking area is not possible, or in the event of permanent denial of
reasonably adequate access to the Demised Premises or Building on account of a
Taking which in Tenant’s reasonable judgment makes it economically unfeasible to
operate Tenant’s business at the Demised Premises, then Tenant may elect to
terminate this Lease by giving notice of termination to Landlord on or before
the date which is ninety (90) days after receipt by Tenant of notice that the
Taking in question. Said notice of termination shall state the date of
termination, which date of termination shall be not more than thirty (30) days
after the date on which such notice of termination is given to Landlord, and
(a) upon the date specified in such notice of termination this Lease and the
term hereof shall cease and expire, and (b) any Fixed Annual Rent and Additional
Rent shall be paid until the date of termination and any such amounts paid for a
period after such date of termination shall be promptly refunded to Tenant.
(2) If Tenant does not elect to terminate this Lease as aforesaid, then the
award or payment for the Taking shall be used by Tenant for restoration as
hereinafter set forth and Tenant shall promptly commence and with due diligence
continue to restore the portion of the Demised Premises remaining after the
Taking to substantially the same condition and tenantability as existed
immediately preceding the Taking. Tenant shall complete the restoration within
two hundred seventy (270) days after the Destruction, subject to Unavoidable
Delays. Taking proceeds shall be paid, held and disbursed in the same manner as
insurance proceeds under Section 26C and there shall be no abatement or
reduction in Fixed Annual Rent or any Additional Rent. Any taking proceeds
remaining after the restoration is complete shall be divided equally between
Landlord and Tenant.
C. If this Lease is terminated under any provision of this
Section 27, so long as Tenant is not then in breach of this Lease beyond any
applicable cure period, any specific damages that are expressly awarded to
Tenant on account of its relocation expenses and specifically so designated
shall belong to Tenant. Except as provided in the preceding sentence of this
paragraph, Landlord reserves to itself, and Tenant releases and assigns to
Landlord, all rights to damages accruing on account of any Taking or by reason
of any act of any public authority for which damages are payable. Tenant agrees
to execute such further instruments of assignment as may be reasonably requested
by Landlord, and to turn over to Landlord any damages that may be recovered in
any proceeding or otherwise; and Tenant irrevocably appoints Landlord as its
attorney-in-fact with full power of substitution so to execute and deliver in
Tenant’s name, place and stead all such further instruments if Tenant shall fail
to do so after 10 days notice.
28. THIRD PARTY LITIGATION. If Landlord, Landlord’s adviser or its
mortgagees are made parties to any litigation commenced by or against Tenant by
or against any
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person claiming through Tenant with respect to the Demised Premises, Tenant
agrees to indemnify Landlord in the manner provided in Section 38 and in
addition pay, as Additional Rent, all costs of Landlord in connection with such
litigation including reasonable counsel fees and litigation costs, except in the
sole instance where Landlord or Tenant have legal claims in the litigation
against one another or where Landlord has been adjudicated in any litigation to
have acted with gross negligence or willful misconduct. Without limitation, the
foregoing includes foreclosure or enforcement of any lien, attachment or
mortgage on the Demised Premises resulting from the act or omission of Tenant,
but shall not include any Fee Mortgage or other lien created by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby expressly waives any and all
rights granted by or under any present or future laws to levy or distrain for
rent, in arrears, in advance or both, upon all goods, merchandise, equipment,
trade fixtures, furniture and personal property of Tenant or any nominee of
Tenant in the Demised Premises, delivered or to be delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any
time and from time to time, Landlord and Tenant agree to execute and deliver to
the other, within thirty (30) days after such request, a written instrument that
may be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid, (c) stating whether or
not, to the knowledge of the party executing such instrument, the other party
hereto is in default and, if such party is in default, stating the nature of
such default, (d) stating the Commencement Date and Expiration Date, (e) stating
which options to renew the term have been exercised, if any; and (f) any other
information that may reasonably requested by the requesting party and
customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of the Senior Vice President of Real Estate, and another shall be
delivered to the attention of the Senior Director of Properties and
Administration, all at 2 Paragon Drive, Montvale, New Jersey 07645 or to such
other addresses as Tenant may designate by notice to Landlord. Any such Notice
shall be deemed given three (3) business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, and one business
(1) day when sent by overnight delivery. A party’s attorney may give Notices on
behalf of such party.
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32. BROKER. Each party represents and warrants to each other there is
no broker, agent, finder or other person with whom it has dealt in connection
with the negotiation, execution and delivery of this Lease other than those
persons named in that certain Agreement of Sale and Leaseback dated as of
November 2, 2010 entered into between Tenant and Landlord (or Affiliates of
each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised Premises (and Landlord’s
interest therein) and Tenant’s leasehold (and Tenant’s interest therein) free
of, and shall within thirty (30) days discharge, any attachment, lien, security
interest or other encumbrance that arises as a result of any act or omission of
Tenant or persons acting by, through or under Tenant. Without limitation, Tenant
will not permit or suffer any mechanic’s or materialmen’s or other liens to
stand against the Demised Premises for any labor or material furnished in
connection with work of any character performed, any services provided or any
other act, omission or obligation on the part or at the direction of Tenant or
persons claiming by, through or under Tenant, and Landlord will not permit any
such liens for work or material furnished the Landlord to stand against said
premises (the foregoing shall not imply that Landlord has any responsibility to
furnish any work or material). However, Landlord and Tenant shall respectively
have the right to contest the validity or amount of any such lien, provided that
the payment of such amount is bonded during the pendency of such contest, but
upon the final determination of such contest the party responsible for such lien
shall immediately pay any judgment rendered with all proper costs and charges
(including reasonable attorneys’ fees) and shall have the lien released at its
own expense. In lieu of bonding either party may obtain other security
acceptable to the other party in such party’s sole discretion. Any contest
hereunder shall be subject to all requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means
Landlord named herein and any subsequent owner of Landlord’s estate hereunder.
Any owner of Landlord’s estate hereunder shall be relieved of all liability
under this Lease after the date that it ceases to be the owner of Landlord’s
estate (except for any liability arising prior to such date) and the party
succeeding to Landlord’s estate shall assume all liability of Landlord arising
from and after it becomes owner of Landlord’s estate. The foregoing shall be
self-operative but Landlord and Tenant shall upon the request of either execute
and deliver an instrument acknowledging the foregoing.
35. ADJOINING OR ADJACENT PROPERTY. Landlord and Tenant shall each
promptly forward to the other any notice or other written communication received
by it from any owner of property adjoining or adjacent to the Demised Premises
or from any municipal or other governmental authority in connection with any
hearing or other administrative proceeding relating to the use of the Demised
Premises or any adjoining or adjacent property. Tenant may, at its sole cost and
expense, in its own name and/or in the name of Landlord, appear in any such
proceeding. Landlord shall fully cooperate with Tenant (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall, without limitation, make
such appearances and furnish such information as may be reasonably required by
Tenant. Landlord agrees to execute any instruments reasonably requested by
Tenant in connection with any such proceeding.
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36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4) the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5) the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Land and Demised Premises prior to,
on and after the Commencement Date, it being acknowledged that Tenant or its
Affiliate owned the Land and Demised Premises prior to the Commencement Date.
Tenant shall provide Landlord with copies of any notices pertaining to any
governmental proceedings or actions under any Environmental Law (including
requests or demands for entry onto the Demised Premises and/or Land for purposes
of inspection regarding the handling, disposal, clean-up or remediation of
Hazardous Materials or claims, penalties, fines or assessments) within fifteen
(15) days after receipt thereof. Landlord shall cooperate with Tenant (so long
as Landlord’s cooperation does not involve incurring obligations or liability or
material expense to Landlord unreimbursed by Tenant) and provide such documents,
affidavits and information as may be reasonably necessary for Tenant to comply
with all Environmental Laws.
C. If required by governmental authority or if Landlord has a reasonable basis
to believe a release of Hazardous Materials may have occurred or a threat of
release exists on or from the Land or Demised Premises or Hazardous Materials
activities have taken place on the Land or Demised Premises that do not conform
to Environmental Laws, then Landlord may, but need not, perform appropriate
testing in a commercially reasonable manner and the reasonable costs thereof
shall be reimbursed to Landlord by Tenant upon demand as Additional Rent. Tenant
shall execute affidavits, representations and the like from time to time at
Landlord’s request concerning Tenant’s actual knowledge and belief regarding the
presence or absence of Hazardous Materials at the Land and Demised Premises. In
all events, and without limitation, Tenant shall indemnify all Indemnitees,
expressly including without limitation all Fee Mortgagees, in the manner
elsewhere provided in this Lease with respect to Hazardous Materials on or
migrating from the Land and Demised Premises prior to, on and after the
Commencement Date (and for these purposes, the loss indemnified shall include
without limitation any costs of
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investigation or remediation, and any claim of personal injury or property
damage to any person); provided, however, that such indemnity shall not include
and Tenant shall not be responsible for Hazardous Materials migrating on to the
Land from the land of third parties. The covenants of this Section shall survive
the Term. Tenant shall from time to time upon Landlord’s request confirm all of
the foregoing covenants directly to mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without
limitation, any subtenant of Tenant), may, from time to time and without
Landlord’s prior written consent, mortgage all or any portion of its right,
title and interest in and to this Lease under one leasehold mortgage at any one
time, or two leasehold mortgages given as part of a single financing
transaction, to an Institutional Lender (each, a “Leasehold Mortgage”), and
assign any or all rights under this Lease and any subleases as collateral
security for such Leasehold Mortgage; provided that all rights acquired under
such Leasehold Mortgage shall be subject to all of the terms, covenants and
conditions of this Lease, and to all rights and interests of Landlord, none of
which terms, covenants or conditions is or shall be waived by Landlord by reason
of the right given to so mortgage such interest in this Lease. In no event shall
Tenant have any right to mortgage or encumber Landlord’s fee interest in the
Demised Premises. The term “Leasehold Mortgage” shall include whatever security
instruments that may be used in the locale of the Demised Premises, such as,
without limitation, deeds of trust, security deeds and conditional deeds, as
well as financing statements, assignment of leases and rents, security
agreements and other documentation required pursuant to the Uniform Commercial
Code. The term “Leasehold Mortgage” shall also include any instruments required
in connection with a sale-leaseback transaction. An “Institutional Lender” is a
bank, trust company, savings and loan association, pension fund, endowment fund,
insurance company, other institutional pool of recognized status or a
governmental authority empowered to make loans or issue bonds or any other
recognized institution regularly engaged in the making of mortgage loans that
has not less than $100,000,000 in assets. The holder of any Leasehold Mortgage
shall be called a “Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but
not limited to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and
if Tenant shall send to Landlord a true copy thereof, together with a notice
specifying the name and address of the Leasehold Mortgagee (“Mortgage Notice”),
Landlord agrees that as long as any such Leasehold Mortgage shall remain
unsatisfied of record or until a notice of satisfaction is given by the
Leasehold Mortgagee to Landlord, the following provisions shall apply:
(1) There shall be no cancellation, surrender or modification of
this Lease by joint action of Landlord and Tenant without the prior consent of
the Leasehold Mortgagee;
(2) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee. The
Leasehold Mortgagee shall thereupon have the same period to remedy or cause to
be remedied the defaults complained of, and Landlord shall accept such
performance by or at the instigation of such Leasehold Mortgagee as if the same
had been done by Tenant; provided that in the case of
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defaults that cannot be cured by the payment of money in addition the Leasehold
Mortgagee shall be entitled to such further time to remedy or cause to be
remedied the defaults complained of as may be reasonably necessary for the
Leasehold Mortgagee to remove any stay in bankruptcy and/or to commence and
complete foreclosure proceedings or remove any cause beyond the Leasehold
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.. Nothing herein shall be
construed as requiring a Leasehold Mortgagee to cure any default. Landlord’s
failure to deliver any such copy to a Leasehold Mortgagee shall not affect the
Landlord’s exercise of any right or remedy under the Lease in any way
whatsoever;
(3) If any default shall occur which, pursuant to any provision of
this Lease, entitles Landlord to terminate this Lease, and if before the
expiration of twenty (20) days from the date of the giving of notice of
termination upon such Leasehold Mortgagee, such Leasehold Mortgagee shall have
notified Landlord of its desire to nullify such notice and shall have paid to
Landlord all Fixed Annual Rent and Additional Rent herein provided for which are
then in default, and shall have complied (or caused compliance) with all of the
other requirements of this Lease, if any are then in default, then, in such
event, Landlord shall not be entitled to terminate this Lease and any notice of
termination previously given shall be void and of no effect;
(4) Notwithstanding anything in this Lease to the contrary, any sale
of Tenant’s leasehold interest in any proceeding for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of Tenant’s leasehold interest
in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment;
(5) If not required to be held by the Fee Mortgagee, the proceeds
from any insurance policies or arising from a Taking may be held by any
institutional Leasehold Mortgagee and distributed pursuant to the provisions of
this Lease;
(6) The Leasehold Mortgagee may be added to the “Loss Payable
Endorsement” of any and all insurance policies required to be carried by Tenant
hereunder on the condition that the insurance proceeds are to be applied in the
manner specified in this Lease and that the Leasehold Mortgage shall so agree;
except that the Leasehold Mortgage may provide a manner for disposition of such
proceeds as remain after full compliance with the restoration covenants of this
Lease, if any, otherwise payable to Tenant (but not such proceeds, if any,
payable to Landlord, any Fee Mortgagee or jointly to Landlord or Tenant)
pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of any legal
proceeding or arbitration between Landlord and Tenant. Unless the Leasehold
Mortgage provided otherwise, Leasehold Mortgagee shall have the right to
intervene in any such proceeding and be made a party to such proceeding, and the
parties hereby consent to such intervention. Landlord’s failure to deliver any
such notice to a Leasehold Mortgagee shall not affect the Landlord’s exercise of
any right or remedy under the Lease in any way whatsoever.
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Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease,
Tenant shall assume exclusive control of the Demised Premises and all areas
pertaining thereto including all appurtenances, improvements, utilities, water
bodies, grounds, sidewalks, walkways, driveways and parking facilities, and
Tenant shall bear the sole risk of all related tort liabilities. To the greatest
extent permitted by applicable law, Tenant shall indemnify, save harmless and
defend Landlord, Landlord’s adviser and mortgagees and their respective
officers, directors, managers, members, partners, agents and employees,
(“Indemnitees”) from all liability, claim, damage, cost or loss (including
reasonable fees and litigation costs) arising in whole or in part out of, or in
any manner connected with (i) any injury, loss, theft or damage to any person or
property while on or about the Demised Premises, or (ii) any condition of the
Demised Premises, or the possession and use thereof (including any failure to
vacate at the end of the Term) or any activity permitted or suffered on the
Demised Premises (including Hazardous Materials), or (iii) any breach of any
covenant, representation or certification by Tenant or persons acting under
Tenant, or (iv) any negligent act or omission anywhere by Tenant or persons
acting under Tenant, in each case paying the same to Landlord on demand as
Additional Rent, except to the extent such liability results from the negligence
or willful misconduct of Landlord or the other Indemnitees. Without implying
that other covenants do not survive, the covenants of this Section shall survive
the Term. Tenant shall immediately respond and assume the investigation, defense
and expense of all of the foregoing matters. Landlord or any Indemnitee, at its
sole cost and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY. Notwithstanding anything
contained to the contrary in this Lease, whether express or implied, it is
agreed that Tenant will look only to Landlord’s fee interest in and to the
Demised Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of a breach or default
under this Lease by Landlord with respect to any claim whatsoever related to the
Demised Premises, and no other property or assets of Landlord or of Landlord’s
adviser or of any Fee Mortgagee or its or their managers, members, directors,
officers, trustees, beneficiaries, shareholders, partners, joint venturers
(disclosed or undisclosed) shall be subject to suit or to levy, execution or
other enforcement procedures for the satisfaction of any such judgment (or other
judicial process). No officer, director, manager, member, shareholder, trustee,
beneficiary, partner, agent, attorney or employee of Landlord or of Landlord’s
adviser or of any Fee Mortgagee shall ever be personally or individually liable;
nor shall Landlord, Landlord’s adviser or any Fee Mortgagee or such persons ever
be answerable or liable in any equitable judicial proceeding or order beyond the
extent of their interest in the Demised Premises. In no event shall Landlord,
Landlord’s adviser or any Fee Mortgagee or any such persons ever be liable to
Tenant for indirect or consequential damages.
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40. BOOKS AND RECORDS. Tenant shall at all times keep and maintain
full and correct records and books of account of the operations of the Demised
Premises in accordance with generally accepted accounting principals
consistently applied and shall accurately record and preserve the records of
such operations in accordance with its customary records retention policy.
Notwithstanding that there has been no Percentage Rent Event, Tenant shall
report the gross sales from the Demised Premises to Landlord annually for each
fiscal year of Tenant no later than thirty (30) days following the end of such
fiscal year, such report to be certified by Tenant’s chief financial officer.
Landlord shall keep such information confidential at all times in accordance
with the terms of Exhibit J and may only release such information to Landlord’s
constituent members, and so long as such persons execute and deliver to Tenant a
Confidentiality Agreement with Tenant in the form attached hereto as Exhibit J
(“Confidentiality Agreement”) whether or not Tenant signs such Confidentiality
Agreement, also to its lenders and prospective lenders and to prospective
purchasers of Landlord’s interest in the Demised Premises. Upon an Event of
Default, Tenant shall permit Landlord, Landlord’s accountants and Fee Mortgagees
reasonable access thereto, with the right to make copies and excerpts therefrom
upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by applicable law, Tenant shall have
the right to place on the roof or wall of the Demised Premises at Tenant’s sole
cost and expense, a satellite dish (hereinafter called the “Dish”) for
transmission of data (both receiving and sending) between Tenant’s various
operations and its headquarters in accordance with all laws and governmental
regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant agree and
acknowledge that this Lease has been freely negotiated by Landlord and Tenant.
In any event of any ambiguity, controversy, dispute or disagreement over the
interpretation, validity or enforceability of this Lease or any of its
covenants, terms or conditions, no inference, presumption or conclusion
whatsoever shall be drawn against Tenant by virtue of Tenant’s having drafted
this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The covenants and agreements
contained in this Lease shall bind and inure to the benefit of the successors
and assigns of each party. As used in this Lease “Affiliate” (whether or not
capitalized) shall mean, with respect to any person, any person controlled by,
controlling, or under common control with such person; and “control” shall mean
any direct ownership interest or right through the exercise of voting or
approval rights or otherwise, to exercise decision-making authority generally.
44. CAPTIONS. The captions preceding the Sections of this Lease are
intended only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Lease
shall be invalid or unenforceable, the remainder of the provisions of this Lease
shall not be affected thereby and each and every provision of this Lease shall
be enforceable to the fullest extent permitted by law.
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46. CHOICE OF LAW/JURISDICTION. This Lease, and the rights and
obligations of the parties hereto, shall be interpreted and construed in
accordance with the laws where the Demised Premises are located (the “State”),
without regard to the State’s internal conflict of law principles. Any disputes
arising out of this Lease or between Landlord and Tenant shall be subject to the
exclusive jurisdiction of the state courts of the State.
47. NO WAIVER. The failure of either party to seek redress for
violation of or to insist upon the strict performance of, any term, covenant or
condition contained in this Lease shall not prevent a similar subsequent act
from constituting a default under this Lease. Without limitation, no written
consent by Landlord or Tenant to any act or omission that otherwise would be a
default shall be construed to permit other similar acts or omissions. Neither
party’s failure to seek redress for violation or to insist upon the strict
performance of any covenant, nor the receipt by Landlord of rent with knowledge
of any breach of covenant, shall be deemed a consent to or waiver of such
breach. No breach of covenant shall be implied to have been waived unless such
is in writing, signed by the party benefiting from such covenant and delivered
to the other party; and no acceptance by Landlord of a lesser sum than the Fixed
Annual Rent, Additional Rent or any other sum due shall be deemed to be other
than on account of the installment of such rent or other sum due. Nor shall any
endorsement or statement on any check or in any letter accompanying any check or
payment be deemed an accord and satisfaction; and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other right or remedy. The delivery of keys (or any
other act) to Landlord shall not operate as a termination of the Term or an
acceptance or surrender of the Demised Premises. The acceptance by Landlord of
any rent following the giving of any default and/or termination notice shall not
be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either Landlord or Tenant
employ an attorney to enforce or defend any of the conditions, covenants, rights
or obligations of this Lease (including, without limitation, a default by either
party), then the prevailing party shall be entitled to all reasonable attorney
fees and all other reasonable out-of-pocket litigation costs (including, but not
limited to filing fees, expert reports and testimony, court costs and other
usual costs of litigation of this type) incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent such waiver is permitted
by law, the parties waive trial by jury in any action or proceeding brought in
connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than contemporaneous instruments executed and delivered
of even date, if any, this Lease contains all of the agreements between Landlord
and Tenant relating in any way to the Demised Premises and supersedes all prior
agreements and dealings between them. There are no oral agreements between
Landlord and Tenant relating to this Lease or the Demised Premises. This Lease
may be amended only by a written instrument executed and delivered by both
Landlord and Tenant. The provisions of this Lease shall bind Landlord and Tenant
and their respective successors and assigns. Where the phrases “persons acting
under” Landlord or Tenant or “persons claiming through” Landlord or Tenant or
similar phrases are used, the persons included shall be assignees, sublessees,
licensees or other transferees or successors of Landlord or Tenant as well as
invitees or independent contractors of
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Landlord or Tenant, and all of the respective employees, servants, contractors,
agents and invitees of Landlord, Tenant and any of the foregoing. As used
herein, “monetary default” shall mean a default that can be substantially cured
solely by the payment of money and nothing more and “non-monetary default” shall
mean a default that cannot be substantially cured solely by the payment of money
and northing more. If either party is granted any extension, election or other
option, to be effective the exercise (and notice thereof) shall be
unconditional, irrevocable and must be made strictly in accordance with the
prescribed terms and times; otherwise its purported exercise shall be void and
ineffective. The enumeration of specific examples of a general provisions or use
of the word “including” shall not be construed as a limitation of the general
provision. Unless a party’s approval or consent is required by the express terms
of this Lease not to be unreasonably withheld, such approval or consent may be
withheld in the party’s sole discretion. The submission of a form of this Lease
or any summary of its terms shall not constitute an offer by Landlord to Tenant;
the leasehold shall only be created and the parties bound when this Lease is
executed and delivered by both Landlord and Tenant. Nothing herein shall be
construed as creating the relationship between Landlord and Tenant of principal
and agent, or of partners or joint venturers or any relationship other than
landlord and tenant. This Lease and all consents, notices, approvals and all
other related documents may be reproduced by any party by any electronic means
or by electronic, photographic or other reproduction process and the originals
may be destroyed; and each party agrees that any reproductions shall be as
admissible in evidence in any proceeding as the original itself (whether or not
the original is in existence and whether or not reproduction was made in the
regular course of business), and that any further reproduction of such
reproduction shall likewise be admissible. If any payment in the nature of
interest provided for in this Lease shall exceed the maximum interest permitted
under controlling law, as established by final judgment of a court, then such
interest shall instead be at the maximum permitted interest rate as established
by such judgment. Landlord and Tenant expressly agree that there are and shall
be no implied warranties of merchantability, habitability, suitability, fitness
for a particular purpose or of any other kind arising out of this Lease, and
there are no warranties or representations other than those expressly set forth
in this Lease. Without limitation, where Tenant in this Lease indemnifies or
covenants for the benefit of present and future Fee Mortgagees, such agreements
are for the benefit of present and future Fee Mortgagees as third party
beneficiaries; and at the request of Landlord, Tenant from time to time will
confirm such matters directly with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be deemed to be one and the same instrument. A
facsimile, email, PDF or electronic signature shall be deemed an original
signature.
52. INCORPORATION OF STATE LAW PROVISIONS. Certain provisions/
sections of this Lease and certain additional provisions/sections that are
applicable or required by laws of the state in which the Demised Premises are
located may be amended, described or otherwise set forth in more detail on
Exhibit I attached hereto, which such Exhibit by this reference, is incorporated
into and made a part of this Lease. In the event of any conflict between such
state law provisions and any provision herein, the state law provisions shall
control.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Lease has been duly executed under as of the Effective
Date.
WITNESS:
WE APP UPPER DARBY LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Vice President and Secretary
Signature Page to Lease By and Between
WE APP UPPER DARBY LLC and PATHMARK STORES, INC.
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
[g36891mq021i001.jpg]
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EXHIBIT B1
LEGAL DESCRIPTION OF THE LAND
[g36891mq021i002.jpg]
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[g36891mq021i003.jpg]
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EXHIBIT B2
TITLE MATTERS AND ENCUMBRANCES
1. Real estate taxes for the current and prior
tax years which are hereafter assessed and are not yet due and payable.
2. Public and private rights in and to that
portion of the premises lying in the bed of Heather Road and Marshall Road.
3. Easement and proportionate part of expense
of maintenance of driveway on Northwest and alley on North (Premises A).
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: $450,000.00
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
C.4 Re-allocation of Reimbursement Cap. Upon the completion of the Remedial Work
up to $20,000 of the Reimbursement Cap may be allocated to increase the
“Reimbursement Cap” under any other lease between Tenant and any Affiliate of
Landlord (except for that certain lease for space at 9210 Atlantic Avenue,
Queens (Ozone Park), New York).
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and
among , a , and its successors and assigns,
having an office at (hereinafter together with its
successors and assigns called “Mortgagee”), WE APP Upper Darby LLC, a Delaware
limited liability company, having an office c/o Winstanley Enterprises, LLC, 150
Baker Avenue Extension, Suite 303 Concord, Massachusetts 01742 (hereinafter
called “Landlord”) and Pathmark Stores, Inc., a Delaware corporation having an
office at 2 Paragon Drive, Montvale, New Jersey 07645 (hereinafter called
“Tenant”).
W I T N E S S E T H:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a promissory Note
secured by, among other securities, a mortgage or deed of trust (hereinafter, as
the same may be amended, supplemented or otherwise modified from time to time,
called the “Mortgage”) covering a parcel or parcels of land owned by Landlord
and described on Exhibit A annexed hereto and made a part hereof, together with
the improvements now or hereafter erected thereon (said parcel or parcels of
land and improvements thereon being hereinafter called the “Mortgaged
Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments being
hereinafter collectively called the “Lease”), Landlord leased to Tenant the
Mortgaged Premises together with the building now or hereafter erected on all or
a portion of said premises (the Mortgaged Premises and the improvements on or to
be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on
November , 2010 in the in Book ,
Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and approves the Lease.
2. Tenant covenants and agrees with Mortgagee that the Lease and
any extensions, renewals, replacements or modifications thereof and Tenant’s
interest in the premises under the Lease are and at all times shall subject and
subordinate to the lien of the Mortgage, without regard to the order of priority
of recording of the Mortgage and the Memorandum of the Lease, subject, however,
to the provisions of this Agreement.
3. Tenant certifies that the Lease is presently in full force and
effect.
4. Mortgagee agrees that so long as the Lease shall be in full
force and effect and so long as Tenant is not in default (beyond any applicable
notice and cure period) in the payment of fixed rent as set forth in the Lease,
or in the performance of any of the terms, covenants or conditions of the Lease
on Tenant’s part to be performed:
A. Tenant shall not be named or joined as a party defendant or
otherwise in any suit, action or proceeding for the foreclosure of the Mortgage
or to enforce any rights under the Mortgage or the bond or note or other
obligations secured thereby unless required by law to do so; and
B. The possession by Tenant of the Demised Premises and the
Tenant’s rights thereto shall not be disturbed, affected or impaired by, nor
will the Lease or the term thereof be terminated or otherwise affected by
(i) any suit, action or proceeding upon the Mortgage or the bond or note or
other obligation secured thereby, or for the foreclosure of the Mortgage or the
enforcement of any rights under the Mortgage or any other documents held by the
Mortgagee, or by any judicial sale or execution or other sale of the Mortgaged
Property, or by any deed given in lieu of foreclosure, or by the exercise of any
other rights given to the Mortgagee by any other documents or as a matter of
law, or (ii) any default under the Mortgage or the bond or note or other
obligation secured thereby.
5. Mortgagee hereby acknowledges and agrees that all trade
fixtures and equipment whether owned by Tenant or any subtenant or leased by
Tenant from a Landlord/Owner in the Demised Premises shall be subject to the
provisions of Section 17 of the Lease.
6. If the Mortgagee shall become the owner of the Mortgaged
Property by reason of foreclosure of the Mortgage or otherwise, or if the
Mortgaged Property shall be sold as a result of any action or proceeding to
foreclose the Mortgage or by a deed given in lieu of foreclosure, the Lease
shall continue in full force and effect, without necessity for executing any new
lease, as a direct lease between Tenant, as tenant thereunder, and the then
owner of the Mortgaged Property, as landlord thereunder, upon all of the same
terms, covenants and provisions contained in the Lease, and in such event:
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A. Tenant shall be bound to such new owner under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) and Tenant hereby agrees to attorn to such new owner
and to recognize such new owner as landlord under the Lease; and
B. Such new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) which terms, covenants and provisions such new owner
hereby agrees to assume and perform; provided, however, that such new owner
shall not be (i) obligated to complete any construction work required to be done
by Landlord within or outside of the Demised Premises pursuant to the provisions
of the Lease or to reimburse Tenant for any construction work done by Tenant;
however this provision shall not relieve such new owner from any repair or
maintenance obligations of Landlord expressly set forth in the Lease accruing or
arising following new owner’s acquisition of fee title to the Mortgaged Property
or impair any express setoff rights of Tenant expressly set forth in the Lease
accruing or arising following new owner’s acquisition of fee title to the
Mortgaged Property; (ii) required to make any repairs to the Mortgaged Property
or to the Demised Premises or to perform any other construction or other work,
including without limitation the restoration of the Demised Premises following
any casualty or taking; (iii) liable for the return of security deposits or
letters of credit, if any, paid or delivered by or on behalf of Tenant to
Landlord, except to the extent such sums are actually received by such new owner
(or any Mortgagee if such Mortgagee is not the new owner); (iv) bound by any
payment of rents, additional rents or other sums which Tenant may have paid more
than one (1) month in advance to any prior Landlord unless such sums are
actually received by Mortgagee or if such prepayment shall have been expressly
approved of in writing by such new owner (or any Mortgagee if such Mortgagee is
not the new owner); (v) bound by any agreement amending, modifying or
terminating the Lease made without Mortgagee’s prior written consent; (vi) bound
by any assignment of the Lease or sublease of the Demised Premises, or any
portion thereof, made prior to the time such new owner succeeded to Landlord’s
interest other than if made pursuant to the provisions of the Lease;
(vii) liable on account of any default on the part of Landlord occurring prior
to such new owner’s succeeding to Landlord’s estate; or (viii) subject to any
counterclaims, offsets or defenses that Tenant might have against Landlord.
7. If Landlord shall default in the performance of the Lease
Tenant shall give written notice thereof to Mortgagee and Mortgagee shall have
the right, but not the obligation, to cure such default in accordance with
Section 23 of the Lease (and as provided therein the Mortgagee shall be entitled
to such further time to cure as may be reasonably necessary for the Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Mortgagee’s reasonable control
impairing its ability to cure or remedy, to obtain possession of the Demised
Premises and thereafter to commence and diligently prosecute such cure or remedy
to completion)
8. Landlord has agreed in the Mortgage and other loan documents
that the rents payable under the Lease shall be paid directly by Tenant to
Mortgagee upon the occurrence of a default by Landlord under the Mortgage or any
other loan document. Accordingly, after notice is given by Mortgagee to Tenant
that the rents under the Lease should be paid to or at the
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications given under this Agreement shall
be in writing and shall be given by registered or certified mail, return receipt
requested, postage prepaid, (a) if to Mortgagee at the address of Mortgagee as
hereinabove set forth or at such other address as Mortgagee may designate by
notice, or (b) if to Landlord at the address of Landlord as hereinabove, or at
such other address as Landlord may designate by notice, or (c) if to Tenant,
then one copy shall be delivered to the attention of the Senior Vice President
of Real Estate of Tenant, another shall be delivered to the attention of General
Counsel of Tenant, and another shall be delivered to the Director of
Properties & Administration of Tenant, all at 2 Paragon Drive, Montvale, New
Jersey 07645 or at such other addresses as Tenant may designate by notice.
During the period of any postal strike or other interference with the mail,
personal delivery shall be substituted for registered or certified mail.
10. This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. This Agreement contains the entire agreement between the parties
and cannot be changed, modified, waived or cancelled except by an agreement in
writing executed by the party against whom enforcement of such modification,
change, waiver or cancellation is sought.
12. This Agreement and the covenants herein contained are intended
to run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WITNESS:
LANDLORD:
WE APP UPPER DARBY LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a Delaware corporation
Name:
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
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MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of 2010, before me,
the subscriber, personally appeared to me
known, who being by me duly sworn, did depose and say that he
is of the corporation described
in and which executed the within instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation
and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me,
the undersigned notary public,personally appeared ,
proved to me through satisfactory evidence of identification, which was a
[current driver’s license] [a current U.S. passport] [my personal knowledge], to
be the person whose name is signed on the preceding instrument andacknowledged
the foregoing instrument to be his/her free act and deed
as of WE APP Upper Darby LLC.
Notary Public
My Commission Expires:
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before
me, the subscriber, personally came Christopher W. McGarry, to me known, who
being by me duly sworn, did depose and say that he is Vice President and
Secretary of Pathmark Stores, Inc., the corporation described in and which
executed the within instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation and that he
signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP UPPER
DARBY LLC, a Delaware limited liability company, having an office at c/o
Winstanley Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord,
Massachusetts 01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and
PATHMARK STORES, INC., a Delaware corporation, having an office at 2 Paragon
Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
1. For and in consideration of the sum of TEN and no/100 Dollars
($10.00) and of other valuable considerations paid by Tenant to Landlord, the
receipt and sufficiency of which are hereby acknowledged by Landlord, Tenant and
Tenant hereby takes from Landlord that certain parcel of land (hereinafter
called “Land”) described on Exhibit B and the buildings and other improvements
now or hereafter erected on the Land together with the benefit of any and all
easements, appurtenances, rights and privileges now or hereafter belonging
thereto. The land is currently improved by an existing building consisting of
52,971 square feet of space (the “Building), as more particularly shown on the
site plan attached hereto as Exhibit A. The Building and any buildings and
improvements now or hereafter erected on the Land shall be hereinafter called
“Improvements”. The Land and any Improvements now or hereafter erected thereon
are hereinafter collectively called the “Demised Premises.” The Demised Premises
have been leased to Tenant upon and subject to the covenants and agreements set
forth in a certain agreement between Landlord and Tenant bearing even date
herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The original term of the Lease shall
continue to and include the date which is twenty (20) years after the day before
the Commencement Date if the Commencement Date is the first day of a month, or
twenty years (20) years after the last day of the month in which the
Commencement Date occurs if the Commencement Date is not the first day of a
month.
3. Tenant has the right and option to extend the term of the Lease
from the date upon which it would otherwise expire for ten (10) separate renewal
periods of five (5) years each (each such period being known as a “Renewal
Period”). Said right and option, if exercised by Tenant, shall be in accordance
with the terms and conditions of Section 4 of the Lease.
4. The Lease contains the entire agreement between the parties.
All persons are hereby put on notice of the existence of the Lease and are
referred to the Lease for its terms and conditions. The Lease is on file in the
offices of Tenant and the Landlord as hereinabove set forth.
5. This Memorandum of Lease is prepared, signed and acknowledged
solely for recording purposes under the laws of the Commonwealth of
Pennsylvania, and is in no way
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intended to change, alter, modify, amend or in any other way affect the rights,
duties and obligations of Landlord and Tenant pursuant to the Lease; it being
specifically understood and agreed between the parties that each has rights,
duties and obligations imposed upon it in the Lease which are not expressly
contained herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP UPPER DARBY LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
Name: Craig H. Feldman
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
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EXHIBIT B
DEMISED PREMISES
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared , proved to me
through satisfactory evidence of identification, which was a [current driver’s
license] [a current U.S. passport] [my personal knowledge], to be the person
whose name is signed on the preceding instrument and acknowledged the foregoing
instrument to be his/her free act and deed as of WE APP
Upper Darby LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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EXHIBIT F
UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 421 South 69th Boulevard, Upper Darby, Pennsylvania, with WE APP Upper
Darby LLC, a Delaware limited liability company (“Landlord”). (Terms used herein
and not otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and absolutely guarantees to Landlord
(which shall include its legal representatives, successors and assigns) the due
and punctual performance of each and all of the Tenant’s obligations under or
related to the Lease, including the timely payment of all sums due therein.
Tenant’s obligations hereby guaranteed include, without limitation, those
arising under amendments or modifications to the Lease hereafter entered into by
Tenant and Landlord, all of which shall be so guaranteed even though Guarantor
hereafter does not consent to or approve the same (Guarantor hereby waiving all
rights of consent or approval with respect to such amendments or modifications).
2. Guarantor waives presentment for payment or performance, notice
of nonpayment or performance, notice of default, demand, protest or notice or
acceptance of this Guaranty, any rights Guarantor may have by reason of any
forbearance, modification, amendment, extension or any indulgence whatsoever
that Landlord may grant or to which Landlord and the Tenant may agree with
respect to the Lease, any and all notice of every kind to which Guarantor might
otherwise be entitled with respect to the incurring of any further obligation or
liability by Tenant to Landlord, demand for payment, the presentment of any
instrument for payment, the protest or nonpayment thereof and any and all
defenses whatsoever excepting only Tenant’s performance as required by the terms
of the Lease. Guarantor also waives, unless and until all of the obligations of
Tenant are fully paid and performed, any right to be subrogated in whole or in
part to any right or claim of Landlord against Tenant and any right to require
the marshalling of any assets of the Tenant, which right of subrogation or
marshalling might otherwise arise from any partial payment by the Guarantor. It
is expressly understood and agreed that Guarantor’s liability hereunder shall be
unaffected by (i) any amendment or modification whatsoever of the provisions of
the Lease, (ii) any extension of time for performance under the Lease, (iii) any
delay by Landlord in exercising any right under the Lease or this Guaranty (none
of which shall ever operate as a waiver of such right), or (iv) the release of
Tenant or any other guarantor from performance or observance of any of the
agreements or conditions contained in the Lease by operation of law or
otherwise, whether made with or without notice to Guarantor, including without
limitation any impairment, modification, change, release, rejection,
disaffirmance, or limitation of the liability of Tenant, or any other guarantor
of the Lease, of their estate in
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bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of suretyship as well as of
guaranty, and Landlord, without being required to proceed first against Tenant
or any other person or entity, may proceed directly against Guarantor whenever
Tenant fails to make any payment due or fails to perform any obligation now or
hereafter owed to Landlord without first resorting to or exhausting any other
remedy and without first having recourse to the Lease; provided, however, that
nothing herein contained shall prevent Landlord from suing on the Lease with or
without making Guarantor a party to the suit or from exercising any other rights
thereunder and if such suit, or other remedy, is availed of, only the net
proceeds therefrom, after deduction of all Landlord’s Costs of Collection
(defined below) shall be applied in reduction of the amount then due on this
Guaranty.
4. Guarantor agrees to pay to Landlord, on demand, all costs and
expenses, including reasonable attorneys’ fees and litigation expenses, which
Landlord may incur in the enforcement of Tenant’s obligations under the Lease or
the liability of Guarantor hereunder (“Costs of Collection”). “Costs of
Collection” includes, without limitation, all out of pocket expenses incurred by
the Landlord’s attorneys and all costs incurred by Landlord including, without
limitation, costs and expenses associated with travel on behalf of Landlord,
which costs and expenses are related to or in respect of Landlord’s efforts to
collect and/or to enforce any of the obligations and/or to enforce any of its
rights, remedies or powers against or in respect of either or both Tenant or
Guarantor (whether or not suit is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has either examined
the Lease or has had an opportunity to examine the Lease and has waived the
right to examine; (ii) that it (and the individual acting on its behalf) has the
full power, authority and legal right to execute and deliver this Guaranty;
(iii) that this Guaranty is a binding legal obligation and is fully enforceable
against Guarantor in accordance with its terms; (iv) that there is no action or
proceeding pending or, to its knowledge, threatened against Guarantor before any
court or administrative agency which might result in any material adverse change
in its business or condition or in its assets; (v) that neither the execution
nor delivery of this Guaranty nor fulfillment of nor compliance with the terms
and provisions thereof will constitute a default under or result in the creation
of any lien, charge or encumbrance upon any property or assets of Guarantor
under any agreement or instrument to which it is now a party or by which
Guarantor may be bound; and (vi) that Guarantor is the sole owner of all the
common stock of Tenant and expects to derive financial benefit from the Lease.
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6. This Agreement shall be binding upon Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Landlord and its legal representatives, successors and assigns, and is
irrevocable until released in writing by Landlord. Each and every right, remedy
and power hereby granted to Landlord or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by
Landlord at any time and from time to time. The validity, construction and
performance of this Guaranty shall be governed by the laws of the State where
the Demised Premises are located (the “State”), without regard to conflict of
law principles. If any clause or provision of this Guaranty should be held
illegal or invalid by any court, the invalidity of such clause or provisions
shall not affect any of the remaining clauses or provisions hereof. In case any
agreement or obligation contained in this Guaranty should be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Guarantor, as the case may be, to the full extent
permitted by law. Each and every default hereunder or under the Lease shall give
rise to a separate cause of action hereunder. The obligations and liabilities of
hereunder shall be joint and several with any other guarantees given to Landlord
in connection with the Lease. This Guaranty may be amended only by instrument in
writing executed and delivered by both Landlord and Tenant. The provisions of
this Guaranty shall bind Guarantor and its respective successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns. This
Guaranty and all consents, notices, approvals and all other documents relating
hereto may be reproduced by photographic, microfilm, microfiche or other
reproduction process and the originals thereof may be destroyed; and each party
agrees that any reproductions shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not reproduction was made in the regular course
of business) and that any further reproduction of such reproduction shall
likewise be admissible in evidence.
7. Guarantor consents to and agrees that the courts of the State
shall have personal jurisdiction over Guarantor for any action brought on this
Guaranty including the right to grant judgment against Guarantor personally
together with interest on any judgment obtained by Landlord at the interest rate
set forth in the Lease for late payments (but if the same shall be unlawful for
any reason, then at the highest permissible interest rate). Guarantor further
agrees and consents that venue, if any, for any such action shall be as set
forth in the Lease. Guarantor waives and relinquishes any and all rights to
removal of any such action to any other court. Guarantor also waives trial by
jury in any judicial proceeding involving any matter in any way arising out of
or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand made under
this Guaranty shall be in writing and shall be deemed given at the earlier of
(i) the date received or (ii) three (3) business days after the date deposited
in a United States Postal Service Depository, postage prepaid first class
certified or registered mail, return receipt requested, addressed to Guarantor
or Landlord, as the case may be, at the respective addresses set forth opposite
their names below:
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Landlord:
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303
Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
WE APP Upper Darby LLC
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
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EXHIBIT H
INSURANCE
This Exhibit G shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this
Exhibit shall prevail and govern the Lease.
1. INSURANCE.
A. Coverage. Tenant shall purchase and maintain insurance during the entire Term
of the Lease and any period Tenant (or any party claiming by, through or under
Tenant) occupies any portion of the Demised Premises, for the benefit of the
Tenant and Landlord (as their interest may appear) with terms and coverages
reasonably satisfactory to Landlord, and with insurers having a minimum A.M.
Best rating of at least A/X, and with such increases in limits as Landlord may
from time to time reasonably request, but initially Tenant shall maintain the
following coverages in the following amounts:
(1) Commercial General Liability Insurance naming Landlord,
Landlord’s management, leasing and development agents and Landlord’s
mortgagee(s) from time to time as additional insureds, with coverage for
premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Property insurance covering property damage and business
interruption for the entire Demised Premises. Covered property shall include the
Building, boilers and machinery, all tenant improvements, office furniture,
trade fixtures, office equipment, merchandise and all other items Tenant’s
property on the Demised Premises. Such insurance shall name Landlord and Fee
Mortgagee(s) from time to time as additional loss payees as their interests may
appear. Such insurance shall be written on an “all risk” of physical loss or
damage basis including but not limited to the perils of fire, extended coverage,
windstorm, vandalism, malicious mischief, terrorism, sprinkler leakage, flood,
windstorm and earthquake, for the full replacement cost value of the covered
items and other endorsements as Landlord shall reasonably request from time to
time and in amounts that meet any co insurance clause of the policies of
insurance with a deductible amount not to exceed $750,000. Such insurance shall
include rent continuation coverage of no less than twelve (12) months. Such
policy or policies shall provide that the proceeds of any loss shall be payable
to Landlord and Tenant and to the holder (as its interest may appear) of any Fee
Mortgage to which this Lease is subordinate so long as such holder and future
holders of such Fee Mortgage are obligated to apply proceeds of insurance in the
manner provided for in this Lease.
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(3) Workers’ Compensation Insurance and Employers Liability
Insurance with statutory limits and automobile liability insurance (coverage
must include owned, leased, hired and non owned vehicles) with a limit of at
least $1,000,000 Combined Single Limit-Bodily Injury & Property Damage.
(4) Tenant shall purchase or shall cause each Tenant contractor
performing work on the Demised Premises to carry insurance protecting against
claims set forth below which may arise out of or result from the contractor’s
operations on the Premises and naming Landlord, Landlord’s management, leasing
and development agents as additional insureds for Premises Operations and
Completed Operations. Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s compensation, disability
benefit and other similar employee benefit acts—in amounts as required by law;
(2) claims for damages because of bodily injury, occupational
sickness or disease, or death of his employees or any other person and other
personal injury and motor vehicle liability — Public Liability - Single Limit
(Combined) Per Occurrence. Bodily Injury/Property Damage $1,000,000 w/
$2,000,000 General/Completed Operations Aggregate. Automobile Liability - Single
Limit (Combined) Per Occurrence Bodily Injury and Property Damage $1,000,000.
Excess Liability Umbrella covering all above items $5,000,000 per Occurrence;
and
(3) claims for damages, other than the work of the contractor itself, because of
injury to or destruction of tangible property, including loss of use resulting
therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
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EXHIBIT H
PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark.
“Gross Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $44,500,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise
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would be made at, in, on, about, from or with respect to the Premises, nor the
amount of any cash or credit refund made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures which are not a part of Tenant’s stock in
trade. Each sale upon installment, credit or layaway shall be treated as a sale
for the full price in the month during which such sale shall be made,
irrespective of the time when Tenant shall receive payments from its customers,
and no deduction shall be allowed for uncollectible payment by customer or
uncollected or uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior
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month to Landlord without demand, provided that if such amount exceeds the
Percentage Rent that would be payable with respect to such month if Percentage
Rent were calculated on the basis of Gross Sales for all months elapsed in the
then current calendar year, Tenant shall not be required to pay any amount on
account of such month unless and until such amount shall later be payable as
part of the annual adjustment. Upon receipt by Landlord of each Annual Statement
of Gross Sales there shall be an adjustment between Landlord and Tenant to the
end that Landlord shall receive the exact amount of Percentage Rent due
hereunder. Any overpayments by Tenant hereunder shall be credited against the
next payments due under this Section. Any underpayments by Tenant shall be
immediately due and payable. With respect to the calendar year in which the Term
ends, the adjustments shall be prorated for the portion of the calendar year
included in the Term.
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EXHIBIT I
LOCAL LAW ADDENDUM
(Attached)
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Lease Addendum (PA)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Upper Darby LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”).
Capitalized terms used in this Addendum without definition shall have the
meanings set forth in the Lease. This Addendum is to be construed as
supplemental to, and part of, the Lease. In the event of any inconsistency
between the Lease and this Addendum, the terms and provisions of this Addendum
shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Construction Liens. Tenant acknowledges and agrees that any
improvements, repairs, replacements or alterations contracted for by Tenant in
or to the Demised Premises during the Term of the Lease are solely for the
immediate use and benefit of Tenant and not Landlord. Tenant shall include the
acknowledgement contained in the immediately preceding sentence in any contract
made by Tenant for such work.
2. Surrender of Premises/Tenant Waiver. Tenant expressly waives
and releases the benefit to Tenant of 68. P.S. Section 250.501, being
Section 501 of that act, approved April 6, 1951, entitled “Landlord and Tenant
Act of 1951”, as may be amended from time to time, requiring notice to quit upon
the expiration of the Term of the Lease or at the expiration of any extension or
renewal thereof, or upon any earlier termination of the Lease, as therein
provided. Tenant covenants and agrees to vacate, remove from and deliver up and
surrender the possession of the Demised Premises to Landlord upon the expiration
of the Term or upon the expiration of any extension or renewal thereof, or upon
any earlier termination of the Lease, as provided thereunder, without such
notice, in the condition required in the Lease.
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EXHIBIT J
Confidentiality Agreement
(Attached)
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CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as
of , 2010 (the “Effective Date”) by and between [TENANT],
a , having an address
at (“Company”) and ,
a , having an address at (“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in
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accordance with the laws of the State of New Jersey, without regard to conflict
of law principles. The exclusive jurisdiction for any disputes concerning this
Agreement shall be the Superior Court of New Jersey, Bergen County, and the
parties hereby submit to such jurisdiction and waive all defenses relating to
jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
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EXHIBIT B-2
LEASE FORM FOR LAWNSIDE, NJ
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KEY NO:
LEASE
BY AND BETWEEN
WE APP LAWNSIDE LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
130 WHITE HORSE PIKE, LAWNSIDE, NEW JERSEY
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
8
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
10
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
15
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
16
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
17
26.
DESTRUCTION
19
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
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TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
27
45.
INVALIDITY OF CERTAIN PROVISIONS
27
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
28
51.
COUNTERPARTS
29
52.
INCORPORATION OF STATE LAW PROVISIONS
29
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP LAWNSIDE LLC, a Delaware limited liability company
with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue Extension,
Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley (hereinafter called
“Landlord”), and PATHMARK STORES, INC., a Delaware corporation, having an office
at 2 Paragon Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
This Lease is guaranteed by The Great Atlantic & Pacific Tea Company, Inc., a
Maryland corporation (“Guarantor”) pursuant to a guaranty of even date herewith
(as the same may be amended, supplemented or modified from time to time, the
“Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made
a part hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Local Law Addendum; and
K. Exhibit J, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from Landlord that
certain parcel of land (hereinafter called “Land”) commonly known as 130 White
Horse Pike, Lawnside, New Jersey and more particularly described on Exhibit B1
and the buildings and other improvements now or hereafter erected on the Land
together with the benefit of and subject to any and all easements,
appurtenances, rights and privileges and other matters of record now or
hereafter arising including those described in Exhibit B2. The land is currently
improved by an
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existing building consisting of approximately 55,760 square feet of space (the
“Building”), as more particularly shown on the Site Plan attached hereto as
Exhibit A. The Building and any other buildings and improvements now or
hereafter erected on the Land shall be hereinafter called “Improvements.” The
Land and any Improvements are hereinafter collectively called the “Demised
Premises.”
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the “Commencement
Date”) on the Effective Date and shall continue to and include the date (the
“Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 12 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten
(10) separate consecutive renewal periods of five (5) years each (each such
period being hereinafter called a “Renewal Period”) upon the same terms and
conditions as are herein set forth except the rent for such Renewal Period shall
be as provided in Section 5 below; provided, however, that at the time of so
electing to extend and also at the time any Renewal Period commences Tenant is
not in default beyond any applicable notice and cure period, and this Lease is
then in full force and effect. If Tenant fails timely so to exercise its option
for any Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the
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Term of this Lease shall be automatically extended for the Renewal
Period(s) covered by the Renewal Notice without execution of an extension or
renewal lease. If Tenant shall not have given notice of such election to
Landlord by such date in respect of any Renewal Period, Landlord shall (unless
notice shall have been given as hereinafter specifically permitted) give notice
to Tenant that Tenant has failed to give notice of such election to Landlord
(hereinafter called the “Option Notice”). Tenant’s time to give notice of such
election shall continue until the date which is sixty (60) days after receipt of
the Option Notice. Landlord shall not give the Option Notice prior to the date
which is four hundred twenty-five (425) days before the Expiration Date. If
Landlord shall not have given the Option Notice prior to the date which is four
hundred twenty-five (425) days before the beginning of the next succeeding
Renewal Period, the term of this Lease shall be extended beyond the Expiration
Date to the date which is four hundred twenty-five (425) days after the date on
which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
574,885.00
$
47,907.08
6-10
$
603,629.25
$
50,302.44
11-15
$
633,810.71
$
52,817.56
16-20
$
665,501.25
$
55,458.44
First Renewal Period
21-25
$
698,776.31
$
58,231.36
Second Renewal Period
26-30
$
733,715.13
$
61,142.93
Third Renewal Period
31-35
$
770,400.88
$
64,200.07
Fourth Renewal Period
36-40
$
808,920.93
$
67,410.08
Fifth Renewal Period
41-45
$
849,366.97
$
70,780.58
Sixth Renewal Period
46-50
$
891,835.32
$
74,319.61
Seventh Renewal Period
5 1-55
$
936,427.09
$
78,035.59
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Eighth Renewal Period
56-60
$
983,248.44
$
81,937.37
Ninth Renewal Period
61-65
$
1,032,410.86
$
86,034.24
Tenth Renewal Period
66-70
$
1,084,031.41
$
90,335.95
B. All Fixed Annual Rent shall be payable by Tenant in equal
monthly installments in advance on the first day of every calendar month during
the Term of this Lease (and any Renewal Periods), and shall be payable at the
office of the Landlord first above set forth or at such other address as
Landlord shall have given in a notice to Tenant) in current U.S. currency by
check drawn on a clearinghouse bank and payable directly to Landlord (or, if
requested by Landlord from time to time by electronic fund transfer, to an
account designated by Landlord). Rent for a part of a month shall be prorated on
a daily basis and paid on the Commencement Date. Further, the rent for the first
full month shall be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water, sewer, telephone, refuse
disposal, and other charges for utilities and services supplied to the Demised
Premises, insurance costs, amounts due under any title encumbrance matter
described in Exhibit B2, and all costs of cleaning, maintaining, repairing and
replacing the Demised Premises or any portion thereof and of complying with all
laws now existing or hereafter enacted including all Environmental Laws (defined
below). Any cost, expense or obligation directly relating to the Demised
Premises that is not expressly declared in this Lease to be that of Landlord
shall be deemed to be an obligation of Tenant to be performed by Tenant at
Tenant’s sole expense, and to the greatest extent permitted by law Tenant shall
indemnify and defend Landlord against, and hold Landlord harmless from, the
same, and Tenant’s liability for the payment and performance of such amounts and
obligations that shall arise during the Term is hereby expressly provided to
survive the expiration of the Term or early termination of this
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Lease. Fixed Annual Rent, Additional Rent, and all other sums payable hereunder
by Tenant, shall be paid without notice or demand, and without set off,
counterclaim, recoupment, abatement, suspension, deduction, or defense (other
than payment) whatsoever. Except as otherwise expressly set forth in this Lease
with respect to certain events of casualty in Section 26 or condemnation in
Section 27, Tenant shall in no event have any right to terminate this Lease, and
any right so to terminate (or to abate, suspend, set off or otherwise deduct
from Fixed Annual Rent or Additional Rent) under applicable law is hereby waived
to the greatest extent permitted by law. It is the intention of the parties that
the obligations of Tenant hereunder shall be separate and independent covenants
and shall not be discharged or otherwise affected by any law or regulation now
or hereafter applicable to the Demised Premises or any other restriction on
Tenant’s use, and that Fixed Annual Rent, Additional Rent, and all other sums
payable by Tenant hereunder shall continue to be payable in all events, and that
the obligations of Tenant hereunder shall continue unaffected throughout the
Term. Landlord, at its sole cost and expense, shall be responsible for the
following: (i) payment of any amounts relating to Fee Mortgages or other
encumbrances or liens created by Landlord, (ii) management fees, administrative
costs, professional fees and any other costs incidental to its fee ownership of
the Demised Premises; and (iii) and cost, expense, or liability resulting from
the negligent or willful misconduct of Landlord, its employees or agents. For
the avoidance of doubt, Tenant shall be responsible for all costs, expenses and
obligations of Landlord in that certain cross-easement agreement listed on
Exhibit B2 as item 7.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of a
supermarket, drugstore, automated teller machine, bank, all other uses customary
and incidental to a supermarket and, so long as the Minimum Credit Test (defined
in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised Premises
or Tenant or both, foreseen or unforeseen, and whether or not the same interfere
with Tenant’s occupancy. Tenant shall procure all approvals, licenses and
permits, in each case promptly giving Landlord true and complete copies of the
same and all applications therefor. Tenant shall never overload any of the
Building systems, including the floors and mechanical, electrical and structural
systems, and shall also keep the Demised Premises equipped with appropriate
safety appliances and comply with all requirements of insurance and of insurance
inspection or rating bureaus. Tenant shall not itself, nor shall Tenant permit
or suffer persons
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acting under Tenant to, either with or without negligence, injure, overload,
deface, damage or otherwise harm the Demised Premises or any part thereof or use
the Demised Premises contrary to any law or in a manner likely to create any
nuisance. It is intended that Tenant bear the sole risk of all present or future
laws affecting the Demised Premises, and Landlord shall not suffer any reduction
in any rent on account of the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land. Landlord further covenants and
agrees, upon request of tenant, to convey without compensation therefor,
insubstantial perimeter portions of the Land for highway or roadway purposes, to
the state in which the demised premises are situate or any other municipal or
governmental body, provided, however, that any such conveyance shall not
constitute a taking (as defined in section 28 below) nor constitute grounds for
tenant to terminate this Lease. Notwithstanding anything to the contrary or
otherwise set forth herein, any encumbrance on the Demised Premises shall be
subject to any requirements imposed by any Fee Mortgage (provided that Landlord
shall reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s intention to discontinue permanently the operation of its
business in the Demised Premises or any part of the Demised Premises or
discontinues the operation of its business in the Demised Premises or any part
of the Demised Premises for a period of one (1) year for any reason (other than
Destruction or Taking that pursuant to the applicable provisions of this Lease
entitles Tenant to terminate this Lease), then Landlord may terminate this Lease
as to the Demised Premises, or if applicable, the part of the Demised Premises
with respect to which Tenant has given notice of its intention to discontinue,
or in which Tenant has discontinued, its operations, by thirty (30) days’
written notice to Tenant of Landlord’s election to terminate this Lease (or, if
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as applicable, resuming operations of
its business in the Demised Premises within twenty-five (25) days after receipt
of Landlord’s notice or by rescinding its notice of its intention to discontinue
its business in writing to Landlord delivered within twenty-five (25) days after
receipt of Landlord’s notice.
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7. TAXES.
A. Tenant shall, during the term of this Lease, as Additional Rent,
pay and discharge punctually, as and when the same shall become due and payable,
all taxes, special and general assessments, water rents, rates and charges,
sewer rents and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, including rent and/or
occupancy taxes (hereinafter collectively referred to as “Taxes”), and each and
every installment thereof that shall or may during the term of this Lease,
become due and payable, or liens upon the Demised Premises or any part thereof,
together with all interest and penalties thereon, under or by virtue of all
present or future laws, ordinances, requirements, orders, directives, rules or
regulations of the Federal, State, County, Town and City Governments and of all
other governmental authorities whatsoever (all of which shall also be included
in the term “Taxes” as heretofore defined).
B. To the extent permitted by law, Tenant or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installments. Landlord agrees to permit the application
for the foregoing conversion to be filed in Landlord’s name, if necessary, and
shall execute any and all documents, instruments or certificates reasonably
requested by Tenant to accomplish the foregoing.
C. Tenant shall be deemed to have complied with the covenants of
this Lease if payment of Taxes shall have been made either within any period
allowed by law or by the applicable governmental authority during which payment
is permitted without penalty so long as the Taxes shall never become subject to
a tax sale on the Demised Premises or subject Landlord to any civil or criminal
liability. Tenant shall produce and exhibit to Landlord satisfactory evidence of
payment prior to the expiration of any such period.
D. All Taxes shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of such year during which the
Term shall be in effect. Notwithstanding anything to the contrary contained
herein, if the Term hereof terminates prior to the date which would have been
the expiration thereof but for the earlier termination, then Tenant shall pay
those Taxes which would have been paid by Tenant to and including the term
expiration date and this obligation shall expressly survive such termination.
E. So long as the requirements of Paragraph C of this Section are complied with,
Tenant or its designees shall have the right to contest or review all Taxes by
legal proceedings, or in such other manner as it may deem suitable. Tenant or
its designees shall inform Landlord of any such proceedings and conduct such
proceedings promptly at its own cost and expense, and free of any expenses to
Landlord, and if necessary, in the name of and with the cooperation of Landlord
(so long as Landlord’s cooperation does not involve incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant). Landlord
shall execute all documents, instruments or certificates reasonably necessary
and correct to accomplish the foregoing. Notwithstanding anything to the
contrary or otherwise set forth herein, any such contest shall be subject to
compliance with all applicable provisions of any Fee Mortgage (provided that
Landlord shall reasonably cooperate with Tenant, at no material out of pocket
cost to Landlord, in connection with such compliance).
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F. Landlord covenants and agrees that any refunds or rebates on
account of Taxes paid by Tenant pursuant to the provisions of this Lease shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and as such are to be received by Landlord in trust and paid to Tenant
forthwith. Landlord will, upon the request of Tenant, sign any receipts that may
be necessary to secure the payment of any such refund or rebate, directly to
Tenant and/or will pay over to Tenant such refund or rebate as received by
Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant’s application (if
legally required) for separate tax assessments for such portions of the Demised
Premises as Tenant shall at any time, and from time to time, reasonably
designate. Landlord hereby agrees, upon request of Tenant, to execute all
documents, instruments or certificates as shall reasonably be required by Tenant
(so long as the same impose no material obligations on Landlord or expose
Landlord to any liability).
G. Nothing herein or in this Lease otherwise contained shall
require or be construed to require Tenant to pay any inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, that are or may
be imposed upon Landlord, its successors or assigns, whether arising out of
Landlord’s ownership of the Demised Premises, this Lease or otherwise; provided,
however, that if at any time hereafter there is levied any tax on Landlord in
lieu of real estate taxes based solely upon the ownership of real property, by
property owners, in general, within the tax jurisdiction within which the
Demised Premises are located, then such tax shall be considered to be an item of
Taxes but for purposes of computing the amount of such tax payable by Tenant,
the Demised Premises shall be deemed to be the sole real property owned by
Landlord.
H. In the event that any fee mortgagee (“Fee Mortgagee”) requires the escrow of
Real Estate Taxes or insurance premiums, Tenant shall pay to such Fee Mortgagee
in escrow, on the first day of each and every month during the term of this
Lease, one twelfth (1/12) of all estimated charges for the ensuing twelve (12)
month period as reasonably estimated by the Fee Mortgagee based on current bills
for same. Tenant shall deposit at least ten (10) days prior to the first date on
which any interest or penalty will accrue such additional amounts as may be
necessary so that there shall at all times be sufficient funds in escrow to pay
such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall
have the right to install, maintain and replace in, on or in front of any
Improvement or location on the Demised Premises or in any part thereof such
signs and advertising matter as Tenant, and with Tenant’s consent, any such
assignee or subtenant of Tenant may desire, provided that Tenant shall comply
with any applicable requirements of governmental authorities having jurisdiction
and shall obtain any necessary permits for such purposes. As used in this
Section, the word “sign” shall be construed to include any placard, pylon, logo,
light or other advertising symbol or object, irrespective or whether same be
temporary or permanent. All signs shall be Tenant’s personal property and shall
be maintained and removed by Tenant upon termination of this Lease at Tenant’s
sole expense.
9. TRUE LEASE. It is the intent of Landlord and Tenant and the
parties agree that this Lease is a true lease and that this Lease does not
represent a financing agreement. Each party shall reflect the transaction
represented hereby in all applicable books, records, and reports
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(including income tax filings) in a manner consistent with “true lease”
treatment rather than “financing” treatment.
10. REPAIRS. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, keep and maintain or cause to be kept
and maintained in repair and good condition the Building and improvements at any
time erected on the Demised Premises. Without limitation, Tenant shall perform
the Remedial Work described in Exhibit C. Landlord shall not be required to
furnish services or facilities or to make any improvements, repairs,
replacements or alterations in or to the Demised Premises whatsoever during the
Term of this Lease. Without limiting the generality of the foregoing, Tenant
shall be responsible for the entire Demised Premises and shall manage, maintain,
repair, replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment serving the Demised Premises,
keeping the Demised Premises and all improvements and appurtenances in at least
as good condition as on the Commencement Date. Without limitation, Tenant shall
provide all cleaning, painting, janitorial services, rubbish disposal, periodic
exterior waterproofing treatments to the Building, window caulking, maintenance
of all gas, water, electric and other utility lines from public ways to the
Demised Premises, and shall repair, maintain and replace all landscaping, roads,
parking areas, and walkways appurtenant to the Demised Premises, and shall
provide all snowplowing services thereto. Tenant shall provide a copy of all
current vendor contracts, if any, relating to the foregoing to Landlord at least
annually and from time to time otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost and expense insurance
policies insuring against loss by fire, lightning, the perils of extended
coverage and malicious mischief covering the Demised Premises and the other
Improvements in the Demised Premises and other perils as more fully described in
Exhibit G.
B. So long as Tenant performs its obligations in Paragraph A of
this Section, Landlord hereby waives all rights of recovery against Tenant and
any other occupant(s) of the Demised Premises and any of their agents and
employees for damage or destruction to any and all of the Improvements,
including without limitation, the Building, arising out of fire or other
casualty whether or not caused by acts or negligence of the aforementioned
persons. Tenant hereby waives all rights of recovery against Landlord, its
agents and employees for damage or destruction to any and all of the
Improvements, including without limitation, the Building and to Tenant’s trade
fixtures, equipment and inventory arising out of fire or other casualty whether
or not caused by the acts or negligence of Landlord, its agents or employees.
C. Tenant shall maintain at its own cost and expense public
liability and other insurance in accordance with the requirements of Exhibit G.
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D. Any insurance required to be provided by Tenant pursuant to this
Lease may be provided by blanket insurance covering the Demised Premises and
other locations of Tenant, provided such blanket insurance complies with all of
the other requirements of this Lease with respect to the type of insurance
covered by blanket policies. If Tenant elects to insure the Demised Premises
under any blanket insurance policy, Tenant shall furnish to Landlord a
certificate of insurance showing the Demised Premises as a location insured
under any such blanket insurance policy to the extent of the limits required in
Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as to which
Tenant has received a notice containing such mortgagee’s name and address a
duplicate original copy or certificate of the policies of insurance required to
be carried by Tenant.
E. Notwithstanding anything to the contrary contained herein,
Tenant may carry any required insurance on trade fixtures and equipment
described in Section 17 under a program of self-insurance or to carry insurance
with deductibles in excess of part or all of the amounts of insurance required
under Exhibit G hereunder.
F. If Tenant fails to perform any covenant in this Section and such failure
continues for more than three (3) days after written notice, then, without
limiting any of Landlord’s other rights and notwithstanding any other provision
of this Lease concerning notice and cure of defaults, Landlord may but need not
obtain such insurance, and Tenant shall pay the cost thereof upon demand as
Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with
and shall from time to time conform the Demised Premises to every applicable
requirement of law, duly constituted authority, Board of Fire Underwriters
having jurisdiction or of the carriers of all insurance on the Demised Premises
(all of the foregoing being hereinafter called “Legal Requirements”). Tenant
shall have the right upon giving notice to Landlord to contest any obligations
imposed upon Tenant pursuant to the provisions of this Section and to defer
compliance during the pendency of such contest, if the failure of Tenant to so
comply will not subject Landlord to civil or criminal penalty or liability.
Landlord shall cooperate with Tenant in such contest (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall execute any documents
reasonably required in furtherance of such purpose. Tenant shall not apply for
any change in zoning applicable to the Land or the Demised Premises without
Landlord’s prior written consent, not to be unreasonably withheld, conditioned
or delayed.
13. ALTERATIONS. Tenant may at its own expense from time to time,
during the term hereof, make such alterations, additions, improvements and
changes, structural or otherwise (hereinafter called “Alterations”), in and to
the Demised Premises which it may deem necessary or desirable, provided such
Alterations shall not reduce the value of the Demised Premises. Tenant, in
making any Alterations, shall use materials of equal or better quality than
those used in the construction of the Demised Premises and comply with all Legal
Requirements. Tenant shall obtain or cause to be obtained all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals that may be required in connection with the making of
Alterations. Landlord shall cooperate with Tenant in the obtaining thereof (so
long as Landlord’s cooperation does not involve (a) incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant or (b) breach
of any covenants binding on
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Landlord or the Demised Premises, including, without limitation, any mortgage)
and shall execute any documents required in furtherance of such purpose. Tenant
may, but shall not be obligated to, remove any Alteration so long as such
removal does not materially and adversely affect any heating, ventilating,
mechanical, electrical, structural, roof or life safety elements of the Building
and Tenant shall repair all damage that results from such removal and restore
the Demised Premises to a functional condition (including the filling of all
floor and wall holes, the removal of all disconnected wiring back to junction
boxes and the replacement of all damaged ceiling tiles). Upon completion of any
Alteration that is not Cosmetic Work, Tenant shall promptly deliver to Landlord
plans showing such Alteration as built. “Cosmetic Work” shall mean painting,
carpeting and wall coverings and the like and the addition or deletion of
interior non structural partitions, provided such work does not materially and
adversely affect any roof, structural, mechanical, electrical, utility, fire
protection or life safety systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall permit Landlord to enter
upon the Demised Premises at all reasonable times approved by Tenant to examine
the Demised Premises, and during the six (6) month period preceding the
Expiration Date, to exhibit the Demised Premises to prospective tenants,
provided that Landlord shall not unreasonably interfere with the conduct of
business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any and all utility services to
the Demised Premises, including, without limitation, telecommunications, water,
gas, electricity and fuel used by it in the Demised Premises. Tenant shall pay
all sewer charges assessed by the municipal authority having jurisdiction. The
failure or interruption of any utility services shall be at Tenant’s sole risk
and Landlord shall not suffer any reduction in any rent on account thereof.
B. Tenant shall have the sole right to apply for, claim and receive
any rebate, reimbursement, credit, or payment from any utility company providing
service to the Building resulting from Tenant’s installation of energy saving
equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall
become subject and subordinate to the lien of any Fee Mortgagee of the entire
fee interest of the Demised Premises, and any renewals, modifications or
extensions thereof, provided that a Subordination, Non Disturbance and
Attornment Agreement (“SNDA”) substantially in the form annexed hereto as
Exhibit D (or a reasonably equivalent form that is reasonably acceptable to
Tenant and the applicable Fee Mortgagee) is executed, acknowledged and delivered
by such Fee Mortgagee to Tenant. If the Fee Mortgagee requires that this Lease
have priority over such mortgage, Tenant shall, upon request of the Fee
Mortgagee, execute, acknowledge and deliver to the Fee Mortgagee an agreement
acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment whether owned by Tenant or
leased by Tenant from a Lessor/Owner (hereinafter called the “Equipment Lessor”)
installed in the Demised Premises, regardless of the manner or mode of
attachment, shall be and remain the
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property of Tenant or any such Equipment Lessor and may be removed by Tenant or
any such Equipment Lessor at any time. In no event (including a default under
this Lease) shall Landlord have any liens, rights or claims in Tenant’s or
Equipment Lessor’s trade fixtures and equipment and Landlord agrees to execute
and deliver to Tenant and Equipment Lessor, within ten (10) days after request
therefor, any document reasonably required by Tenant or Equipment Lessor in
order to evidence the foregoing, so long as the same is reasonably acceptable to
Landlord and any Fee Mortgagee. Tenant shall promptly repair all damage to the
Building caused by the removal of any such trade fixtures or equipment.
Notwithstanding anything to the contrary in this Lease, the following shall not
constitute trade fixtures or equipment for purposes of this Lease and neither
Tenant nor any Equipment Lessor shall own or have any right to remove the same
(and, without limiting the generality of the foregoing, the following shall not
be subject to the provisions of this Paragraph A or Paragraph B of this
Section 17): (i) the HVAC system, plumbing, alarm, electric, life safety and
other building systems used to operate the Building or maintain the certificate
of occupancy, and (ii) any “fixtures” as such term is defined in the applicable
Uniform Commercial Code.
B. In the event Tenant shall enter into any arrangement to finance
all or any portion of its trade fixtures or equipment either before or after the
installation thereof in the Demised Premises and whether such financing shall be
in the form of a mortgage, financing agreement, equipment lease, equipment sale
leaseback or otherwise and in the event the lessor or secured party thereunder
shall provide written notice to Landlord that it requires a copy of any default
sent by Landlord to Tenant under this Lease also to be sent to such person
(hereinafter called the “Owner/Secured Party”), then Landlord upon receipt of
such requirement shall simultaneously send a copy of any default notice to such
Owner/Secured Party at the address furnished to Landlord; provided that
Landlord’s failure to deliver any such copy to the Owner/Secured Party shall not
affect Landlord’s exercise of any right or remedy under this Lease in any way
whatsoever. The copy of any such default notice shall be sent to such
Owner/Secured Party in the same manner as notices are required to be sent and in
the same manner as such notice is being sent to Tenant hereunder. Landlord
further agrees that any such Owner/Secured Party shall have the right, but not
the obligation, to remedy or cure any default of Tenant under this Lease within
the same period of time granted to Tenant to remedy or cure any such default
under this Lease.
C. All trade fixtures and other personal property (which term shall
include without limitation food and inventory) of any person that is located on
the Demised Premises shall be at the sole risk of Tenant. Landlord shall not be
liable for any loss or damage to person or property resulting from any accident,
theft, vandalism or other occurrence on the Demised Premises, including damage
resulting from water, wind, ice, steam, explosion, fire, smoke, chemicals, the
rising of water or leaking or bursting of pipes or sprinklers, defect, failure
or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this Section, Tenant may sublet all or any part
of the Demised Premises, or license the use of any portion thereof or assign
this Lease, but Tenant and Guarantor shall nevertheless continue to remain
liable hereunder. Any assignee of
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the Lease and any sublessee or licensee of all or substantially all of the
Demised Premises shall become jointly and severally liable to Landlord, and any
such transferee shall upon Landlord’s request execute and deliver an instrument
in confirmation thereof. In the case of any assignment of this Lease or any
sublease or licensee of all or substantially all of the Demised Premises, Tenant
shall promptly deliver to Landlord a true and complete copy of the transfer
instruments. No transfer of all or any portion of the Demised Premises or
Landlord’s consent thereto shall be deemed a waiver of the provisions of this
Section, or a release of Tenant or any Guarantor.
B. So long as the Minimum Credit Test is not met (however the
following provisions of this paragraph B shall not apply at any time when the
Minimum Credit Test is met), Tenant shall not assign this Lease or sublet or
license all or substantially all of the Demised Premises to any transferee
unless (x) such transferee (1) operates at least five (5) other grocery stores
and (2) has Tangible Net Worth” (as defined in Section 25 below) of at least One
Hundred Million Dollars ($100,000,000) or (y) if such transferee does not meet
the requirements of (1) and (2) then such transferee must be approved by
Landlord, such approval not to be unreasonably withheld, conditioned or delayed.
If Tenant desires to so transfer this Lease to a person who does not meet the
requirements of (1) and (2) in the preceding sentence, then Tenant shall give
notice of such intended transfer to Landlord together with reasonable
information on its grocery store business and its audited financial statements
for the three most recent years showing the credit of the proposed transferee
and the proposed terms of the transfer. Upon receiving such information Landlord
shall have thirty (30) days to elect by written notice to Tenant to do one of
the following (and any failure of Landlord to affirmatively elect one or the
other shall be deemed to be an election by Landlord to consent to such transfer:
(a) approve such transfer, (b) disapprove such transfer, or (c) terminate the
Term of this Lease on any date which is no sooner than one-hundred twenty (120)
days after such election notice and no later than one-hundred eighty (180) days
after such election. If Landlord elects to terminate this Lease and thereafter
within one-hundred twenty (120) days enters into a lease or other agreement with
Tenant’s proposed transferee, any transfer payment that was to have been made to
Tenant by such transferee as specifically disclosed in writing as such to
Landlord in the proposed terms of the transfer furnished to Landlord as provided
above shall be paid by Landlord to Tenant out of the first rent amounts received
by Landlord from such transferee until the transfer payment is paid to Tenant in
full. For purposes of the previous sentence, a “transfer payment” shall include
proposed sublease income in excess of the rent under this Lease, and in such
cases Landlord’s payment to Tenant shall be a liquidated amount equal to such
excess rent at a discount rate of ten percent (10%).
C. If Tenant assigns this Lease, Landlord, when giving notice to
said assignee with respect to any default, shall also give a copy of such notice
upon Tenant originally named herein or its successor of whom Landlord shall have
been given written notice (being herein called “Original Tenant”), and no notice
of default shall be effective as against a Tenant until a copy thereof is given
to the Original Tenant. The Original Tenant shall have the same period after the
giving of such notice to cure such default as is given to Tenant under this
Lease. If this Lease terminates or this Lease and the Term hereof cease and
expire because of a default of such assignee, Landlord shall promptly give the
Original Tenant notice thereof. The Original Tenant shall have the option, to be
exercised by notifying Landlord in writing within thirty (30) days after receipt
by the Original Tenant of Landlord’s notice, to cure any default and become
Tenant under a new lease for the remainder of the term of this Lease (including
any Renewal Periods if applicable) upon all of the same terms and conditions of
this Lease as it may have been amended
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by agreement between Landlord and Original Tenant, provided, however, that at
the time of making any such election Original Tenant cures all defaults under
the Lease. In the event Original Tenant assigns this Lease and it shall
thereafter be rejected in a bankruptcy or similar proceeding brought by or
against such assignee, a new lease identical to this Lease shall be entered into
between Landlord and Original Tenant, provided that Original Tenant cures any
monetary defaults and any other defaults that are capable of being cured. Any
new lease created under this Section shall commence on the date of termination
or rejection of this Lease, as applicable. Notwithstanding the foregoing, if
Landlord, in its sole discretion delivers to the Original Tenant and Guarantor a
release as to all liability under this Lease as theretofore amended, the
Original Tenant shall not have the foregoing option.
D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test or the
requirements of Section 1 8B are met, Landlord shall, within thirty (30) days
following Tenant’s request, deliver to Tenant a recognition and attornment
agreement following the form attached hereto as Exhibit D and otherwise subject
to Landlord’s reasonable approval, executed and acknowledged by Landlord, for
the benefit of such subtenant; provided that such subtenant executes and
delivers an instrument reasonably satisfactory to Landlord confirming that such
subtenant is jointly and severally liable under this Lease. Further, Landlord
shall, within ten (10) days after Tenant’s request, shall request its Fee
Mortgagee to deliver to Tenant an SNDA for the benefit of any such subtenant
(and Landlord shall reasonably cooperate with Tenant, at no out of pocket cost
to Landlord, in connection with obtaining any requisite consent from any Fee
Mortgagee). In the event that the existing gas station tenant on the Demised
Premises request a recognition and attornment agreement Landlord will promptly
provide same.
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that Landlord is the owner of
the fee simple of the Demised Premises and that other than any mortgages held by
Fee Mortgagees that have provided an SNDA to Tenant in accordance with this
Lease or such other liens or encumbrances that do not interfere with Tenant’s
use of the Demised Premises or liens or encumbrances arising on account of any
act or omission by Tenant or persons acting under Tenant or on account of
Tenant’s failure to perform its obligations under this Lease, or matters set
forth in Exhibit B 1, Landlord shall not voluntarily impose any other lien or
encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and represent to the other that
(a) each is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which such entity was organized; (b) each has the
authority to own its property and to carry on its business as contemplated under
this Lease; (c) each has duly executed and delivered this Lease; (d) the
execution, delivery and performance by each of this Lease (i) are within its
powers, (ii) have been duly authorized by all requisite action, (iii) will not
violate any provision of law or any order of any court or agency of government,
or any agreement or other instrument to which it is a party or by which it or
any of its property is bound, (iv) will not render it insolvent or (v) will not
result in the imposition of any lien or charge on any of its property,
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except by the provisions of this Lease; and (e) the Lease is a valid and binding
obligation of each in accordance with its terms.
C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no
default remains uncured beyond any applicable notice and cure period, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises and all
rights, easements, appurtenances and privileges belonging or in anyway
appertaining thereto during the full term of this Lease and any extension
thereof subject always to the terms of this Lease, provisions of law, and
matters of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other so called quiet enjoyment covenant, whether
express or implied.
21. UNAVOIDABLE DELAYS. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any condition under this
Lease by any strike, lockout, labor dispute, inability to obtain labor or
material, Act of God, governmental restriction, regulation or control, enemy or
hostile governmental action, civil commotion, insurrection, sabotage, fire or
other casualty or by any other event similar to the foregoing and beyond the
control of such party, then the time to perform such obligation or to satisfy
such condition shall be postponed by the period of time consumed by the delay.
Time is of the essence for the performance of all monetary obligations under
this Lease and the foregoing shall never apply to the performance of monetary
obligations.
22. END OF TERM. Upon expiration or other termination of the term of this Lease,
Tenant shall peaceably and quietly quit and surrender the Demised Premises and
all Alterations in the good order and condition Tenant is required to maintain
the same and remove all trade fixtures, equipment and other personal property
whether or not bolted or otherwise attached and all of Tenant’s signs wherever
located; and in all cases shall repair damage that results from such removal.
Any fixtures and equipment that Tenant or Owner/Secured Party does not remove
following the expiration or other termination of the Term of this Lease shall be
deemed to be abandoned by Tenant, shall at once become the property of Landlord,
and may be disposed of in such manner as Landlord shall see fit; and Tenant
shall pay the cost of removal and disposal to Landlord within thirty (30) days
after demand; provided, however, that if this Lease shall be terminated as the
result of a default by Tenant, then trade fixtures and equipment shall not be
deemed abandoned until sixty (60) days after notice of such termination is given
to Owner/Secured Party. Tenant or Owner/Secured Party shall have the right at
any time prior to the date such fixtures and equipment shall be deemed abandoned
to remove the same from the Demised Premises. Should Tenant or anyone claiming
by, through or under Tenant hold over in possession after the Expiration Date or
earlier termination of this Lease, such holding over shall not be deemed to
extend the Term or to renew this Lease, but without limiting Landlord’s other
rights and remedies on account of such breach the tenancy thereafter shall
continue as a tenancy
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at sufferance from month-to-month upon the terms and conditions herein
contained, provided, however that rent shall be charged and paid at one hundred
fifty percent (150%) of the Fixed Annual Rent and Additional Rent in effect
during the twelve (12) month period immediately preceding the Expiration Date or
earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply
with any of its express obligations set forth in this Lease within thirty (30)
days following written notice and opportunity to cure; provided, however,
Landlord will not be in default if said default could not reasonably be cured
within such period of thirty (30) days, and Landlord promptly commences and
thereafter proceeds with due diligence and in good faith to cure such default.
B. In the event that a Fee Mortgagee shall have given written
notice to Tenant that it is the holder of a mortgage covering the Demised
Premises, and provided such notice includes the address to which notices to the
Fee Mortgagee are to be sent, Tenant agrees that in the event it shall give
written notice to Landlord to cure a default of Landlord as provided for in this
Section, Tenant shall give a copy of said notice to the Fee Mortgagee. Tenant
agrees that the Fee Mortgagee may cure or remedy such default within the time
permitted to Landlord pursuant to this Section; provided that in addition the
Fee Mortgagee shall be entitled to such further time as may be reasonably
necessary for the Fee Mortgagee to remove any stay in bankruptcy and/or to
commence and complete foreclosure proceedings or remove any cause beyond the Fee
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in default hereunder, Landlord, after
thirty (30) days notice that Landlord intends to cure such default (but only ten
(10) days notice if such default concerns any breach of Tenant’s insurance
obligations under Section 11), shall have the right, but not the obligation, to
cure such default and Tenant shall pay to Landlord, upon demand, as Additional
Rent, the reasonable cost thereof. Other than such insurance defaults, Landlord
shall not commence to cure any default of such a nature that it could not
reasonably be cured within such period of thirty (30) days, if Tenant commences
to cure same within said period, and thereafter proceeds with reasonable
diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of this Section; or if a petition is filed by Tenant
(or Guarantor) for insolvency or for appointment of a receiver, trustee or
assignee or for adjudication, reorganization or arrangement under any bankruptcy
act or other applicable law or if any similar petition is filed against Tenant
(or Guarantor) and such petition is not dismissed within sixty (60) days
thereafter; or if Tenant fails to perform any other covenant or condition under
this Lease, Landlord may give Tenant a written
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notice specifying the nature of the default of such other covenant or condition
and if Tenant does not, within thirty (30) days after receipt of such written
notice (but only three (3) days in the case of failure to perform Tenant’s
insurance obligations under Section 11), cure such other default or, if such
default is of such a nature that it could not reasonably be cured within such
period of thirty (30) days, and Tenant does not commence and proceed with
reasonable diligence and in good faith to cure such default then, after the
expiration of such thirty (30) day period (or longer period if such default
cannot reasonably be cured within said thirty (30) day period), Landlord shall
have the right, in addition to the rights set forth in the preceding sentence,
to seek damages or an injunction as to such failure to perform, or after the
expiration of such thirty (30) day period Landlord may, but only during the
continuance of such default, send a notice to Tenant terminating this Lease and
reenter the Demised Premises and dispossess Tenant and any other occupants
thereof, remove their effects not previously removed by them, and hold the
Demised Premises as if this Lease had not been made; and Tenant waives the
service of any additional notice of intention to reenter or to institute legal
proceedings to that end. If any payment of Fixed Annual Rent, Additional Rent,
or other sum owing Landlord is not paid within five (5) days after the same is
due, then in addition to all other remedies hereunder Tenant shall pay an
administrative late charge to Landlord equal to five percent (5%) of the overdue
amount in question, which late charge will be due upon demand as Additional
Rent.
B. After a termination, dispossess or removal in accordance with this Section,
(1) the Fixed Annual Rent and Additional Rent shall be paid up to the date of
such dispossess or removal, (2) Landlord may re-let the Demised Premises or any
part or parts thereof either in the name of Landlord or otherwise, for a term or
terms which may, at the option of Landlord, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease,
and (3) Tenant shall pay to Landlord, as liquidated damages, any deficiency
between the Fixed Annual Rent and Additional Rent due hereunder and the amount,
if any, of the rents actually collected by Landlord on account of the new lease
or leases of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the term of this Lease (not including
any Renewal Periods, the commencement of which shall not have occurred prior to
such dispossess or removal). In computing such liquidated damages there shall be
added to said deficiency the expenses which Landlord incurs in connection with
re-letting the Demised Premises, including reasonable attorneys’ and brokerage
fees, tenant inducements such as free rent, moving expense reimbursements,
tenant improvement allowances, brokerage commissions, fees for legal services,
and other expenses of preparing the Demised Premises for reletting (“Reletting
Expenses”). Such Reletting Expenses shall be paid to Landlord within ten
(10) days of demand and all other liquidated damages shall be paid by Tenant in
monthly installments on the dates specified in this Lease for payment of Fixed
Annual Rent and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord shall not
be liable for failure to re-let the Demised Premises or, in the event that the
Demised Premises are re-let, for failure to collect the rent under such
re-letting, unless Landlord shall not have used its commercially reasonable
efforts to re-let the Demised Premises for the reasonable rental value thereof
and to collect the rent under such re-letting. Landlord shall use its
commercially reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any and all rights granted by
or under any present or future laws to reenter the Demised Premises, to
dispossess Tenant or any other occupant thereof or to remove their effects not
previously removed by them, or to terminate this
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Lease for any reason or in any manner other than as set forth in this
Section 25. Tenant hereby expressly waives any and all rights granted by or
under any present or future laws to remain in possession, cure any defaults or
redeem its leasehold for any reason or in any manner other than as set forth in
this Section 25. The provisions of this Section 25 shall survive the early
termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five (5) days
after the same is due, such amount shall bear interest from the date due at the
rate of one and one-half (11/2%) percent for each month (or ratable portion
thereof) the same remains unpaid. Nothing in this Lease shall limit the right of
Landlord to prove and obtain in proceedings for bankruptcy or insolvency an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time; and Tenant agrees that the fair value for occupancy of all or any part
of the Demised Premises at all times shall never be less than the Fixed Annual
Rent and all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material
inducement to Landlord’s entering into this Lease. If at any time the Guarantor
of this Lease shall sell all or a material portion of its assets or shall merge
or consolidate with another entity and, in either case, if (1) Guarantor
(including the resulting entity of any merger or consolidation) has a tangible
net worth immediately after the transaction that is less than Guarantor’s
tangible net worth immediately prior to the transaction, and (2) Guarantor’s
tangible net worth immediately after the transaction is less than the Minimum
Credit Test, then the transaction shall be a default under this Lease for which
there is no cure period entitling Landlord to exercise all of the rights and
remedies under this Section. If at any time the existing Guarantor desires to
assign the Guaranty to another person and for such person to assume all of the
obligations and liabilities under the Guaranty, and if the proposed successor
Guarantor’s tangible net worth is greater than the Minimum Credit Test, Tenant
may present evidence of such proposed successor Guarantor’s tangible net worth
to Landlord in the form of financial statements for (A) the most recent fiscal
year of the proposed successor Guarantor audited by a nationally recognized firm
of certified public accountants and (B) the most recent fiscal quarters since
such fiscal year certified to by Guarantor’s chief financial officer, together
with a form of Guaranty identical in form to the form of Guaranty attached to
this Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial statements to Landlord demonstrating that it continues
to meet the Minimum Credit Test for those provisions of this Lease requiring
such as a condition of being relieved from certain Lease obligations otherwise
applicable. As used in this Lease “Guarantor” means the Guarantor then fully
liable under its Guaranty to Landlord. “Tangible net worth” means the net worth
as shown on such financial statements prepared in accordance with generally
accepted accounting
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principles consistently applied and disregarding any value attributable to good
will or other intangible assets and amounts owed by shareholders, officers or
Affiliates except to the extent such amounts owed by Affiliates would ordinarily
and customarily be consolidated on Tenant’s financial statements. “Minimum
Credit Test” means a tangible net worth as shown on such fiscal year and fiscal
quarter financial statements of at least Five Hundred Million Dollars
($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements,
or casualty (hereinafter called “Destruction”) to all or any part of the
Building or any other Improvements in the Demised Premises, Tenant shall
commence promptly, and with due diligence continue to restore same to
substantially the same condition as existed immediately preceding the
Destruction, except as otherwise provided in paragraph B of this Section. If the
Destruction is partial, Tenant shall complete the restoration within two hundred
seventy (270) days after the Destructions, subject to Unavoidable Delays. If the
Destruction is total, Tenant shall complete the restoration within eighteen (18)
months following the Destruction, subject to Unavoidable Delays. In no event
shall Fixed Annual Rent or any Additional Rent abate on account of any
Destruction.
B. If, as a result of any Destruction, fifty percent (50%) or more of
the total floor area of the Building is damaged, destroyed or, in Tenant’s
reasonable opinion rendered untenantable, during the last two (2) years of the
Initial Term or during any Renewal Term (but this shall not apply at any other
time), Tenant may elect to terminate this Lease by giving notice to Landlord of
such election on or before the date that is ninety (90) days after the
Destruction, stating the date of termination, which shall be not more than
thirty (30) days after the date on which such notice of termination shall have
been given, and (1) upon the date specified in such notice this Lease and the
term hereof shall cease and expire and (2) any Fixed Annual Rent and Additional
Rent shall be paid until such date of termination and any such amounts paid for
a period after such date of termination shall be promptly refunded to Tenant. In
the event that Tenant elects to terminate this Lease as a result of the
Destruction referenced above, Tenant shall cause all insurance proceeds to be
paid to Landlord including business interruption insurance proceeds.
C. Except in the case of paragraph B of this Section, Insurance proceeds shall
be deposited with a bank or trust company acceptable to Landlord and Tenant and
under the control of Landlord and Tenant, as trustees, or, if the Fee Mortgagee
shall be a bank, trust company, insurance company or other entity engaged in
mortgage lending then such proceeds shall be deposited with such Fee Mortgagee
and shall be held and disbursed by it, as trustee, for restoration in accordance
with customary construction lending practice and procedures. Any excess
insurance proceeds shall be paid to Tenant at the conclusion of the restoration
so long as Tenant is not then in default beyond any applicable cure period.
27. EMINENT DOMAIN.
A. In the event of an actual taking for any public or quasi-public
use by any lawful power or authority by exercise of the right of condemnation or
of eminent domain or by agreement between Landlord and those having the
authority to exercise such right (hereinafter
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called “Taking”) of the entire Building, then (1) this Lease and the Term shall
cease and expire as of the date of vesting of title or transfer of possession,
whichever occurs earlier, as a result of the Taking, and (2) any Fixed Annual
Rent and Additional Rent shall be paid until such termination and any such
amounts paid for a period after such date of termination shall be promptly
refunded to Tenant.
B. (1) In the event of a Taking of twenty (20%) or more of the
Demised Premises, or in the event of a Taking resulting in a reduction of twenty
(20%) percent or more of the parking spaces (unless Landlord provides adequate
and sufficient additional contiguous parking areas in substitution therefor
reasonably acceptable to Tenant), or in the event of a Taking resulting in a
divided Building or parking area such that passage between the divided portions
of the parking area is not possible, or in the event of permanent denial of
reasonably adequate access to the Demised Premises or Building on account of a
Taking which in Tenant’s reasonable judgment makes it economically unfeasible to
operate Tenant’s business at the Demised Premises, then Tenant may elect to
terminate this Lease by giving notice of termination to Landlord on or before
the date which is ninety (90) days after receipt by Tenant of notice that the
Taking in question. Said notice of termination shall state the date of
termination, which date of termination shall be not more than thirty (30) days
after the date on which such notice of termination is given to Landlord, and
(a) upon the date specified in such notice of termination this Lease and the
term hereof shall cease and expire, and (b) any Fixed Annual Rent and Additional
Rent shall be paid until the date of termination and any such amounts paid for a
period after such date of termination shall be promptly refunded to Tenant.
(2) If Tenant does not elect to terminate this Lease as aforesaid, then the
award or payment for the Taking shall be used by Tenant for restoration as
hereinafter set forth and Tenant shall promptly commence and with due diligence
continue to restore the portion of the Demised Premises remaining after the
Taking to substantially the same condition and tenantability as existed
immediately preceding the Taking. Tenant shall complete the restoration within
two hundred seventy (270) days after the Destruction, subject to Unavoidable
Delays. Taking proceeds shall be paid, held and disbursed in the same manner as
insurance proceeds under Section 26C and there shall be no abatement or
reduction in Fixed Annual Rent or any Additional Rent. Any taking proceeds
remaining after the restoration is complete shall be divided equally between
Landlord and Tenant.
C. If this Lease is terminated under any provision of this
Section 27, so long as Tenant is not then in breach of this Lease beyond any
applicable cure period, any specific damages that are expressly awarded to
Tenant on account of its relocation expenses and specifically so designated
shall belong to Tenant. Except as provided in the preceding sentence of this
paragraph, Landlord reserves to itself, and Tenant releases and assigns to
Landlord, all rights to damages accruing on account of any Taking or by reason
of any act of any public authority for which damages are payable. Tenant agrees
to execute such further instruments of assignment as may be reasonably requested
by Landlord, and to turn over to Landlord any damages that may be recovered in
any proceeding or otherwise; and Tenant irrevocably appoints Landlord as its
attorney-in-fact with full power of substitution so to execute and deliver in
Tenant’s name, place and stead all such further instruments if Tenant shall fail
to do so after 10 days notice.
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28. THIRD PARTY LITIGATION. If Landlord, Landlord’s adviser or its
mortgagees are made parties to any litigation commenced by or against Tenant by
or against any person claiming through Tenant with respect to the Demised
Premises, Tenant agrees to indemnify Landlord in the manner provided in
Section 38 and in addition pay, as Additional Rent, all costs of Landlord in
connection with such litigation including reasonable counsel fees and litigation
costs, except in the sole instance where Landlord or Tenant have legal claims in
the litigation against one another or where Landlord has been adjudicated in any
litigation to have acted with gross negligence or willful misconduct. Without
limitation, the foregoing includes foreclosure or enforcement of any lien,
attachment or mortgage on the Demised Premises resulting from the act or
omission of Tenant, but shall not include any Fee Mortgage or other lien created
by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby expressly waives any and all
rights granted by or under any present or future laws to levy or distrain for
rent, in arrears, in advance or both, upon all goods, merchandise, equipment,
trade fixtures, furniture and personal property of Tenant or any nominee of
Tenant in the Demised Premises, delivered or to be delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any time and
from time to time, Landlord and Tenant agree to execute and deliver to the
other, within thirty (30) days after such request, a written instrument that may
be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid, (c) stating whether or
not, to the knowledge of the party executing such instrument, the other party
hereto is in default and, if such party is in default, stating the nature of
such default, (d) stating the Commencement Date and Expiration Date, (e) stating
which options to renew the term have been exercised, if any; and (f) any other
information that may reasonably requested by the requesting party and
customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of the Senior Vice President of Real Estate, and another shall be
delivered to the attention of the Senior Director of Properties and
Administration, all at 2 Paragon Drive, Montvale, New Jersey 07645 or to such
other addresses as Tenant may designate by notice to Landlord. Any such Notice
shall be deemed given three (3) business days after being sent by registered or
certified
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mail, return receipt requested, postage prepaid, and one business (1) day when
sent by overnight delivery. A party’s attorney may give Notices on behalf of
such party.
32. BROKER. Each party represents and warrants to each other there is
no broker, agent, finder or other person with whom it has dealt in connection
with the negotiation, execution and delivery of this Lease other than those
persons named in that certain Agreement of Sale and Leaseback dated as of
November 2, 2010 entered into between Tenant and Landlord (or Affiliates of
each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised Premises (and Landlord’s
interest therein) and Tenant’s leasehold (and Tenant’s interest therein) free
of, and shall within thirty (30) days discharge, any attachment, lien, security
interest or other encumbrance that arises as a result of any act or omission of
Tenant or persons acting by, through or under Tenant. Without limitation, Tenant
will not permit or suffer any mechanic’s or materialmen’s or other liens to
stand against the Demised Premises for any labor or material furnished in
connection with work of any character performed, any services provided or any
other act, omission or obligation on the part or at the direction of Tenant or
persons claiming by, through or under Tenant, and Landlord will not permit any
such liens for work or material furnished the Landlord to stand against said
premises (the foregoing shall not imply that Landlord has any responsibility to
furnish any work or material). However, Landlord and Tenant shall respectively
have the right to contest the validity or amount of any such lien, provided that
the payment of such amount is bonded during the pendency of such contest, but
upon the final determination of such contest the party responsible for such lien
shall immediately pay any judgment rendered with all proper costs and charges
(including reasonable attorneys’ fees) and shall have the lien released at its
own expense. In lieu of bonding either party may obtain other security
acceptable to the other party in such party’s sole discretion. Any contest
hereunder shall be subject to all requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means
Landlord named herein and any subsequent owner of Landlord’s estate hereunder.
Any owner of Landlord’s estate hereunder shall be relieved of all liability
under this Lease after the date that it ceases to be the owner of Landlord’s
estate (except for any liability arising prior to such date) and the party
succeeding to Landlord’s estate shall assume all liability of Landlord arising
from and after it becomes owner of Landlord’s estate. The foregoing shall be
self-operative but Landlord and Tenant shall upon the request of either execute
and deliver an instrument acknowledging the foregoing.
35. ADJOINING OR ADJACENT PROPERTY. Landlord and Tenant shall each
promptly forward to the other any notice or other written communication received
by it from any owner of property adjoining or adjacent to the Demised Premises
or from any municipal or other governmental authority in connection with any
hearing or other administrative proceeding relating to the use of the Demised
Premises or any adjoining or adjacent property. Tenant may, at its sole cost and
expense, in its own name and/or in the name of Landlord, appear in any such
proceeding. Landlord shall fully cooperate with Tenant (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall, without limitation, make
such appearances and furnish such information as
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may be reasonably required by Tenant. Landlord agrees to execute any instruments
reasonably requested by Tenant in connection with any such proceeding.
36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4) the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5) the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Land and Demised Premises prior to,
on and after the Commencement Date, it being acknowledged that Tenant or its
Affiliate owned the Land and Demised Premises prior to the Commencement Date.
Tenant shall provide Landlord with copies of any notices pertaining to any
governmental proceedings or actions under any Environmental Law (including
requests or demands for entry onto the Demised Premises and/or Land for purposes
of inspection regarding the handling, disposal, clean-up or remediation of
Hazardous Materials or claims, penalties, fines or assessments) within fifteen
(15) days after receipt thereof. Landlord shall cooperate with Tenant (so long
as Landlord’s cooperation does not involve incurring obligations or liability or
material expense to Landlord unreimbursed by Tenant) and provide such documents,
affidavits and information as may be reasonably necessary for Tenant to comply
with all Environmental Laws.
C. If required by governmental authority or if Landlord has a reasonable basis
to believe a release of Hazardous Materials may have occurred or a threat of
release exists on or from the Land or Demised Premises or Hazardous Materials
activities have taken place on the Land or Demised Premises that do not conform
to Environmental Laws, then Landlord may, but need not, perform appropriate
testing in a commercially reasonable manner and the reasonable costs thereof
shall be reimbursed to Landlord by Tenant upon demand as Additional Rent. Tenant
shall execute affidavits, representations and the like from time to time at
Landlord’s request concerning Tenant’s actual knowledge and belief regarding the
presence or absence of Hazardous Materials at the Land and Demised Premises. In
all events, and without limitation, Tenant shall indemnify all Indemnitees,
expressly including without limitation all Fee Mortgagees, in the manner
elsewhere provided in this Lease with respect to Hazardous Materials
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on or migrating from the Land and Demised Premises prior to, on and after the
Commencement Date (and for these purposes, the loss indemnified shall include
without limitation any costs of investigation or remediation, and any claim of
personal injury or property damage to any person); provided, however, that such
indemnity shall not include and Tenant shall not be responsible for Hazardous
Materials migrating on to the Land from the land of third parties. The covenants
of this Section shall survive the Term. Tenant shall from time to time upon
Landlord’s request confirm all of the foregoing covenants directly to
mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without
limitation, any subtenant of Tenant), may, from time to time and without
Landlord’s prior written consent, mortgage all or any portion of its right,
title and interest in and to this Lease under one leasehold mortgage at any one
time, or two leasehold mortgages given as part of a single financing
transaction, to an Institutional Lender (each, a “Leasehold Mortgage”), and
assign any or all rights under this Lease and any subleases as collateral
security for such Leasehold Mortgage; provided that all rights acquired under
such Leasehold Mortgage shall be subject to all of the terms, covenants and
conditions of this Lease, and to all rights and interests of Landlord, none of
which terms, covenants or conditions is or shall be waived by Landlord by reason
of the right given to so mortgage such interest in this Lease. In no event shall
Tenant have any right to mortgage or encumber Landlord’s fee interest in the
Demised Premises. The term “Leasehold Mortgage” shall include whatever security
instruments that may be used in the locale of the Demised Premises, such as,
without limitation, deeds of trust, security deeds and conditional deeds, as
well as financing statements, assignment of leases and rents, security
agreements and other documentation required pursuant to the Uniform Commercial
Code. The term “Leasehold Mortgage” shall also include any instruments required
in connection with a sale-leaseback transaction. An “Institutional Lender” is a
bank, trust company, savings and loan association, pension fund, endowment fund,
insurance company, other institutional pool of recognized status or a
governmental authority empowered to make loans or issue bonds or any other
recognized institution regularly engaged in the making of mortgage loans that
has not less than $100,000,000 in assets. The holder of any Leasehold Mortgage
shall be called a “Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but
not limited to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and
if Tenant shall send to Landlord a true copy thereof, together with a notice
specifying the name and address of the Leasehold Mortgagee (“Mortgage Notice”),
Landlord agrees that as long as any such Leasehold Mortgage shall remain
unsatisfied of record or until a notice of satisfaction is given by the
Leasehold Mortgagee to Landlord, the following provisions shall apply:
(1) There shall be no cancellation, surrender or modification of this
Lease by joint action of Landlord and Tenant without the prior consent of the
Leasehold Mortgagee;
(2) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee. The
Leasehold
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Mortgagee shall thereupon have the same period to remedy or cause to be remedied
the defaults complained of, and Landlord shall accept such performance by or at
the instigation of such Leasehold Mortgagee as if the same had been done by
Tenant; provided that in the case of defaults that cannot be cured by the
payment of money in addition the Leasehold Mortgagee shall be entitled to such
further time to remedy or cause to be remedied the defaults complained of as may
be reasonably necessary for the Leasehold Mortgagee to remove any stay in
bankruptcy and/or to commence and complete foreclosure proceedings or remove any
cause beyond the Leasehold Mortgagee’s reasonable control impairing its ability
to cure or remedy, to obtain possession of the Demised Premises and thereafter
to commence and diligently prosecute such cure or remedy to completion.. Nothing
herein shall be construed as requiring a Leasehold Mortgagee to cure any
default. Landlord’s failure to deliver any such copy to a Leasehold Mortgagee
shall not affect the Landlord’s exercise of any right or remedy under the Lease
in any way whatsoever;
(3) If any default shall occur which, pursuant to any provision of
this Lease, entitles Landlord to terminate this Lease, and if before the
expiration of twenty (20) days from the date of the giving of notice of
termination upon such Leasehold Mortgagee, such Leasehold Mortgagee shall have
notified Landlord of its desire to nullify such notice and shall have paid to
Landlord all Fixed Annual Rent and Additional Rent herein provided for which are
then in default, and shall have complied (or caused compliance) with all of the
other requirements of this Lease, if any are then in default, then, in such
event, Landlord shall not be entitled to terminate this Lease and any notice of
termination previously given shall be void and of no effect;
(4) Notwithstanding anything in this Lease to the contrary, any sale
of Tenant’s leasehold interest in any proceeding for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of Tenant’s leasehold interest
in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment;
(5) If not required to be held by the Fee Mortgagee, the proceeds
from any insurance policies or arising from a Taking may be held by any
institutional Leasehold Mortgagee and distributed pursuant to the provisions of
this Lease;
(6) The Leasehold Mortgagee may be added to the “Loss Payable
Endorsement” of any and all insurance policies required to be carried by Tenant
hereunder on the condition that the insurance proceeds are to be applied in the
manner specified in this Lease and that the Leasehold Mortgage shall so agree;
except that the Leasehold Mortgage may provide a manner for disposition of such
proceeds as remain after full compliance with the restoration covenants of this
Lease, if any, otherwise payable to Tenant (but not such proceeds, if any,
payable to Landlord, any Fee Mortgagee or jointly to Landlord or Tenant)
pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of any legal
proceeding or arbitration between Landlord and Tenant. Unless the Leasehold
Mortgage provided otherwise, Leasehold Mortgagee shall have the right to
intervene in any such proceeding and be made a party to such proceeding, and the
parties hereby consent to such
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intervention. Landlord’s failure to deliver any such notice to a Leasehold
Mortgagee shall not affect the Landlord’s exercise of any right or remedy under
the Lease in any way whatsoever.
Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease,
Tenant shall assume exclusive control of the Demised Premises and all areas
pertaining thereto including all appurtenances, improvements, utilities, water
bodies, grounds, sidewalks, walkways, driveways and parking facilities, and
Tenant shall bear the sole risk of all related tort liabilities. To the greatest
extent permitted by applicable law, Tenant shall indemnify, save harmless and
defend Landlord, Landlord’s adviser and mortgagees and their respective
officers, directors, managers, members, partners, agents and employees,
(“Indemnitees”) from all liability, claim, damage, cost or loss (including
reasonable fees and litigation costs) arising in whole or in part out of, or in
any manner connected with (i) any injury, loss, theft or damage to any person or
property while on or about the Demised Premises, or (ii) any condition of the
Demised Premises, or the possession and use thereof (including any failure to
vacate at the end of the Term) or any activity permitted or suffered on the
Demised Premises (including Hazardous Materials), or (iii) any breach of any
covenant, representation or certification by Tenant or persons acting under
Tenant, or (iv) any negligent act or omission anywhere by Tenant or persons
acting under Tenant, in each case paying the same to Landlord on demand as
Additional Rent, except to the extent such liability results from the negligence
or willful misconduct of Landlord or the other Indemnitees. Without implying
that other covenants do not survive, the covenants of this Section shall survive
the Term. Tenant shall immediately respond and assume the investigation, defense
and expense of all of the foregoing matters. Landlord or any Indemnitee, at its
sole cost and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY. Notwithstanding anything
contained to the contrary in this Lease, whether express or implied, it is
agreed that Tenant will look only to Landlord’s fee interest in and to the
Demised Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of a breach or default
under this Lease by Landlord with respect to any claim whatsoever related to the
Demised Premises, and no other property or assets of Landlord or of Landlord’s
adviser or of any Fee Mortgagee or its or their managers, members, directors,
officers, trustees, beneficiaries, shareholders, partners, joint venturers
(disclosed or undisclosed) shall be subject to suit or to levy, execution or
other enforcement procedures for the satisfaction of any such judgment (or other
judicial process). No officer, director, manager, member, shareholder, trustee,
beneficiary, partner, agent, attorney or employee of Landlord or of Landlord’s
adviser or of any Fee Mortgagee shall ever be personally or individually liable;
nor shall Landlord, Landlord’s adviser or any Fee Mortgagee or such persons ever
be answerable or liable in any equitable judicial proceeding or order beyond the
extent of their interest in the Demised Premises. In no event
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shall Landlord, Landlord’s adviser or any Fee Mortgagee or any such persons ever
be liable to Tenant for indirect or consequential damages.
40. BOOKS AND RECORDS. Tenant shall at all times keep and maintain
full and correct records and books of account of the operations of the Demised
Premises in accordance with generally accepted accounting principals
consistently applied and shall accurately record and preserve the records of
such operations in accordance with its customary records retention policy.
Notwithstanding that there has been no Percentage Rent Event, Tenant shall
report the gross sales from the Demised Premises to Landlord annually for each
fiscal year of Tenant no later than thirty (30) days following the end of such
fiscal year, such report to be certified by Tenant’s chief financial officer.
Landlord shall keep such information confidential at all times in accordance
with the terms of Exhibit J and may only release such information to Landlord’s
constituent members, and so long as such persons execute and deliver to Tenant a
Confidentiality Agreement with Tenant in the form attached hereto as Exhibit J
(“Confidentiality Agreement”) whether or not Tenant signs such Confidentiality
Agreement, also to its lenders and prospective lenders and to prospective
purchasers of Landlord’s interest in the Demised Premises. Upon an Event of
Default, Tenant shall permit Landlord, Landlord’s accountants and Fee Mortgagees
reasonable access thereto, with the right to make copies and excerpts therefrom
upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by applicable law, Tenant shall have
the right to place on the roof or wall of the Demised Premises at Tenant’s sole
cost and expense, a satellite dish (hereinafter called the “Dish”) for
transmission of data (both receiving and sending) between Tenant’s various
operations and its headquarters in accordance with all laws and governmental
regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant agree and
acknowledge that this Lease has been freely negotiated by Landlord and Tenant.
In any event of any ambiguity, controversy, dispute or disagreement over the
interpretation, validity or enforceability of this Lease or any of its
covenants, terms or conditions, no inference, presumption or conclusion
whatsoever shall be drawn against Tenant by virtue of Tenant’s having drafted
this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The covenants and agreements
contained in this Lease shall bind and inure to the benefit of the successors
and assigns of each party. As used in this Lease “Affiliate” (whether or not
capitalized) shall mean, with respect to any person, any person controlled by,
controlling, or under common control with such person; and “control” shall mean
any direct ownership interest or right through the exercise of voting or
approval rights or otherwise, to exercise decision-making authority generally.
44. CAPTIONS. The captions preceding the Sections of this Lease are
intended only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Lease
shall be invalid or unenforceable, the remainder of the provisions of this Lease
shall not be
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affected thereby and each and every provision of this Lease shall be enforceable
to the fullest extent permitted by law.
46. CHOICE OF LAW/JURISDICTION. This Lease, and the rights and
obligations of the parties hereto, shall be interpreted and construed in
accordance with the laws where the Demised Premises are located (the “State”),
without regard to the State’s internal conflict of law principles. Any disputes
arising out of this Lease or between Landlord and Tenant shall be subject to the
exclusive jurisdiction of the state courts of the State.
47. NO WAIVER. The failure of either party to seek redress for
violation of or to insist upon the strict performance of, any term, covenant or
condition contained in this Lease shall not prevent a similar subsequent act
from constituting a default under this Lease. Without limitation, no written
consent by Landlord or Tenant to any act or omission that otherwise would be a
default shall be construed to permit other similar acts or omissions. Neither
party’s failure to seek redress for violation or to insist upon the strict
performance of any covenant, nor the receipt by Landlord of rent with knowledge
of any breach of covenant, shall be deemed a consent to or waiver of such
breach. No breach of covenant shall be implied to have been waived unless such
is in writing, signed by the party benefiting from such covenant and delivered
to the other party; and no acceptance by Landlord of a lesser sum than the Fixed
Annual Rent, Additional Rent or any other sum due shall be deemed to be other
than on account of the installment of such rent or other sum due. Nor shall any
endorsement or statement on any check or in any letter accompanying any check or
payment be deemed an accord and satisfaction; and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other right or remedy. The delivery of keys (or any
other act) to Landlord shall not operate as a termination of the Term or an
acceptance or surrender of the Demised Premises. The acceptance by Landlord of
any rent following the giving of any default and/or termination notice shall not
be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either Landlord or Tenant
employ an attorney to enforce or defend any of the conditions, covenants, rights
or obligations of this Lease (including, without limitation, a default by either
party), then the prevailing party shall be entitled to all reasonable attorney
fees and all other reasonable out-of-pocket litigation costs (including, but not
limited to filing fees, expert reports and testimony, court costs and other
usual costs of litigation of this type) incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent such waiver is permitted
by law, the parties waive trial by jury in any action or proceeding brought in
connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than contemporaneous instruments executed and delivered
of even date, if any, this Lease contains all of the agreements between Landlord
and Tenant relating in any way to the Demised Premises and supersedes all prior
agreements and dealings between them. There are no oral agreements between
Landlord and Tenant relating to this Lease or the Demised Premises. This Lease
may be amended only by a written instrument executed and delivered by both
Landlord and Tenant. The provisions of this Lease shall bind Landlord and Tenant
and their respective successors and assigns. Where the phrases “persons
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acting under” Landlord or Tenant or “persons claiming through” Landlord or
Tenant or similar phrases are used, the persons included shall be assignees,
sublessees, licensees or other transferees or successors of Landlord or Tenant
as well as invitees or independent contractors of Landlord or Tenant, and all of
the respective employees, servants, contractors, agents and invitees of
Landlord, Tenant and any of the foregoing. As used herein, “monetary default”
shall mean a default that can be substantially cured solely by the payment of
money and nothing more and “non-monetary default” shall mean a default that
cannot be substantially cured solely by the payment of money and northing more.
If either party is granted any extension, election or other option, to be
effective the exercise (and notice thereof) shall be unconditional, irrevocable
and must be made strictly in accordance with the prescribed terms and times;
otherwise its purported exercise shall be void and ineffective. The enumeration
of specific examples of a general provisions or use of the word “including”
shall not be construed as a limitation of the general provision. Unless a
party’s approval or consent is required by the express terms of this Lease not
to be unreasonably withheld, such approval or consent may be withheld in the
party’s sole discretion. The submission of a form of this Lease or any summary
of its terms shall not constitute an offer by Landlord to Tenant; the leasehold
shall only be created and the parties bound when this Lease is executed and
delivered by both Landlord and Tenant. Nothing herein shall be construed as
creating the relationship between Landlord and Tenant of principal and agent, or
of partners or joint venturers or any relationship other than landlord and
tenant. This Lease and all consents, notices, approvals and all other related
documents may be reproduced by any party by any electronic means or by
electronic, photographic or other reproduction process and the originals may be
destroyed; and each party agrees that any reproductions shall be as admissible
in evidence in any proceeding as the original itself (whether or not the
original is in existence and whether or not reproduction was made in the regular
course of business), and that any further reproduction of such reproduction
shall likewise be admissible. If any payment in the nature of interest provided
for in this Lease shall exceed the maximum interest permitted under controlling
law, as established by final judgment of a court, then such interest shall
instead be at the maximum permitted interest rate as established by such
judgment. Landlord and Tenant expressly agree that there are and shall be no
implied warranties of merchantability, habitability, suitability, fitness for a
particular purpose or of any other kind arising out of this Lease, and there are
no warranties or representations other than those expressly set forth in this
Lease. Without limitation, where Tenant in this Lease indemnifies or covenants
for the benefit of present and future Fee Mortgagees, such agreements are for
the benefit of present and future Fee Mortgagees as third party beneficiaries;
and at the request of Landlord, Tenant from time to time will confirm such
matters directly with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be deemed to be one and the same instrument. A
facsimile, email, PDF or electronic signature shall be deemed an original
signature.
52. INCORPORATION OF STATE LAW PROVISIONS. Certain provisions/
sections of this Lease and certain additional provisions/sections that are
applicable or required by laws of the state in which the Demised Premises are
located may be amended, described or otherwise set forth in more detail on
Exhibit I attached hereto, which such Exhibit by this reference, is incorporated
into and made a part of this Lease. In the event of any conflict between such
state law provisions and any provision herein, the state law provisions shall
control.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Lease has been duly executed under as of the Effective
Date.
WITNESS:
WE APP LAWNSIDE LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Vice President and Secretary
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Signature Page to Lease By and Between
WE APP LAWNSIDE LLC and PATHMARK STORES, INC.
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
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EXHIBIT B1
LEGAL DESCRIPTION OF THE LAND
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[g36891mq039i004.jpg]
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EXHIBIT B2
TITLE MATTERS AND ENCUMBRANCES
1. Payment of all taxes, water, sewer,
rents and assessments, if any, to and including the current installment of 2010,
not yet due and payable.
2. Any unpaid municipal property taxes for
the year 2010, not yet due and payable. NOTE: Taxes are paid to and including
the third quarter of 2010.
3. Possible additional taxes and
assessments assessed or levied under R.S.54:4-653.1 et seq, not yet due and
payable.
4. Subject to restrictions as contained in
Deed Book 2881/Page 207.
5. Subject to terms of party wall
agreement as contained in Deed Book 3117/1150.
6. Grants and easements in Deed Book
3138/Page 565 to Public Service Electric and Gas Company.
7. Subject to terms and provisions of
agreements as contained in Deed Book 3164/1194, Modification of Cross-Easement
Agreement in Deed Book 3791/418, and Amendment of Cross-Easement Agreement in
Deed Book 5113/168.
8. Subject to Real Property Waiver as
contained in Deed Book 4242/Page 574.
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: N/A
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
C.4 Re-allocation of Reimbursement Cap. Upon the completion of the Remedial Work
up to $20,000 of the Reimbursement Cap may be allocated to increase the
“Reimbursement Cap” under any other lease between Tenant and any Affiliate of
Landlord (except for that certain lease for space at 9210 Atlantic Avenue,
Queens (Ozone Park), New York).
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and among
, a , and its successors and
assigns, having an office at
(hereinafter together with its successors and assigns called “Mortgagee”), WE
APP Lawnside LLC, a Delaware limited liability company, having an office c/o
Winstanley Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord,
Massachusetts 01742 (hereinafter called “Landlord”) and Pathmark Stores, Inc., a
Delaware corporation having an office at 2 Paragon Drive, Montvale, New Jersey
07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a
promissory Note secured by, among other securities, a mortgage or deed of trust
(hereinafter, as the same may be amended, supplemented or otherwise modified
from time to time, called the “Mortgage”) covering a parcel or parcels of land
owned by Landlord and described on Exhibit A annexed hereto and made a part
hereof, together with the improvements now or hereafter erected thereon (said
parcel or parcels of land and improvements thereon being hereinafter called the
“Mortgaged Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments
being hereinafter collectively called the “Lease”), Landlord leased to Tenant
the Mortgaged Premises together with the building now or hereafter erected on
all or a portion of said premises (the Mortgaged Premises and the improvements
on or to be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on
November , 2010 in the in Book
, Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and approves the Lease.
2. Tenant covenants and agrees with Mortgagee that the Lease and
any extensions, renewals, replacements or modifications thereof and Tenant’s
interest in the premises under the Lease are and at all times shall subject and
subordinate to the lien of the Mortgage, without regard to the order of priority
of recording of the Mortgage and the Memorandum of the Lease, subject, however,
to the provisions of this Agreement.
3. Tenant certifies that the Lease is presently in full force and
effect.
4. Mortgagee agrees that so long as the Lease shall be in full
force and effect and so long as Tenant is not in default (beyond any applicable
notice and cure period) in the payment of fixed rent as set forth in the Lease,
or in the performance of any of the terms, covenants or conditions of the Lease
on Tenant’s part to be performed:
A. Tenant shall not be named or joined as a party defendant or
otherwise in any suit, action or proceeding for the foreclosure of the Mortgage
or to enforce any rights under the Mortgage or the bond or note or other
obligations secured thereby unless required by law to do so; and
B. The possession by Tenant of the Demised Premises and the
Tenant’s rights thereto shall not be disturbed, affected or impaired by, nor
will the Lease or the term thereof be terminated or otherwise affected by
(i) any suit, action or proceeding upon the Mortgage or the bond or note or
other obligation secured thereby, or for the foreclosure of the Mortgage or the
enforcement of any rights under the Mortgage or any other documents held by the
Mortgagee, or by any judicial sale or execution or other sale of the Mortgaged
Property, or by any deed given in lieu of foreclosure, or by the exercise of any
other rights given to the Mortgagee by any other documents or as a matter of
law, or (ii) any default under the Mortgage or the bond or note or other
obligation secured thereby.
5. Mortgagee hereby acknowledges and agrees that all trade fixtures
and equipment whether owned by Tenant or any subtenant or leased by Tenant from
a Landlord/Owner in the Demised Premises shall be subject to the provisions of
Section 17 of the Lease.
6. If the Mortgagee shall become the owner of the Mortgaged
Property by reason of foreclosure of the Mortgage or otherwise, or if the
Mortgaged Property shall be sold as a result of any action or proceeding to
foreclose the Mortgage or by a deed given in lieu of foreclosure, the Lease
shall continue in full force and effect, without necessity for executing any new
lease, as a direct lease between Tenant, as tenant thereunder, and the then
owner of the Mortgaged Property, as landlord thereunder, upon all of the same
terms, covenants and provisions contained in the Lease, and in such event:
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A. Tenant shall be bound to such new owner under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) and Tenant hereby agrees to attorn to such new owner
and to recognize such new owner as landlord under the Lease; and
B. Such new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) which terms, covenants and provisions such new owner
hereby agrees to assume and perform; provided, however, that such new owner
shall not be (i) obligated to complete any construction work required to be done
by Landlord within or outside of the Demised Premises pursuant to the provisions
of the Lease or to reimburse Tenant for any construction work done by Tenant;
however this provision shall not relieve such new owner from any repair or
maintenance obligations of Landlord expressly set forth in the Lease accruing or
arising following new owner’s acquisition of fee title to the Mortgaged Property
or impair any express setoff rights of Tenant expressly set forth in the Lease
accruing or arising following new owner’s acquisition of fee title to the
Mortgaged Property; (ii) required to make any repairs to the Mortgaged Property
or to the Demised Premises or to perform any other construction or other work,
including without limitation the restoration of the Demised Premises following
any casualty or taking; (iii) liable for the return of security deposits or
letters of credit, if any, paid or delivered by or on behalf of Tenant to
Landlord, except to the extent such sums are actually received by such new owner
(or any Mortgagee if such Mortgagee is not the new owner); (iv) bound by any
payment of rents, additional rents or other sums which Tenant may have paid more
than one (1) month in advance to any prior Landlord unless such sums are
actually received by Mortgagee or if such prepayment shall have been expressly
approved of in writing by such new owner (or any Mortgagee if such Mortgagee is
not the new owner); (v) bound by any agreement amending, modifying or
terminating the Lease made without Mortgagee’s prior written consent; (vi) bound
by any assignment of the Lease or sublease of the Demised Premises, or any
portion thereof, made prior to the time such new owner succeeded to Landlord’s
interest other than if made pursuant to the provisions of the Lease;
(vii) liable on account of any default on the part of Landlord occurring prior
to such new owner’s succeeding to Landlord’s estate; or (viii) subject to any
counterclaims, offsets or defenses that Tenant might have against Landlord.
7. If Landlord shall default in the performance of the Lease Tenant
shall give written notice thereof to Mortgagee and Mortgagee shall have the
right, but not the obligation, to cure such default in accordance with
Section 23 of the Lease (and as provided therein the Mortgagee shall be entitled
to such further time to cure as may be reasonably necessary for the Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Mortgagee’s reasonable control
impairing its ability to cure or remedy, to obtain possession of the Demised
Premises and thereafter to commence and diligently prosecute such cure or remedy
to completion)
8. Landlord has agreed in the Mortgage and other loan documents
that the rents payable under the Lease shall be paid directly by Tenant to
Mortgagee upon the occurrence of a default by Landlord under the Mortgage or any
other loan document. Accordingly, after notice is given by Mortgagee to Tenant
that the rents under the Lease should be paid to or at the
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications given under this Agreement shall
be in writing and shall be given by registered or certified mail, return receipt
requested, postage prepaid, (a) if to Mortgagee at the address of Mortgagee as
hereinabove set forth or at such other address as Mortgagee may designate by
notice, or (b) if to Landlord at the address of Landlord as hereinabove, or at
such other address as Landlord may designate by notice, or (c) if to Tenant,
then one copy shall be delivered to the attention of the Senior Vice President
of Real Estate of Tenant, another shall be delivered to the attention of General
Counsel of Tenant, and another shall be delivered to the Director of
Properties & Administration of Tenant, all at 2 Paragon Drive, Montvale, New
Jersey 07645 or at such other addresses as Tenant may designate by notice.
During the period of any postal strike or other interference with the mail,
personal delivery shall be substituted for registered or certified mail.
10. This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. This Agreement contains the entire agreement between the parties
and cannot be changed, modified, waived or cancelled except by an agreement in
writing executed by the party against whom enforcement of such modification,
change, waiver or cancellation is sought.
12. This Agreement and the covenants herein contained are intended to
run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WE APP LAWNSIDE LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a Delaware corporation
Name:
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
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WITNESS:
LANDLORD:
MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of .2010, before
me, the subscriber, personally appeared to me known, who being
by me duly sworn, did depose and say that he is
of the corporation described in and which executed the within
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation and that he signed his name thereto by
like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me, the
undersigned notary public, personally appeared ,
proved to me through satisfactory evidence of identification, which was a
[current driver’s license] [a current U.S. passport] [my personal knowledge], to
be the person whose name is signed on the preceding instrument and acknowledged
the foregoing instrument to be his/her free act and deed as
of WE APP Lawnside LLC.
Notary Public
My Commission Expires:
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before me, the
subscriber, personally came Christopher W. McGarry, to me known, who being by me
duly sworn, did depose and say that he is Vice President and Secretary of
Pathmark Stores, Inc., the corporation described in and which executed the
within instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his name
thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP LAWNSIDE
LLC, a Delaware limited liability company, having an office at c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and PATHMARK
STORES, INC., a Delaware corporation, having an office at 2 Paragon Drive,
Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
1. For and in consideration of the sum of TEN and no/100 Dollars
($10.00) and of other valuable considerations paid by Tenant to Landlord, the
receipt and sufficiency of which are hereby acknowledged by Landlord, Tenant and
Tenant hereby takes from Landlord that certain parcel of land (hereinafter
called “Land”) described on Exhibit B and the buildings and other improvements
now or hereafter erected on the Land together with the benefit of any and all
easements, appurtenances, rights and privileges now or hereafter belonging
thereto. The land is currently improved by an existing building consisting of
55,760 square feet of space (the “Building), as more particularly shown on the
site plan attached hereto as Exhibit A. The Building and any buildings and
improvements now or hereafter erected on the Land shall be hereinafter called
“Improvements”. The Land and any Improvements now or hereafter erected thereon
are hereinafter collectively called the “Demised Premises.” The Demised Premises
have been leased to Tenant upon and subject to the covenants and agreements set
forth in a certain agreement between Landlord and Tenant bearing even date
herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The original term of the Lease shall
continue to and include the date which is twenty (20) years after the day before
the Commencement Date if the Commencement Date is the first day of a month, or
twenty years (20) years after the last day of the month in which the
Commencement Date occurs if the Commencement Date is not the first day of a
month.
3. Tenant has the right and option to extend the term of the Lease
from the date upon which it would otherwise expire for ten (10) separate renewal
periods of five (5) years each (each such period being known as a “Renewal
Period”). Said right and option, if exercised by Tenant, shall be in accordance
with the terms and conditions of Section 4 of the Lease.
4. The Lease contains the entire agreement between the parties. All
persons are hereby put on notice of the existence of the Lease and are referred
to the Lease for its terms and conditions. The Lease is on file in the offices
of Tenant and the Landlord as hereinabove set forth.
5. This Memorandum of Lease is prepared, signed and acknowledged
solely for recording purposes under the laws of the State of New Jersey, and is
in no way intended to
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change, alter, modify, amend or in any other way affect the rights, duties and
obligations of Landlord and Tenant pursuant to the Lease; it being specifically
understood and agreed between the parties that each has rights, duties and
obligations imposed upon it in the Lease which are not expressly contained
herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP LAWNSIDE LLC, a Delaware
limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
Name: Craig H. Feldman
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
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EXHIBIT B
DEMISED PREMISES
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared , proved to me through
satisfactory evidence of identification, which was a [current driver’s license]
[a current U.S. passport] [my personal knowledge], to be the person whose name
is signed on the preceding instrument and acknowledged the foregoing instrument
to be his/her free act and deed as of WE APP
Lawnside LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 130 White Horse Pike, Lawnside, New Jersey, with WE APP Lawnside LLC, a
Delaware limited liability company (“Landlord”). (Terms used herein and not
otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and absolutely guarantees to Landlord
(which shall include its legal representatives, successors and assigns) the due
and punctual performance of each and all of the Tenant’s obligations under or
related to the Lease, including the timely payment of all sums due therein.
Tenant’s obligations hereby guaranteed include, without limitation, those
arising under amendments or modifications to the Lease hereafter entered into by
Tenant and Landlord, all of which shall be so guaranteed even though Guarantor
hereafter does not consent to or approve the same (Guarantor hereby waiving all
rights of consent or approval with respect to such amendments or modifications).
2. Guarantor waives presentment for payment or performance, notice
of nonpayment or performance, notice of default, demand, protest or notice or
acceptance of this Guaranty, any rights Guarantor may have by reason of any
forbearance, modification, amendment, extension or any indulgence whatsoever
that Landlord may grant or to which Landlord and the Tenant may agree with
respect to the Lease, any and all notice of every kind to which Guarantor might
otherwise be entitled with respect to the incurring of any further obligation or
liability by Tenant to Landlord, demand for payment, the presentment of any
instrument for payment, the protest or nonpayment thereof and any and all
defenses whatsoever excepting only Tenant’s performance as required by the terms
of the Lease. Guarantor also waives, unless and until all of the obligations of
Tenant are fully paid and performed, any right to be subrogated in whole or in
part to any right or claim of Landlord against Tenant and any right to require
the marshalling of any assets of the Tenant, which right of subrogation or
marshalling might otherwise arise from any partial payment by the Guarantor. It
is expressly understood and agreed that Guarantor’s liability hereunder shall be
unaffected by (i) any amendment or modification whatsoever of the provisions of
the Lease, (ii) any extension of time for performance under the Lease, (iii) any
delay by Landlord in exercising any right under the Lease or this Guaranty (none
of which shall ever operate as a waiver of such right), or (iv) the release of
Tenant or any other guarantor from performance or observance of any of the
agreements or conditions contained in the Lease by operation of law or
otherwise, whether made with or without notice to Guarantor, including without
limitation any impairment, modification, change, release, rejection,
disaffirmance, or limitation of the liability of Tenant, or any other guarantor
of the Lease, of their estate in
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EXHIBIT F
bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of suretyship as well as of guaranty,
and Landlord, without being required to proceed first against Tenant or any
other person or entity, may proceed directly against Guarantor whenever Tenant
fails to make any payment due or fails to perform any obligation now or
hereafter owed to Landlord without first resorting to or exhausting any other
remedy and without first having recourse to the Lease; provided, however, that
nothing herein contained shall prevent Landlord from suing on the Lease with or
without making Guarantor a party to the suit or from exercising any other rights
thereunder and if such suit, or other remedy, is availed of, only the net
proceeds therefrom, after deduction of all Landlord’s Costs of Collection
(defined below) shall be applied in reduction of the amount then due on this
Guaranty.
4. Guarantor agrees to pay to Landlord, on demand, all costs and
expenses, including reasonable attorneys’ fees and litigation expenses, which
Landlord may incur in the enforcement of Tenant’s obligations under the Lease or
the liability of Guarantor hereunder (“Costs of Collection”). “Costs of
Collection” includes, without limitation, all out of pocket expenses incurred by
the Landlord’s attorneys and all costs incurred by Landlord including, without
limitation, costs and expenses associated with travel on behalf of Landlord,
which costs and expenses are related to or in respect of Landlord’s efforts to
collect and/or to enforce any of the obligations and/or to enforce any of its
rights, remedies or powers against or in respect of either or both Tenant or
Guarantor (whether or not suit is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has
either examined the Lease or has had an opportunity to examine the Lease and has
waived the right to examine; (ii) that it (and the individual acting on its
behalf) has the full power, authority and legal right to execute and deliver
this Guaranty; (iii) that this Guaranty is a binding legal obligation and is
fully enforceable against Guarantor in accordance with its terms; (iv) that
there is no action or proceeding pending or, to its knowledge, threatened
against Guarantor before any court or administrative agency which might result
in any material adverse change in its business or condition or in its assets;
(v) that neither the execution nor delivery of this Guaranty nor fulfillment of
nor compliance with the terms and provisions thereof will constitute a default
under or result in the creation of any lien, charge or encumbrance upon any
property or assets of Guarantor under any agreement or instrument to which it is
now a party or by which Guarantor may be bound; and (vi) that Guarantor is the
sole owner of all the common stock of Tenant and expects to derive financial
benefit from the Lease.
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6. This Agreement shall be binding upon Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Landlord and its legal representatives, successors and assigns, and is
irrevocable until released in writing by Landlord. Each and every right, remedy
and power hereby granted to Landlord or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by
Landlord at any time and from time to time. The validity, construction and
performance of this Guaranty shall be governed by the laws of the State where
the Demised Premises are located (the “State”), without regard to conflict of
law principles. If any clause or provision of this Guaranty should be held
illegal or invalid by any court, the invalidity of such clause or provisions
shall not affect any of the remaining clauses or provisions hereof. In case any
agreement or obligation contained in this Guaranty should be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Guarantor, as the case may be, to the full extent
permitted by law. Each and every default hereunder or under the Lease shall give
rise to a separate cause of action hereunder. The obligations and liabilities of
hereunder shall be joint and several with any other guarantees given to Landlord
in connection with the Lease. This Guaranty may be amended only by instrument in
writing executed and delivered by both Landlord and Tenant. The provisions of
this Guaranty shall bind Guarantor and its respective successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns. This
Guaranty and all consents, notices, approvals and all other documents relating
hereto may be reproduced by photographic, microfilm, microfiche or other
reproduction process and the originals thereof may be destroyed; and each party
agrees that any reproductions shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not reproduction was made in the regular course
of business) and that any further reproduction of such reproduction shall
likewise be admissible in evidence.
7. Guarantor consents to and agrees that the courts of the State
shall have personal jurisdiction over Guarantor for any action brought on this
Guaranty including the right to grant judgment against Guarantor personally
together with interest on any judgment obtained by Landlord at the interest rate
set forth in the Lease for late payments (but if the same shall be unlawful for
any reason, then at the highest permissible interest rate). Guarantor further
agrees and consents that venue, if any, for any such action shall be as set
forth in the Lease. Guarantor waives and relinquishes any and all rights to
removal of any such action to any other court. Guarantor also waives trial by
jury in any judicial proceeding involving any matter in any way arising out of
or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand
made under this Guaranty shall be in writing and shall be deemed given at the
earlier of (i) the date received or (ii) three (3) business days after the date
deposited in a United States Postal Service Depository, postage prepaid first
class certified or registered mail, return receipt requested, addressed to
Guarantor or Landlord, as the case may be, at the respective addresses set forth
opposite their names below:
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Landlord:
WE APP Lawnside LLC
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303
Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., a Maryland corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
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EXHIBIT H
INSURANCE
This Exhibit G shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this
Exhibit shall prevail and govern the Lease.
1. INSURANCE.
A. Coverage. Tenant shall purchase and maintain insurance during the entire Term
of the Lease and any period Tenant (or any party claiming by, through or under
Tenant) occupies any portion of the Demised Premises, for the benefit of the
Tenant and Landlord (as their interest may appear) with terms and coverages
reasonably satisfactory to Landlord, and with insurers having a minimum A.M.
Best rating of at least A/X, and with such increases in limits as Landlord may
from time to time reasonably request, but initially Tenant shall maintain the
following coverages in the following amounts:
(1) Commercial General Liability Insurance naming Landlord,
Landlord’s management, leasing and development agents and Landlord’s
mortgagee(s) from time to time as additional insureds, with coverage for
premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Property insurance covering property damage and business
interruption for the entire Demised Premises. Covered property shall include the
Building, boilers and machinery, all tenant improvements, office furniture,
trade fixtures, office equipment, merchandise and all other items Tenant’s
property on the Demised Premises. Such insurance shall name Landlord and Fee
Mortgagee(s) from time to time as additional loss payees as their interests may
appear. Such insurance shall be written on an “all risk” of physical loss or
damage basis including but not limited to the perils of fire, extended coverage,
windstorm, vandalism, malicious mischief, terrorism, sprinkler leakage, flood,
windstorm and earthquake, for the full replacement cost value of the covered
items and other endorsements as Landlord shall reasonably request from time to
time and in amounts that meet any co insurance clause of the policies of
insurance with a deductible amount not to exceed $750,000. Such insurance shall
include rent continuation coverage of no less than twelve (12) months. Such
policy or policies shall provide that the proceeds of any loss shall be payable
to Landlord and Tenant and to the holder (as its interest may appear) of any Fee
Mortgage to which this Lease is subordinate so long as such holder and future
holders of such Fee Mortgage are obligated to apply proceeds of insurance in the
manner provided for in this Lease.
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EXHIBIT H
(3) Workers’ Compensation Insurance and Employers Liability
Insurance with statutory limits and automobile liability insurance (coverage
must include owned, leased, hired and non owned vehicles) with a limit of at
least $1,000,000 Combined Single Limit-Bodily Injury & Property Damage.
(4) Tenant shall purchase or shall cause each Tenant contractor
performing work on the Demised Premises to carry insurance protecting against
claims set forth below which may arise out of or result from the contractor’s
operations on the Premises and naming Landlord, Landlord’s management, leasing
and development agents as additional insureds for Premises Operations and
Completed Operations. Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s compensation, disability
benefit and other similar employee benefit acts—in amounts as required by law;
(2) claims for damages because of bodily injury, occupational
sickness or disease, or death of his employees or any other person and other
personal injury and motor vehicle liability — Public Liability - Single Limit
(Combined) Per Occurrence. Bodily Injury/Property Damage $1,000,000 w/
$2,000,000 General/Completed Operations Aggregate. Automobile Liability - Single
Limit (Combined) Per Occurrence Bodily Injury and Property Damage $1,000,000.
Excess Liability Umbrella covering all above items $5,000,000 per Occurrence;
and
(3) claims for damages, other than the work of the contractor itself, because of
injury to or destruction of tangible property, including loss of use resulting
therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
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PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark. “Gross
Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $35,000,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise
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would be made at, in, on, about, from or with respect to the Premises, nor the
amount of any cash or credit refund made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures which are not a part of Tenant’s stock in
trade. Each sale upon installment, credit or layaway shall be treated as a sale
for the full price in the month during which such sale shall be made,
irrespective of the time when Tenant shall receive payments from its customers,
and no deduction shall be allowed for uncollectible payment by customer or
uncollected or uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior
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month to Landlord without demand, provided that if such amount exceeds the
Percentage Rent that would be payable with respect to such month if Percentage
Rent were calculated on the basis of Gross Sales for all months elapsed in the
then current calendar year, Tenant shall not be required to pay any amount on
account of such month unless and until such amount shall later be payable as
part of the annual adjustment. Upon receipt by Landlord of each Annual Statement
of Gross Sales there shall be an adjustment between Landlord and Tenant to the
end that Landlord shall receive the exact amount of Percentage Rent due
hereunder. Any overpayments by Tenant hereunder shall be credited against the
next payments due under this Section. Any underpayments by Tenant shall be
immediately due and payable. With respect to the calendar year in which the Term
ends, the adjustments shall be prorated for the portion of the calendar year
included in the Term.
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EXHIBIT I
LOCAL LAW ADDENDUM
(Attached)
185
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Lease Addendum (NJ)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Lawnside LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”). Capitalized
terms used in this Addendum without definition shall have the meanings set forth
in the Lease. This Addendum is to be construed as supplemental to, and part of,
the Lease. In the event of any inconsistency between the Lease and this
Addendum, the terms and provisions of this Addendum shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Construction Liens. In no event shall Landlord’s consent to Tenant performing
any improvements, repairs, replacements or alterations in or to the Demised
Premises whatsoever during the Term of the Lease constitute Landlord’s written
authorization for Tenant or contractors engaged by Tenant to file a construction
lien against Landlord’s interest in the Demised Premises.
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EXHIBIT J
Confidentiality Agreement
(Attached)
187
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CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as of , 2010
(the “Effective Date”) by and between [TENANT], a , having an
address at (“Company”) and , a ,
having an address at (“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in
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accordance with the laws of the State of New Jersey, without regard to conflict
of law principles. The exclusive jurisdiction for any disputes concerning this
Agreement shall be the Superior Court of New Jersey, Bergen County, and the
parties hereby submit to such jurisdiction and waive all defenses relating to
jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
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EXHIBIT B-3
LEASE FORM FOR SEAFORD, NY
191
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KEY NO:
LEASE
BY AND BETWEEN
WE APP SEAFORD LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
4055 MERRICK ROAD, SEAFORD, NEW YORK
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
8
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
10
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
15
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
16
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
16
26.
DESTRUCTION
19
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
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TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
27
45.
INVALIDITY OF CERTAIN PROVISIONS
27
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
28
51.
COUNTERPARTS
29
52.
INCORPORATION OF STATE LAW PROVISIONS
29
194
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP SEAFORD LLC, a Delaware limited liability company
with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue Extension,
Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley (hereinafter called
“Landlord”), and PATHMARK STORES, INC., a Delaware corporation, having an office
at 2 Paragon Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
This Lease is guaranteed by The Great Atlantic & Pacific Tea Company, Inc., a
Maryland corporation (“Guarantor”) pursuant to a guaranty of even date herewith
(as the same may be amended, supplemented or modified from time to time, the
“Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made a part
hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Local Law Addendum; and
K. Exhibit J, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from Landlord that
certain parcel of land (hereinafter called “Land”) commonly known as 4055
Merrick Road, Seaford, New York and more particularly described on Exhibit B1
and the buildings and other improvements now or hereafter erected on the Land
together with the benefit of and subject to any and all easements,
appurtenances, rights and privileges and other matters of record now or
hereafter arising including those described in Exhibit B2. The land is currently
improved by an
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existing building consisting of approximately 41,030 square feet of space (the
“Building”), as more particularly shown on the Site Plan attached hereto as
Exhibit A. The Building and any other buildings and improvements now or
hereafter erected on the Land shall be hereinafter called “Improvements.” The
Land and any Improvements are hereinafter collectively called the “Demised
Premises.”
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the
“Commencement Date”) on the Effective Date and shall continue to and include the
date (the “Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 12 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten
(10) separate consecutive renewal periods of five (5) years each (each such
period being hereinafter called a “Renewal Period”) upon the same terms and
conditions as are herein set forth except the rent for such Renewal Period shall
be as provided in Section 5 below; provided, however, that at the time of so
electing to extend and also at the time any Renewal Period commences Tenant is
not in default beyond any applicable notice and cure period, and this Lease is
then in full force and effect. If Tenant fails timely so to exercise its option
for any Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the
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Term of this Lease shall be automatically extended for the Renewal
Period(s) covered by the Renewal Notice without execution of an extension or
renewal lease. If Tenant shall not have given notice of such election to
Landlord by such date in respect of any Renewal Period, Landlord shall (unless
notice shall have been given as hereinafter specifically permitted) give notice
to Tenant that Tenant has failed to give notice of such election to Landlord
(hereinafter called the “Option Notice”). Tenant’s time to give notice of such
election shall continue until the date which is sixty (60) days after receipt of
the Option Notice. Landlord shall not give the Option Notice prior to the date
which is four hundred twenty-five (425) days before the Expiration Date. If
Landlord shall not have given the Option Notice prior to the date which is four
hundred twenty-five (425) days before the beginning of the next succeeding
Renewal Period, the term of this Lease shall be extended beyond the Expiration
Date to the date which is four hundred twenty-five (425) days after the date on
which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
1,641,000.00
$
136,750.00
6-10
$
1,723,050.00
$
143,587.50
11-15
$
1,809,202.50
$
150,766.88
16-20
$
1,899,662.63
$
158,305.22
First Renewal Period
21-25
$
1,994,645.76
$
166,220.48
Second Renewal Period
26-30
$
2,094,378.04
$
174,531.50
Third Renewal Period
31-35
$
2,199,096.95
$
183,258.08
Fourth Renewal Period
36-40
$
2,309,051.79
$
192,420.98
Fifth Renewal Period
41-45
$
2,424,504.38
$
202,042.03
Sixth Renewal Period
46-50
$
2,545,729.60
$
212,144.13
Seventh Renewal Period
51-55
$
2,673,016.08
$
222,751.34
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Eighth Renewal Period
56-60
$
2,806,666.89
$
233,888.91
Ninth Renewal Period
61-65
$
2,947,000.23
$
245,583.35
Tenth Renewal Period
66-70
$
3,094,350.24
$
257,862.52
B. All Fixed Annual Rent shall be payable by Tenant in equal
monthly installments in advance on the first day of every calendar month during
the Term of this Lease (and any Renewal Periods), and shall be payable at the
office of the Landlord first above set forth or at such other address as
Landlord shall have given in a notice to Tenant) in current U.S. currency by
check drawn on a clearinghouse bank and payable directly to Landlord (or, if
requested by Landlord from time to time by electronic fund transfer, to an
account designated by Landlord). Rent for a part of a month shall be prorated on
a daily basis and paid on the Commencement Date. Further, the rent for the first
full month shall be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water, sewer, telephone, refuse
disposal, and other charges for utilities and services supplied to the Demised
Premises, insurance costs, amounts due under any title encumbrance matter
described in Exhibit B2, and all costs of cleaning, maintaining, repairing and
replacing the Demised Premises or any portion thereof and of complying with all
laws now existing or hereafter enacted including all Environmental Laws (defined
below). Any cost, expense or obligation directly relating to the Demised
Premises that is not expressly declared in this Lease to be that of Landlord
shall be deemed to be an obligation of Tenant to be performed by Tenant at
Tenant’s sole expense, and to the greatest extent permitted by law Tenant shall
indemnify and defend Landlord against, and hold Landlord harmless from, the
same, and Tenant’s liability for the payment and performance of such amounts and
obligations that shall arise during the Term is
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hereby expressly provided to survive the expiration of the Term or early
termination of this Lease. Fixed Annual Rent, Additional Rent, and all other
sums payable hereunder by Tenant, shall be paid without notice or demand, and
without set off, counterclaim, recoupment, abatement, suspension, deduction, or
defense (other than payment) whatsoever. Except as otherwise expressly set forth
in this Lease with respect to certain events of casualty in Section 26 or
condemnation in Section 27, Tenant shall in no event have any right to terminate
this Lease, and any right so to terminate (or to abate, suspend, set off or
otherwise deduct from Fixed Annual Rent or Additional Rent) under applicable law
is hereby waived to the greatest extent permitted by law. It is the intention of
the parties that the obligations of Tenant hereunder shall be separate and
independent covenants and shall not be discharged or otherwise affected by any
law or regulation now or hereafter applicable to the Demised Premises or any
other restriction on Tenant’s use, and that Fixed Annual Rent, Additional Rent,
and all other sums payable by Tenant hereunder shall continue to be payable in
all events, and that the obligations of Tenant hereunder shall continue
unaffected throughout the Term. Landlord, at its sole cost and expense, shall be
responsible for the following: (i) payment of any amounts relating to Fee
Mortgages or other encumbrances or liens created by Landlord, (ii) management
fees, administrative costs, professional fees and any other costs incidental to
its fee ownership of the Demised Premises; and (iii) and cost, expense, or
liability resulting from the negligent or willful misconduct of Landlord, its
employees or agents.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of a
supermarket, drugstore, automated teller machine, bank, all other uses customary
and incidental to a supermarket and, so long as the Minimum Credit Test (defined
in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised Premises
or Tenant or both, foreseen or unforeseen, and whether or not the same interfere
with Tenant’s occupancy. Tenant shall procure all approvals, licenses and
permits, in each case promptly giving Landlord true and complete copies of the
same and all applications therefor. Tenant shall never overload any of the
Building systems, including the floors and mechanical, electrical and structural
systems, and shall also keep the Demised Premises equipped with appropriate
safety appliances and comply with all requirements of insurance and of insurance
inspection or rating bureaus. Tenant shall not itself, nor shall Tenant permit
or suffer persons acting under Tenant to, either with or without negligence,
injure, overload, deface, damage or otherwise harm the Demised Premises or any
part thereof or use the Demised Premises contrary
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to any law or in a manner likely to create any nuisance. It is intended that
Tenant bear the sole risk of all present or future laws affecting the Demised
Premises, and Landlord shall not suffer any reduction in any rent on account of
the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land. Landlord further covenants and
agrees, upon request of tenant, to convey without compensation therefor,
insubstantial perimeter portions of the Land for highway or roadway purposes, to
the state in which the demised premises are situate or any other municipal or
governmental body, provided, however, that any such conveyance shall not
constitute a taking (as defined in section 28 below) nor constitute grounds for
tenant to terminate this Lease. Notwithstanding anything to the contrary or
otherwise set forth herein, any encumbrance on the Demised Premises shall be
subject to any requirements imposed by any Fee Mortgage (provided that Landlord
shall reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s intention to discontinue permanently the operation of its
business in the Demised Premises or any part of the Demised Premises or
discontinues the operation of its business in the Demised Premises or any part
of the Demised Premises for a period of one (1) year for any reason (other than
Destruction or Taking that pursuant to the applicable provisions of this Lease
entitles Tenant to terminate this Lease), then Landlord may terminate this Lease
as to the Demised Premises, or if applicable, the part of the Demised Premises
with respect to which Tenant has given notice of its intention to discontinue,
or in which Tenant has discontinued, its operations, by thirty (30) days’
written notice to Tenant of Landlord’s election to terminate this Lease (or, if
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as applicable, resuming operations of
its business in the Demised Premises within twenty-five (25) days after receipt
of Landlord’s notice or by rescinding its notice of its intention to discontinue
its business in writing to Landlord delivered within twenty-five (25) days after
receipt of Landlord’s notice.
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A. Tenant shall, during the term of this Lease, as Additional Rent,
pay and discharge punctually, as and when the same shall become due and payable,
all taxes, special and general assessments, water rents, rates and charges,
sewer rents and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, including rent and/or
occupancy taxes (hereinafter collectively referred to as “Taxes”), and each and
every installment thereof that shall or may during the term of this Lease,
become due and payable, or liens upon the Demised Premises or any part thereof,
together with all interest and penalties thereon, under or by virtue of all
present or future laws, ordinances, requirements, orders, directives, rules or
regulations of the Federal, State, County, Town and City Governments and of all
other governmental authorities whatsoever (all of which shall also be included
in the term “Taxes” as heretofore defined).
B. To the extent permitted by law, Tenant or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installments. Landlord agrees to permit the application
for the foregoing conversion to be filed in Landlord’s name, if necessary, and
shall execute any and all documents, instruments or certificates reasonably
requested by Tenant to accomplish the foregoing.
C. Tenant shall be deemed to have complied with the covenants of
this Lease if payment of Taxes shall have been made either within any period
allowed by law or by the applicable governmental authority during which payment
is permitted without penalty so long as the Taxes shall never become subject to
a tax sale on the Demised Premises or subject Landlord to any civil or criminal
liability. Tenant shall produce and exhibit to Landlord satisfactory evidence of
payment prior to the expiration of any such period.
D. All Taxes shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of such year during which the
Term shall be in effect. Notwithstanding anything to the contrary contained
herein, if the Term hereof terminates prior to the date which would have been
the expiration thereof but for the earlier termination, then Tenant shall pay
those Taxes which would have been paid by Tenant to and including the term
expiration date and this obligation shall expressly survive such termination.
E. So long as the requirements of Paragraph C of this Section are complied with,
Tenant or its designees shall have the right to contest or review all Taxes by
legal proceedings, or in such other manner as it may deem suitable. Tenant or
its designees shall inform Landlord of any such proceedings and conduct such
proceedings promptly at its own cost and expense, and free of any expenses to
Landlord, and if necessary, in the name of and with the cooperation of Landlord
(so long as Landlord’s cooperation does not involve incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant). Landlord
shall execute all documents, instruments or certificates reasonably necessary
and correct to accomplish the foregoing. Notwithstanding anything to the
contrary or otherwise set forth herein, any such contest shall be subject to
compliance with all applicable provisions of any Fee Mortgage (provided that
Landlord shall reasonably cooperate with Tenant, at no material out of pocket
cost to Landlord, in connection with such compliance).
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7. TAXES.
F. Landlord covenants and agrees that any refunds or rebates on
account of Taxes paid by Tenant pursuant to the provisions of this Lease shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and as such are to be received by Landlord in trust and paid to Tenant
forthwith. Landlord will, upon the request of Tenant, sign any receipts that may
be necessary to secure the payment of any such refund or rebate, directly to
Tenant and/or will pay over to Tenant such refund or rebate as received by
Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant’s application (if
legally required) for separate tax assessments for such portions of the Demised
Premises as Tenant shall at any time, and from time to time, reasonably
designate. Landlord hereby agrees, upon request of Tenant, to execute all
documents, instruments or certificates as shall reasonably be required by Tenant
(so long as the same impose no material obligations on Landlord or expose
Landlord to any liability).
G. Nothing herein or in this Lease otherwise contained shall
require or be construed to require Tenant to pay any inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, that are or may
be imposed upon Landlord, its successors or assigns, whether arising out of
Landlord’s ownership of the Demised Premises, this Lease or otherwise; provided,
however, that if at any time hereafter there is levied any tax on Landlord in
lieu of real estate taxes based solely upon the ownership of real property, by
property owners, in general, within the tax jurisdiction within which the
Demised Premises are located, then such tax shall be considered to be an item of
Taxes but for purposes of computing the amount of such tax payable by Tenant,
the Demised Premises shall be deemed to be the sole real property owned by
Landlord.
H. In the event that any fee mortgagee (“Fee Mortgagee”) requires the escrow of
Real Estate Taxes or insurance premiums, Tenant shall pay to such Fee Mortgagee
in escrow, on the first day of each and every month during the term of this
Lease, one twelfth (1/12) of all estimated charges for the ensuing twelve (12)
month period as reasonably estimated by the Fee Mortgagee based on current bills
for same. Tenant shall deposit at least ten (10) days prior to the first date on
which any interest or penalty will accrue such additional amounts as may be
necessary so that there shall at all times be sufficient funds in escrow to pay
such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall
have the right to install, maintain and replace in, on or in front of any
Improvement or location on the Demised Premises or in any part thereof such
signs and advertising matter as Tenant, and with Tenant’s consent, any such
assignee or subtenant of Tenant may desire, provided that Tenant shall comply
with any applicable requirements of governmental authorities having jurisdiction
and shall obtain any necessary permits for such purposes. As used in this
Section, the word “sign” shall be construed to include any placard, pylon, logo,
light or other advertising symbol or object, irrespective or whether same be
temporary or permanent. All signs shall be Tenant’s personal property and shall
be maintained and removed by Tenant upon termination of this Lease at Tenant’s
sole expense.
9. TRUE LEASE. It is the intent of Landlord and Tenant and the
parties agree that this Lease is a true lease and that this Lease does not
represent a financing agreement. Each party shall reflect the transaction
represented hereby in all applicable books, records, and reports
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(including income tax filings) in a manner consistent with “true lease”
treatment rather than “financing” treatment.
10. REPAIRS. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, keep and maintain or cause to be kept
and maintained in repair and good condition the Building and improvements at any
time erected on the Demised Premises. Without limitation, Tenant shall perform
the Remedial Work described in Exhibit C. Landlord shall not be required to
furnish services or facilities or to make any improvements, repairs,
replacements or alterations in or to the Demised Premises whatsoever during the
Term of this Lease. Without limiting the generality of the foregoing, Tenant
shall be responsible for the entire Demised Premises and shall manage, maintain,
repair, replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment serving the Demised Premises,
keeping the Demised Premises and all improvements and appurtenances in at least
as good condition as on the Commencement Date. Without limitation, Tenant shall
provide all cleaning, painting, janitorial services, rubbish disposal, periodic
exterior waterproofing treatments to the Building, window caulking, maintenance
of all gas, water, electric and other utility lines from public ways to the
Demised Premises, and shall repair, maintain and replace all landscaping, roads,
parking areas, and walkways appurtenant to the Demised Premises, and shall
provide all snowplowing services thereto. Tenant shall provide a copy of all
current vendor contracts, if any, relating to the foregoing to Landlord at least
annually and from time to time otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost and expense insurance
policies insuring against loss by fire, lightning, the perils of extended
coverage and malicious mischief covering the Demised Premises and the other
Improvements in the Demised Premises and other perils as more fully described in
Exhibit G.
B. So long as Tenant performs its obligations in Paragraph A of
this Section, Landlord hereby waives all rights of recovery against Tenant and
any other occupant(s) of the Demised Premises and any of their agents and
employees for damage or destruction to any and all of the Improvements,
including without limitation, the Building, arising out of fire or other
casualty whether or not caused by acts or negligence of the aforementioned
persons. Tenant hereby waives all rights of recovery against Landlord, its
agents and employees for damage or destruction to any and all of the
Improvements, including without limitation, the Building and to Tenant’s trade
fixtures, equipment and inventory arising out of fire or other casualty whether
or not caused by the acts or negligence of Landlord, its agents or employees.
C. Tenant shall maintain at its own cost and expense public
liability and other insurance in accordance with the requirements of Exhibit G.
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D. Any insurance required to be provided by Tenant pursuant to this
Lease may be provided by blanket insurance covering the Demised Premises and
other locations of Tenant, provided such blanket insurance complies with all of
the other requirements of this Lease with respect to the type of insurance
covered by blanket policies. If Tenant elects to insure the Demised Premises
under any blanket insurance policy, Tenant shall furnish to Landlord a
certificate of insurance showing the Demised Premises as a location insured
under any such blanket insurance policy to the extent of the limits required in
Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as to which
Tenant has received a notice containing such mortgagee’s name and address a
duplicate original copy or certificate of the policies of insurance required to
be carried by Tenant.
E. Notwithstanding anything to the contrary contained herein,
Tenant may carry any required insurance on trade fixtures and equipment
described in Section 17 under a program of self-insurance or to carry insurance
with deductibles in excess of part or all of the amounts of insurance required
under Exhibit G hereunder.
F. If Tenant fails to perform any covenant in this Section and such failure
continues for more than three (3) days after written notice, then, without
limiting any of Landlord’s other rights and notwithstanding any other provision
of this Lease concerning notice and cure of defaults, Landlord may but need not
obtain such insurance, and Tenant shall pay the cost thereof upon demand as
Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with
and shall from time to time conform the Demised Premises to every applicable
requirement of law, duly constituted authority, Board of Fire Underwriters
having jurisdiction or of the carriers of all insurance on the Demised Premises
(all of the foregoing being hereinafter called “Legal Requirements”). Tenant
shall have the right upon giving notice to Landlord to contest any obligations
imposed upon Tenant pursuant to the provisions of this Section and to defer
compliance during the pendency of such contest, if the failure of Tenant to so
comply will not subject Landlord to civil or criminal penalty or liability.
Landlord shall cooperate with Tenant in such contest (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall execute any documents
reasonably required in furtherance of such purpose. Tenant shall not apply for
any change in zoning applicable to the Land or the Demised Premises without
Landlord’s prior written consent, not to be unreasonably withheld, conditioned
or delayed.
13. ALTERATIONS. Tenant may at its own expense from time to time,
during the term hereof, make such alterations, additions, improvements and
changes, structural or otherwise (hereinafter called “Alterations”), in and to
the Demised Premises which it may deem necessary or desirable, provided such
Alterations shall not reduce the value of the Demised Premises. Tenant, in
making any Alterations, shall use materials of equal or better quality than
those used in the construction of the Demised Premises and comply with all Legal
Requirements. Tenant shall obtain or cause to be obtained all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals that may be required in connection with the making of
Alterations. Landlord shall cooperate with Tenant in the obtaining thereof (so
long as Landlord’s cooperation does not involve (a) incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant or (b) breach
of any covenants binding on
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Landlord or the Demised Premises, including, without limitation, any mortgage)
and shall execute any documents required in furtherance of such purpose. Tenant
may, but shall not be obligated to, remove any Alteration so long as such
removal does not materially and adversely affect any heating, ventilating,
mechanical, electrical, structural, roof or life safety elements of the Building
and Tenant shall repair all damage that results from such removal and restore
the Demised Premises to a functional condition (including the filling of all
floor and wall holes, the removal of all disconnected wiring back to junction
boxes and the replacement of all damaged ceiling tiles). Upon completion of any
Alteration that is not Cosmetic Work, Tenant shall promptly deliver to Landlord
plans showing such Alteration as built. “Cosmetic Work” shall mean painting,
carpeting and wall coverings and the like and the addition or deletion of
interior non structural partitions, provided such work does not materially and
adversely affect any roof, structural, mechanical, electrical, utility, fire
protection or life safety systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall permit Landlord to enter
upon the Demised Premises at all reasonable times approved by Tenant to examine
the Demised Premises, and during the six (6) month period preceding the
Expiration Date, to exhibit the Demised Premises to prospective tenants,
provided that Landlord shall not unreasonably interfere with the conduct of
business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any and all utility services to
the Demised Premises, including, without limitation, telecommunications, water,
gas, electricity and fuel used by it in the Demised Premises. Tenant shall pay
all sewer charges assessed by the municipal authority having jurisdiction. The
failure or interruption of any utility services shall be at Tenant’s sole risk
and Landlord shall not suffer any reduction in any rent on account thereof.
B. Tenant shall have the sole right to apply for, claim and receive
any rebate, reimbursement, credit, or payment from any utility company providing
service to the Building resulting from Tenant’s installation of energy saving
equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall
become subject and subordinate to the lien of any Fee Mortgagee of the entire
fee interest of the Demised Premises, and any renewals, modifications or
extensions thereof, provided that a Subordination, Non Disturbance and
Attornment Agreement (“SNDA”) substantially in the form annexed hereto as
Exhibit D (or a reasonably equivalent form that is reasonably acceptable to
Tenant and the applicable Fee Mortgagee) is executed, acknowledged and delivered
by such Fee Mortgagee to Tenant. If the Fee Mortgagee requires that this Lease
have priority over such mortgage, Tenant shall, upon request of the Fee
Mortgagee, execute, acknowledge and deliver to the Fee Mortgagee an agreement
acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment whether owned by Tenant or
leased by Tenant from a Lessor/Owner (hereinafter called the “Equipment Lessor”)
installed in the
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Demised Premises, regardless of the manner or mode of attachment, shall be and
remain the property of Tenant or any such Equipment Lessor and may be removed by
Tenant or any such Equipment Lessor at any time. In no event (including a
default under this Lease) shall Landlord have any liens, rights or claims in
Tenant’s or Equipment Lessor’s trade fixtures and equipment and Landlord agrees
to execute and deliver to Tenant and Equipment Lessor, within ten (10) days
after request therefor, any document reasonably required by Tenant or Equipment
Lessor in order to evidence the foregoing, so long as the same is reasonably
acceptable to Landlord and any Fee Mortgagee. Tenant shall promptly repair all
damage to the Building caused by the removal of any such trade fixtures or
equipment. Notwithstanding anything to the contrary in this Lease, the following
shall not constitute trade fixtures or equipment for purposes of this Lease and
neither Tenant nor any Equipment Lessor shall own or have any right to remove
the same (and, without limiting the generality of the foregoing, the following
shall not be subject to the provisions of this Paragraph A or Paragraph B of
this Section 17): (i) the HVAC system, plumbing, alarm, electric, life safety
and other building systems used to operate the Building or maintain the
certificate of occupancy, and (ii) any “fixtures” as such term is defined in the
applicable Uniform Commercial Code.
B. In the event Tenant shall enter into any arrangement to finance
all or any portion of its trade fixtures or equipment either before or after the
installation thereof in the Demised Premises and whether such financing shall be
in the form of a mortgage, financing agreement, equipment lease, equipment sale
leaseback or otherwise and in the event the lessor or secured party thereunder
shall provide written notice to Landlord that it requires a copy of any default
sent by Landlord to Tenant under this Lease also to be sent to such person
(hereinafter called the “Owner/Secured Party”), then Landlord upon receipt of
such requirement shall simultaneously send a copy of any default notice to such
Owner/Secured Party at the address furnished to Landlord; provided that
Landlord’s failure to deliver any such copy to the Owner/Secured Party shall not
affect Landlord’s exercise of any right or remedy under this Lease in any way
whatsoever. The copy of any such default notice shall be sent to such
Owner/Secured Party in the same manner as notices are required to be sent and in
the same manner as such notice is being sent to Tenant hereunder. Landlord
further agrees that any such Owner/Secured Party shall have the right, but not
the obligation, to remedy or cure any default of Tenant under this Lease within
the same period of time granted to Tenant to remedy or cure any such default
under this Lease.
C. All trade fixtures and other personal property (which term shall
include without limitation food and inventory) of any person that is located on
the Demised Premises shall be at the sole risk of Tenant. Landlord shall not be
liable for any loss or damage to person or property resulting from any accident,
theft, vandalism or other occurrence on the Demised Premises, including damage
resulting from water, wind, ice, steam, explosion, fire, smoke, chemicals, the
rising of water or leaking or bursting of pipes or sprinklers, defect, failure
or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this Section, Tenant may sublet all or any part
of the Demised Premises, or license the use of any portion thereof or assign
this Lease, but Tenant and Guarantor shall nevertheless continue to remain
liable hereunder. Any assignee of
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the Lease and any sublessee or licensee of all or substantially all of the
Demised Premises shall become jointly and severally liable to Landlord, and any
such transferee shall upon Landlord’s request execute and deliver an instrument
in confirmation thereof. In the case of any assignment of this Lease or any
sublease or licensee of all or substantially all of the Demised Premises, Tenant
shall promptly deliver to Landlord a true and complete copy of the transfer
instruments. No transfer of all or any portion of the Demised Premises or
Landlord’s consent thereto shall be deemed a waiver of the provisions of this
Section, or a release of Tenant or any Guarantor.
B. So long as the Minimum Credit Test is not met (however the
following provisions of this paragraph B shall not apply at any time when the
Minimum Credit Test is met), Tenant shall not assign this Lease or sublet or
license all or substantially all of the Demised Premises to any transferee
unless (x) such transferee (1) operates at least five (5) other grocery stores
and (2) has Tangible Net Worth” (as defined in Section 25 below) of at least One
Hundred Million Dollars ($100,000,000) or (y) if such transferee does not meet
the requirements of (1) and (2) then such transferee must be approved by
Landlord, such approval not to be unreasonably withheld, conditioned or delayed.
If Tenant desires to so transfer this Lease to a person who does not meet the
requirements of (1) and (2) in the preceding sentence, then Tenant shall give
notice of such intended transfer to Landlord together with reasonable
information on its grocery store business and its audited financial statements
for the three most recent years showing the credit of the proposed transferee
and the proposed terms of the transfer. Upon receiving such information Landlord
shall have thirty (30) days to elect by written notice to Tenant to do one of
the following (and any failure of Landlord to affirmatively elect one or the
other shall be deemed to be an election by Landlord to consent to such transfer:
(a) approve such transfer, (b) disapprove such transfer, or (c) terminate the
Term of this Lease on any date which is no sooner than one-hundred twenty (120)
days after such election notice and no later than one-hundred eighty (180) days
after such election. If Landlord elects to terminate this Lease and thereafter
within one-hundred twenty (120) days enters into a lease or other agreement with
Tenant’s proposed transferee, any transfer payment that was to have been made to
Tenant by such transferee as specifically disclosed in writing as such to
Landlord in the proposed terms of the transfer furnished to Landlord as provided
above shall be paid by Landlord to Tenant out of the first rent amounts received
by Landlord from such transferee until the transfer payment is paid to Tenant in
full. For purposes of the previous sentence, a “transfer payment” shall include
proposed sublease income in excess of the rent under this Lease, and in such
cases Landlord’s payment to Tenant shall be a liquidated amount equal to such
excess rent at a discount rate of ten percent (10%).
C. If Tenant assigns this Lease, Landlord, when giving notice to
said assignee with respect to any default, shall also give a copy of such notice
upon Tenant originally named herein or its successor of whom Landlord shall have
been given written notice (being herein called “Original Tenant”), and no notice
of default shall be effective as against a Tenant until a copy thereof is given
to the Original Tenant. The Original Tenant shall have the same period after the
giving of such notice to cure such default as is given to Tenant under this
Lease. If this Lease terminates or this Lease and the Term hereof cease and
expire because of a default of such assignee, Landlord shall promptly give the
Original Tenant notice thereof. The Original Tenant shall have the option, to be
exercised by notifying Landlord in writing within thirty (30) days after receipt
by the Original Tenant of Landlord’s notice, to cure any default and become
Tenant under a new lease for the remainder of the term of this Lease (including
any Renewal Periods if
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applicable) upon all of the same terms and conditions of this Lease as it may
have been amended by agreement between Landlord and Original Tenant, provided,
however, that at the time of making any such election Original Tenant cures all
defaults under the Lease. In the event Original Tenant assigns this Lease and it
shall thereafter be rejected in a bankruptcy or similar proceeding brought by or
against such assignee, a new lease identical to this Lease shall be entered into
between Landlord and Original Tenant, provided that Original Tenant cures any
monetary defaults and any other defaults that are capable of being cured. Any
new lease created under this Section shall commence on the date of termination
or rejection of this Lease, as applicable. Notwithstanding the foregoing, if
Landlord, in its sole discretion delivers to the Original Tenant and Guarantor a
release as to all liability under this Lease as theretofore amended, the
Original Tenant shall not have the foregoing option.
D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test or the
requirements of Section 1 8B are met, Landlord shall, within thirty (30) days
following Tenant’s request, deliver to Tenant a recognition and attornment
agreement following the form attached hereto as Exhibit D and otherwise subject
to Landlord’s reasonable approval, executed and acknowledged by Landlord, for
the benefit of such subtenant; provided that such subtenant executes and
delivers an instrument reasonably satisfactory to Landlord confirming that such
subtenant is jointly and severally liable under this Lease. Further, Landlord
shall, within ten (10) days after Tenant’s request, shall request its Fee
Mortgagee to deliver to Tenant an SNDA for the benefit of any such subtenant
(and Landlord shall reasonably cooperate with Tenant, at no out of pocket cost
to Landlord, in connection with obtaining any requisite consent from any Fee
Mortgagee).
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that Landlord is the owner of
the fee simple of the Demised Premises and that other than any mortgages held by
Fee Mortgagees that have provided an SNDA to Tenant in accordance with this
Lease or such other liens or encumbrances that do not interfere with Tenant’s
use of the Demised Premises or liens or encumbrances arising on account of any
act or omission by Tenant or persons acting under Tenant or on account of
Tenant’s failure to perform its obligations under this Lease, or matters set
forth in Exhibit B 1, Landlord shall not voluntarily impose any other lien or
encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and represent to the other that
(a) each is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which such entity was organized; (b) each has the
authority to own its property and to carry on its business as contemplated under
this Lease; (c) each has duly executed and delivered this Lease; (d) the
execution, delivery and performance by each of this Lease (i) are within its
powers, (ii) have been duly authorized by all requisite action, (iii) will not
violate any provision of law or any order of any court or agency of government,
or any agreement or other instrument to which it is a party or by which it or
any of its property is bound, (iv) will not render it insolvent or (v) will not
result in the imposition of any lien or charge on any of its property, except by
the provisions of this Lease; and (e) the Lease is a valid and binding
obligation of each in accordance with its terms.
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C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no
default remains uncured beyond any applicable notice and cure period, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises and all
rights, easements, appurtenances and privileges belonging or in anyway
appertaining thereto during the full term of this Lease and any extension
thereof subject always to the terms of this Lease, provisions of law, and
matters of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other so called quiet enjoyment covenant, whether
express or implied.
21. UNAVOIDABLE DELAYS. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any condition under this
Lease by any strike, lockout, labor dispute, inability to obtain labor or
material, Act of God, governmental restriction, regulation or control, enemy or
hostile governmental action, civil commotion, insurrection, sabotage, fire or
other casualty or by any other event similar to the foregoing and beyond the
control of such party, then the time to perform such obligation or to satisfy
such condition shall be postponed by the period of time consumed by the delay.
Time is of the essence for the performance of all monetary obligations under
this Lease and the foregoing shall never apply to the performance of monetary
obligations.
22. END OF TERM. Upon expiration or other termination of the term of this Lease,
Tenant shall peaceably and quietly quit and surrender the Demised Premises and
all Alterations in the good order and condition Tenant is required to maintain
the same and remove all trade fixtures, equipment and other personal property
whether or not bolted or otherwise attached and all of Tenant’s signs wherever
located; and in all cases shall repair damage that results from such removal.
Any fixtures and equipment that Tenant or Owner/Secured Party does not remove
following the expiration or other termination of the Term of this Lease shall be
deemed to be abandoned by Tenant, shall at once become the property of Landlord,
and may be disposed of in such manner as Landlord shall see fit; and Tenant
shall pay the cost of removal and disposal to Landlord within thirty (30) days
after demand; provided, however, that if this Lease shall be terminated as the
result of a default by Tenant, then trade fixtures and equipment shall not be
deemed abandoned until sixty (60) days after notice of such termination is given
to Owner/Secured Party. Tenant or Owner/Secured Party shall have the right at
any time prior to the date such fixtures and equipment shall be deemed abandoned
to remove the same from the Demised Premises. Should Tenant or anyone claiming
by, through or under Tenant hold over in possession after the Expiration Date or
earlier termination of this Lease, such holding over shall not be deemed to
extend the Term or to renew this Lease, but without limiting Landlord’s other
rights and remedies on account of such breach the tenancy thereafter shall
continue as a tenancy at sufferance from month-to-month upon the terms and
conditions herein contained, provided, however that rent shall be charged and
paid at one hundred fifty percent (150%) of the Fixed
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Annual Rent and Additional Rent in effect during the twelve (12) month period
immediately preceding the Expiration Date or earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply
with any of its express obligations set forth in this Lease within thirty (30)
days following written notice and opportunity to cure; provided, however,
Landlord will not be in default if said default could not reasonably be cured
within such period of thirty (30) days, and Landlord promptly commences and
thereafter proceeds with due diligence and in good faith to cure such default.
B. In the event that a Fee Mortgagee shall have given written
notice to Tenant that it is the holder of a mortgage covering the Demised
Premises, and provided such notice includes the address to which notices to the
Fee Mortgagee are to be sent, Tenant agrees that in the event it shall give
written notice to Landlord to cure a default of Landlord as provided for in this
Section, Tenant shall give a copy of said notice to the Fee Mortgagee. Tenant
agrees that the Fee Mortgagee may cure or remedy such default within the time
permitted to Landlord pursuant to this Section; provided that in addition the
Fee Mortgagee shall be entitled to such further time as may be reasonably
necessary for the Fee Mortgagee to remove any stay in bankruptcy and/or to
commence and complete foreclosure proceedings or remove any cause beyond the Fee
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in default hereunder, Landlord, after
thirty (30) days notice that Landlord intends to cure such default (but only ten
(10) days notice if such default concerns any breach of Tenant’s insurance
obligations under Section 11), shall have the right, but not the obligation, to
cure such default and Tenant shall pay to Landlord, upon demand, as Additional
Rent, the reasonable cost thereof. Other than such insurance defaults, Landlord
shall not commence to cure any default of such a nature that it could not
reasonably be cured within such period of thirty (30) days, if Tenant commences
to cure same within said period, and thereafter proceeds with reasonable
diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of this Section; or if a petition is filed by Tenant
(or Guarantor) for insolvency or for appointment of a receiver, trustee or
assignee or for adjudication, reorganization or arrangement under any bankruptcy
act or other applicable law or if any similar petition is filed against Tenant
(or Guarantor) and such petition is not dismissed within sixty (60) days
thereafter; or if Tenant fails to perform any other covenant or condition under
this Lease, Landlord may give Tenant a written notice specifying the nature of
the default of such other covenant or condition and if Tenant does not, within
thirty (30) days after receipt of such written notice (but only three (3) days
in the case of failure to perform Tenant’s insurance obligations under
Section 11), cure such other default
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or, if such default is of such a nature that it could not reasonably be cured
within such period of thirty (30) days, and Tenant does not commence and proceed
with reasonable diligence and in good faith to cure such default then, after the
expiration of such thirty (30) day period (or longer period if such default
cannot reasonably be cured within said thirty (30) day period), Landlord shall
have the right, in addition to the rights set forth in the preceding sentence,
to seek damages or an injunction as to such failure to perform, or after the
expiration of such thirty (30) day period Landlord may, but only during the
continuance of such default, send a notice to Tenant terminating this Lease and
reenter the Demised Premises and dispossess Tenant and any other occupants
thereof, remove their effects not previously removed by them, and hold the
Demised Premises as if this Lease had not been made; and Tenant waives the
service of any additional notice of intention to reenter or to institute legal
proceedings to that end. If any payment of Fixed Annual Rent, Additional Rent,
or other sum owing Landlord is not paid within five (5) days after the same is
due, then in addition to all other remedies hereunder Tenant shall pay an
administrative late charge to Landlord equal to five percent (5%) of the overdue
amount in question, which late charge will be due upon demand as Additional
Rent.
B. After a termination, dispossess or removal in accordance with this Section,
(1) the Fixed Annual Rent and Additional Rent shall be paid up to the date of
such dispossess or removal, (2) Landlord may re-let the Demised Premises or any
part or parts thereof either in the name of Landlord or otherwise, for a term or
terms which may, at the option of Landlord, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease,
and (3) Tenant shall pay to Landlord, as liquidated damages, any deficiency
between the Fixed Annual Rent and Additional Rent due hereunder and the amount,
if any, of the rents actually collected by Landlord on account of the new lease
or leases of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the term of this Lease (not including
any Renewal Periods, the commencement of which shall not have occurred prior to
such dispossess or removal). In computing such liquidated damages there shall be
added to said deficiency the expenses which Landlord incurs in connection with
re-letting the Demised Premises, including reasonable attorneys’ and brokerage
fees, tenant inducements such as free rent, moving expense reimbursements,
tenant improvement allowances, brokerage commissions, fees for legal services,
and other expenses of preparing the Demised Premises for reletting (“Reletting
Expenses”). Such Reletting Expenses shall be paid to Landlord within ten
(10) days of demand and all other liquidated damages shall be paid by Tenant in
monthly installments on the dates specified in this Lease for payment of Fixed
Annual Rent and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord shall not
be liable for failure to re-let the Demised Premises or, in the event that the
Demised Premises are re-let, for failure to collect the rent under such
re-letting, unless Landlord shall not have used its commercially reasonable
efforts to re-let the Demised Premises for the reasonable rental value thereof
and to collect the rent under such re-letting. Landlord shall use its
commercially reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any and all rights granted by or under any
present or future laws to reenter the Demised Premises, to dispossess Tenant or
any other occupant thereof or to remove their effects not previously removed by
them, or to terminate this Lease for any reason or in any manner other than as
set forth in this Section 25. Tenant hereby expressly waives any and all rights
granted by or under any present or future laws to remain in
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possession, cure any defaults or redeem its leasehold for any reason or in any
manner other than as set forth in this Section 25. The provisions of this
Section 25 shall survive the early termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five
(5) days after the same is due, such amount shall bear interest from the date
due at the rate of one and one-half (11/2%) percent for each month (or ratable
portion thereof) the same remains unpaid. Nothing in this Lease shall limit the
right of Landlord to prove and obtain in proceedings for bankruptcy or
insolvency an amount equal to the maximum allowed by any statute or rule of law
in effect at the time; and Tenant agrees that the fair value for occupancy of
all or any part of the Demised Premises at all times shall never be less than
the Fixed Annual Rent and all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material
inducement to Landlord’s entering into this Lease. If at any time the Guarantor
of this Lease shall sell all or a material portion of its assets or shall merge
or consolidate with another entity and, in either case, if (1) Guarantor
(including the resulting entity of any merger or consolidation) has a tangible
net worth immediately after the transaction that is less than Guarantor’s
tangible net worth immediately prior to the transaction, and (2) Guarantor’s
tangible net worth immediately after the transaction is less than the Minimum
Credit Test, then the transaction shall be a default under this Lease for which
there is no cure period entitling Landlord to exercise all of the rights and
remedies under this Section. If at any time the existing Guarantor desires to
assign the Guaranty to another person and for such person to assume all of the
obligations and liabilities under the Guaranty, and if the proposed successor
Guarantor’s tangible net worth is greater than the Minimum Credit Test, Tenant
may present evidence of such proposed successor Guarantor’s tangible net worth
to Landlord in the form of financial statements for (A) the most recent fiscal
year of the proposed successor Guarantor audited by a nationally recognized firm
of certified public accountants and (B) the most recent fiscal quarters since
such fiscal year certified to by Guarantor’s chief financial officer, together
with a form of Guaranty identical in form to the form of Guaranty attached to
this Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial statements to Landlord demonstrating that it continues
to meet the Minimum Credit Test for those provisions of this Lease requiring
such as a condition of being relieved from certain Lease obligations otherwise
applicable. As used in this Lease “Guarantor” means the Guarantor then fully
liable under its Guaranty to Landlord. “Tangible net worth” means the net worth
as shown on such financial statements prepared in accordance with generally
accepted accounting principles consistently applied and disregarding any value
attributable to good will or other intangible assets and amounts owed by
shareholders, officers or Affiliates except to the extent such amounts owed by
Affiliates would ordinarily and customarily be consolidated on Tenant’s
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financial statements. “Minimum Credit Test” means a tangible net worth as shown
on such fiscal year and fiscal quarter financial statements of at least Five
Hundred Million Dollars ($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements,
or casualty (hereinafter called “Destruction”) to all or any part of the
Building or any other Improvements in the Demised Premises, Tenant shall
commence promptly, and with due diligence continue to restore same to
substantially the same condition as existed immediately preceding the
Destruction, except as otherwise provided in paragraph B of this Section. If the
Destruction is partial, Tenant shall complete the restoration within two hundred
seventy (270) days after the Destructions, subject to Unavoidable Delays. If the
Destruction is total, Tenant shall complete the restoration within eighteen (18)
months following the Destruction, subject to Unavoidable Delays. In no event
shall Fixed Annual Rent or any Additional Rent abate on account of any
Destruction.
B. If, as a result of any Destruction, fifty percent (50%) or more
of the total floor area of the Building is damaged, destroyed or, in Tenant’s
reasonable opinion rendered untenantable, during the last two (2) years of the
Initial Term or during any Renewal Term (but this shall not apply at any other
time), Tenant may elect to terminate this Lease by giving notice to Landlord of
such election on or before the date that is ninety (90) days after the
Destruction, stating the date of termination, which shall be not more than
thirty (30) days after the date on which such notice of termination shall have
been given, and (1) upon the date specified in such notice this Lease and the
term hereof shall cease and expire and (2) any Fixed Annual Rent and Additional
Rent shall be paid until such date of termination and any such amounts paid for
a period after such date of termination shall be promptly refunded to Tenant. In
the event that Tenant elects to terminate this Lease as a result of the
Destruction referenced above, Tenant shall cause all insurance proceeds to be
paid to Landlord including business interruption insurance proceeds.
C. Except in the case of paragraph B of this Section, Insurance proceeds shall
be deposited with a bank or trust company acceptable to Landlord and Tenant and
under the control of Landlord and Tenant, as trustees, or, if the Fee Mortgagee
shall be a bank, trust company, insurance company or other entity engaged in
mortgage lending then such proceeds shall be deposited with such Fee Mortgagee
and shall be held and disbursed by it, as trustee, for restoration in accordance
with customary construction lending practice and procedures. Any excess
insurance proceeds shall be paid to Tenant at the conclusion of the restoration
so long as Tenant is not then in default beyond any applicable cure period.
27. EMINENT DOMAIN.
A. In the event of an actual taking for any public or quasi-public use by any
lawful power or authority by exercise of the right of condemnation or of eminent
domain or by agreement between Landlord and those having the authority to
exercise such right (hereinafter called “Taking”) of the entire Building, then
(1) this Lease and the Term shall cease and expire as of the date of vesting of
title or transfer of possession, whichever occurs earlier, as a result of
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the Taking, and (2) any Fixed Annual Rent and Additional Rent shall be paid
until such termination and any such amounts paid for a period after such date of
termination shall be promptly refunded to Tenant.
B. (1) In the event of a Taking of twenty (20%) or more of the
Demised Premises, or in the event of a Taking resulting in a reduction of twenty
(20%) percent or more of the parking spaces (unless Landlord provides adequate
and sufficient additional contiguous parking areas in substitution therefor
reasonably acceptable to Tenant), or in the event of a Taking resulting in a
divided Building or parking area such that passage between the divided portions
of the parking area is not possible, or in the event of permanent denial of
reasonably adequate access to the Demised Premises or Building on account of a
Taking which in Tenant’s reasonable judgment makes it economically unfeasible to
operate Tenant’s business at the Demised Premises, then Tenant may elect to
terminate this Lease by giving notice of termination to Landlord on or before
the date which is ninety (90) days after receipt by Tenant of notice that the
Taking in question. Said notice of termination shall state the date of
termination, which date of termination shall be not more than thirty (30) days
after the date on which such notice of termination is given to Landlord, and
(a) upon the date specified in such notice of termination this Lease and the
term hereof shall cease and expire, and (b) any Fixed Annual Rent and Additional
Rent shall be paid until the date of termination and any such amounts paid for a
period after such date of termination shall be promptly refunded to Tenant.
(2) If Tenant does not elect to terminate this Lease as aforesaid, then the
award or payment for the Taking shall be used by Tenant for restoration as
hereinafter set forth and Tenant shall promptly commence and with due diligence
continue to restore the portion of the Demised Premises remaining after the
Taking to substantially the same condition and tenantability as existed
immediately preceding the Taking. Tenant shall complete the restoration within
two hundred seventy (270) days after the Destruction, subject to Unavoidable
Delays. Taking proceeds shall be paid, held and disbursed in the same manner as
insurance proceeds under Section 26C and there shall be no abatement or
reduction in Fixed Annual Rent or any Additional Rent. Any taking proceeds
remaining after the restoration is complete shall be divided equally between
Landlord and Tenant.
C. If this Lease is terminated under any provision of this
Section 27, so long as Tenant is not then in breach of this Lease beyond any
applicable cure period, any specific damages that are expressly awarded to
Tenant on account of its relocation expenses and specifically so designated
shall belong to Tenant. Except as provided in the preceding sentence of this
paragraph, Landlord reserves to itself, and Tenant releases and assigns to
Landlord, all rights to damages accruing on account of any Taking or by reason
of any act of any public authority for which damages are payable. Tenant agrees
to execute such further instruments of assignment as may be reasonably requested
by Landlord, and to turn over to Landlord any damages that may be recovered in
any proceeding or otherwise; and Tenant irrevocably appoints Landlord as its
attorney-in-fact with full power of substitution so to execute and deliver in
Tenant’s name, place and stead all such further instruments if Tenant shall fail
to do so after 10 days notice.
28. THIRD PARTY LITIGATION. If Landlord, Landlord’s adviser or its
mortgagees are made parties to any litigation commenced by or against Tenant by
or against any
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person claiming through Tenant with respect to the Demised Premises, Tenant
agrees to indemnify Landlord in the manner provided in Section 38 and in
addition pay, as Additional Rent, all costs of Landlord in connection with such
litigation including reasonable counsel fees and litigation costs, except in the
sole instance where Landlord or Tenant have legal claims in the litigation
against one another or where Landlord has been adjudicated in any litigation to
have acted with gross negligence or willful misconduct. Without limitation, the
foregoing includes foreclosure or enforcement of any lien, attachment or
mortgage on the Demised Premises resulting from the act or omission of Tenant,
but shall not include any Fee Mortgage or other lien created by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby expressly waives any and all
rights granted by or under any present or future laws to levy or distrain for
rent, in arrears, in advance or both, upon all goods, merchandise, equipment,
trade fixtures, furniture and personal property of Tenant or any nominee of
Tenant in the Demised Premises, delivered or to be delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any
time and from time to time, Landlord and Tenant agree to execute and deliver to
the other, within thirty (30) days after such request, a written instrument that
may be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid,
(c) stating whether or not, to the knowledge of the party executing such
instrument, the other party hereto is in default and, if such party is in
default, stating the nature of such default, (d) stating the Commencement Date
and Expiration Date, (e) stating which options to renew the term have been
exercised, if any; and (f) any other information that may reasonably requested
by the requesting party and customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of the Senior Vice President of Real Estate, and another shall be
delivered to the attention of the Senior Director of Properties and
Administration, all at 2 Paragon Drive, Montvale, New Jersey 07645 or to such
other addresses as Tenant may designate by notice to Landlord. Any such Notice
shall be deemed given three (3) business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, and one business
(1) day when sent by overnight delivery. A party’s attorney may give Notices on
behalf of such party.
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32. BROKER. Each party represents and warrants to each other there is
no broker, agent, finder or other person with whom it has dealt in connection
with the negotiation, execution and delivery of this Lease other than those
persons named in that certain Agreement of Sale and Leaseback dated as of
November 2, 2010 entered into between Tenant and Landlord (or Affiliates of
each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised Premises (and Landlord’s
interest therein) and Tenant’s leasehold (and Tenant’s interest therein) free
of, and shall within thirty (30) days discharge, any attachment, lien, security
interest or other encumbrance that arises as a result of any act or omission of
Tenant or persons acting by, through or under Tenant. Without limitation, Tenant
will not permit or suffer any mechanic’s or materialmen’s or other liens to
stand against the Demised Premises for any labor or material furnished in
connection with work of any character performed, any services provided or any
other act, omission or obligation on the part or at the direction of Tenant or
persons claiming by, through or under Tenant, and Landlord will not permit any
such liens for work or material furnished the Landlord to stand against said
premises (the foregoing shall not imply that Landlord has any responsibility to
furnish any work or material). However, Landlord and Tenant shall respectively
have the right to contest the validity or amount of any such lien, provided that
the payment of such amount is bonded during the pendency of such contest, but
upon the final determination of such contest the party responsible for such lien
shall immediately pay any judgment rendered with all proper costs and charges
(including reasonable attorneys’ fees) and shall have the lien released at its
own expense. In lieu of bonding either party may obtain other security
acceptable to the other party in such party’s sole discretion. Any contest
hereunder shall be subject to all requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means
Landlord named herein and any subsequent owner of Landlord’s estate hereunder.
Any owner of Landlord’s estate hereunder shall be relieved of all liability
under this Lease after the date that it ceases to be the owner of Landlord’s
estate (except for any liability arising prior to such date) and the party
succeeding to Landlord’s estate shall assume all liability of Landlord arising
from and after it becomes owner of Landlord’s estate. The foregoing shall be
self-operative but Landlord and Tenant shall upon the request of either execute
and deliver an instrument acknowledging the foregoing.
35. ADJOINING OR ADJACENT PROPERTY. Landlord and Tenant shall each
promptly forward to the other any notice or other written communication received
by it from any owner of property adjoining or adjacent to the Demised Premises
or from any municipal or other governmental authority in connection with any
hearing or other administrative proceeding relating to the use of the Demised
Premises or any adjoining or adjacent property. Tenant may, at its sole cost and
expense, in its own name and/or in the name of Landlord, appear in any such
proceeding. Landlord shall fully cooperate with Tenant (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall, without limitation, make
such appearances and furnish such information as may be reasonably required by
Tenant. Landlord agrees to execute any instruments reasonably requested by
Tenant in connection with any such proceeding.
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36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4)the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5)the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Land and Demised Premises prior to,
on and after the Commencement Date, it being acknowledged that Tenant or its
Affiliate owned the Land and Demised Premises prior to the Commencement Date.
Tenant shall provide Landlord with copies of any notices pertaining to any
governmental proceedings or actions under any Environmental Law (including
requests or demands for entry onto the Demised Premises and/or Land for purposes
of inspection regarding the handling, disposal, clean-up or remediation of
Hazardous Materials or claims, penalties, fines or assessments) within fifteen
(15) days after receipt thereof. Landlord shall cooperate with Tenant (so long
as Landlord’s cooperation does not involve incurring obligations or liability or
material expense to Landlord unreimbursed by Tenant) and provide such documents,
affidavits and information as may be reasonably necessary for Tenant to comply
with all Environmental Laws.
C. If required by governmental authority or if Landlord has a reasonable basis
to believe a release of Hazardous Materials may have occurred or a threat of
release exists on or from the Land or Demised Premises or Hazardous Materials
activities have taken place on the Land or Demised Premises that do not conform
to Environmental Laws, then Landlord may, but need not, perform appropriate
testing in a commercially reasonable manner and the reasonable costs thereof
shall be reimbursed to Landlord by Tenant upon demand as Additional Rent. Tenant
shall execute affidavits, representations and the like from time to time at
Landlord’s request concerning Tenant’s actual knowledge and belief regarding the
presence or absence of Hazardous Materials at the Land and Demised Premises. In
all events, and without limitation, Tenant shall indemnify all Indemnitees,
expressly including without limitation all Fee Mortgagees, in the manner
elsewhere provided in this Lease with respect to Hazardous Materials on or
migrating from the Land and Demised Premises prior to, on and after the
Commencement Date (and for these purposes, the loss indemnified shall include
without limitation any costs of
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investigation or remediation, and any claim of personal injury or property
damage to any person); provided, however, that such indemnity shall not include
and Tenant shall not be responsible for Hazardous Materials migrating on to the
Land from the land of third parties. The covenants of this Section shall survive
the Term. Tenant shall from time to time upon Landlord’s request confirm all of
the foregoing covenants directly to mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without
limitation, any subtenant of Tenant), may, from time to time and without
Landlord’s prior written consent, mortgage all or any portion of its right,
title and interest in and to this Lease under one leasehold mortgage at any one
time, or two leasehold mortgages given as part of a single financing
transaction, to an Institutional Lender (each, a “Leasehold Mortgage”), and
assign any or all rights under this Lease and any subleases as collateral
security for such Leasehold Mortgage; provided that all rights acquired under
such Leasehold Mortgage shall be subject to all of the terms, covenants and
conditions of this Lease, and to all rights and interests of Landlord, none of
which terms, covenants or conditions is or shall be waived by Landlord by reason
of the right given to so mortgage such interest in this Lease. In no event shall
Tenant have any right to mortgage or encumber Landlord’s fee interest in the
Demised Premises. The term “Leasehold Mortgage” shall include whatever security
instruments that may be used in the locale of the Demised Premises, such as,
without limitation, deeds of trust, security deeds and conditional deeds, as
well as financing statements, assignment of leases and rents, security
agreements and other documentation required pursuant to the Uniform Commercial
Code. The term “Leasehold Mortgage” shall also include any instruments required
in connection with a sale-leaseback transaction. An “Institutional Lender” is a
bank, trust company, savings and loan association, pension fund, endowment fund,
insurance company, other institutional pool of recognized status or a
governmental authority empowered to make loans or issue bonds or any other
recognized institution regularly engaged in the making of mortgage loans that
has not less than $100,000,000 in assets. The holder of any Leasehold Mortgage
shall be called a “Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but
not limited to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and
if Tenant shall send to Landlord a true copy thereof, together with a notice
specifying the name and address of the Leasehold Mortgagee (“Mortgage Notice”),
Landlord agrees that as long as any such Leasehold Mortgage shall remain
unsatisfied of record or until a notice of satisfaction is given by the
Leasehold Mortgagee to Landlord, the following provisions shall apply:
(1) There shall be no cancellation, surrender or modification of
this Lease by joint action of Landlord and Tenant without the prior consent of
the Leasehold Mortgagee;
(2) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee. The
Leasehold Mortgagee shall thereupon have the same period to remedy or cause to
be remedied the defaults complained of, and Landlord shall accept such
performance by or at the instigation of such Leasehold Mortgagee as if the same
had been done by Tenant; provided that in the case of
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defaults that cannot be cured by the payment of money in addition the Leasehold
Mortgagee shall be entitled to such further time to remedy or cause to be
remedied the defaults complained of as may be reasonably necessary for the
Leasehold Mortgagee to remove any stay in bankruptcy and/or to commence and
complete foreclosure proceedings or remove any cause beyond the Leasehold
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.. Nothing herein shall be
construed as requiring a Leasehold Mortgagee to cure any default. Landlord’s
failure to deliver any such copy to a Leasehold Mortgagee shall not affect the
Landlord’s exercise of any right or remedy under the Lease in any way
whatsoever;
(3) If any default shall occur which, pursuant to any provision of
this Lease, entitles Landlord to terminate this Lease, and if before the
expiration of twenty (20) days from the date of the giving of notice of
termination upon such Leasehold Mortgagee, such Leasehold Mortgagee shall have
notified Landlord of its desire to nullify such notice and shall have paid to
Landlord all Fixed Annual Rent and Additional Rent herein provided for which are
then in default, and shall have complied (or caused compliance) with all of the
other requirements of this Lease, if any are then in default, then, in such
event, Landlord shall not be entitled to terminate this Lease and any notice of
termination previously given shall be void and of no effect;
(4) Notwithstanding anything in this Lease to the contrary, any sale
of Tenant’s leasehold interest in any proceeding for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of Tenant’s leasehold interest
in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment;
(5) If not required to be held by the Fee Mortgagee, the proceeds
from any insurance policies or arising from a Taking may be held by any
institutional Leasehold Mortgagee and distributed pursuant to the provisions of
this Lease;
(6) The Leasehold Mortgagee may be added to the “Loss Payable
Endorsement” of any and all insurance policies required to be carried by Tenant
hereunder on the condition that the insurance proceeds are to be applied in the
manner specified in this Lease and that the Leasehold Mortgage shall so agree;
except that the Leasehold Mortgage may provide a manner for disposition of such
proceeds as remain after full compliance with the restoration covenants of this
Lease, if any, otherwise payable to Tenant (but not such proceeds, if any,
payable to Landlord, any Fee Mortgagee or jointly to Landlord or Tenant)
pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of any legal
proceeding or arbitration between Landlord and Tenant. Unless the Leasehold
Mortgage provided otherwise, Leasehold Mortgagee shall have the right to
intervene in any such proceeding and be made a party to such proceeding, and the
parties hereby consent to such intervention. Landlord’s failure to deliver any
such notice to a Leasehold Mortgagee shall not affect the Landlord’s exercise of
any right or remedy under the Lease in any way whatsoever.
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Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease,
Tenant shall assume exclusive control of the Demised Premises and all areas
pertaining thereto including all appurtenances, improvements, utilities, water
bodies, grounds, sidewalks, walkways, driveways and parking facilities, and
Tenant shall bear the sole risk of all related tort liabilities. To the greatest
extent permitted by applicable law, Tenant shall indemnify, save harmless and
defend Landlord, Landlord’s adviser and mortgagees and their respective
officers, directors, managers, members, partners, agents and employees,
(“Indemnitees”) from all liability, claim, damage, cost or loss (including
reasonable fees and litigation costs) arising in whole or in part out of, or in
any manner connected with (i) any injury, loss, theft or damage to any person or
property while on or about the Demised Premises, or (ii) any condition of the
Demised Premises, or the possession and use thereof (including any failure to
vacate at the end of the Term) or any activity permitted or suffered on the
Demised Premises (including Hazardous Materials), or (iii) any breach of any
covenant, representation or certification by Tenant or persons acting under
Tenant, or (iv) any negligent act or omission anywhere by Tenant or persons
acting under Tenant, in each case paying the same to Landlord on demand as
Additional Rent, except to the extent such liability results from the negligence
or willful misconduct of Landlord or the other Indemnitees. Without implying
that other covenants do not survive, the covenants of this Section shall survive
the Term. Tenant shall immediately respond and assume the investigation, defense
and expense of all of the foregoing matters. Landlord or any Indemnitee, at its
sole cost and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY. Notwithstanding anything
contained to the contrary in this Lease, whether express or implied, it is
agreed that Tenant will look only to Landlord’s fee interest in and to the
Demised Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of a breach or default
under this Lease by Landlord with respect to any claim whatsoever related to the
Demised Premises, and no other property or assets of Landlord or of Landlord’s
adviser or of any Fee Mortgagee or its or their managers, members, directors,
officers, trustees, beneficiaries, shareholders, partners, joint venturers
(disclosed or undisclosed) shall be subject to suit or to levy, execution or
other enforcement procedures for the satisfaction of any such judgment (or other
judicial process). No officer, director, manager, member, shareholder, trustee,
beneficiary, partner, agent, attorney or employee of Landlord or of Landlord’s
adviser or of any Fee Mortgagee shall ever be personally or individually liable;
nor shall Landlord, Landlord’s adviser or any Fee Mortgagee or such persons ever
be answerable or liable in any equitable judicial proceeding or order beyond the
extent of their interest in the Demised Premises. In no event shall Landlord,
Landlord’s adviser or any Fee Mortgagee or any such persons ever be liable to
Tenant for indirect or consequential damages.
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40. BOOKS AND RECORDS. Tenant shall at all times keep and maintain
full and correct records and books of account of the operations of the Demised
Premises in accordance with generally accepted accounting principals
consistently applied and shall accurately record and preserve the records of
such operations in accordance with its customary records retention policy.
Notwithstanding that there has been no Percentage Rent Event, Tenant shall
report the gross sales from the Demised Premises to Landlord annually for each
fiscal year of Tenant no later than thirty (30) days following the end of such
fiscal year, such report to be certified by Tenant’s chief financial officer.
Landlord shall keep such information confidential at all times in accordance
with the terms of Exhibit J and may only release such information to Landlord’s
constituent members, and so long as such persons execute and deliver to Tenant a
Confidentiality Agreement with Tenant in the form attached hereto as Exhibit J
(“Confidentiality Agreement”) whether or not Tenant signs such Confidentiality
Agreement, also to its lenders and prospective lenders and to prospective
purchasers of Landlord’s interest in the Demised Premises. Upon an Event of
Default, Tenant shall permit Landlord, Landlord’s accountants and Fee Mortgagees
reasonable access thereto, with the right to make copies and excerpts therefrom
upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by applicable law, Tenant shall have
the right to place on the roof or wall of the Demised Premises at Tenant’s sole
cost and expense, a satellite dish (hereinafter called the “Dish”) for
transmission of data (both receiving and sending) between Tenant’s various
operations and its headquarters in accordance with all laws and governmental
regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant agree and
acknowledge that this Lease has been freely negotiated by Landlord and Tenant.
In any event of any ambiguity, controversy, dispute or disagreement over the
interpretation, validity or enforceability of this Lease or any of its
covenants, terms or conditions, no inference, presumption or conclusion
whatsoever shall be drawn against Tenant by virtue of Tenant’s having drafted
this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The covenants and agreements
contained in this Lease shall bind and inure to the benefit of the successors
and assigns of each party. As used in this Lease “Affiliate” (whether or not
capitalized) shall mean, with respect to any person, any person controlled by,
controlling, or under common control with such person; and “control” shall mean
any direct ownership interest or right through the exercise of voting or
approval rights or otherwise, to exercise decision-making authority generally.
44. CAPTIONS. The captions preceding the Sections of this Lease are
intended only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Lease
shall be invalid or unenforceable, the remainder of the provisions of this Lease
shall not be affected thereby and each and every provision of this Lease shall
be enforceable to the fullest extent permitted by law.
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46. CHOICE OF LAW/JURISDICTION. This Lease, and the rights and
obligations of the parties hereto, shall be interpreted and construed in
accordance with the laws where the Demised Premises are located (the “State”),
without regard to the State’s internal conflict of law principles. Any disputes
arising out of this Lease or between Landlord and Tenant shall be subject to the
exclusive jurisdiction of the state courts of the State.
47. NO WAIVER. The failure of either party to seek redress for
violation of or to insist upon the strict performance of, any term, covenant or
condition contained in this Lease shall not prevent a similar subsequent act
from constituting a default under this Lease. Without limitation, no written
consent by Landlord or Tenant to any act or omission that otherwise would be a
default shall be construed to permit other similar acts or omissions. Neither
party’s failure to seek redress for violation or to insist upon the strict
performance of any covenant, nor the receipt by Landlord of rent with knowledge
of any breach of covenant, shall be deemed a consent to or waiver of such
breach. No breach of covenant shall be implied to have been waived unless such
is in writing, signed by the party benefiting from such covenant and delivered
to the other party; and no acceptance by Landlord of a lesser sum than the Fixed
Annual Rent, Additional Rent or any other sum due shall be deemed to be other
than on account of the installment of such rent or other sum due. Nor shall any
endorsement or statement on any check or in any letter accompanying any check or
payment be deemed an accord and satisfaction; and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other right or remedy. The delivery of keys (or any
other act) to Landlord shall not operate as a termination of the Term or an
acceptance or surrender of the Demised Premises. The acceptance by Landlord of
any rent following the giving of any default and/or termination notice shall not
be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either Landlord or Tenant
employ an attorney to enforce or defend any of the conditions, covenants, rights
or obligations of this Lease (including, without limitation, a default by either
party), then the prevailing party shall be entitled to all reasonable attorney
fees and all other reasonable out-of-pocket litigation costs (including, but not
limited to filing fees, expert reports and testimony, court costs and other
usual costs of litigation of this type) incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent such waiver is permitted
by law, the parties waive trial by jury in any action or proceeding brought in
connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than contemporaneous instruments executed and delivered
of even date, if any, this Lease contains all of the agreements between Landlord
and Tenant relating in any way to the Demised Premises and supersedes all prior
agreements and dealings between them. There are no oral agreements between
Landlord and Tenant relating to this Lease or the Demised Premises. This Lease
may be amended only by a written instrument executed and delivered by both
Landlord and Tenant. The provisions of this Lease shall bind Landlord and Tenant
and their respective successors and assigns. Where the phrases “persons acting
under” Landlord or Tenant or “persons claiming through” Landlord or Tenant or
similar phrases are used, the persons included shall be assignees, sublessees,
licensees or other transferees or successors of Landlord or Tenant as well as
invitees or independent contractors of
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Landlord or Tenant, and all of the respective employees, servants, contractors,
agents and invitees of Landlord, Tenant and any of the foregoing. As used
herein, “monetary default” shall mean a default that can be substantially cured
solely by the payment of money and nothing more and “non-monetary default” shall
mean a default that cannot be substantially cured solely by the payment of money
and northing more. If either party is granted any extension, election or other
option, to be effective the exercise (and notice thereof) shall be
unconditional, irrevocable and must be made strictly in accordance with the
prescribed terms and times; otherwise its purported exercise shall be void and
ineffective. The enumeration of specific examples of a general provisions or use
of the word “including” shall not be construed as a limitation of the general
provision. Unless a party’s approval or consent is required by the express terms
of this Lease not to be unreasonably withheld, such approval or consent may be
withheld in the party’s sole discretion. The submission of a form of this Lease
or any summary of its terms shall not constitute an offer by Landlord to Tenant;
the leasehold shall only be created and the parties bound when this Lease is
executed and delivered by both Landlord and Tenant. Nothing herein shall be
construed as creating the relationship between Landlord and Tenant of principal
and agent, or of partners or joint venturers or any relationship other than
landlord and tenant. This Lease and all consents, notices, approvals and all
other related documents may be reproduced by any party by any electronic means
or by electronic, photographic or other reproduction process and the originals
may be destroyed; and each party agrees that any reproductions shall be as
admissible in evidence in any proceeding as the original itself (whether or not
the original is in existence and whether or not reproduction was made in the
regular course of business), and that any further reproduction of such
reproduction shall likewise be admissible. If any payment in the nature of
interest provided for in this Lease shall exceed the maximum interest permitted
under controlling law, as established by final judgment of a court, then such
interest shall instead be at the maximum permitted interest rate as established
by such judgment. Landlord and Tenant expressly agree that there are and shall
be no implied warranties of merchantability, habitability, suitability, fitness
for a particular purpose or of any other kind arising out of this Lease, and
there are no warranties or representations other than those expressly set forth
in this Lease. Without limitation, where Tenant in this Lease indemnifies or
covenants for the benefit of present and future Fee Mortgagees, such agreements
are for the benefit of present and future Fee Mortgagees as third party
beneficiaries; and at the request of Landlord, Tenant from time to time will
confirm such matters directly with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be deemed to be one and the same instrument. A
facsimile, email, PDF or electronic signature shall be deemed an original
signature.
52. INCORPORATION OF STATE LAW PROVISIONS. Certain provisions/
sections of this Lease and certain additional provisions/sections that are
applicable or required by laws of the state in which the Demised Premises are
located may be amended, described or otherwise set forth in more detail on
Exhibit I attached hereto, which such Exhibit by this reference, is incorporated
into and made a part of this Lease. In the event of any conflict between such
state law provisions and any provision herein, the state law provisions shall
control.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Lease has been duly executed under as of the Effective
Date.
WITNESS:
WE APP SEAFORD LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
Name:
Craig H. Feldman
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
Signature Page to Lease By and Between
WE APP SEAFOOD LLC and PATHMARK STORES, INC
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
[g36891mq053i001.jpg]
225
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EXHIBIT B1
LEGAL DESCRIPTION OF THE LAND
[g36891mq053i002.jpg]
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EXHIBIT B2
TITLE MATTERS AND ENCUMBRANCES
1. Taxes, tax liens, tax sales, water
rates, sewer rents and assessments not yet due and payable.
2. Reservations for Easements contained in a
deed by Avis A. Bond and Ruth Pine to Shop-Rite of Watchung, Inc., dated 6/1/67
recorded 6/6/67 in Liber 7676 cp 191.
3. Agreement for Non-Exclusive easement of ingress and egress by and between
Shop-Rite of Watchung, Inc. and Avis A. Bond and Ruth Pine dated as of 10/09/67
recorded 1/26/68 in Liber 7785 cp 277.
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: $425,000.00
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
C.4 Re-allocation of Reimbursement Cap. Upon the completion of the Remedial Work
up to $20,000 of the Reimbursement Cap may be allocated to increase the
“Reimbursement Cap” under any other lease between Tenant and any Affiliate of
Landlord (except for that certain lease for space at 9210 Atlantic Avenue,
Queens (Ozone Park), New York).
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and among
, a , and its successors and assigns,
having an office at (hereinafter
together with its successors and assigns called “Mortgagee”), WE APP Seaford
LLC, a Delaware limited liability company, having an office c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 (hereinafter called “Landlord”) and Pathmark Stores, Inc., a Delaware
corporation having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”).
W I T N E S S E T H:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a
promissory Note secured by, among other securities, a mortgage or deed of trust
(hereinafter, as the same may be amended, supplemented or otherwise modified
from time to time, called the “Mortgage”) covering a parcel or parcels of land
owned by Landlord and described on Exhibit A annexed hereto and made a part
hereof, together with the improvements now or hereafter erected thereon (said
parcel or parcels of land and improvements thereon being hereinafter called the
“Mortgaged Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments being
hereinafter collectively called the “Lease”), Landlord leased to Tenant the
Mortgaged Premises together with the building now or hereafter erected on all or
a portion of said premises (the Mortgaged Premises and the improvements on or to
be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on
November , 2010 in the in Book ,
Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and approves the Lease.
2. Tenant covenants and agrees with Mortgagee that the Lease and
any extensions, renewals, replacements or modifications thereof and Tenant’s
interest in the premises under the Lease are and at all times shall subject and
subordinate to the lien of the Mortgage, without regard to the order of priority
of recording of the Mortgage and the Memorandum of the Lease, subject, however,
to the provisions of this Agreement.
3. Tenant certifies that the Lease is presently in full force and
effect.
4. Mortgagee agrees that so long as the Lease shall be in full
force and effect and so long as Tenant is not in default (beyond any applicable
notice and cure period) in the payment of fixed rent as set forth in the Lease,
or in the performance of any of the terms, covenants or conditions of the Lease
on Tenant’s part to be performed:
A. Tenant shall not be named or joined as a party defendant or
otherwise in any suit, action or proceeding for the foreclosure of the Mortgage
or to enforce any rights under the Mortgage or the bond or note or other
obligations secured thereby unless required by law to do so; and
B. The possession by Tenant of the Demised Premises and the
Tenant’s rights thereto shall not be disturbed, affected or impaired by, nor
will the Lease or the term thereof be terminated or otherwise affected by
(i) any suit, action or proceeding upon the Mortgage or the bond or note or
other obligation secured thereby, or for the foreclosure of the Mortgage or the
enforcement of any rights under the Mortgage or any other documents held by the
Mortgagee, or by any judicial sale or execution or other sale of the Mortgaged
Property, or by any deed given in lieu of foreclosure, or by the exercise of any
other rights given to the Mortgagee by any other documents or as a matter of
law, or (ii) any default under the Mortgage or the bond or note or other
obligation secured thereby.
5. Mortgagee hereby acknowledges and agrees that all trade fixtures
and equipment whether owned by Tenant or any subtenant or leased by Tenant from
a Landlord/Owner in the Demised Premises shall be subject to the provisions of
Section 17 of the Lease.
6. If the Mortgagee shall become the owner of the Mortgaged
Property by reason of foreclosure of the Mortgage or otherwise, or if the
Mortgaged Property shall be sold as a result of any action or proceeding to
foreclose the Mortgage or by a deed given in lieu of foreclosure, the Lease
shall continue in full force and effect, without necessity for executing any new
lease, as a direct lease between Tenant, as tenant thereunder, and the then
owner of the Mortgaged Property, as landlord thereunder, upon all of the same
terms, covenants and provisions contained in the Lease, and in such event:
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A. Tenant shall be bound to such new owner under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) and Tenant hereby agrees to attorn to such new owner
and to recognize such new owner as landlord under the Lease; and
B. Such new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) which terms, covenants and provisions such new owner
hereby agrees to assume and perform; provided, however, that such new owner
shall not be (i) obligated to complete any construction work required to be done
by Landlord within or outside of the Demised Premises pursuant to the provisions
of the Lease or to reimburse Tenant for any construction work done by Tenant;
however this provision shall not relieve such new owner from any repair or
maintenance obligations of Landlord expressly set forth in the Lease accruing or
arising following new owner’s acquisition of fee title to the Mortgaged Property
or impair any express setoff rights of Tenant expressly set forth in the Lease
accruing or arising following new owner’s acquisition of fee title to the
Mortgaged Property; (ii) required to make any repairs to the Mortgaged Property
or to the Demised Premises or to perform any other construction or other work,
including without limitation the restoration of the Demised Premises following
any casualty or taking; (iii) liable for the return of security deposits or
letters of credit, if any, paid or delivered by or on behalf of Tenant to
Landlord, except to the extent such sums are actually received by such new owner
(or any Mortgagee if such Mortgagee is not the new owner); (iv) bound by any
payment of rents, additional rents or other sums which Tenant may have paid more
than one (1) month in advance to any prior Landlord unless such sums are
actually received by Mortgagee or if such prepayment shall have been expressly
approved of in writing by such new owner (or any Mortgagee if such Mortgagee is
not the new owner); (v) bound by any agreement amending, modifying or
terminating the Lease made without Mortgagee’s prior written consent; (vi) bound
by any assignment of the Lease or sublease of the Demised Premises, or any
portion thereof, made prior to the time such new owner succeeded to Landlord’s
interest other than if made pursuant to the provisions of the Lease;
(vii) liable on account of any default on the part of Landlord occurring prior
to such new owner’s succeeding to Landlord’s estate; or (viii) subject to any
counterclaims, offsets or defenses that Tenant might have against Landlord.
7. If Landlord shall default in the performance of the Lease Tenant
shall give written notice thereof to Mortgagee and Mortgagee shall have the
right, but not the obligation, to cure such default in accordance with
Section 23 of the Lease (and as provided therein the Mortgagee shall be entitled
to such further time to cure as may be reasonably necessary for the Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Mortgagee’s reasonable control
impairing its ability to cure or remedy, to obtain possession of the Demised
Premises and thereafter to commence and diligently prosecute such cure or remedy
to completion)
8. Landlord has agreed in the Mortgage and other loan documents
that the rents payable under the Lease shall be paid directly by Tenant to
Mortgagee upon the occurrence of a default by Landlord under the Mortgage or any
other loan document. Accordingly, after notice is given by Mortgagee to Tenant
that the rents under the Lease should be paid to or at the
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications given under this Agreement shall
be in writing and shall be given by registered or certified mail, return receipt
requested, postage prepaid, (a) if to Mortgagee at the address of Mortgagee as
hereinabove set forth or at such other address as Mortgagee may designate by
notice, or (b) if to Landlord at the address of Landlord as hereinabove, or at
such other address as Landlord may designate by notice, or (c) if to Tenant,
then one copy shall be delivered to the attention of the Senior Vice President
of Real Estate of Tenant, another shall be delivered to the attention of General
Counsel of Tenant, and another shall be delivered to the Director of
Properties & Administration of Tenant, all at 2 Paragon Drive, Montvale, New
Jersey 07645 or at such other addresses as Tenant may designate by notice.
During the period of any postal strike or other interference with the mail,
personal delivery shall be substituted for registered or certified mail.
10. This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. This Agreement contains the entire agreement between the parties
and cannot be changed, modified, waived or cancelled except by an agreement in
writing executed by the party against whom enforcement of such modification,
change, waiver or cancellation is sought.
12. This Agreement and the covenants herein contained are intended to
run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WE APP SEAFORD LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a Delaware corporation
Name:
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
234
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WITNESS:
LANDLORD:
MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of 2010, before me, the subscriber,
personally appeared to me known, who being by me duly sworn, did
depose and say that he is of the corporation described
in and which executed the within instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation
and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me, the undersigned
notary public, personally appeared , proved to me through
satisfactory evidence of identification, which was a [current driver’s license]
[a current U.S. passport] [my personal knowledge], to be the person whose name
is signed on the preceding instrument and acknowledged the foregoing instrument
to be his/her free act and deed as of WE APP Seaford LLC.
Notary Public
My Commission Expires:
235
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before me, the
subscriber, personally came Christopher W. McGarry, to me known, who being by me
duly sworn, did depose and say that he is Vice President and Secretary of
Pathmark Stores, Inc., the corporation described in and which executed the
within instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his name
thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
236
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
237
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP SEAFORD
LLC, a Delaware limited liability company, having an office at c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and PATHMARK
STORES, INC., a Delaware corporation, having an office at 2 Paragon Drive,
Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
1. For and in consideration of the sum of TEN and no/100 Dollars
($10.00) and of other valuable considerations paid by Tenant to Landlord, the
receipt and sufficiency of which are hereby acknowledged by Landlord, Tenant and
Tenant hereby takes from Landlord that certain parcel of land (hereinafter
called “Land”) described on Exhibit B and the buildings and other improvements
now or hereafter erected on the Land together with the benefit of any and all
easements, appurtenances, rights and privileges now or hereafter belonging
thereto. The land is currently improved by an existing building consisting of
41,030 square feet of space (the “Building), as more particularly shown on the
site plan attached hereto as Exhibit A. The Building and any buildings and
improvements now or hereafter erected on the Land shall be hereinafter called
“Improvements”. The Land and any Improvements now or hereafter erected thereon
are hereinafter collectively called the “Demised Premises.” The Demised Premises
have been leased to Tenant upon and subject to the covenants and agreements set
forth in a certain agreement between Landlord and Tenant bearing even date
herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The original term of the Lease shall
continue to and include the date which is twenty (20) years after the day before
the Commencement Date if the Commencement Date is the first day of a month, or
twenty years (20) years after the last day of the month in which the
Commencement Date occurs if the Commencement Date is not the first day of a
month.
3. Tenant has the right and option to extend the term of the Lease
from the date upon which it would otherwise expire for ten (10) separate renewal
periods of five (5) years each (each such period being known as a “Renewal
Period”). Said right and option, if exercised by Tenant, shall be in accordance
with the terms and conditions of Section 4 of the Lease.
4. The Lease contains the entire agreement between the parties. All
persons are hereby put on notice of the existence of the Lease and are referred
to the Lease for its terms and conditions. The Lease is on file in the offices
of Tenant and the Landlord as hereinabove set forth.
5. This Memorandum of Lease is prepared, signed and acknowledged
solely for recording purposes under the laws of the State of New York, and is in
no way intended to
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change, alter, modify, amend or in any other way affect the rights, duties and
obligations of Landlord and Tenant pursuant to the Lease; it being specifically
understood and agreed between the parties that each has rights, duties and
obligations imposed upon it in the Lease which are not expressly contained
herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP SEAFORD LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
Name: Craig H. Feldman
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
239
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EXHIBIT B
DEMISED PREMISES
240
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
241
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared ,
proved to me through satisfactory evidence of identification, which was a
[current driver’s license] [a current U.S. passport] [my personal knowledge], to
be the person whose name is signed on the preceding instrument and acknowledged
the foregoing instrument to be his/her free act and deed
as of WE APP Seaford LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 4055 Merrick Road, Seaford, New York, with WE APP SEAFORD LLC, a
Delaware limited liability company (“Landlord”). (Terms used herein and not
otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and absolutely guarantees to Landlord
(which shall include its legal representatives, successors and assigns) the due
and punctual performance of each and all of the Tenant’s obligations under or
related to the Lease, including the timely payment of all sums due therein.
Tenant’s obligations hereby guaranteed include, without limitation, those
arising under amendments or modifications to the Lease hereafter entered into by
Tenant and Landlord, all of which shall be so guaranteed even though Guarantor
hereafter does not consent to or approve the same (Guarantor hereby waiving all
rights of consent or approval with respect to such amendments or modifications).
2. Guarantor waives presentment for payment or performance, notice
of nonpayment or performance, notice of default, demand, protest or notice or
acceptance of this Guaranty, any rights Guarantor may have by reason of any
forbearance, modification, amendment, extension or any indulgence whatsoever
that Landlord may grant or to which Landlord and the Tenant may agree with
respect to the Lease, any and all notice of every kind to which Guarantor might
otherwise be entitled with respect to the incurring of any further obligation or
liability by Tenant to Landlord, demand for payment, the presentment of any
instrument for payment, the protest or nonpayment thereof and any and all
defenses whatsoever excepting only Tenant’s performance as required by the terms
of the Lease. Guarantor also waives, unless and until all of the obligations of
Tenant are fully paid and performed, any right to be subrogated in whole or in
part to any right or claim of Landlord against Tenant and any right to require
the marshalling of any assets of the Tenant, which right of subrogation or
marshalling might otherwise arise from any partial payment by the Guarantor. It
is expressly understood and agreed that Guarantor’s liability hereunder shall be
unaffected by (i) any amendment or modification whatsoever of the provisions of
the Lease, (ii) any extension of time for performance under the Lease, (iii) any
delay by Landlord in exercising any right under the Lease or this Guaranty (none
of which shall ever operate as a waiver of such right), or (iv) the release of
Tenant or any other guarantor from performance or observance of any of the
agreements or conditions contained in the Lease by operation of law or
otherwise, whether made with or without notice to Guarantor, including without
limitation any impairment, modification, change, release, rejection,
disaffirmance, or limitation of the liability of Tenant, or any other guarantor
of the Lease, of their estate in
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EXHIBIT F
bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of suretyship as well as of guaranty,
and Landlord, without being required to proceed first against Tenant or any
other person or entity, may proceed directly against Guarantor whenever Tenant
fails to make any payment due or fails to perform any obligation now or
hereafter owed to Landlord without first resorting to or exhausting any other
remedy and without first having recourse to the Lease; provided, however, that
nothing herein contained shall prevent Landlord from suing on the Lease with or
without making Guarantor a party to the suit or from exercising any other rights
thereunder and if such suit, or other remedy, is availed of, only the net
proceeds therefrom, after deduction of all Landlord’s Costs of Collection
(defined below) shall be applied in reduction of the amount then due on this
Guaranty.
4. Guarantor agrees to pay to Landlord, on demand, all costs and
expenses, including reasonable attorneys’ fees and litigation expenses, which
Landlord may incur in the enforcement of Tenant’s obligations under the Lease or
the liability of Guarantor hereunder (“Costs of Collection”). “Costs of
Collection” includes, without limitation, all out of pocket expenses incurred by
the Landlord’s attorneys and all costs incurred by Landlord including, without
limitation, costs and expenses associated with travel on behalf of Landlord,
which costs and expenses are related to or in respect of Landlord’s efforts to
collect and/or to enforce any of the obligations and/or to enforce any of its
rights, remedies or powers against or in respect of either or both Tenant or
Guarantor (whether or not suit is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has either examined
the Lease or has had an opportunity to examine the Lease and has waived the
right to examine; (ii) that it (and the individual acting on its behalf) has the
full power, authority and legal right to execute and deliver this Guaranty;
(iii) that this Guaranty is a binding legal obligation and is fully enforceable
against Guarantor in accordance with its terms; (iv) that there is no action or
proceeding pending or, to its knowledge, threatened against Guarantor before any
court or administrative agency which might result in any material adverse change
in its business or condition or in its assets; (v) that neither the execution
nor delivery of this Guaranty nor fulfillment of nor compliance with the terms
and provisions thereof will constitute a default under or result in the creation
of any lien, charge or encumbrance upon any property or assets of Guarantor
under any agreement or instrument to which it is now a party or by which
Guarantor may be bound; and (vi) that Guarantor is the sole owner of all the
common stock of Tenant and expects to derive financial benefit from the Lease.
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6. This Agreement shall be binding upon Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Landlord and its legal representatives, successors and assigns, and is
irrevocable until released in writing by Landlord. Each and every right, remedy
and power hereby granted to Landlord or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by
Landlord at any time and from time to time. The validity, construction and
performance of this Guaranty shall be governed by the laws of the State where
the Demised Premises are located (the “State”), without regard to conflict of
law principles. If any clause or provision of this Guaranty should be held
illegal or invalid by any court, the invalidity of such clause or provisions
shall not affect any of the remaining clauses or provisions hereof. In case any
agreement or obligation contained in this Guaranty should be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Guarantor, as the case may be, to the full extent
permitted by law. Each and every default hereunder or under the Lease shall give
rise to a separate cause of action hereunder. The obligations and liabilities of
hereunder shall be joint and several with any other guarantees given to Landlord
in connection with the Lease. This Guaranty may be amended only by instrument in
writing executed and delivered by both Landlord and Tenant. The provisions of
this Guaranty shall bind Guarantor and its respective successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns. This
Guaranty and all consents, notices, approvals and all other documents relating
hereto may be reproduced by photographic, microfilm, microfiche or other
reproduction process and the originals thereof may be destroyed; and each party
agrees that any reproductions shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not reproduction was made in the regular course
of business) and that any further reproduction of such reproduction shall
likewise be admissible in evidence.
7. Guarantor consents to and agrees that the courts of the State
shall have personal jurisdiction over Guarantor for any action brought on this
Guaranty including the right to grant judgment against Guarantor personally
together with interest on any judgment obtained by Landlord at the interest rate
set forth in the Lease for late payments (but if the same shall be unlawful for
any reason, then at the highest permissible interest rate). Guarantor further
agrees and consents that venue, if any, for any such action shall be as set
forth in the Lease. Guarantor waives and relinquishes any and all rights to
removal of any such action to any other court. Guarantor also waives trial by
jury in any judicial proceeding involving any matter in any way arising out of
or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand made under
this Guaranty shall be in writing and shall be deemed given at the earlier of
(i) the date received or (ii) three (3) business days after the date deposited
in a United States Postal Service Depository, postage prepaid first class
certified or registered mail, return receipt requested, addressed to Guarantor
or Landlord, as the case may be, at the respective addresses set forth opposite
their names below:
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Landlord:
WE APP Seaford LLC
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303
Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., a Maryland corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
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INSURANCE
This Exhibit G shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this
Exhibit shall prevail and govern the Lease.
1. INSURANCE.
A. Coverage. Tenant shall purchase and maintain insurance during the entire Term
of the Lease and any period Tenant (or any party claiming by, through or under
Tenant) occupies any portion of the Demised Premises, for the benefit of the
Tenant and Landlord (as their interest may appear) with terms and coverages
reasonably satisfactory to Landlord, and with insurers having a minimum A.M.
Best rating of at least A/X, and with such increases in limits as Landlord may
from time to time reasonably request, but initially Tenant shall maintain the
following coverages in the following amounts:
(1) Commercial General Liability Insurance naming Landlord,
Landlord’s management, leasing and development agents and Landlord’s
mortgagee(s) from time to time as additional insureds, with coverage for
premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Property insurance covering property damage and business
interruption for the entire Demised Premises. Covered property shall include the
Building, boilers and machinery, all tenant improvements, office furniture,
trade fixtures, office equipment, merchandise and all other items Tenant’s
property on the Demised Premises. Such insurance shall name Landlord and Fee
Mortgagee(s) from time to time as additional loss payees as their interests may
appear. Such insurance shall be written on an “all risk” of physical loss or
damage basis including but not limited to the perils of fire, extended coverage,
windstorm, vandalism, malicious mischief, terrorism, sprinkler leakage, flood,
windstorm and earthquake, for the full replacement cost value of the covered
items and other endorsements as Landlord shall reasonably request from time to
time and in amounts that meet any co insurance clause of the policies of
insurance with a deductible amount not to exceed $750,000. Such insurance shall
include rent continuation coverage of no less than twelve (12) months. Such
policy or policies shall provide that the proceeds of any loss shall be payable
to Landlord and Tenant and to the holder (as its interest may appear) of any Fee
Mortgage to which this Lease is subordinate so long as such holder and future
holders of such Fee Mortgage are obligated to apply proceeds of insurance in the
manner provided for in this Lease.
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EXHIBIT H
(3) Workers’ Compensation Insurance and Employers Liability
Insurance with statutory limits and automobile liability insurance (coverage
must include owned, leased, hired and non owned vehicles) with a limit of at
least $1,000,000 Combined Single Limit-Bodily Injury & Property Damage.
(4) Tenant shall purchase or shall cause each Tenant contractor
performing work on the Demised Premises to carry insurance protecting against
claims set forth below which may arise out of or result from the contractor’s
operations on the Premises and naming Landlord, Landlord’s management, leasing
and development agents as additional insureds for Premises Operations and
Completed Operations. Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s compensation, disability
benefit and other similar employee benefit acts—in amounts as required by law;
(2) claims for damages because of bodily injury, occupational sickness
or disease, or death of his employees or any other person and other personal
injury and motor vehicle liability — Public Liability - Single Limit (Combined)
Per Occurrence. Bodily Injury/Property Damage $1,000,000 w/ $2,000,000
General/Completed Operations Aggregate. Automobile Liability - Single Limit
(Combined) Per Occurrence Bodily Injury and Property Damage $1,000,000. Excess
Liability Umbrella covering all above items $5,000,000 per Occurrence; and
(3) claims for damages, other than the work of the contractor itself, because of
injury to or destruction of tangible property, including loss of use resulting
therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
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PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark.
“Gross Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $51,500,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise
249
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EXHIBIT H
would be made at, in, on, about, from or with respect to the Premises, nor the
amount of any cash or credit refund made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures which are not a part of Tenant’s stock in
trade. Each sale upon installment, credit or layaway shall be treated as a sale
for the full price in the month during which such sale shall be made,
irrespective of the time when Tenant shall receive payments from its customers,
and no deduction shall be allowed for uncollectible payment by customer or
uncollected or uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior
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month to Landlord without demand, provided that if such amount exceeds the
Percentage Rent that would be payable with respect to such month if Percentage
Rent were calculated on the basis of Gross Sales for all months elapsed in the
then current calendar year, Tenant shall not be required to pay any amount on
account of such month unless and until such amount shall later be payable as
part of the annual adjustment. Upon receipt by Landlord of each Annual Statement
of Gross Sales there shall be an adjustment between Landlord and Tenant to the
end that Landlord shall receive the exact amount of Percentage Rent due
hereunder. Any overpayments by Tenant hereunder shall be credited against the
next payments due under this Section. Any underpayments by Tenant shall be
immediately due and payable. With respect to the calendar year in which the Term
ends, the adjustments shall be prorated for the portion of the calendar year
included in the Term.
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EXHIBIT I
LOCAL LAW ADDENDUM
(Attached)
252
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Lease Addendum (NY)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Seaford LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”). Capitalized
terms used in this Addendum without definition shall have the meanings set forth
in the Lease. This Addendum is to be construed as supplemental to, and part of,
the Lease. In the event of any inconsistency between the Lease and this
Addendum, the terms and provisions of this Addendum shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Construction Lien. Nothing in the Lease shall be deemed to
constitute Landlord’s consent or request, express or implied, by inference or
otherwise: (a) to any contractor, subcontractor, laborer, or material supplier
for the performance of any labor or the furnishing of any materials for any
improvement, alteration or repair of the Demised Premises; or (b) to subject the
Demised Premises to any mechanic’s lien.
2. Maintenance of Property.
A. To the extent the Lease requires Tenant to maintain or repair any
sidewalk, Tenant shall perform all obligations of Landlord (and shall indemnify
Landlord in the manner provided in the Lease against any liability of Landlord
arising) under New York City Administrative Code §2-710 and -711.
B. Tenant shall not clean any window in or about the Demised Premises
(or require, permit, suffer, or allow any window to be cleaned) from the outside
in violation of New York Labor Law §202.
3. Landlord’s Remedies.
A. Notwithstanding anything to the contrary in New York Real Property
Actions and Proceedings Law (N.Y. RPAPL) §711(2) or any other applicable law or
rule of procedure, Landlord’s acceptance of any partial payment on account of
rent, even if such payment has been acknowledged or receipted for in writing,
shall not be deemed to constitute Landlord’s “express consent in writing to
permit Tenant to continue in possession” as referred to in N.Y. RPAPL
§711(2) unless Landlord’s written acceptance expressly states that: “Landlord
consents to Tenant’s remaining in possession notwithstanding nonpayment of
rent.” Any such part payment shall merely constitute a payment on account and
nothing more, and shall not limit any rights or remedies of Landlord.
B. Tenant expressly waives and releases, for itself and for any
person claiming by, through or under Tenant, any rights that Tenant or such
person may have under New York civil practice law and rules §220 1 (or any other
law or rule of procedure, including any provisions of the New York real property
actions and proceedings law), in connection with any holdover proceedings or
other action or proceeding regarding this Lease, Tenant’s rights as a tenant of
the Building, or Tenant’s possession of the Demised Premises.
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4. Casualty. The provisions of Article 26 of this Lease on
destruction shall be deemed an express agreement as to damage or destruction of
the Demised Premises by fire or other casualty. New York Real Property Law §227
(and any similar or successor statute), providing for such a contingency in the
absence of an express agreement, shall have no application.
5. Redemption. Tenant specifically waives the right of redemption
provided for in New York Real Property Actions and Proceedings Law §761, and any
similar or successor statute.
6. Landmarks. Tenant acknowledges and agrees that it shall not seek
or support a landmark designation, unless such landmark designation is
specifically sought by Landlord, pursuant to the New York City Administrative
Code §25-322 for the Demised Premises or any part of the Building.
7. Zoning Lot. Tenant acknowledges that Tenant has no rights to or
interest in any development rights, “air rights,” rights to construct additional
floor area, or comparable rights appurtenant to the Demised Premises. Tenant
consents, without further consideration, to Landlord’s utilization or transfer
of such rights in any manner. Tenant shall promptly execute and deliver any
instruments that Landlord may reasonably request, including without limitation,
instruments merging zoning lots, or waiving Tenant’s right to join in such
instruments, to evidence such acknowledgment and consent. The provisions of this
paragraph are and shall be deemed to be and shall be construed as Tenant’s
express waiver and release of any interest Tenant may have as a “party in
interest” (as defined under the definition of “Zoning Lot” in §12- 10 of the New
York City Zoning Resolution or any similar or successor statute) in the Demised
Premises.
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EXHIBIT J
Confidentiality Agreement
(Attached)
255
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CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as of
, 2010 (the “Effective Date”) by and between [TENANT], a
, having an address at
(“Company”) and ,
a , having an address at
(“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without regard to conflict of law principles. The exclusive
jurisdiction for any disputes concerning this Agreement shall be the Superior
Court of New Jersey,
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Bergen County, and the parties hereby submit to such jurisdiction and waive all
defenses relating to jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
258
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EXHIBIT B-4
LEASE FORM FOR BALDWIN, NY
259
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KEY NO:
LEASE
BY AND BETWEEN
WE APP BALDWIN LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
1764 GRAND AVENUE, BALDWIN, NEW YORK
260
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
9
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
10
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT.
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
15
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
16
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
16
26.
DESTRUCTION
19
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
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TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
27
45.
INVALIDITY OF CERTAIN PROVISIONS
27
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
28
51.
COUNTERPARTS
29
52.
INCORPORATION OF STATE LAW PROVISIONS
29
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP BALDWIN LLC, a Delaware limited liability company
with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue Extension,
Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley (hereinafter called
“Landlord”), and PATHMARK STORES, INC., a Delaware corporation, having an office
at 2 Paragon Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
This Lease is guaranteed by The Great Atlantic & Pacific Tea Company, Inc., a
Maryland corporation (“Guarantor”) pursuant to a guaranty of even date herewith
(as the same may be amended, supplemented or modified from time to time, the
“Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made a part
hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Local Law Addendum; and
K. Exhibit J, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from Landlord that
certain parcel of land (hereinafter called “Land”) commonly known as 1764 Grand
Avenue, Baldwin, New York and more particularly described on Exhibit B1 and the
buildings and other improvements now or hereafter erected on the Land together
with the benefit of and subject to any and all easements, appurtenances, rights
and privileges and other matters of record now or hereafter arising including
those described in Exhibit B2. The land is currently improved by an
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existing building consisting of approximately 51,798 square feet of space (the
“Building”), as more particularly shown on the Site Plan attached hereto as
Exhibit A. The Building and any other buildings and improvements now or
hereafter erected on the Land shall be hereinafter called “Improvements.” The
Land and any Improvements are hereinafter collectively called the “Demised
Premises.”
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the
“Commencement Date”) on the Effective Date and shall continue to and include the
date (the “Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 12 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten
(10) separate consecutive renewal periods of five (5) years each (each such
period being hereinafter called a “Renewal Period”) upon the same terms and
conditions as are herein set forth except the rent for such Renewal Period shall
be as provided in Section 5 below; provided, however, that at the time of so
electing to extend and also at the time any Renewal Period commences Tenant is
not in default beyond any applicable notice and cure period, and this Lease is
then in full force and effect. If Tenant fails timely so to exercise its option
for any Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the
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Term of this Lease shall be automatically extended for the Renewal
Period(s) covered by the Renewal Notice without execution of an extension or
renewal lease. If Tenant shall not have given notice of such election to
Landlord by such date in respect of any Renewal Period, Landlord shall (unless
notice shall have been given as hereinafter specifically permitted) give notice
to Tenant that Tenant has failed to give notice of such election to Landlord
(hereinafter called the “Option Notice”). Tenant’s time to give notice of such
election shall continue until the date which is sixty (60) days after receipt of
the Option Notice. Landlord shall not give the Option Notice prior to the date
which is four hundred twenty-five (425) days before the Expiration Date. If
Landlord shall not have given the Option Notice prior to the date which is four
hundred twenty-five (425) days before the beginning of the next succeeding
Renewal Period, the term of this Lease shall be extended beyond the Expiration
Date to the date which is four hundred twenty-five (425) days after the date on
which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
1,450,344.00
$
120,862.00
6-10
$
1,522,861.20
$
126,905.10
11-15
$
1,599,004.26
$
133,250.36
16-20
$
1,678,954.47
$
139,912.87
First Renewal Period
21-25
$
1,762,902.20
$
146,908.52
Second Renewal Period
26-30
$
1,851,047.31
$
154,253.94
Third Renewal Period
31-35
$
1,943,599.67
$
161,966.64
Fourth Renewal Period
36-40
$
2,040,779.66
$
170,064.97
Fifth Renewal Period
41-45
$
2,142,818.64
$
178,568.22
Sixth Renewal Period
46-50
$
2,249,959.57
$
187,496.63
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Seventh Renewal Period
51-55
$
2,362,457.55
$
196,871.46
Eighth Renewal Period
56-60
$
2,480,580.43
$
206,715.04
Ninth Renewal Period
61-65
$
2,604,609.45
$
217,050.79
Tenth Renewal Period
66-70
$
2,734,839.92
$
227,903.33
B. All Fixed Annual Rent shall be payable by Tenant in equal
monthly installments in advance on the first day of every calendar month during
the Term of this Lease (and any Renewal Periods), and shall be payable at the
office of the Landlord first above set forth or at such other address as
Landlord shall have given in a notice to Tenant) in current U.S. currency by
check drawn on a clearinghouse bank and payable directly to Landlord (or, if
requested by Landlord from time to time by electronic fund transfer, to an
account designated by Landlord). Rent for a part of a month shall be prorated on
a daily basis and paid on the Commencement Date. Further, the rent for the first
full month shall be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water, sewer, telephone, refuse
disposal, and other charges for utilities and services supplied to the Demised
Premises, insurance costs, amounts due under any title encumbrance matter
described in Exhibit B2, and all costs of cleaning, maintaining, repairing and
replacing the Demised Premises or any portion thereof and of complying with all
laws now existing or hereafter enacted
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including all Environmental Laws (defined below). Any cost, expense or
obligation directly relating to the Demised Premises that is not expressly
declared in this Lease to be that of Landlord shall be deemed to be an
obligation of Tenant to be performed by Tenant at Tenant’s sole expense, and to
the greatest extent permitted by law Tenant shall indemnify and defend Landlord
against, and hold Landlord harmless from, the same, and Tenant’s liability for
the payment and performance of such amounts and obligations that shall arise
during the Term is hereby expressly provided to survive the expiration of the
Term or early termination of this Lease. Fixed Annual Rent, Additional Rent, and
all other sums payable hereunder by Tenant, shall be paid without notice or
demand, and without set off, counterclaim, recoupment, abatement, suspension,
deduction, or defense (other than payment) whatsoever. Except as otherwise
expressly set forth in this Lease with respect to certain events of casualty in
Section 26 or condemnation in Section 27, Tenant shall in no event have any
right to terminate this Lease, and any right so to terminate (or to abate,
suspend, set off or otherwise deduct from Fixed Annual Rent or Additional Rent)
under applicable law is hereby waived to the greatest extent permitted by law.
It is the intention of the parties that the obligations of Tenant hereunder
shall be separate and independent covenants and shall not be discharged or
otherwise affected by any law or regulation now or hereafter applicable to the
Demised Premises or any other restriction on Tenant’s use, and that Fixed Annual
Rent, Additional Rent, and all other sums payable by Tenant hereunder shall
continue to be payable in all events, and that the obligations of Tenant
hereunder shall continue unaffected throughout the Term. Landlord, at its sole
cost and expense, shall be responsible for the following: (i) payment of any
amounts relating to Fee Mortgages or other encumbrances or liens created by
Landlord, (ii) management fees, administrative costs, professional fees and any
other costs incidental to its fee ownership of the Demised Premises; and
(iii) and cost, expense, or liability resulting from the negligent or willful
misconduct of Landlord, its employees or agents.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of a
supermarket, drugstore, automated teller machine, bank, all other uses customary
and incidental to a supermarket and, so long as the Minimum Credit Test (defined
in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised Premises
or Tenant or both, foreseen or unforeseen, and whether or not the same interfere
with Tenant’s occupancy. Tenant shall procure all approvals, licenses and
permits, in each case promptly giving Landlord true and complete copies of the
same and all applications therefor.
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Tenant shall never overload any of the Building systems, including the floors
and mechanical, electrical and structural systems, and shall also keep the
Demised Premises equipped with appropriate safety appliances and comply with all
requirements of insurance and of insurance inspection or rating bureaus. Tenant
shall not itself, nor shall Tenant permit or suffer persons acting under Tenant
to, either with or without negligence, injure, overload, deface, damage or
otherwise harm the Demised Premises or any part thereof or use the Demised
Premises contrary to any law or in a manner likely to create any nuisance. It is
intended that Tenant bear the sole risk of all present or future laws affecting
the Demised Premises, and Landlord shall not suffer any reduction in any rent on
account of the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land. Landlord further covenants and
agrees, upon request of tenant, to convey without compensation therefor,
insubstantial perimeter portions of the Land for highway or roadway purposes, to
the state in which the demised premises are situate or any other municipal or
governmental body, provided, however, that any such conveyance shall not
constitute a taking (as defined in section 28 below) nor constitute grounds for
tenant to terminate this Lease. Notwithstanding anything to the contrary or
otherwise set forth herein, any encumbrance on the Demised Premises shall be
subject to any requirements imposed by any Fee Mortgage (provided that Landlord
shall reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s intention to discontinue permanently the operation of its
business in the Demised Premises or any part of the Demised Premises or
discontinues the operation of its business in the Demised Premises or any part
of the Demised Premises for a period of one (1) year for any reason (other than
Destruction or Taking that pursuant to the applicable provisions of this Lease
entitles Tenant to terminate this Lease), then Landlord may terminate this Lease
as to the Demised Premises, or if applicable, the part of the Demised Premises
with respect to which Tenant has given notice of its intention to discontinue,
or in which Tenant has discontinued, its operations, by thirty (30) days’
written notice to Tenant of Landlord’s election to terminate this Lease (or, if
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as
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applicable, resuming operations of its business in the Demised Premises within
twenty-five (25) days after receipt of Landlord’s notice or by rescinding its
notice of its intention to discontinue its business in writing to Landlord
delivered within twenty-five (25) days after receipt of Landlord’s notice.
7. TAXES.
A. Tenant shall, during the term of this Lease, as Additional Rent,
pay and discharge punctually, as and when the same shall become due and payable,
all taxes, special and general assessments, water rents, rates and charges,
sewer rents and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, including rent and/or
occupancy taxes (hereinafter collectively referred to as “Taxes”), and each and
every installment thereof that shall or may during the term of this Lease,
become due and payable, or liens upon the Demised Premises or any part thereof,
together with all interest and penalties thereon, under or by virtue of all
present or future laws, ordinances, requirements, orders, directives, rules or
regulations of the Federal, State, County, Town and City Governments and of all
other governmental authorities whatsoever (all of which shall also be included
in the term “Taxes” as heretofore defined).
B. To the extent permitted by law, Tenant or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installments. Landlord agrees to permit the application
for the foregoing conversion to be filed in Landlord’s name, if necessary, and
shall execute any and all documents, instruments or certificates reasonably
requested by Tenant to accomplish the foregoing.
C. Tenant shall be deemed to have complied with the covenants of
this Lease if payment of Taxes shall have been made either within any period
allowed by law or by the applicable governmental authority during which payment
is permitted without penalty so long as the Taxes shall never become subject to
a tax sale on the Demised Premises or subject Landlord to any civil or criminal
liability. Tenant shall produce and exhibit to Landlord satisfactory evidence of
payment prior to the expiration of any such period.
D. All Taxes shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of such year during which the
Term shall be in effect. Notwithstanding anything to the contrary contained
herein, if the Term hereof terminates prior to the date which would have been
the expiration thereof but for the earlier termination, then Tenant shall pay
those Taxes which would have been paid by Tenant to and including the term
expiration date and this obligation shall expressly survive such termination.
E. So long as the requirements of Paragraph C of this Section are complied with,
Tenant or its designees shall have the right to contest or review all Taxes by
legal proceedings, or in such other manner as it may deem suitable. Tenant or
its designees shall inform Landlord of any such proceedings and conduct such
proceedings promptly at its own cost and expense, and free of any expenses to
Landlord, and if necessary, in the name of and with the cooperation of Landlord
(so long as Landlord’s cooperation does not involve incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant). Landlord
shall
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execute all documents, instruments or certificates reasonably necessary and
correct to accomplish the foregoing. Notwithstanding anything to the contrary or
otherwise set forth herein, any such contest shall be subject to compliance with
all applicable provisions of any Fee Mortgage (provided that Landlord shall
reasonably cooperate with Tenant, at no material out of pocket cost to Landlord,
in connection with such compliance).
F. Landlord covenants and agrees that any refunds or rebates on
account of Taxes paid by Tenant pursuant to the provisions of this Lease shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and as such are to be received by Landlord in trust and paid to Tenant
forthwith. Landlord will, upon the request of Tenant, sign any receipts that may
be necessary to secure the payment of any such refund or rebate, directly to
Tenant and/or will pay over to Tenant such refund or rebate as received by
Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant’s application (if
legally required) for separate tax assessments for such portions of the Demised
Premises as Tenant shall at any time, and from time to time, reasonably
designate. Landlord hereby agrees, upon request of Tenant, to execute all
documents, instruments or certificates as shall reasonably be required by Tenant
(so long as the same impose no material obligations on Landlord or expose
Landlord to any liability).
G. Nothing herein or in this Lease otherwise contained shall
require or be construed to require Tenant to pay any inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, that are or may
be imposed upon Landlord, its successors or assigns, whether arising out of
Landlord’s ownership of the Demised Premises, this Lease or otherwise; provided,
however, that if at any time hereafter there is levied any tax on Landlord in
lieu of real estate taxes based solely upon the ownership of real property, by
property owners, in general, within the tax jurisdiction within which the
Demised Premises are located, then such tax shall be considered to be an item of
Taxes but for purposes of computing the amount of such tax payable by Tenant,
the Demised Premises shall be deemed to be the sole real property owned by
Landlord.
H. In the event that any fee mortgagee (“Fee Mortgagee”) requires the escrow of
Real Estate Taxes or insurance premiums, Tenant shall pay to such Fee Mortgagee
in escrow, on the first day of each and every month during the term of this
Lease, one twelfth (1/12) of all estimated charges for the ensuing twelve (12)
month period as reasonably estimated by the Fee Mortgagee based on current bills
for same. Tenant shall deposit at least ten (10) days prior to the first date on
which any interest or penalty will accrue such additional amounts as may be
necessary so that there shall at all times be sufficient funds in escrow to pay
such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall have the right
to install, maintain and replace in, on or in front of any Improvement or
location on the Demised Premises or in any part thereof such signs and
advertising matter as Tenant, and with Tenant’s consent, any such assignee or
subtenant of Tenant may desire, provided that Tenant shall comply with any
applicable requirements of governmental authorities having jurisdiction and
shall obtain any necessary permits for such purposes. As used in this Section,
the word “sign” shall be construed to include any placard, pylon, logo, light or
other advertising symbol or object, irrespective or whether same be temporary or
permanent. All signs shall be Tenant’s personal
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property and shall be maintained and removed by Tenant upon termination of this
Lease at Tenant’s sole expense.
9. TRUE LEASE. It is the intent of Landlord and Tenant and the
parties agree that this Lease is a true lease and that this Lease does not
represent a financing agreement. Each party shall reflect the transaction
represented hereby in all applicable books, records, and reports (including
income tax filings) in a manner consistent with “true lease” treatment rather
than “financing” treatment.
10. REPAIRS. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, keep and maintain or cause to be kept
and maintained in repair and good condition the Building and improvements at any
time erected on the Demised Premises. Without limitation, Tenant shall perform
the Remedial Work described in Exhibit C. Landlord shall not be required to
furnish services or facilities or to make any improvements, repairs,
replacements or alterations in or to the Demised Premises whatsoever during the
Term of this Lease. Without limiting the generality of the foregoing, Tenant
shall be responsible for the entire Demised Premises and shall manage, maintain,
repair, replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment serving the Demised Premises,
keeping the Demised Premises and all improvements and appurtenances in at least
as good condition as on the Commencement Date. Without limitation, Tenant shall
provide all cleaning, painting, janitorial services, rubbish disposal, periodic
exterior waterproofing treatments to the Building, window caulking, maintenance
of all gas, water, electric and other utility lines from public ways to the
Demised Premises, and shall repair, maintain and replace all landscaping, roads,
parking areas, and walkways appurtenant to the Demised Premises, and shall
provide all snowplowing services thereto. Tenant shall provide a copy of all
current vendor contracts, if any, relating to the foregoing to Landlord at least
annually and from time to time otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost and expense insurance
policies insuring against loss by fire, lightning, the perils of extended
coverage and malicious mischief covering the Demised Premises and the other
Improvements in the Demised Premises and other perils as more fully described in
Exhibit G.
B. So long as Tenant performs its obligations in Paragraph A of
this Section, Landlord hereby waives all rights of recovery against Tenant and
any other occupant(s) of the Demised Premises and any of their agents and
employees for damage or destruction to any and all of the Improvements,
including without limitation, the Building, arising out of fire or other
casualty whether or not caused by acts or negligence of the aforementioned
persons. Tenant hereby waives all rights of recovery against Landlord, its
agents and employees for damage or destruction to any and all of the
Improvements, including without limitation, the Building and to
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Tenant’s trade fixtures, equipment and inventory arising out of fire or other
casualty whether or not caused by the acts or negligence of Landlord, its agents
or employees.
C. Tenant shall maintain at its own cost and expense public
liability and other insurance in accordance with the requirements of Exhibit G.
D. Any insurance required to be provided by Tenant pursuant to this
Lease may be provided by blanket insurance covering the Demised Premises and
other locations of Tenant, provided such blanket insurance complies with all of
the other requirements of this Lease with respect to the type of insurance
covered by blanket policies. If Tenant elects to insure the Demised Premises
under any blanket insurance policy, Tenant shall furnish to Landlord a
certificate of insurance showing the Demised Premises as a location insured
under any such blanket insurance policy to the extent of the limits required in
Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as to which
Tenant has received a notice containing such mortgagee’s name and address a
duplicate original copy or certificate of the policies of insurance required to
be carried by Tenant.
E. Notwithstanding anything to the contrary contained herein,
Tenant may carry any required insurance on trade fixtures and equipment
described in Section 17 under a program of self-insurance or to carry insurance
with deductibles in excess of part or all of the amounts of insurance required
under Exhibit G hereunder.
F. If Tenant fails to perform any covenant in this Section and such
failure continues for more than three (3) days after written notice, then,
without limiting any of Landlord’s other rights and notwithstanding any other
provision of this Lease concerning notice and cure of defaults, Landlord may but
need not obtain such insurance, and Tenant shall pay the cost thereof upon
demand as Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with
and shall from time to time conform the Demised Premises to every applicable
requirement of law, duly constituted authority, Board of Fire Underwriters
having jurisdiction or of the carriers of all insurance on the Demised Premises
(all of the foregoing being hereinafter called “Legal Requirements”). Tenant
shall have the right upon giving notice to Landlord to contest any obligations
imposed upon Tenant pursuant to the provisions of this Section and to defer
compliance during the pendency of such contest, if the failure of Tenant to so
comply will not subject Landlord to civil or criminal penalty or liability.
Landlord shall cooperate with Tenant in such contest (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall execute any documents
reasonably required in furtherance of such purpose. Tenant shall not apply for
any change in zoning applicable to the Land or the Demised Premises without
Landlord’s prior written consent, not to be unreasonably withheld, conditioned
or delayed.
13. ALTERATIONS. Tenant may at its own expense from time to time,
during the term hereof, make such alterations, additions, improvements and
changes, structural or otherwise (hereinafter called “Alterations”), in and to
the Demised Premises which it may deem necessary or desirable, provided such
Alterations shall not reduce the value of the Demised Premises. Tenant, in
making any Alterations, shall use materials of equal or better quality than
those used
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in the construction of the Demised Premises and comply with all Legal
Requirements. Tenant shall obtain or cause to be obtained all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals that may be required in connection with the making of
Alterations. Landlord shall cooperate with Tenant in the obtaining thereof (so
long as Landlord’s cooperation does not involve (a) incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant or (b) breach
of any covenants binding on Landlord or the Demised Premises, including, without
limitation, any mortgage) and shall execute any documents required in
furtherance of such purpose. Tenant may, but shall not be obligated to, remove
any Alteration so long as such removal does not materially and adversely affect
any heating, ventilating, mechanical, electrical, structural, roof or life
safety elements of the Building and Tenant shall repair all damage that results
from such removal and restore the Demised Premises to a functional condition
(including the filling of all floor and wall holes, the removal of all
disconnected wiring back to junction boxes and the replacement of all damaged
ceiling tiles). Upon completion of any Alteration that is not Cosmetic Work,
Tenant shall promptly deliver to Landlord plans showing such Alteration as
built. “Cosmetic Work” shall mean painting, carpeting and wall coverings and the
like and the addition or deletion of interior non structural partitions,
provided such work does not materially and adversely affect any roof,
structural, mechanical, electrical, utility, fire protection or life safety
systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall permit Landlord to enter
upon the Demised Premises at all reasonable times approved by Tenant to examine
the Demised Premises, and during the six (6) month period preceding the
Expiration Date, to exhibit the Demised Premises to prospective tenants,
provided that Landlord shall not unreasonably interfere with the conduct of
business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any and all utility services to
the Demised Premises, including, without limitation, telecommunications, water,
gas, electricity and fuel used by it in the Demised Premises. Tenant shall pay
all sewer charges assessed by the municipal authority having jurisdiction. The
failure or interruption of any utility services shall be at Tenant’s sole risk
and Landlord shall not suffer any reduction in any rent on account thereof.
B. Tenant shall have the sole right to apply for, claim and receive
any rebate, reimbursement, credit, or payment from any utility company providing
service to the Building resulting from Tenant’s installation of energy saving
equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall become
subject and subordinate to the lien of any Fee Mortgagee of the entire fee
interest of the Demised Premises, and any renewals, modifications or extensions
thereof, provided that a Subordination, Non Disturbance and Attornment Agreement
(“SNDA”) substantially in the form annexed hereto as Exhibit D (or a reasonably
equivalent form that is reasonably acceptable to Tenant and the applicable Fee
Mortgagee) is executed, acknowledged and delivered by such Fee Mortgagee to
Tenant. If the Fee Mortgagee requires that this Lease
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have priority over such mortgage, Tenant shall, upon request of the Fee
Mortgagee, execute, acknowledge and deliver to the Fee Mortgagee an agreement
acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment whether owned by Tenant or
leased by Tenant from a Lessor/Owner (hereinafter called the “Equipment Lessor”)
installed in the Demised Premises, regardless of the manner or mode of
attachment, shall be and remain the property of Tenant or any such Equipment
Lessor and may be removed by Tenant or any such Equipment Lessor at any time. In
no event (including a default under this Lease) shall Landlord have any liens,
rights or claims in Tenant’s or Equipment Lessor’s trade fixtures and equipment
and Landlord agrees to execute and deliver to Tenant and Equipment Lessor,
within ten (10) days after request therefor, any document reasonably required by
Tenant or Equipment Lessor in order to evidence the foregoing, so long as the
same is reasonably acceptable to Landlord and any Fee Mortgagee. Tenant shall
promptly repair all damage to the Building caused by the removal of any such
trade fixtures or equipment. Notwithstanding anything to the contrary in this
Lease, the following shall not constitute trade fixtures or equipment for
purposes of this Lease and neither Tenant nor any Equipment Lessor shall own or
have any right to remove the same (and, without limiting the generality of the
foregoing, the following shall not be subject to the provisions of this
Paragraph A or Paragraph B of this Section 17): (i) the HVAC system, plumbing,
alarm, electric, life safety and other building systems used to operate the
Building or maintain the certificate of occupancy, and (ii) any “fixtures” as
such term is defined in the applicable Uniform Commercial Code.
B. In the event Tenant shall enter into any arrangement to finance
all or any portion of its trade fixtures or equipment either before or after the
installation thereof in the Demised Premises and whether such financing shall be
in the form of a mortgage, financing agreement, equipment lease, equipment sale
leaseback or otherwise and in the event the lessor or secured party thereunder
shall provide written notice to Landlord that it requires a copy of any default
sent by Landlord to Tenant under this Lease also to be sent to such person
(hereinafter called the “Owner/Secured Party”), then Landlord upon receipt of
such requirement shall simultaneously send a copy of any default notice to such
Owner/Secured Party at the address furnished to Landlord; provided that
Landlord’s failure to deliver any such copy to the Owner/Secured Party shall not
affect Landlord’s exercise of any right or remedy under this Lease in any way
whatsoever. The copy of any such default notice shall be sent to such
Owner/Secured Party in the same manner as notices are required to be sent and in
the same manner as such notice is being sent to Tenant hereunder. Landlord
further agrees that any such Owner/Secured Party shall have the right, but not
the obligation, to remedy or cure any default of Tenant under this Lease within
the same period of time granted to Tenant to remedy or cure any such default
under this Lease.
C. All trade fixtures and other personal property (which term shall include
without limitation food and inventory) of any person that is located on the
Demised Premises shall be at the sole risk of Tenant. Landlord shall not be
liable for any loss or damage to person or property resulting from any accident,
theft, vandalism or other occurrence on the Demised Premises, including damage
resulting from water, wind, ice, steam, explosion, fire, smoke,
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chemicals, the rising of water or leaking or bursting of pipes or sprinklers,
defect, failure or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this Section, Tenant may sublet all
or any part of the Demised Premises, or license the use of any portion thereof
or assign this Lease, but Tenant and Guarantor shall nevertheless continue to
remain liable hereunder. Any assignee of the Lease and any sublessee or licensee
of all or substantially all of the Demised Premises shall become jointly and
severally liable to Landlord, and any such transferee shall upon Landlord’s
request execute and deliver an instrument in confirmation thereof. In the case
of any assignment of this Lease or any sublease or licensee of all or
substantially all of the Demised Premises, Tenant shall promptly deliver to
Landlord a true and complete copy of the transfer instruments. No transfer of
all or any portion of the Demised Premises or Landlord’s consent thereto shall
be deemed a waiver of the provisions of this Section, or a release of Tenant or
any Guarantor.
B. So long as the Minimum Credit Test is not met (however the
following provisions of this paragraph B shall not apply at any time when the
Minimum Credit Test is met), Tenant shall not assign this Lease or sublet or
license all or substantially all of the Demised Premises to any transferee
unless (x) such transferee (1) operates at least five (5) other grocery stores
and (2) has Tangible Net Worth” (as defined in Section 25 below) of at least One
Hundred Million Dollars ($100,000,000) or (y) if such transferee does not meet
the requirements of (1) and (2) then such transferee must be approved by
Landlord, such approval not to be unreasonably withheld, conditioned or delayed.
If Tenant desires to so transfer this Lease to a person who does not meet the
requirements of (1) and (2) in the preceding sentence, then Tenant shall give
notice of such intended transfer to Landlord together with reasonable
information on its grocery store business and its audited financial statements
for the three most recent years showing the credit of the proposed transferee
and the proposed terms of the transfer. Upon receiving such information Landlord
shall have thirty (30) days to elect by written notice to Tenant to do one of
the following (and any failure of Landlord to affirmatively elect one or the
other shall be deemed to be an election by Landlord to consent to such transfer:
(a) approve such transfer, (b) disapprove such transfer, or (c) terminate the
Term of this Lease on any date which is no sooner than one-hundred twenty (120)
days after such election notice and no later than one-hundred eighty (180) days
after such election. If Landlord elects to terminate this Lease and thereafter
within one-hundred twenty (120) days enters into a lease or other agreement with
Tenant’s proposed transferee, any transfer payment that was to have been made to
Tenant by such transferee as specifically disclosed in writing as such to
Landlord in the proposed terms of the transfer furnished to Landlord as provided
above shall be paid by Landlord to Tenant out of the first rent amounts received
by Landlord from such transferee until the transfer payment is paid to Tenant in
full. For purposes of the previous sentence, a “transfer payment” shall include
proposed sublease income in excess of the rent under this Lease, and in such
cases Landlord’s payment to Tenant shall be a liquidated amount equal to such
excess rent at a discount rate of ten percent (10%).
C. If Tenant assigns this Lease, Landlord, when giving notice to said assignee
with respect to any default, shall also give a copy of such notice upon Tenant
originally named herein or its successor of whom Landlord shall have been given
written notice (being herein
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called “Original Tenant”), and no notice of default shall be effective as
against a Tenant until a copy thereof is given to the Original Tenant. The
Original Tenant shall have the same period after the giving of such notice to
cure such default as is given to Tenant under this Lease. If this Lease
terminates or this Lease and the Term hereof cease and expire because of a
default of such assignee, Landlord shall promptly give the Original Tenant
notice thereof. The Original Tenant shall have the option, to be exercised by
notifying Landlord in writing within thirty (30) days after receipt by the
Original Tenant of Landlord’s notice, to cure any default and become Tenant
under a new lease for the remainder of the term of this Lease (including any
Renewal Periods if applicable) upon all of the same terms and conditions of this
Lease as it may have been amended by agreement between Landlord and Original
Tenant, provided, however, that at the time of making any such election Original
Tenant cures all defaults under the Lease. In the event Original Tenant assigns
this Lease and it shall thereafter be rejected in a bankruptcy or similar
proceeding brought by or against such assignee, a new lease identical to this
Lease shall be entered into between Landlord and Original Tenant, provided that
Original Tenant cures any monetary defaults and any other defaults that are
capable of being cured. Any new lease created under this Section shall commence
on the date of termination or rejection of this Lease, as applicable.
Notwithstanding the foregoing, if Landlord, in its sole discretion delivers to
the Original Tenant and Guarantor a release as to all liability under this Lease
as theretofore amended, the Original Tenant shall not have the foregoing option.
D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test or the
requirements of Section 1 8B are met, Landlord shall, within thirty (30) days
following Tenant’s request, deliver to Tenant a recognition and attornment
agreement following the form attached hereto as Exhibit D and otherwise subject
to Landlord’s reasonable approval, executed and acknowledged by Landlord, for
the benefit of such subtenant; provided that such subtenant executes and
delivers an instrument reasonably satisfactory to Landlord confirming that such
subtenant is jointly and severally liable under this Lease. Further, Landlord
shall, within ten (10) days after Tenant’s request, shall request its Fee
Mortgagee to deliver to Tenant an SNDA for the benefit of any such subtenant
(and Landlord shall reasonably cooperate with Tenant, at no out of pocket cost
to Landlord, in connection with obtaining any requisite consent from any Fee
Mortgagee).
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that Landlord is the owner of
the fee simple of the Demised Premises and that other than any mortgages held by
Fee Mortgagees that have provided an SNDA to Tenant in accordance with this
Lease or such other liens or encumbrances that do not interfere with Tenant’s
use of the Demised Premises or liens or encumbrances arising on account of any
act or omission by Tenant or persons acting under Tenant or on account of
Tenant’s failure to perform its obligations under this Lease, or matters set
forth in Exhibit B 1, Landlord shall not voluntarily impose any other lien or
encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and represent to the other that
(a) each is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which such entity was organized; (b) each has the
authority to own its property and to carry on its business as contemplated under
this Lease; (c) each has duly executed and delivered this
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Lease; (d) the execution, delivery and performance by each of this Lease (i) are
within its powers, (ii) have been duly authorized by all requisite action,
(iii) will not violate any provision of law or any order of any court or agency
of government, or any agreement or other instrument to which it is a party or by
which it or any of its property is bound, (iv) will not render it insolvent or
(v) will not result in the imposition of any lien or charge on any of its
property, except by the provisions of this Lease; and (e) the Lease is a valid
and binding obligation of each in accordance with its terms.
C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no
default remains uncured beyond any applicable notice and cure period, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises and all
rights, easements, appurtenances and privileges belonging or in anyway
appertaining thereto during the full term of this Lease and any extension
thereof subject always to the terms of this Lease, provisions of law, and
matters of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other so called quiet enjoyment covenant, whether
express or implied.
21. UNAVOIDABLE DELAYS. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any condition under this
Lease by any strike, lockout, labor dispute, inability to obtain labor or
material, Act of God, governmental restriction, regulation or control, enemy or
hostile governmental action, civil commotion, insurrection, sabotage, fire or
other casualty or by any other event similar to the foregoing and beyond the
control of such party, then the time to perform such obligation or to satisfy
such condition shall be postponed by the period of time consumed by the delay.
Time is of the essence for the performance of all monetary obligations under
this Lease and the foregoing shall never apply to the performance of monetary
obligations.
22. END OF TERM. Upon expiration or other termination of the term of this Lease,
Tenant shall peaceably and quietly quit and surrender the Demised Premises and
all Alterations in the good order and condition Tenant is required to maintain
the same and remove all trade fixtures, equipment and other personal property
whether or not bolted or otherwise attached and all of Tenant’s signs wherever
located; and in all cases shall repair damage that results from such removal.
Any fixtures and equipment that Tenant or Owner/Secured Party does not remove
following the expiration or other termination of the Term of this Lease shall be
deemed to be abandoned by Tenant, shall at once become the property of Landlord,
and may be disposed of in such manner as Landlord shall see fit; and Tenant
shall pay the cost of removal and disposal to Landlord within thirty (30) days
after demand; provided, however, that if this Lease shall be terminated as the
result of a default by Tenant, then trade fixtures and equipment shall not be
deemed abandoned until sixty (60) days after notice of such termination is given
to
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Owner/Secured Party. Tenant or Owner/Secured Party shall have the right at any
time prior to the date such fixtures and equipment shall be deemed abandoned to
remove the same from the Demised Premises. Should Tenant or anyone claiming by,
through or under Tenant hold over in possession after the Expiration Date or
earlier termination of this Lease, such holding over shall not be deemed to
extend the Term or to renew this Lease, but without limiting Landlord’s other
rights and remedies on account of such breach the tenancy thereafter shall
continue as a tenancy at sufferance from month-to-month upon the terms and
conditions herein contained, provided, however that rent shall be charged and
paid at one hundred fifty percent (150%) of the Fixed Annual Rent and Additional
Rent in effect during the twelve (12) month period immediately preceding the
Expiration Date or earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply
with any of its express obligations set forth in this Lease within thirty (30)
days following written notice and opportunity to cure; provided, however,
Landlord will not be in default if said default could not reasonably be cured
within such period of thirty (30) days, and Landlord promptly commences and
thereafter proceeds with due diligence and in good faith to cure such default.
B. In the event that a Fee Mortgagee shall have given written
notice to Tenant that it is the holder of a mortgage covering the Demised
Premises, and provided such notice includes the address to which notices to the
Fee Mortgagee are to be sent, Tenant agrees that in the event it shall give
written notice to Landlord to cure a default of Landlord as provided for in this
Section, Tenant shall give a copy of said notice to the Fee Mortgagee. Tenant
agrees that the Fee Mortgagee may cure or remedy such default within the time
permitted to Landlord pursuant to this Section; provided that in addition the
Fee Mortgagee shall be entitled to such further time as may be reasonably
necessary for the Fee Mortgagee to remove any stay in bankruptcy and/or to
commence and complete foreclosure proceedings or remove any cause beyond the Fee
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in default hereunder, Landlord, after
thirty (30) days notice that Landlord intends to cure such default (but only ten
(10) days notice if such default concerns any breach of Tenant’s insurance
obligations under Section 11), shall have the right, but not the obligation, to
cure such default and Tenant shall pay to Landlord, upon demand, as Additional
Rent, the reasonable cost thereof. Other than such insurance defaults, Landlord
shall not commence to cure any default of such a nature that it could not
reasonably be cured within such period of thirty (30) days, if Tenant commences
to cure same within said period, and thereafter proceeds with reasonable
diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of
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this Section; or if a petition is filed by Tenant (or Guarantor) for insolvency
or for appointment of a receiver, trustee or assignee or for adjudication,
reorganization or arrangement under any bankruptcy act or other applicable law
or if any similar petition is filed against Tenant (or Guarantor) and such
petition is not dismissed within sixty (60) days thereafter; or if Tenant fails
to perform any other covenant or condition under this Lease, Landlord may give
Tenant a written notice specifying the nature of the default of such other
covenant or condition and if Tenant does not, within thirty (30) days after
receipt of such written notice (but only three (3) days in the case of failure
to perform Tenant’s insurance obligations under Section 11), cure such other
default or, if such default is of such a nature that it could not reasonably be
cured within such period of thirty (30) days, and Tenant does not commence and
proceed with reasonable diligence and in good faith to cure such default then,
after the expiration of such thirty (30) day period (or longer period if such
default cannot reasonably be cured within said thirty (30) day period), Landlord
shall have the right, in addition to the rights set forth in the preceding
sentence, to seek damages or an injunction as to such failure to perform, or
after the expiration of such thirty (30) day period Landlord may, but only
during the continuance of such default, send a notice to Tenant terminating this
Lease and reenter the Demised Premises and dispossess Tenant and any other
occupants thereof, remove their effects not previously removed by them, and hold
the Demised Premises as if this Lease had not been made; and Tenant waives the
service of any additional notice of intention to reenter or to institute legal
proceedings to that end. If any payment of Fixed Annual Rent, Additional Rent,
or other sum owing Landlord is not paid within five (5) days after the same is
due, then in addition to all other remedies hereunder Tenant shall pay an
administrative late charge to Landlord equal to five percent (5%) of the overdue
amount in question, which late charge will be due upon demand as Additional
Rent.
B. After a termination, dispossess or removal in accordance with this Section,
(1) the Fixed Annual Rent and Additional Rent shall be paid up to the date of
such dispossess or removal, (2) Landlord may re-let the Demised Premises or any
part or parts thereof either in the name of Landlord or otherwise, for a term or
terms which may, at the option of Landlord, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease,
and (3) Tenant shall pay to Landlord, as liquidated damages, any deficiency
between the Fixed Annual Rent and Additional Rent due hereunder and the amount,
if any, of the rents actually collected by Landlord on account of the new lease
or leases of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the term of this Lease (not including
any Renewal Periods, the commencement of which shall not have occurred prior to
such dispossess or removal). In computing such liquidated damages there shall be
added to said deficiency the expenses which Landlord incurs in connection with
re-letting the Demised Premises, including reasonable attorneys’ and brokerage
fees, tenant inducements such as free rent, moving expense reimbursements,
tenant improvement allowances, brokerage commissions, fees for legal services,
and other expenses of preparing the Demised Premises for reletting (“Reletting
Expenses”). Such Reletting Expenses shall be paid to Landlord within ten
(10) days of demand and all other liquidated damages shall be paid by Tenant in
monthly installments on the dates specified in this Lease for payment of Fixed
Annual Rent and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord shall not
be liable for failure to re-let the Demised Premises or, in the event that the
Demised Premises are re-let, for failure to collect the rent under such
re-letting, unless Landlord shall not have used its commercially reasonable
efforts to re-let the Demised Premises for the reasonable
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rental value thereof and to collect the rent under such re-letting. Landlord
shall use its commercially reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any and all rights granted by
or under any present or future laws to reenter the Demised Premises, to
dispossess Tenant or any other occupant thereof or to remove their effects not
previously removed by them, or to terminate this Lease for any reason or in any
manner other than as set forth in this Section 25. Tenant hereby expressly
waives any and all rights granted by or under any present or future laws to
remain in possession, cure any defaults or redeem its leasehold for any reason
or in any manner other than as set forth in this Section 25. The provisions of
this Section 25 shall survive the early termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five
(5) days after the same is due, such amount shall bear interest from the date
due at the rate of one and one-half (1 1/2%) percent for each month (or ratable
portion thereof) the same remains unpaid. Nothing in this Lease shall limit the
right of Landlord to prove and obtain in proceedings for bankruptcy or
insolvency an amount equal to the maximum allowed by any statute or rule of law
in effect at the time; and Tenant agrees that the fair value for occupancy of
all or any part of the Demised Premises at all times shall never be less than
the Fixed Annual Rent and all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material inducement to
Landlord’s entering into this Lease. If at any time the Guarantor of this Lease
shall sell all or a material portion of its assets or shall merge or consolidate
with another entity and, in either case, if (1) Guarantor (including the
resulting entity of any merger or consolidation) has a tangible net worth
immediately after the transaction that is less than Guarantor’s tangible net
worth immediately prior to the transaction, and (2) Guarantor’s tangible net
worth immediately after the transaction is less than the Minimum Credit Test,
then the transaction shall be a default under this Lease for which there is no
cure period entitling Landlord to exercise all of the rights and remedies under
this Section. If at any time the existing Guarantor desires to assign the
Guaranty to another person and for such person to assume all of the obligations
and liabilities under the Guaranty, and if the proposed successor Guarantor’s
tangible net worth is greater than the Minimum Credit Test, Tenant may present
evidence of such proposed successor Guarantor’s tangible net worth to Landlord
in the form of financial statements for (A) the most recent fiscal year of the
proposed successor Guarantor audited by a nationally recognized firm of
certified public accountants and (B) the most recent fiscal quarters since such
fiscal year certified to by Guarantor’s chief financial officer, together with a
form of Guaranty identical in form to the form of Guaranty attached to this
Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial
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statements to Landlord demonstrating that it continues to meet the Minimum
Credit Test for those provisions of this Lease requiring such as a condition of
being relieved from certain Lease obligations otherwise applicable. As used in
this Lease “Guarantor” means the Guarantor then fully liable under its Guaranty
to Landlord. “Tangible net worth” means the net worth as shown on such financial
statements prepared in accordance with generally accepted accounting principles
consistently applied and disregarding any value attributable to good will or
other intangible assets and amounts owed by shareholders, officers or Affiliates
except to the extent such amounts owed by Affiliates would ordinarily and
customarily be consolidated on Tenant’s financial statements. “Minimum Credit
Test” means a tangible net worth as shown on such fiscal year and fiscal quarter
financial statements of at least Five Hundred Million Dollars ($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements,
or casualty (hereinafter called “Destruction”) to all or any part of the
Building or any other Improvements in the Demised Premises, Tenant shall
commence promptly, and with due diligence continue to restore same to
substantially the same condition as existed immediately preceding the
Destruction, except as otherwise provided in paragraph B of this Section. If the
Destruction is partial, Tenant shall complete the restoration within two hundred
seventy (270) days after the Destructions, subject to Unavoidable Delays. If the
Destruction is total, Tenant shall complete the restoration within eighteen (18)
months following the Destruction, subject to Unavoidable Delays. In no event
shall Fixed Annual Rent or any Additional Rent abate on account of any
Destruction.
B. If, as a result of any Destruction, fifty percent (50%) or more
of the total floor area of the Building is damaged, destroyed or, in Tenant’s
reasonable opinion rendered untenantable, during the last two (2) years of the
Initial Term or during any Renewal Term (but this shall not apply at any other
time), Tenant may elect to terminate this Lease by giving notice to Landlord of
such election on or before the date that is ninety (90) days after the
Destruction, stating the date of termination, which shall be not more than
thirty (30) days after the date on which such notice of termination shall have
been given, and (1) upon the date specified in such notice this Lease and the
term hereof shall cease and expire and (2) any Fixed Annual Rent and Additional
Rent shall be paid until such date of termination and any such amounts paid for
a period after such date of termination shall be promptly refunded to Tenant. In
the event that Tenant elects to terminate this Lease as a result of the
Destruction referenced above, Tenant shall cause all insurance proceeds to be
paid to Landlord including business interruption insurance proceeds.
C. Except in the case of paragraph B of this Section, Insurance proceeds shall
be deposited with a bank or trust company acceptable to Landlord and Tenant and
under the control of Landlord and Tenant, as trustees, or, if the Fee Mortgagee
shall be a bank, trust company, insurance company or other entity engaged in
mortgage lending then such proceeds shall be deposited with such Fee Mortgagee
and shall be held and disbursed by it, as trustee, for restoration in accordance
with customary construction lending practice and procedures. Any excess
insurance proceeds shall be paid to Tenant at the conclusion of the restoration
so long as Tenant is not then in default beyond any applicable cure period.
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27. EMINENT DOMAIN.
A. In the event of an actual taking for any public or quasi-public
use by any lawful power or authority by exercise of the right of condemnation or
of eminent domain or by agreement between Landlord and those having the
authority to exercise such right (hereinafter called “Taking”) of the entire
Building, then (1) this Lease and the Term shall cease and expire as of the date
of vesting of title or transfer of possession, whichever occurs earlier, as a
result of the Taking, and (2) any Fixed Annual Rent and Additional Rent shall be
paid until such termination and any such amounts paid for a period after such
date of termination shall be promptly refunded to Tenant.
B. (1) In the event of a Taking of twenty (20%) or more of the
Demised Premises, or in the event of a Taking resulting in a reduction of twenty
(20%) percent or more of the parking spaces (unless Landlord provides adequate
and sufficient additional contiguous parking areas in substitution therefor
reasonably acceptable to Tenant), or in the event of a Taking resulting in a
divided Building or parking area such that passage between the divided portions
of the parking area is not possible, or in the event of permanent denial of
reasonably adequate access to the Demised Premises or Building on account of a
Taking which in Tenant’s reasonable judgment makes it economically unfeasible to
operate Tenant’s business at the Demised Premises, then Tenant may elect to
terminate this Lease by giving notice of termination to Landlord on or before
the date which is ninety (90) days after receipt by Tenant of notice that the
Taking in question. Said notice of termination shall state the date of
termination, which date of termination shall be not more than thirty (30) days
after the date on which such notice of termination is given to Landlord, and
(a) upon the date specified in such notice of termination this Lease and the
term hereof shall cease and expire, and (b) any Fixed Annual Rent and Additional
Rent shall be paid until the date of termination and any such amounts paid for a
period after such date of termination shall be promptly refunded to Tenant.
(2) If Tenant does not elect to terminate this Lease as aforesaid, then the
award or payment for the Taking shall be used by Tenant for restoration as
hereinafter set forth and Tenant shall promptly commence and with due diligence
continue to restore the portion of the Demised Premises remaining after the
Taking to substantially the same condition and tenantability as existed
immediately preceding the Taking. Tenant shall complete the restoration within
two hundred seventy (270) days after the Destruction, subject to Unavoidable
Delays. Taking proceeds shall be paid, held and disbursed in the same manner as
insurance proceeds under Section 26C and there shall be no abatement or
reduction in Fixed Annual Rent or any Additional Rent. Any taking proceeds
remaining after the restoration is complete shall be divided equally between
Landlord and Tenant.
C. If this Lease is terminated under any provision of this Section 27, so long
as Tenant is not then in breach of this Lease beyond any applicable cure period,
any specific damages that are expressly awarded to Tenant on account of its
relocation expenses and specifically so designated shall belong to Tenant.
Except as provided in the preceding sentence of this paragraph, Landlord
reserves to itself, and Tenant releases and assigns to Landlord, all rights to
damages accruing on account of any Taking or by reason of any act of any public
authority for which damages are payable. Tenant agrees to execute such further
instruments of assignment as may be reasonably requested by Landlord, and to
turn over to Landlord any
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damages that may be recovered in any proceeding or otherwise; and Tenant
irrevocably appoints Landlord as its attorney-in-fact with full power of
substitution so to execute and deliver in Tenant’s name, place and stead all
such further instruments if Tenant shall fail to do so after 10 days notice.
28. THIRD PARTY LITIGATION. If Landlord, Landlord’s adviser or its
mortgagees are made parties to any litigation commenced by or against Tenant by
or against any person claiming through Tenant with respect to the Demised
Premises, Tenant agrees to indemnify Landlord in the manner provided in
Section 38 and in addition pay, as Additional Rent, all costs of Landlord in
connection with such litigation including reasonable counsel fees and litigation
costs, except in the sole instance where Landlord or Tenant have legal claims in
the litigation against one another or where Landlord has been adjudicated in any
litigation to have acted with gross negligence or willful misconduct. Without
limitation, the foregoing includes foreclosure or enforcement of any lien,
attachment or mortgage on the Demised Premises resulting from the act or
omission of Tenant, but shall not include any Fee Mortgage or other lien created
by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby expressly waives any and all
rights granted by or under any present or future laws to levy or distrain for
rent, in arrears, in advance or both, upon all goods, merchandise, equipment,
trade fixtures, furniture and personal property of Tenant or any nominee of
Tenant in the Demised Premises, delivered or to be delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any time and
from time to time, Landlord and Tenant agree to execute and deliver to the
other, within thirty (30) days after such request, a written instrument that may
be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid, (c) stating whether or
not, to the knowledge of the party executing such instrument, the other party
hereto is in default and, if such party is in default, stating the nature of
such default, (d) stating the Commencement Date and Expiration Date, (e) stating
which options to renew the term have been exercised, if any; and (f) any other
information that may reasonably requested by the requesting party and
customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of
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the Senior Vice President of Real Estate, and another shall be delivered to the
attention of the Senior Director of Properties and Administration, all at 2
Paragon Drive, Montvale, New Jersey 07645 or to such other addresses as Tenant
may designate by notice to Landlord. Any such Notice shall be deemed given three
(3) business days after being sent by registered or certified mail, return
receipt requested, postage prepaid, and one business (1) day when sent by
overnight delivery. A party’s attorney may give Notices on behalf of such party.
32. BROKER. Each party represents and warrants to each other there is
no broker, agent, finder or other person with whom it has dealt in connection
with the negotiation, execution and delivery of this Lease other than those
persons named in that certain Agreement of Sale and Leaseback dated as of
November 2, 2010 entered into between Tenant and Landlord (or Affiliates of
each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised Premises (and Landlord’s
interest therein) and Tenant’s leasehold (and Tenant’s interest therein) free
of, and shall within thirty (30) days discharge, any attachment, lien, security
interest or other encumbrance that arises as a result of any act or omission of
Tenant or persons acting by, through or under Tenant. Without limitation, Tenant
will not permit or suffer any mechanic’s or materialmen’s or other liens to
stand against the Demised Premises for any labor or material furnished in
connection with work of any character performed, any services provided or any
other act, omission or obligation on the part or at the direction of Tenant or
persons claiming by, through or under Tenant, and Landlord will not permit any
such liens for work or material furnished the Landlord to stand against said
premises (the foregoing shall not imply that Landlord has any responsibility to
furnish any work or material). However, Landlord and Tenant shall respectively
have the right to contest the validity or amount of any such lien, provided that
the payment of such amount is bonded during the pendency of such contest, but
upon the final determination of such contest the party responsible for such lien
shall immediately pay any judgment rendered with all proper costs and charges
(including reasonable attorneys’ fees) and shall have the lien released at its
own expense. In lieu of bonding either party may obtain other security
acceptable to the other party in such party’s sole discretion. Any contest
hereunder shall be subject to all requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means
Landlord named herein and any subsequent owner of Landlord’s estate hereunder.
Any owner of Landlord’s estate hereunder shall be relieved of all liability
under this Lease after the date that it ceases to be the owner of Landlord’s
estate (except for any liability arising prior to such date) and the party
succeeding to Landlord’s estate shall assume all liability of Landlord arising
from and after it becomes owner of Landlord’s estate. The foregoing shall be
self-operative but Landlord and Tenant shall upon the request of either execute
and deliver an instrument acknowledging the foregoing.
35. ADJOINING OR ADJACENT PROPERTY. Landlord and Tenant shall each
promptly forward to the other any notice or other written communication received
by it from any owner of property adjoining or adjacent to the Demised Premises
or from any municipal or other governmental authority in connection with any
hearing or other administrative proceeding relating to the use of the Demised
Premises or any adjoining or adjacent property. Tenant may, at its sole cost and
expense, in its own name and/or in the name of Landlord, appear in any such
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proceeding. Landlord shall fully cooperate with Tenant (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall, without limitation, make
such appearances and furnish such information as may be reasonably required by
Tenant. Landlord agrees to execute any instruments reasonably requested by
Tenant in connection with any such proceeding.
36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4) the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5) the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Land and Demised Premises prior to,
on and after the Commencement Date, it being acknowledged that Tenant or its
Affiliate owned the Land and Demised Premises prior to the Commencement Date.
Tenant shall provide Landlord with copies of any notices pertaining to any
governmental proceedings or actions under any Environmental Law (including
requests or demands for entry onto the Demised Premises and/or Land for purposes
of inspection regarding the handling, disposal, clean-up or remediation of
Hazardous Materials or claims, penalties, fines or assessments) within fifteen
(15) days after receipt thereof. Landlord shall cooperate with Tenant (so long
as Landlord’s cooperation does not involve incurring obligations or liability or
material expense to Landlord unreimbursed by Tenant) and provide such documents,
affidavits and information as may be reasonably necessary for Tenant to comply
with all Environmental Laws.
C. If required by governmental authority or if Landlord has a reasonable basis
to believe a release of Hazardous Materials may have occurred or a threat of
release exists on or from the Land or Demised Premises or Hazardous Materials
activities have taken place on the Land or Demised Premises that do not conform
to Environmental Laws, then Landlord may, but need not, perform appropriate
testing in a commercially reasonable manner and the reasonable costs thereof
shall be reimbursed to Landlord by Tenant upon demand as Additional Rent. Tenant
shall execute affidavits, representations and the like from time to time at
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Landlord’s request concerning Tenant’s actual knowledge and belief regarding the
presence or absence of Hazardous Materials at the Land and Demised Premises. In
all events, and without limitation, Tenant shall indemnify all Indemnitees,
expressly including without limitation all Fee Mortgagees, in the manner
elsewhere provided in this Lease with respect to Hazardous Materials on or
migrating from the Land and Demised Premises prior to, on and after the
Commencement Date (and for these purposes, the loss indemnified shall include
without limitation any costs of investigation or remediation, and any claim of
personal injury or property damage to any person); provided, however, that such
indemnity shall not include and Tenant shall not be responsible for Hazardous
Materials migrating on to the Land from the land of third parties. The covenants
of this Section shall survive the Term. Tenant shall from time to time upon
Landlord’s request confirm all of the foregoing covenants directly to
mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without
limitation, any subtenant of Tenant), may, from time to time and without
Landlord’s prior written consent, mortgage all or any portion of its right,
title and interest in and to this Lease under one leasehold mortgage at any one
time, or two leasehold mortgages given as part of a single financing
transaction, to an Institutional Lender (each, a “Leasehold Mortgage”), and
assign any or all rights under this Lease and any subleases as collateral
security for such Leasehold Mortgage; provided that all rights acquired under
such Leasehold Mortgage shall be subject to all of the terms, covenants and
conditions of this Lease, and to all rights and interests of Landlord, none of
which terms, covenants or conditions is or shall be waived by Landlord by reason
of the right given to so mortgage such interest in this Lease. In no event shall
Tenant have any right to mortgage or encumber Landlord’s fee interest in the
Demised Premises. The term “Leasehold Mortgage” shall include whatever security
instruments that may be used in the locale of the Demised Premises, such as,
without limitation, deeds of trust, security deeds and conditional deeds, as
well as financing statements, assignment of leases and rents, security
agreements and other documentation required pursuant to the Uniform Commercial
Code. The term “Leasehold Mortgage” shall also include any instruments required
in connection with a sale-leaseback transaction. An “Institutional Lender” is a
bank, trust company, savings and loan association, pension fund, endowment fund,
insurance company, other institutional pool of recognized status or a
governmental authority empowered to make loans or issue bonds or any other
recognized institution regularly engaged in the making of mortgage loans that
has not less than $100,000,000 in assets. The holder of any Leasehold Mortgage
shall be called a “Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but
not limited to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and
if Tenant shall send to Landlord a true copy thereof, together with a notice
specifying the name and address of the Leasehold Mortgagee (“Mortgage Notice”),
Landlord agrees that as long as any such Leasehold Mortgage shall remain
unsatisfied of record or until a notice of satisfaction is given by the
Leasehold Mortgagee to Landlord, the following provisions shall apply:
(1) There shall be no cancellation, surrender or modification of this Lease by
joint action of Landlord and Tenant without the prior consent of the Leasehold
Mortgagee;
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(2) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee. The
Leasehold Mortgagee shall thereupon have the same period to remedy or cause to
be remedied the defaults complained of, and Landlord shall accept such
performance by or at the instigation of such Leasehold Mortgagee as if the same
had been done by Tenant; provided that in the case of defaults that cannot be
cured by the payment of money in addition the Leasehold Mortgagee shall be
entitled to such further time to remedy or cause to be remedied the defaults
complained of as may be reasonably necessary for the Leasehold Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Leasehold Mortgagee’s reasonable
control impairing its ability to cure or remedy, to obtain possession of the
Demised Premises and thereafter to commence and diligently prosecute such cure
or remedy to completion.. Nothing herein shall be construed as requiring a
Leasehold Mortgagee to cure any default. Landlord’s failure to deliver any such
copy to a Leasehold Mortgagee shall not affect the Landlord’s exercise of any
right or remedy under the Lease in any way whatsoever;
(3) If any default shall occur which, pursuant to any provision of
this Lease, entitles Landlord to terminate this Lease, and if before the
expiration of twenty (20) days from the date of the giving of notice of
termination upon such Leasehold Mortgagee, such Leasehold Mortgagee shall have
notified Landlord of its desire to nullify such notice and shall have paid to
Landlord all Fixed Annual Rent and Additional Rent herein provided for which are
then in default, and shall have complied (or caused compliance) with all of the
other requirements of this Lease, if any are then in default, then, in such
event, Landlord shall not be entitled to terminate this Lease and any notice of
termination previously given shall be void and of no effect;
(4) Notwithstanding anything in this Lease to the contrary, any sale
of Tenant’s leasehold interest in any proceeding for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of Tenant’s leasehold interest
in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment;
(5) If not required to be held by the Fee Mortgagee, the proceeds from
any insurance policies or arising from a Taking may be held by any institutional
Leasehold Mortgagee and distributed pursuant to the provisions of this Lease;
(6) The Leasehold Mortgagee may be added to the “Loss Payable
Endorsement” of any and all insurance policies required to be carried by Tenant
hereunder on the condition that the insurance proceeds are to be applied in the
manner specified in this Lease and that the Leasehold Mortgage shall so agree;
except that the Leasehold Mortgage may provide a manner for disposition of such
proceeds as remain after full compliance with the restoration covenants of this
Lease, if any, otherwise payable to Tenant (but not such proceeds, if any,
payable to Landlord, any Fee Mortgagee or jointly to Landlord or Tenant)
pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of
any legal proceeding or arbitration between Landlord and Tenant. Unless the
Leasehold Mortgage provided otherwise, Leasehold Mortgagee shall have the right
to intervene in any such
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proceeding and be made a party to such proceeding, and the parties hereby
consent to such intervention. Landlord’s failure to deliver any such notice to a
Leasehold Mortgagee shall not affect the Landlord’s exercise of any right or
remedy under the Lease in any way whatsoever.
Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease,
Tenant shall assume exclusive control of the Demised Premises and all areas
pertaining thereto including all appurtenances, improvements, utilities, water
bodies, grounds, sidewalks, walkways, driveways and parking facilities, and
Tenant shall bear the sole risk of all related tort liabilities. To the greatest
extent permitted by applicable law, Tenant shall indemnify, save harmless and
defend Landlord, Landlord’s adviser and mortgagees and their respective
officers, directors, managers, members, partners, agents and employees,
(“Indemnitees”) from all liability, claim, damage, cost or loss (including
reasonable fees and litigation costs) arising in whole or in part out of, or in
any manner connected with (i) any injury, loss, theft or damage to any person or
property while on or about the Demised Premises, or (ii) any condition of the
Demised Premises, or the possession and use thereof (including any failure to
vacate at the end of the Term) or any activity permitted or suffered on the
Demised Premises (including Hazardous Materials), or (iii) any breach of any
covenant, representation or certification by Tenant or persons acting under
Tenant, or (iv) any negligent act or omission anywhere by Tenant or persons
acting under Tenant, in each case paying the same to Landlord on demand as
Additional Rent, except to the extent such liability results from the negligence
or willful misconduct of Landlord or the other Indemnitees. Without implying
that other covenants do not survive, the covenants of this Section shall survive
the Term. Tenant shall immediately respond and assume the investigation, defense
and expense of all of the foregoing matters. Landlord or any Indemnitee, at its
sole cost and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY. Notwithstanding anything
contained to the contrary in this Lease, whether express or implied, it is
agreed that Tenant will look only to Landlord’s fee interest in and to the
Demised Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of a breach or default
under this Lease by Landlord with respect to any claim whatsoever related to the
Demised Premises, and no other property or assets of Landlord or of Landlord’s
adviser or of any Fee Mortgagee or its or their managers, members, directors,
officers, trustees, beneficiaries, shareholders, partners, joint venturers
(disclosed or undisclosed) shall be subject to suit or to levy, execution or
other enforcement procedures for the satisfaction of any such judgment (or other
judicial process). No officer, director, manager, member, shareholder, trustee,
beneficiary, partner, agent, attorney or employee of Landlord or of Landlord’s
adviser or of any Fee Mortgagee shall ever be personally or individually liable;
nor shall Landlord, Landlord’s adviser or any Fee Mortgagee or such persons ever
be answerable or liable in any equitable judicial
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proceeding or order beyond the extent of their interest in the Demised Premises.
In no event shall Landlord, Landlord’s adviser or any Fee Mortgagee or any such
persons ever be liable to Tenant for indirect or consequential damages.
40. BOOKS AND RECORDS. Tenant shall at all times keep and maintain
full and correct records and books of account of the operations of the Demised
Premises in accordance with generally accepted accounting principals
consistently applied and shall accurately record and preserve the records of
such operations in accordance with its customary records retention policy.
Notwithstanding that there has been no Percentage Rent Event, Tenant shall
report the gross sales from the Demised Premises to Landlord annually for each
fiscal year of Tenant no later than thirty (30) days following the end of such
fiscal year, such report to be certified by Tenant’s chief financial officer.
Landlord shall keep such information confidential at all times in accordance
with the terms of Exhibit J and may only release such information to Landlord’s
constituent members, and so long as such persons execute and deliver to Tenant a
Confidentiality Agreement with Tenant in the form attached hereto as Exhibit J
(“Confidentiality Agreement”) whether or not Tenant signs such Confidentiality
Agreement, also to its lenders and prospective lenders and to prospective
purchasers of Landlord’s interest in the Demised Premises. Upon an Event of
Default, Tenant shall permit Landlord, Landlord’s accountants and Fee Mortgagees
reasonable access thereto, with the right to make copies and excerpts therefrom
upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by applicable law, Tenant shall have
the right to place on the roof or wall of the Demised Premises at Tenant’s sole
cost and expense, a satellite dish (hereinafter called the “Dish”) for
transmission of data (both receiving and sending) between Tenant’s various
operations and its headquarters in accordance with all laws and governmental
regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant agree and
acknowledge that this Lease has been freely negotiated by Landlord and Tenant.
In any event of any ambiguity, controversy, dispute or disagreement over the
interpretation, validity or enforceability of this Lease or any of its
covenants, terms or conditions, no inference, presumption or conclusion
whatsoever shall be drawn against Tenant by virtue of Tenant’s having drafted
this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The covenants and agreements
contained in this Lease shall bind and inure to the benefit of the successors
and assigns of each party. As used in this Lease “Affiliate” (whether or not
capitalized) shall mean, with respect to any person, any person controlled by,
controlling, or under common control with such person; and “control” shall mean
any direct ownership interest or right through the exercise of voting or
approval rights or otherwise, to exercise decision-making authority generally.
44. CAPTIONS. The captions preceding the Sections of this Lease are
intended only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Lease
shall be invalid or unenforceable, the remainder of the provisions of this Lease
shall not be
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affected thereby and each and every provision of this Lease shall be enforceable
to the fullest extent permitted by law.
46. CHOICE OF LAW/JURISDICTION. This Lease, and the rights and
obligations of the parties hereto, shall be interpreted and construed in
accordance with the laws where the Demised Premises are located (the “State”),
without regard to the State’s internal conflict of law principles. Any disputes
arising out of this Lease or between Landlord and Tenant shall be subject to the
exclusive jurisdiction of the state courts of the State.
47. NO WAIVER. The failure of either party to seek redress for
violation of or to insist upon the strict performance of, any term, covenant or
condition contained in this Lease shall not prevent a similar subsequent act
from constituting a default under this Lease. Without limitation, no written
consent by Landlord or Tenant to any act or omission that otherwise would be a
default shall be construed to permit other similar acts or omissions. Neither
party’s failure to seek redress for violation or to insist upon the strict
performance of any covenant, nor the receipt by Landlord of rent with knowledge
of any breach of covenant, shall be deemed a consent to or waiver of such
breach. No breach of covenant shall be implied to have been waived unless such
is in writing, signed by the party benefiting from such covenant and delivered
to the other party; and no acceptance by Landlord of a lesser sum than the Fixed
Annual Rent, Additional Rent or any other sum due shall be deemed to be other
than on account of the installment of such rent or other sum due. Nor shall any
endorsement or statement on any check or in any letter accompanying any check or
payment be deemed an accord and satisfaction; and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other right or remedy. The delivery of keys (or any
other act) to Landlord shall not operate as a termination of the Term or an
acceptance or surrender of the Demised Premises. The acceptance by Landlord of
any rent following the giving of any default and/or termination notice shall not
be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either Landlord or Tenant
employ an attorney to enforce or defend any of the conditions, covenants, rights
or obligations of this Lease (including, without limitation, a default by either
party), then the prevailing party shall be entitled to all reasonable attorney
fees and all other reasonable out-of-pocket litigation costs (including, but not
limited to filing fees, expert reports and testimony, court costs and other
usual costs of litigation of this type) incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent such waiver is permitted
by law, the parties waive trial by jury in any action or proceeding brought in
connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than contemporaneous instruments executed and delivered
of even date, if any, this Lease contains all of the agreements between Landlord
and Tenant relating in any way to the Demised Premises and supersedes all prior
agreements and dealings between them. There are no oral agreements between
Landlord and Tenant relating to this Lease or the Demised Premises. This Lease
may be amended only by a written instrument executed and delivered by both
Landlord and Tenant. The provisions of this Lease shall bind Landlord and Tenant
and their respective successors and assigns. Where the phrases “persons
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acting under” Landlord or Tenant or “persons claiming through” Landlord or
Tenant or similar phrases are used, the persons included shall be assignees,
sublessees, licensees or other transferees or successors of Landlord or Tenant
as well as invitees or independent contractors of Landlord or Tenant, and all of
the respective employees, servants, contractors, agents and invitees of
Landlord, Tenant and any of the foregoing. As used herein, “monetary default”
shall mean a default that can be substantially cured solely by the payment of
money and nothing more and “non-monetary default” shall mean a default that
cannot be substantially cured solely by the payment of money and northing more.
If either party is granted any extension, election or other option, to be
effective the exercise (and notice thereof) shall be unconditional, irrevocable
and must be made strictly in accordance with the prescribed terms and times;
otherwise its purported exercise shall be void and ineffective. The enumeration
of specific examples of a general provisions or use of the word “including”
shall not be construed as a limitation of the general provision. Unless a
party’s approval or consent is required by the express terms of this Lease not
to be unreasonably withheld, such approval or consent may be withheld in the
party’s sole discretion. The submission of a form of this Lease or any summary
of its terms shall not constitute an offer by Landlord to Tenant; the leasehold
shall only be created and the parties bound when this Lease is executed and
delivered by both Landlord and Tenant. Nothing herein shall be construed as
creating the relationship between Landlord and Tenant of principal and agent, or
of partners or joint venturers or any relationship other than landlord and
tenant. This Lease and all consents, notices, approvals and all other related
documents may be reproduced by any party by any electronic means or by
electronic, photographic or other reproduction process and the originals may be
destroyed; and each party agrees that any reproductions shall be as admissible
in evidence in any proceeding as the original itself (whether or not the
original is in existence and whether or not reproduction was made in the regular
course of business), and that any further reproduction of such reproduction
shall likewise be admissible. If any payment in the nature of interest provided
for in this Lease shall exceed the maximum interest permitted under controlling
law, as established by final judgment of a court, then such interest shall
instead be at the maximum permitted interest rate as established by such
judgment. Landlord and Tenant expressly agree that there are and shall be no
implied warranties of merchantability, habitability, suitability, fitness for a
particular purpose or of any other kind arising out of this Lease, and there are
no warranties or representations other than those expressly set forth in this
Lease. Without limitation, where Tenant in this Lease indemnifies or covenants
for the benefit of present and future Fee Mortgagees, such agreements are for
the benefit of present and future Fee Mortgagees as third party beneficiaries;
and at the request of Landlord, Tenant from time to time will confirm such
matters directly with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be deemed to be one and the same instrument. A
facsimile, email, PDF or electronic signature shall be deemed an original
signature.
52. INCORPORATION OF STATE LAW PROVISIONS. Certain provisions/
sections of this Lease and certain additional provisions/sections that are
applicable or required by laws of the state in which the Demised Premises are
located may be amended, described or otherwise set forth in more detail on
Exhibit I attached hereto, which such Exhibit by this reference, is incorporated
into and made a part of this Lease. In the event of any conflict between such
state law provisions and any provision herein, the state law provisions shall
control.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Lease has been
duly executed under as of the Effective Date.
WITNESS:
WE APP BALDWIN LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Vice President and Secretary
Signature Page to Lease By and Between
WE APP BALDWIN LLC and PATHMARK STORES, INC.
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
[g36891mq067i001.jpg]
294
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EXHIBIT B2
LEGAL DESCRIPTION OF THE LAND
[g36891mq067i002.jpg]
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EXHIBIT B2
TITLE MATTERS AND ENCUMBRANCES
1. Taxes, tax liens, tax sales, water rates, sewer rents and assessments not yet
due and payable.
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: $425,000.00
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
C.4 Re-allocation of Reimbursement Cap. Upon the completion of the Remedial Work
up to $20,000 of the Reimbursement Cap may be allocated to increase the
“Reimbursement Cap” under any other lease between Tenant and any Affiliate of
Landlord (except for that certain lease for space at 9210 Atlantic Avenue,
Queens (Ozone Park), New York).
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and
among , a , and its successors and
assigns, having an office at (hereinafter
together with its successors and assigns called “Mortgagee”), WE APP Baldwin
LLC, a Delaware limited liability company, having an office c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 (hereinafter called “Landlord”) and Pathmark Stores, Inc., a Delaware
corporation having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”).
W I T N E S S E T H:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a promissory
Note secured by, among other securities, a mortgage or deed of trust
(hereinafter, as the same may be amended, supplemented or otherwise modified
from time to time, called the “Mortgage”) covering a parcel or parcels of land
owned by Landlord and described on Exhibit A annexed hereto and made a part
hereof, together with the improvements now or hereafter erected thereon (said
parcel or parcels of land and improvements thereon being hereinafter called the
“Mortgaged Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments being
hereinafter collectively called the “Lease”), Landlord leased to Tenant the
Mortgaged Premises together with the building now or hereafter erected on all or
a portion of said premises (the Mortgaged Premises and the improvements on or to
be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on November
, 2010 in the in Book ,
Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and approves the Lease.
2. Tenant covenants and agrees with Mortgagee that the Lease and
any extensions, renewals, replacements or modifications thereof and Tenant’s
interest in the premises under the Lease are and at all times shall subject and
subordinate to the lien of the Mortgage, without regard to the order of priority
of recording of the Mortgage and the Memorandum of the Lease, subject, however,
to the provisions of this Agreement.
3. Tenant certifies that the Lease is presently in full force and
effect.
4. Mortgagee agrees that so long as the Lease shall be in full
force and effect and so long as Tenant is not in default (beyond any applicable
notice and cure period) in the payment of fixed rent as set forth in the Lease,
or in the performance of any of the terms, covenants or conditions of the Lease
on Tenant’s part to be performed:
A. Tenant shall not be named or joined as a party defendant or
otherwise in any suit, action or proceeding for the foreclosure of the Mortgage
or to enforce any rights under the Mortgage or the bond or note or other
obligations secured thereby unless required by law to do so; and
B. The possession by Tenant of the Demised Premises and the Tenant’s
rights thereto shall not be disturbed, affected or impaired by, nor will the
Lease or the term thereof be terminated or otherwise affected by (i) any suit,
action or proceeding upon the Mortgage or the bond or note or other obligation
secured thereby, or for the foreclosure of the Mortgage or the enforcement of
any rights under the Mortgage or any other documents held by the Mortgagee, or
by any judicial sale or execution or other sale of the Mortgaged Property, or by
any deed given in lieu of foreclosure, or by the exercise of any other rights
given to the Mortgagee by any other documents or as a matter of law, or (ii) any
default under the Mortgage or the bond or note or other obligation secured
thereby.
5. Mortgagee hereby acknowledges and agrees that all trade fixtures
and equipment whether owned by Tenant or any subtenant or leased by Tenant from
a Landlord/Owner in the Demised Premises shall be subject to the provisions of
Section 17 of the Lease.
6. If the Mortgagee shall become the owner of the Mortgaged
Property by reason of foreclosure of the Mortgage or otherwise, or if the
Mortgaged Property shall be sold as a result of any action or proceeding to
foreclose the Mortgage or by a deed given in lieu of foreclosure, the Lease
shall continue in full force and effect, without necessity for executing any new
lease, as a direct lease between Tenant, as tenant thereunder, and the then
owner of the Mortgaged Property, as landlord thereunder, upon all of the same
terms, covenants and provisions contained in the Lease, and in such event:
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A. Tenant shall be bound to such new owner under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) and Tenant hereby agrees to attorn to such new owner
and to recognize such new owner as landlord under the Lease; and
B. Such new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the Renewal Periods, if Tenant elects or has elected to exercise its
options to extend the term) which terms, covenants and provisions such new owner
hereby agrees to assume and perform; provided, however, that such new owner
shall not be (i) obligated to complete any construction work required to be done
by Landlord within or outside of the Demised Premises pursuant to the provisions
of the Lease or to reimburse Tenant for any construction work done by Tenant;
however this provision shall not relieve such new owner from any repair or
maintenance obligations of Landlord expressly set forth in the Lease accruing or
arising following new owner’s acquisition of fee title to the Mortgaged Property
or impair any express setoff rights of Tenant expressly set forth in the Lease
accruing or arising following new owner’s acquisition of fee title to the
Mortgaged Property; (ii) required to make any repairs to the Mortgaged Property
or to the Demised Premises or to perform any other construction or other work,
including without limitation the restoration of the Demised Premises following
any casualty or taking; (iii) liable for the return of security deposits or
letters of credit, if any, paid or delivered by or on behalf of Tenant to
Landlord, except to the extent such sums are actually received by such new owner
(or any Mortgagee if such Mortgagee is not the new owner); (iv) bound by any
payment of rents, additional rents or other sums which Tenant may have paid more
than one (1) month in advance to any prior Landlord unless such sums are
actually received by Mortgagee or if such prepayment shall have been expressly
approved of in writing by such new owner (or any Mortgagee if such Mortgagee is
not the new owner); (v) bound by any agreement amending, modifying or
terminating the Lease made without Mortgagee’s prior written consent; (vi) bound
by any assignment of the Lease or sublease of the Demised Premises, or any
portion thereof, made prior to the time such new owner succeeded to Landlord’s
interest other than if made pursuant to the provisions of the Lease; (vii)
liable on account of any default on the part of Landlord occurring prior to such
new owner’s succeeding to Landlord’s estate; or (viii) subject to any
counterclaims, offsets or defenses that Tenant might have against Landlord.
7. If Landlord shall default in the performance of the Lease Tenant
shall give written notice thereof to Mortgagee and Mortgagee shall have the
right, but not the obligation, to cure such default in accordance with Section
23 of the Lease (and as provided therein the Mortgagee shall be entitled to such
further time to cure as may be reasonably necessary for the Mortgagee to remove
any stay in bankruptcy and/or to commence and complete foreclosure proceedings
or remove any cause beyond the Mortgagee’s reasonable control impairing its
ability to cure or remedy, to obtain possession of the Demised Premises and
thereafter to commence and diligently prosecute such cure or remedy to
completion)
8. Landlord has agreed in the Mortgage and other loan documents
that the rents payable under the Lease shall be paid directly by Tenant to
Mortgagee upon the occurrence of a default by Landlord under the Mortgage or any
other loan document. Accordingly, after notice is given by Mortgagee to Tenant
that the rents under the Lease should be paid to or at the
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications given under this Agreement shall
be in writing and shall be given by registered or certified mail, return receipt
requested, postage prepaid, (a) if to Mortgagee at the address of Mortgagee as
hereinabove set forth or at such other address as Mortgagee may designate by
notice, or (b) if to Landlord at the address of Landlord as hereinabove, or at
such other address as Landlord may designate by notice, or (c) if to Tenant,
then one copy shall be delivered to the attention of the Senior Vice President
of Real Estate of Tenant, another shall be delivered to the attention of General
Counsel of Tenant, and another shall be delivered to the Director of Properties
& Administration of Tenant, all at 2 Paragon Drive, Montvale, New Jersey 07645
or at such other addresses as Tenant may designate by notice. During the period
of any postal strike or other interference with the mail, personal delivery
shall be substituted for registered or certified mail.
10. This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. This Agreement contains the entire agreement between the parties
and cannot be changed, modified, waived or cancelled except by an agreement in
writing executed by the party against whom enforcement of such modification,
change, waiver or cancellation is sought.
12. This Agreement and the covenants herein contained are intended to
run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WE APP BALDWIN LLC, a Delaware
limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a
Delaware corporation
Name:
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
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WITNESS:
LANDLORD:
MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of 2010, before me, the subscriber,
personally appeared to me known, who being by me duly sworn,
did depose and say that he is of the corporation
described in and which executed the within instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me, the undersigned
notary public, personally appeared , proved to me through
satisfactory evidence of identification, which was a [current driver’s license]
[a current U.S. passport] [my personal knowledge], to be the person whose name
is signed on the preceding instrument and acknowledged the foregoing instrument
to be his/her free act and deed as of WE APP Baldwin LLC.
Notary Public
My Commission Expires:
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before me, the
subscriber, personally came Christopher W. McGarry, to me known, who being by me
duly sworn, did depose and say that he is Vice President and Secretary of
Pathmark Stores, Inc., the corporation described in and which executed the
within instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his name
thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
306
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP BALDWIN
LLC, a Delaware limited liability company, having an office at c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and PATHMARK
STORES, INC., a Delaware corporation, having an office at 2 Paragon Drive,
Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
1. For and in consideration of the sum of TEN and no/100 Dollars
($10.00) and of other valuable considerations paid by Tenant to Landlord, the
receipt and sufficiency of which are hereby acknowledged by Landlord, Tenant and
Tenant hereby takes from Landlord that certain parcel of land (hereinafter
called “Land”) described on Exhibit B and the buildings and other improvements
now or hereafter erected on the Land together with the benefit of any and all
easements, appurtenances, rights and privileges now or hereafter belonging
thereto. The land is currently improved by an existing building consisting of
51,798 square feet of space (the “Building), as more particularly shown on the
site plan attached hereto as Exhibit A. The Building and any buildings and
improvements now or hereafter erected on the Land shall be hereinafter called
“Improvements”. The Land and any Improvements now or hereafter erected thereon
are hereinafter collectively called the “Demised Premises.” The Demised Premises
have been leased to Tenant upon and subject to the covenants and agreements set
forth in a certain agreement between Landlord and Tenant bearing even date
herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The original term of the Lease shall
continue to and include the date which is twenty (20) years after the day before
the Commencement Date if the Commencement Date is the first day of a month, or
twenty years (20) years after the last day of the month in which the
Commencement Date occurs if the Commencement Date is not the first day of a
month.
3. Tenant has the right and option to extend the term of the Lease
from the date upon which it would otherwise expire for ten (10) separate renewal
periods of five (5) years each (each such period being known as a “Renewal
Period”). Said right and option, if exercised by Tenant, shall be in accordance
with the terms and conditions of Section 4 of the Lease.
4. The Lease contains the entire agreement between the parties. All
persons are hereby put on notice of the existence of the Lease and are referred
to the Lease for its terms and conditions. The Lease is on file in the offices
of Tenant and the Landlord as hereinabove set forth.
5. This Memorandum of Lease is prepared, signed and acknowledged
solely for recording purposes under the laws of the State of New York, and is in
no way intended to
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change, alter, modify, amend or in any other way affect the rights, duties and
obligations of Landlord and Tenant pursuant to the Lease; it being specifically
understood and agreed between the parties that each has rights, duties and
obligations imposed upon it in the Lease which are not expressly contained
herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP BALDWIN LLC, a Delaware
limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
Name: Craig H. Feldman
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
308
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EXHIBIT B
DEMISED PREMISES
309
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
310
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared , proved to me through
satisfactory evidence of identification, which was a [current driver’s license]
[a current U.S. passport] [my personal knowledge], to be the person whose name
is signed on the preceding instrument and acknowledged the foregoing instrument
to be his/her free act and deed as of WE APP Baldwin
LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
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UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 1764 Grand Avenue, Baldwin, New York, with WE APP Baldwin LLC, a
Delaware limited liability company (“Landlord”). (Terms used herein and not
otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and absolutely guarantees to Landlord
(which shall include its legal representatives, successors and assigns) the due
and punctual performance of each and all of the Tenant’s obligations under or
related to the Lease, including the timely payment of all sums due therein.
Tenant’s obligations hereby guaranteed include, without limitation, those
arising under amendments or modifications to the Lease hereafter entered into by
Tenant and Landlord, all of which shall be so guaranteed even though Guarantor
hereafter does not consent to or approve the same (Guarantor hereby waiving all
rights of consent or approval with respect to such amendments or modifications).
2. Guarantor waives presentment for payment or performance, notice
of nonpayment or performance, notice of default, demand, protest or notice or
acceptance of this Guaranty, any rights Guarantor may have by reason of any
forbearance, modification, amendment, extension or any indulgence whatsoever
that Landlord may grant or to which Landlord and the Tenant may agree with
respect to the Lease, any and all notice of every kind to which Guarantor might
otherwise be entitled with respect to the incurring of any further obligation or
liability by Tenant to Landlord, demand for payment, the presentment of any
instrument for payment, the protest or nonpayment thereof and any and all
defenses whatsoever excepting only Tenant’s performance as required by the terms
of the Lease. Guarantor also waives, unless and until all of the obligations of
Tenant are fully paid and performed, any right to be subrogated in whole or in
part to any right or claim of Landlord against Tenant and any right to require
the marshalling of any assets of the Tenant, which right of subrogation or
marshalling might otherwise arise from any partial payment by the Guarantor. It
is expressly understood and agreed that Guarantor’s liability hereunder shall be
unaffected by (i) any amendment or modification whatsoever of the provisions of
the Lease, (ii) any extension of time for performance under the Lease, (iii) any
delay by Landlord in exercising any right under the Lease or this Guaranty (none
of which shall ever operate as a waiver of such right), or (iv) the release of
Tenant or any other guarantor from performance or observance of any of the
agreements or conditions contained in the Lease by operation of law or
otherwise, whether made with or without notice to Guarantor, including without
limitation any impairment, modification, change, release, rejection,
disaffirmance, or limitation of the liability of Tenant, or any other guarantor
of the Lease, of their estate in
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EXHIBIT F
bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of suretyship as well as of guaranty,
and Landlord, without being required to proceed first against Tenant or any
other person or entity, may proceed directly against Guarantor whenever Tenant
fails to make any payment due or fails to perform any obligation now or
hereafter owed to Landlord without first resorting to or exhausting any other
remedy and without first having recourse to the Lease; provided, however, that
nothing herein contained shall prevent Landlord from suing on the Lease with or
without making Guarantor a party to the suit or from exercising any other rights
thereunder and if such suit, or other remedy, is availed of, only the net
proceeds therefrom, after deduction of all Landlord’s Costs of Collection
(defined below) shall be applied in reduction of the amount then due on this
Guaranty.
4. Guarantor agrees to pay to Landlord, on demand, all costs and
expenses, including reasonable attorneys’ fees and litigation expenses, which
Landlord may incur in the enforcement of Tenant’s obligations under the Lease or
the liability of Guarantor hereunder (“Costs of Collection”). “Costs of
Collection” includes, without limitation, all out of pocket expenses incurred by
the Landlord’s attorneys and all costs incurred by Landlord including, without
limitation, costs and expenses associated with travel on behalf of Landlord,
which costs and expenses are related to or in respect of Landlord’s efforts to
collect and/or to enforce any of the obligations and/or to enforce any of its
rights, remedies or powers against or in respect of either or both Tenant or
Guarantor (whether or not suit is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has
either examined the Lease or has had an opportunity to examine the Lease and has
waived the right to examine; (ii) that it (and the individual acting on its
behalf) has the full power, authority and legal right to execute and deliver
this Guaranty; (iii) that this Guaranty is a binding legal obligation and is
fully enforceable against Guarantor in accordance with its terms; (iv) that
there is no action or proceeding pending or, to its knowledge, threatened
against Guarantor before any court or administrative agency which might result
in any material adverse change in its business or condition or in its assets;
(v) that neither the execution nor delivery of this Guaranty nor fulfillment of
nor compliance with the terms and provisions thereof will constitute a default
under or result in the creation of any lien, charge or encumbrance upon any
property or assets of Guarantor under any agreement or instrument to which it is
now a party or by which Guarantor may be bound; and (vi) that Guarantor is the
sole owner of all the common stock of Tenant and expects to derive financial
benefit from the Lease.
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6. This Agreement shall be binding upon Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Landlord and its legal representatives, successors and assigns, and is
irrevocable until released in writing by Landlord. Each and every right, remedy
and power hereby granted to Landlord or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by
Landlord at any time and from time to time. The validity, construction and
performance of this Guaranty shall be governed by the laws of the State where
the Demised Premises are located (the “State”), without regard to conflict of
law principles. If any clause or provision of this Guaranty should be held
illegal or invalid by any court, the invalidity of such clause or provisions
shall not affect any of the remaining clauses or provisions hereof. In case any
agreement or obligation contained in this Guaranty should be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Guarantor, as the case may be, to the full extent
permitted by law. Each and every default hereunder or under the Lease shall give
rise to a separate cause of action hereunder. The obligations and liabilities of
hereunder shall be joint and several with any other guarantees given to Landlord
in connection with the Lease. This Guaranty may be amended only by instrument in
writing executed and delivered by both Landlord and Tenant. The provisions of
this Guaranty shall bind Guarantor and its respective successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns. This
Guaranty and all consents, notices, approvals and all other documents relating
hereto may be reproduced by photographic, microfilm, microfiche or other
reproduction process and the originals thereof may be destroyed; and each party
agrees that any reproductions shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not reproduction was made in the regular course
of business) and that any further reproduction of such reproduction shall
likewise be admissible in evidence.
7. Guarantor consents to and agrees that the courts of the State
shall have personal jurisdiction over Guarantor for any action brought on this
Guaranty including the right to grant judgment against Guarantor personally
together with interest on any judgment obtained by Landlord at the interest rate
set forth in the Lease for late payments (but if the same shall be unlawful for
any reason, then at the highest permissible interest rate). Guarantor further
agrees and consents that venue, if any, for any such action shall be as set
forth in the Lease. Guarantor waives and relinquishes any and all rights to
removal of any such action to any other court. Guarantor also waives trial by
jury in any judicial proceeding involving any matter in any way arising out of
or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand made under
this Guaranty shall be in writing and shall be deemed given at the earlier of
(i) the date received or (ii) three (3) business days after the date deposited
in a United States Postal Service Depository, postage prepaid first class
certified or registered mail, return receipt requested, addressed to Guarantor
or Landlord, as the case may be, at the respective addresses set forth opposite
their names below:
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Landlord:
WE APP Baldwin LLC
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303
Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., a Maryland corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
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EXHIBIT H
INSURANCE
This Exhibit G shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this
Exhibit shall prevail and govern the Lease.
1. INSURANCE.
A. Coverage. Tenant shall purchase and maintain insurance during the entire Term
of the Lease and any period Tenant (or any party claiming by, through or under
Tenant) occupies any portion of the Demised Premises, for the benefit of the
Tenant and Landlord (as their interest may appear) with terms and coverages
reasonably satisfactory to Landlord, and with insurers having a minimum A.M.
Best rating of at least A/X, and with such increases in limits as Landlord may
from time to time reasonably request, but initially Tenant shall maintain the
following coverages in the following amounts:
(1) Commercial General Liability Insurance naming Landlord,
Landlord’s management, leasing and development agents and Landlord’s
mortgagee(s) from time to time as additional insureds, with coverage for
premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Property insurance covering property damage and business
interruption for the entire Demised Premises. Covered property shall include the
Building, boilers and machinery, all tenant improvements, office furniture,
trade fixtures, office equipment, merchandise and all other items Tenant’s
property on the Demised Premises. Such insurance shall name Landlord and Fee
Mortgagee(s) from time to time as additional loss payees as their interests may
appear. Such insurance shall be written on an “all risk” of physical loss or
damage basis including but not limited to the perils of fire, extended coverage,
windstorm, vandalism, malicious mischief, terrorism, sprinkler leakage, flood,
windstorm and earthquake, for the full replacement cost value of the covered
items and other endorsements as Landlord shall reasonably request from time to
time and in amounts that meet any co insurance clause of the policies of
insurance with a deductible amount not to exceed $750,000. Such insurance shall
include rent continuation coverage of no less than twelve (12) months. Such
policy or policies shall provide that the proceeds of any loss shall be payable
to Landlord and Tenant and to the holder (as its interest may appear) of any Fee
Mortgage to which this Lease is subordinate so long as such holder and future
holders of such Fee Mortgage are obligated to apply proceeds of insurance in the
manner provided for in this Lease.
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EXHIBIT H
(3) Workers’ Compensation Insurance and Employers Liability
Insurance with statutory limits and automobile liability insurance (coverage
must include owned, leased, hired and non owned vehicles) with a limit of at
least $1,000,000 Combined Single Limit-Bodily Injury & Property Damage.
(4) Tenant shall purchase or shall cause each Tenant contractor
performing work on the Demised Premises to carry insurance protecting against
claims set forth below which may arise out of or result from the contractor’s
operations on the Premises and naming Landlord, Landlord’s management, leasing
and development agents as additional insureds for Premises Operations and
Completed Operations. Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s compensation, disability
benefit and other similar employee benefit acts—in amounts as required by law;
(2) claims for damages because of bodily injury, occupational sickness
or disease, or death of his employees or any other person and other personal
injury and motor vehicle liability — Public Liability - Single Limit (Combined)
Per Occurrence. Bodily Injury/Property Damage $1,000,000 w/ $2,000,000
General/Completed Operations Aggregate. Automobile Liability - Single Limit
(Combined) Per Occurrence Bodily Injury and Property Damage $1,000,000. Excess
Liability Umbrella covering all above items $5,000,000 per Occurrence; and
(3) claims for damages, other than the work of the contractor itself,
because of injury to or destruction of tangible property, including loss of use
resulting therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
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PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark.
“Gross Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $45,500,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise
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would be made at, in, on, about, from or with respect to the Premises, nor the
amount of any cash or credit refund made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures which are not a part of Tenant’s stock in
trade. Each sale upon installment, credit or layaway shall be treated as a sale
for the full price in the month during which such sale shall be made,
irrespective of the time when Tenant shall receive payments from its customers,
and no deduction shall be allowed for uncollectible payment by customer or
uncollected or uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior
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month to Landlord without demand, provided that if such amount exceeds the
Percentage Rent that would be payable with respect to such month if Percentage
Rent were calculated on the basis of Gross Sales for all months elapsed in the
then current calendar year, Tenant shall not be required to pay any amount on
account of such month unless and until such amount shall later be payable as
part of the annual adjustment. Upon receipt by Landlord of each Annual Statement
of Gross Sales there shall be an adjustment between Landlord and Tenant to the
end that Landlord shall receive the exact amount of Percentage Rent due
hereunder. Any overpayments by Tenant hereunder shall be credited against the
next payments due under this Section. Any underpayments by Tenant shall be
immediately due and payable. With respect to the calendar year in which the Term
ends, the adjustments shall be prorated for the portion of the calendar year
included in the Term.
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EXHIBIT I
LOCAL LAW ADDENDUM
(Attached)
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Lease Addendum (NY)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Baldwin LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”). Capitalized
terms used in this Addendum without definition shall have the meanings set forth
in the Lease. This Addendum is to be construed as supplemental to, and part of,
the Lease. In the event of any inconsistency between the Lease and this
Addendum, the terms and provisions of this Addendum shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Construction Lien. Nothing in the Lease shall be deemed to
constitute Landlord’s consent or request, express or implied, by inference or
otherwise: (a) to any contractor, subcontractor, laborer, or material supplier
for the performance of any labor or the furnishing of any materials for any
improvement, alteration or repair of the Demised Premises; or (b) to subject the
Demised Premises to any mechanic’s lien.
2. Maintenance of Property.
A. To the extent the Lease requires Tenant to maintain or repair any
sidewalk, Tenant shall perform all obligations of Landlord (and shall indemnify
Landlord in the manner provided in the Lease against any liability of Landlord
arising) under New York City Administrative Code §2- 710 and -711.
B. Tenant shall not clean any window in or about the Demised Premises
(or require, permit, suffer, or allow any window to be cleaned) from the outside
in violation of New York Labor Law §202.
3. Landlord’s Remedies.
A. Notwithstanding anything to the contrary in New York Real Property
Actions and Proceedings Law (N.Y. RPAPL) §711(2) or any other applicable law or
rule of procedure, Landlord’s acceptance of any partial payment on account of
rent, even if such payment has been acknowledged or receipted for in writing,
shall not be deemed to constitute Landlord’s “express consent in writing to
permit Tenant to continue in possession” as referred to in N.Y. RPAPL
§711(2) unless Landlord’s written acceptance expressly states that: “Landlord
consents to Tenant’s remaining in possession notwithstanding nonpayment of
rent.” Any such part payment shall merely constitute a payment on account and
nothing more, and shall not limit any rights or remedies of Landlord.
B. Tenant expressly waives and releases, for itself and for any
person claiming by, through or under Tenant, any rights that Tenant or such
person may have under New York civil practice law and rules §220 1 (or any other
law or rule of procedure, including any provisions of the New York real property
actions and proceedings law), in connection with any holdover proceedings or
other action or proceeding regarding this Lease, Tenant’s rights as a tenant of
the Building, or Tenant’s possession of the Demised Premises.
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4. Casualty. The provisions of Article 26 of this Lease on
destruction shall be deemed an express agreement as to damage or destruction of
the Demised Premises by fire or other casualty. New York Real Property Law §227
(and any similar or successor statute), providing for such a contingency in the
absence of an express agreement, shall have no application.
5. Redemption. Tenant specifically waives the right of redemption
provided for in New York Real Property Actions and Proceedings Law §761, and any
similar or successor statute.
6. Landmarks. Tenant acknowledges and agrees that it shall not seek
or support a landmark designation, unless such landmark designation is
specifically sought by Landlord, pursuant to the New York City Administrative
Code §25-322 for the Demised Premises or any part of the Building.
7. Zoning Lot. Tenant acknowledges that Tenant has no rights to or
interest in any development rights, “air rights,” rights to construct additional
floor area, or comparable rights appurtenant to the Demised Premises. Tenant
consents, without further consideration, to Landlord’s utilization or transfer
of such rights in any manner. Tenant shall promptly execute and deliver any
instruments that Landlord may reasonably request, including without limitation,
instruments merging zoning lots, or waiving Tenant’s right to join in such
instruments, to evidence such acknowledgment and consent. The provisions of this
paragraph are and shall be deemed to be and shall be construed as Tenant’s
express waiver and release of any interest Tenant may have as a “party in
interest” (as defined under the definition of “Zoning Lot” in § 12-10 of the New
York City Zoning Resolution or any similar or successor statute) in the Demised
Premises.
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EXHIBIT J
Confidentiality Agreement
(Attached)
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CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as
of , 2010 (the “Effective Date”) by and between [TENANT],
a , having an address at (“Company”) and ,
a , having an address
at (“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without regard to conflict of law principles. The exclusive
jurisdiction for any disputes concerning this Agreement shall be the Superior
Court of New Jersey,
325
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Bergen County, and the parties hereby submit to such jurisdiction and waive all
defenses relating to jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
326
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
327
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EXHIBIT B-5
LEASE FORM FOR QUEENS, NY — OZONE PARK
328
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KEY NO:
LEASE
BY AND BETWEEN
WE APP OZONE PARK LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
9210 ATLANTIC AVENUE, QUEENS, NY
329
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
9
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
11
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
14
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
15
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
16
26.
DESTRUCTION
18
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
330
--------------------------------------------------------------------------------
TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
28
45.
INVALIDITY OF CERTAIN PROVISIONS
28
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
29
51.
COUNTERPARTS
29
52.
EXHIBITS
30
53.
INCORPORATION OF STATE LAW PROVISIONS
30
331
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP OZONE PARK LLC, a Delaware limited liability
company with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue
Extension, Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley
(hereinafter called “Landlord”), and PATHMARK STORES, INC., a Delaware
corporation, having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”). This Lease is guaranteed by The Great Atlantic &
Pacific Tea Company, Inc., a Maryland corporation (“Guarantor”) pursuant to a
guaranty of even date herewith (as the same may be amended, supplemented or
modified from time to time, the “Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made a
part hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Special Shopping Center Provisions;
K. Exhibit J, Local Law Addendum; and
L. Exhibit K, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from
Landlord certain premises commonly known as 9210 Atlantic Avenue, Queens, New
York and labeled
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“Demised Premises” and shown crosshatched on Exhibit A and the improvements now
or hereafter erected on said premises (said premises and improvements being
hereinafter collectively called the “Demised Premises” or “Building”), together
with the benefit of and subject to any and all easements or other matters or
record, appurtenances, rights and privileges now or hereafter belonging thereto
including those described in Exhibit B2. The Demised Premises is located within
that certain parcel of land (hereinafter called the “Land”) described on Exhibit
B-1 and contains 62,668 square feet of space. Any buildings and improvements now
or hereafter erected on the Land, including the Demised Premises, shall be
hereinafter called “Improvements”. The Land and the Improvements shall be
hereinafter collectively called the “Shopping Center”. Landlord hereby grants to
Tenant the right and easement to use, in common with other permitted tenants of
the Shopping Center, those portions of the Shopping Center not included within
the Improvements shown on Exhibit A and intended for common use, including,
without limitation, parking areas, roads, streets, drives, tunnels, passageways,
landscaped areas, open and enclosed malls, exterior ramps, walks and arcades
(hereinafter collectively called the “Common Area”) for access and egress to and
customer parking for the Demised Premises.
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the “Commencement
Date”) on the Effective Date and shall continue to and include the date (the
“Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 1 2 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten (10)
separate consecutive renewal periods of five (5) years each (each such period
being hereinafter called a “Renewal Period”) upon the same terms and conditions
as are herein set forth except the rent for such Renewal Period shall be as
provided in Section 5 below; provided, however, that at the time of so electing
to extend and also at the time any Renewal Period commences Tenant is not in
333
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default beyond any applicable notice and cure period, and this Lease is then in
full force and effect. If Tenant fails timely so to exercise its option for any
Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the Term of this Lease shall be automatically extended for the
Renewal Period(s) covered by the Renewal Notice without execution of an
extension or renewal lease. If Tenant shall not have given notice of such
election to Landlord by such date in respect of any Renewal Period, Landlord
shall (unless notice shall have been given as hereinafter specifically
permitted) give notice to Tenant that Tenant has failed to give notice of such
election to Landlord (hereinafter called the “Option Notice”). Tenant’s time to
give notice of such election shall continue until the date which is sixty (60)
days after receipt of the Option Notice. Landlord shall not give the Option
Notice prior to the date which is four hundred twenty-five (425) days before the
Expiration Date. If Landlord shall not have given the Option Notice prior to the
date which is four hundred twenty-five (425) days before the beginning of the
next succeeding Renewal Period, the term of this Lease shall be extended beyond
the Expiration Date to the date which is four hundred twenty-five (425) days
after the date on which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
2,820,060.00
$
235,005.00
6-10
$
2,961,063.00
$
246,755.25
11-15
$
3,109,116.15
$
259,093.01
16-20
$
3,264,571.96
$
272,047.66
First Renewal Period
21-25
$
3,427,800.56
$
285,650.05
Second Renewal Period
26-30
$
3,599,190.58
$
299,932.55
Third Renewal Period
31-35
$
3,779,150.11
$
314,929.18
Fourth Renewal Period
36-40
$
3,968,107.62
$
330,675.63
334
--------------------------------------------------------------------------------
Fifth Renewal Period
41-45
$
4,166,513.00
$
347,209.42
Sixth Renewal Period
46-50
$
4,374,838.65
$
364,569.89
Seventh Renewal Period
5 1-55
$
4,593,580.58
$
382,798.38
Eighth Renewal Period
56-60
$
4,823,259.61
$
401,938.30
Ninth Renewal Period
61-65
$
5,064,422.59
$
422,035.22
Tenth Renewal Period
66-70
$
5,317,643.72
$
443,136.98
B. All Fixed Annual Rent shall be payable by Tenant in equal monthly
installments in advance on the first day of every calendar month during the Term
of this Lease (and any Renewal Periods), and shall be payable at the office of
the Landlord first above set forth or at such other address as Landlord shall
have given in a notice to Tenant) in current U.S. currency by check drawn on a
clearinghouse bank and payable directly to Landlord (or, if requested by
Landlord from time to time by electronic fund transfer, to an account designated
by Landlord). Rent for a part of a month shall be prorated on a daily basis and
paid on the Commencement Date. Further, the rent for the first full month shall
be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water,
335
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sewer, telephone, refuse disposal, and other charges for utilities and services
supplied to the Demised Premises, insurance costs, amounts due under any title
encumbrance matter described in Exhibit B2, and all costs of cleaning,
maintaining, repairing and replacing the Demised Premises or any portion thereof
and of complying with all laws now existing or hereafter enacted including all
Environmental Laws (defined below). Any cost, expense or obligation directly
relating to the Demised Premises that is not expressly declared in this Lease to
be that of Landlord shall be deemed to be an obligation of Tenant to be
performed by Tenant at Tenant’s sole expense, and to the greatest extent
permitted by law Tenant shall indemnify and defend Landlord against, and hold
Landlord harmless from, the same, and Tenant’s liability for the payment and
performance of such amounts and obligations that shall arise during the Term is
hereby expressly provided to survive the expiration of the Term or early
termination of this Lease. Fixed Annual Rent, Additional Rent, and all other
sums payable hereunder by Tenant, shall be paid without notice or demand, and
without set off, counterclaim, recoupment, abatement, suspension, deduction, or
defense (other than payment) whatsoever. Except as otherwise expressly set forth
in this Lease with respect to certain events of casualty in Section 26 or
condemnation in Section 27, Tenant shall in no event have any right to terminate
this Lease, and any right so to terminate (or to abate, suspend, set off or
otherwise deduct from Fixed Annual Rent or Additional Rent) under applicable law
is hereby waived to the greatest extent permitted by law. It is the intention of
the parties that the obligations of Tenant hereunder shall be separate and
independent covenants and shall not be discharged or otherwise affected by any
law or regulation now or hereafter applicable to the Demised Premises or any
other restriction on Tenant’s use, and that Fixed Annual Rent, Additional Rent,
and all other sums payable by Tenant hereunder shall continue to be payable in
all events, and that the obligations of Tenant hereunder shall continue
unaffected throughout the Term. Landlord, at its sole cost and expense, shall be
responsible for the following: (i) payment of any amounts relating to Fee
Mortgages or other encumbrances or liens created by Landlord, (ii) management
fees, administrative costs, professional fees and any other costs incidental to
its fee ownership of the Demised Premises; and (iii) and cost, expense, or
liability resulting from the negligent or willful misconduct of Landlord, its
employees or agents. For the avoidance of doubt, Tenant shall be responsible for
all costs, expenses and obligations of Landlord in that certain Lease (as
amended or otherwise modified from time to time, the “Ground Lease”) dated as of
August 7, 1987 by and between 7 Horizon Corp. and Pathmark Stores, Inc. f/k/a
Supermarkets General Corporation, as affected by that certain Declaration of
Easement dated August 7, 1987, as further affected by that certain Letter
Agreement dated March 28, 1990, as further affected by that certain Assignment
of Lessor’s Interest in Lease dated March 29, 1990, as further affected by that
certain Renewal Notice dated July 25, 2007, as further amended by that certain
First Amendment to Lease dated September 10, 2010.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
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6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of
a supermarket, drugstore, automated teller machine, bank, all other uses
customary and incidental to a supermarket and, so long as the Minimum Credit
Test (defined in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised Premises
or Tenant or both, foreseen or unforeseen, and whether or not the same interfere
with Tenant’s occupancy. Tenant shall procure all approvals, licenses and
permits, in each case promptly giving Landlord true and complete copies of the
same and all applications therefor. Tenant shall never overload any of the
Building systems, including the floors and mechanical, electrical and structural
systems, and shall also keep the Demised Premises equipped with appropriate
safety appliances and comply with all requirements of insurance and of insurance
inspection or rating bureaus. Tenant shall not itself, nor shall Tenant permit
or suffer persons acting under Tenant to, either with or without negligence,
injure, overload, deface, damage or otherwise harm the Demised Premises or any
part thereof or use the Demised Premises contrary to any law or in a manner
likely to create any nuisance. It is intended that Tenant bear the sole risk of
all present or future laws affecting the Demised Premises, and Landlord shall
not suffer any reduction in any rent on account of the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land, or (iii) materially and adversely
affects the Shopping Center including without limitation any other tenant of the
Shopping Center. Notwithstanding anything to the contrary or otherwise set forth
herein, any encumbrance on the Demised Premises shall be subject to any
requirements imposed by any Fee Mortgage (provided that Landlord shall
reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s
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intention to discontinue permanently the operation of its business in the
Demised Premises or any part of the Demised Premises or discontinues the
operation of its business in the Demised Premises or any part of the Demised
Premises for a period of one (1) year for any reason (other than Destruction or
Taking that pursuant to the applicable provisions of this Lease entitles Tenant
to terminate this Lease), then Landlord may terminate this Lease as to the
Demised Premises, or if applicable, the part of the Demised Premises with
respect to which Tenant has given notice of its intention to discontinue, or in
which Tenant has discontinued, its operations, by thirty (30) days’ written
notice to Tenant of Landlord’s election to terminate this Lease (or, if
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as applicable, resuming operations of
its business in the Demised Premises within twenty-five (25) days after receipt
of Landlord’s notice or by rescinding its notice of its intention to discontinue
its business in writing to Landlord delivered within twenty-five (25) days after
receipt of Landlord’s notice.
7. TAXES.
A. Definitions
(1) “Taxes” means all taxes, special and
general assessments, water rents, rates and charges, sewer rents and other
governmental impositions and charges of every kind and nature whatsoever,
extraordinary as well as ordinary, including rent and/or occupancy taxes and
each and every installment thereof that shall or may during the term of this
Lease, become due and payable, or liens upon the Demised Premises or any part
thereof, together with all interest and penalties thereon, under or by virtue of
all present or future laws, ordinances, requirements, orders, directives,
rules or regulations of the Federal, State, County, Town and City Governments
and of all other governmental authorities whatsoever (all of which shall also be
included in the term “Taxes” as heretofore defined). Taxes shall exclude,
without limitation, any income, franchise, gross receipts, corporation, capital
levy, excess profits, revenue, rent, rollback, inheritance, devolution, gift,
estate, payroll or stamp tax by whatsoever authority imposed or howsoever
designated or any tax upon the sale, transfer and/or assignment of Landlord’s
title or estate.
(2) “Tax Year” shall mean the real estate
fiscal tax year designated by the local taxing authorities.
(3) “Proportionate Share” as used in this Lease shall be a fraction, the
numerator of which shall be the total ground floor area of Tenant’s Demised
Premises as set forth in Section 2(A) and the denominator of which shall be the
total floor area of such Demised Premises and all other tenant space in the
Shopping Center. The parties agree that as of the Commencement Date, Tenant’s
Proportionate Share of Taxes is 79.64%.
B. Beginning on the Commencement Date, for each Tax Year during the term of this
Lease, Tenant shall pay to Landlord Tenant’s Proportionate Share of Taxes
monthly in advance in amounts reasonably estimated by Landlord in the same
manner as Tenant pays Common Area Costs under Exhibit I. No later than thirty
(30) days after the due date for
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payment of Taxes, Landlord will send to Tenant a receipted tax bill or other
evidence reasonably indicating Taxes have been paid. If any additions or
deletions of other tenant space in the Shopping Center have been made, then
Landlord will also send Tenant a statement setting forth in reasonable detail
the calculation of Tenants Proportionate Share. If, by law, any Taxes may, at
the option of the taxpayer, be paid in installments (whether or not interest
shall accrue on the unpaid balance thereof), Landlord shall exercise the option
to pay the same in installments and any interest charged thereon by the taxing
authority shall also then be included in the Taxes for which Tenant is obligated
to reimburse Landlord.
C. Any Taxes for a real estate fiscal
tax period, a part of which is included within the term of this Lease (including
any Renewal Periods) and a part of which is included in a period of time before
pr after Term shall be equitably adjusted between Landlord and Tenant. Landlord
shall timely file for and seek to obtain any and all tax abatements Landlord
reasonably determines are available as a result of any subsequent re-development
of the Shopping Center. Any such re-development shall be consistent with the
terms and provisions of this Lease.
D. Landlord shall promptly notify Tenant
of any increase in real estate assessment, tax rate and/or Taxes. Tenant may at
its option, and at its cost and expense, in its own name and/or in the name of
Landlord protest, appeal or institute such other proceedings as it may consider
appropriate to effect a reduction or abatement in such real estate assessment,
tax rate, or Taxes. Landlord shall fully cooperate with Tenant and in
furtherance of the foregoing, shall, without limitation, furnish on a timely
basis, such data, documents, information and assistance and make such
appearances as may be required by Tenant. Landlord agrees to execute all
necessary instruments in connection with any such appeal or other proceedings.
If any such proceeding may only be instituted and maintained by Landlord then
Landlord shall do so at the request of Tenant. Landlord shall not settle any
such appeal or other proceeding without obtaining Tenant’s prior written
approval in each instance, such approval not to be unreasonably withheld,
conditioned or delayed.
E. In the event a refund is obtained
for any Tax Year in which Tenant paid Tenant’s Proportionate Share of Taxes,
Landlord shall promptly pay Tenant its proportionate share of such refund net of
the reasonable expenses incurred in obtaining such refund. If Tenant has filed
for and obtains such refund it may also deduct all reasonable expenses incurred
in doing so from such refund and pay over the balance of such refund promptly to
Landlord.
F. In the event that any fee mortgagee
(“Fee Mortgagee”) requires the escrow of Taxes or insurance premiums, Tenant
shall pay to such Fee Mortgagee in escrow, on the first day of each and every
month during the term of this Lease, one twelfth (1/12) of all estimated charges
for the ensuing twelve (12) month period as reasonably estimated by the Fee
Mortgagee based on current bills for same. Tenant shall deposit at least ten
(10) days prior to the first date on which any interest or penalty will accrue
such additional amounts as may be necessary so that there shall at all times be
sufficient funds in escrow to pay such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall have the right
to install, maintain and replace in, on or in front of any Improvement or
location on the Demised Premises or in any part thereof such signs and
advertising matter as Tenant, and with Tenant’s consent, any such assignee or
subtenant of Tenant may desire, provided that Tenant shall comply
339
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with any applicable requirements of governmental authorities having jurisdiction
and shall obtain any necessary permits for such purposes. As used in this
Section, the word “sign” shall be construed to include any placard, pylon, logo,
light or other advertising symbol or object, irrespective or whether same be
temporary or permanent. All signs shall be Tenant’s personal property and shall
be maintained and removed by Tenant upon termination of this Lease at Tenant’s
sole expense.
9. TRUE LEASE. It is the intent of
Landlord and Tenant and the parties agree that this Lease is a true lease and
that this Lease does not represent a financing agreement. Each party shall
reflect the transaction represented hereby in all applicable books, records, and
reports (including income tax filings) in a manner consistent with “true lease”
treatment rather than “financing” treatment.
10. REPAIRS. Tenant shall, at all times
during the Term of this Lease, and at its own cost and expense, keep and
maintain or cause to be kept and maintained in repair and good condition the
Building and improvements at any time erected on the Demised Premises, except
that Tenant shall not be obligated to make any of the foregoing arising out of
or in any way connected with (1) fire or other insured casualty Landlord is
required to restore under Section 26, or (2) the negligence of Landlord, its
agents, employees, or contractors. Without limitation, Tenant shall perform the
Remedial Work described in Exhibit C. Landlord shall not be required to furnish
services or facilities or to make any improvements, repairs, replacements or
alterations in or to the Demised Premises whatsoever during the Term of this
Lease. Without limiting the generality of the foregoing, Tenant shall be
responsible for the entire Demised Premises and shall manage, maintain, repair,
replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment exclusively serving the Demised
Premises, keeping the Demised Premises and all improvements and appurtenances in
at least as good condition as on the Commencement Date. Without limitation,
Tenant shall provide all cleaning, painting, janitorial services, rubbish
disposal, periodic exterior waterproofing treatments to the Building, and window
caulking. Tenant shall provide a copy of all current vendor contracts, if any,
relating to the foregoing to Landlord at least annually and from time to time
otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost
and expense insurance policies insuring against loss by fire, lightning, the
perils of extended coverage and malicious mischief covering the Demised Premises
and the other Improvements in the Demised Premises and other perils as more
fully described in Exhibit G.
B. So long as Tenant performs its
obligations in Paragraph A of this Section, Landlord hereby waives all rights of
recovery against Tenant and any other occupant(s) of the Demised Premises and
any of their agents and employees for damage or destruction to any and
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all of the Improvements, including without limitation, the Building, arising out
of fire or other casualty whether or not caused by acts or negligence of the
aforementioned persons. Tenant hereby waives all rights of recovery against
Landlord, its agents and employees for damage or destruction to any and all of
the Improvements, including without limitation, the Building and to Tenant’s
trade fixtures, equipment and inventory arising out of fire or other casualty
whether or not caused by the acts or negligence of Landlord, its agents or
employees.
C. Tenant shall maintain at its own cost
and expense public liability and other insurance in accordance with the
requirements of Exhibit G.
D. Any insurance required to be provided
by Tenant pursuant to this Lease may be provided by blanket insurance covering
the Demised Premises and other locations of Tenant, provided such blanket
insurance complies with all of the other requirements of this Lease with respect
to the type of insurance covered by blanket policies. If Tenant elects to insure
the Demised Premises under any blanket insurance policy, Tenant shall furnish to
Landlord a certificate of insurance showing the Demised Premises as a location
insured under any such blanket insurance policy to the extent of the limits
required in Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as
to which Tenant has received a notice containing such mortgagee’s name and
address a duplicate original copy or certificate of the policies of insurance
required to be carried by Tenant.
E. Notwithstanding anything to the
contrary contained herein, Tenant may carry any required insurance on trade
fixtures and equipment described in Section 17 under a program of self-insurance
or to carry insurance with deductibles in excess of part or all of the amounts
of insurance required under Exhibit G hereunder.
F. If Tenant fails to perform any
covenant in this Section and such failure continues for more than three (3) days
after written notice, then, without limiting any of Landlord’s other rights and
notwithstanding any other provision of this Lease concerning notice and cure of
defaults, Landlord may but need not obtain such insurance, and Tenant shall pay
the cost thereof upon demand as Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with and shall
from time to time conform the Demised Premises to every applicable requirement
of law, duly constituted authority, Board of Fire Underwriters having
jurisdiction or of the carriers of all insurance on the Demised Premises (all of
the foregoing being hereinafter called “Legal Requirements”). Tenant shall have
the right upon giving notice to Landlord to contest any obligations imposed upon
Tenant pursuant to the provisions of this Section and to defer compliance during
the pendency of such contest, if the failure of Tenant to so comply will not
subject Landlord to civil or criminal penalty or liability. Landlord shall
cooperate with Tenant in such contest (so long as Landlord’s cooperation does
not involve incurring obligations or liability or material expense to Landlord
unreimbursed by Tenant) and shall execute any documents reasonably required in
furtherance of such purpose. Tenant shall not apply for any change in zoning
applicable to the Land or the Demised Premises without Landlord’s prior written
consent, not to be unreasonably withheld, conditioned or delayed.
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13. ALTERATIONS. Tenant may at its own
expense from time to time, during the term hereof, make such alterations,
additions, improvements and changes, structural or otherwise (hereinafter called
“Alterations”), in and to the Demised Premises which it may deem necessary or
desirable, provided such Alterations shall not reduce the value of the Demised
Premises. Tenant, in making any Alterations, shall use materials of equal or
better quality than those used in the construction of the Demised Premises and
comply with all Legal Requirements. Tenant shall obtain or cause to be obtained
all building permits, licenses, temporary and permanent certificates of
occupancy and other governmental approvals that may be required in connection
with the making of Alterations. Landlord shall cooperate with Tenant in the
obtaining thereof (so long as Landlord’s cooperation does not involve
(a) incurring obligations or liability or material expense to Landlord
unreimbursed by Tenant or (b) breach of any covenants binding on Landlord or the
Demised Premises, including, without limitation, any mortgage) and shall execute
any documents required in furtherance of such purpose. Tenant may, but shall not
be obligated to, remove any Alteration so long as such removal does not
materially and adversely affect any heating, ventilating, mechanical,
electrical, structural, roof or life safety elements of the Building and Tenant
shall repair all damage that results from such removal and restore the Demised
Premises to a functional condition (including the filling of all floor and wall
holes, the removal of all disconnected wiring back to junction boxes and the
replacement of all damaged ceiling tiles). Upon completion of any Alteration
that is not Cosmetic Work, Tenant shall promptly deliver to Landlord plans
showing such Alteration as built. “Cosmetic Work” shall mean painting, carpeting
and wall coverings and the like and the addition or deletion of interior non
structural partitions, provided such work does not materially and adversely
affect any roof, structural, mechanical, electrical, utility, fire protection or
life safety systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall
permit Landlord to enter upon the Demised Premises at all reasonable times
approved by Tenant to examine the Demised Premises, and during the six (6) month
period preceding the Expiration Date, to exhibit the Demised Premises to
prospective tenants, provided that Landlord shall not unreasonably interfere
with the conduct of business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any
and all utility services to the Demised Premises, including, without limitation,
telecommunications, water, gas, electricity and fuel used by it in the Demised
Premises. Tenant shall pay all sewer charges assessed by the municipal authority
having jurisdiction. The failure or interruption of any utility services shall
be at Tenant’s sole risk and Landlord shall not suffer any reduction in any rent
on account thereof.
B. Tenant shall have the sole right to
apply for, claim and receive any rebate, reimbursement, credit, or payment from
any utility company providing service to the Building resulting from Tenant’s
installation of energy saving equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall become
subject and subordinate to the lien of any Fee Mortgagee of the entire fee
interest of the Demised Premises, and any renewals, modifications or extensions
thereof,
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provided that a Subordination, Non Disturbance and Attornment Agreement (“SNDA”)
substantially in the form annexed hereto as Exhibit D (or a reasonably
equivalent form that is reasonably acceptable to Tenant and the applicable Fee
Mortgagee) is executed, acknowledged and delivered by such Fee Mortgagee to
Tenant. If the Fee Mortgagee requires that this Lease have priority over such
mortgage, Tenant shall, upon request of the Fee Mortgagee, execute, acknowledge
and deliver to the Fee Mortgagee an agreement acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment
whether owned by Tenant or leased by Tenant from a Lessor/Owner (hereinafter
called the “Equipment Lessor”) installed in the Demised Premises, regardless of
the manner or mode of attachment, shall be and remain the property of Tenant or
any such Equipment Lessor and may be removed by Tenant or any such Equipment
Lessor at any time. In no event (including a default under this Lease) shall
Landlord have any liens, rights or claims in Tenant’s or Equipment Lessor’s
trade fixtures and equipment and Landlord agrees to execute and deliver to
Tenant and Equipment Lessor, within ten (10) days after request therefor, any
document reasonably required by Tenant or Equipment Lessor in order to evidence
the foregoing, so long as the same is reasonably acceptable to Landlord and any
Fee Mortgagee. Tenant shall promptly repair all damage to the Building caused by
the removal of any such trade fixtures or equipment. Notwithstanding anything to
the contrary in this Lease, the following shall not constitute trade fixtures or
equipment for purposes of this Lease and neither Tenant nor any Equipment Lessor
shall own or have any right to remove the same (and, without limiting the
generality of the foregoing, the following shall not be subject to the
provisions of this Paragraph A or Paragraph B of this Section 17): (i) the HVAC
system, plumbing, alarm, electric, life safety and other building systems used
to operate the Building or maintain the certificate of occupancy, and (ii) any
“fixtures” as such term is defined in the applicable Uniform Commercial Code.
B. In the event Tenant shall enter into
any arrangement to finance all or any portion of its trade fixtures or equipment
either before or after the installation thereof in the Demised Premises and
whether such financing shall be in the form of a mortgage, financing agreement,
equipment lease, equipment sale leaseback or otherwise and in the event the
lessor or secured party thereunder shall provide written notice to Landlord that
it requires a copy of any default sent by Landlord to Tenant under this Lease
also to be sent to such person (hereinafter called the “Owner/Secured Party”),
then Landlord upon receipt of such requirement shall simultaneously send a copy
of any default notice to such Owner/Secured Party at the address furnished to
Landlord; provided that Landlord’s failure to deliver any such copy to the
Owner/Secured Party shall not affect Landlord’s exercise of any right or remedy
under this Lease in any way whatsoever. The copy of any such default notice
shall be sent to such Owner/Secured Party in the same manner as notices are
required to be sent and in the same manner as such notice is being sent to
Tenant hereunder. Landlord further agrees that any such Owner/Secured Party
shall have the right, but not the obligation, to remedy or cure any default of
Tenant under this Lease within the same period of time granted to Tenant to
remedy or cure any such default under this Lease.
C. All trade fixtures and other personal
property (which term shall include without limitation food and inventory) of any
person that is located on the Demised Premises
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shall be at the sole risk of Tenant. Landlord shall not be liable for any loss
or damage to person or property resulting from any accident, theft, vandalism or
other occurrence on the Demised Premises, including damage resulting from water,
wind, ice, steam, explosion, fire, smoke, chemicals, the rising of water or
leaking or bursting of pipes or sprinklers, defect, failure or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this
Section, Tenant may sublet all or any part of the Demised Premises, or license
the use of any portion thereof or assign this Lease, but Tenant and Guarantor
shall nevertheless continue to remain liable hereunder. Any assignee of the
Lease and any sublessee or licensee of all or substantially all of the Demised
Premises shall become jointly and severally liable to Landlord, and any such
transferee shall upon Landlord’s request execute and deliver an instrument in
confirmation thereof. In the case of any assignment of this Lease or any
sublease or licensee of all or substantially all of the Demised Premises, Tenant
shall promptly deliver to Landlord a true and complete copy of the transfer
instruments. No transfer of all or any portion of the Demised Premises or
Landlord’s consent thereto shall be deemed a waiver of the provisions of this
Section, or a release of Tenant or any Guarantor.
B. So long as the Minimum Credit Test is
not met (however the following provisions of this paragraph B shall not apply at
any time when the Minimum Credit Test is met), Tenant shall not assign this
Lease or sublet or license all or substantially all of the Demised Premises to
any transferee.
C. If Tenant assigns this Lease, Landlord, when giving notice to said assignee
with respect to any default, shall also give a copy of such notice upon Tenant
originally named herein or its successor of whom Landlord shall have been given
written notice (being herein called “Original Tenant”), and no notice of default
shall be effective as against a Tenant until a copy thereof is given to the
Original Tenant. The Original Tenant shall have the same period after the giving
of such notice to cure such default as is given to Tenant under this Lease. If
this Lease terminates or this Lease and the Term hereof cease and expire because
of a default of such assignee, Landlord shall promptly give the Original Tenant
notice thereof. The Original Tenant shall have the option, to be exercised by
notifying Landlord in writing within thirty (30) days after receipt by the
Original Tenant of Landlord’s notice, to cure any default and become Tenant
under a new lease for the remainder of the term of this Lease (including any
Renewal Periods if applicable) upon all of the same terms and conditions of this
Lease as it may have been amended by agreement between Landlord and Original
Tenant, provided, however, that at the time of making any such election Original
Tenant cures all defaults under the Lease. In the event Original Tenant assigns
this Lease and it shall thereafter be rejected in a bankruptcy or similar
proceeding brought by or against such assignee, a new lease identical to this
Lease shall be entered into between Landlord and Original Tenant, provided that
Original Tenant cures any monetary defaults and any other defaults that are
capable of being cured. Any new lease created under this Section shall commence
on the date of termination or rejection of this Lease, as applicable.
Notwithstanding the foregoing, if Landlord, in its sole discretion delivers to
the Original Tenant and Guarantor a release as to all liability under this Lease
as theretofore amended, the Original Tenant shall not have the foregoing option.
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D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test is met,
Landlord shall, within thirty (30) days following Tenant’s request, deliver to
Tenant a recognition and attornment agreement following the form attached hereto
as Exhibit D and otherwise subject to Landlord’s reasonable approval, executed
and acknowledged by Landlord, for the benefit of such subtenant; provided that
such subtenant executes and delivers an instrument reasonably satisfactory to
Landlord confirming that such subtenant is jointly and severally liable under
this Lease. Further, Landlord shall, within ten (10) days after Tenant’s
request, shall request its Fee Mortgagee to deliver to Tenant an SNDA for the
benefit of any such subtenant (and Landlord shall reasonably cooperate with
Tenant, at no out of pocket cost to Landlord, in connection with obtaining any
requisite consent from any Fee Mortgagee).
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that
Landlord is the owner of the fee simple of the Demised Premises and that other
than any mortgages held by Fee Mortgagees that have provided an SNDA to Tenant
in accordance with this Lease or such other liens or encumbrances that do not
interfere with Tenant’s use of the Demised Premises or liens or encumbrances
arising on account of any act or omission by Tenant or persons acting under
Tenant or on account of Tenant’s failure to perform its obligations under this
Lease, or matters set forth in Exhibit B 1, Landlord shall not voluntarily
impose any other lien or encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and
represent to the other that (a) each is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which such entity was
organized; (b) each has the authority to own its property and to carry on its
business as contemplated under this Lease; (c) each has duly executed and
delivered this Lease; (d) the execution, delivery and performance by each of
this Lease (i) are within its powers, (ii) have been duly authorized by all
requisite action, (iii) will not violate any provision of law or any order of
any court or agency of government, or any agreement or other instrument to which
it is a party or by which it or any of its property is bound, (iv) will not
render it insolvent or (v) will not result in the imposition of any lien or
charge on any of its property, except by the provisions of this Lease; and
(e) the Lease is a valid and binding obligation of each in accordance with its
terms.
C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no default
remains uncured beyond any applicable notice and cure period, Tenant shall
peaceably and quietly have, hold and enjoy the Demised Premises and all rights,
easements, appurtenances and
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privileges belonging or in anyway appertaining thereto during the full term of
this Lease and any extension thereof subject always to the terms of this Lease,
provisions of law, and matters of record to which this Lease is or may become
subordinate. This covenant is in lieu of any other so called quiet enjoyment
covenant, whether express or implied.
21. UNAVOIDABLE DELAYS. If either party shall
be prevented or delayed from punctually performing any obligation or satisfying
any condition under this Lease by any strike, lockout, labor dispute, inability
to obtain labor or material, Act of God, governmental restriction, regulation or
control, enemy or hostile governmental action, civil commotion, insurrection,
sabotage, fire or other casualty or by any other event similar to the foregoing
and beyond the control of such party, then the time to perform such obligation
or to satisfy such condition shall be postponed by the period of time consumed
by the delay. Time is of the essence for the performance of all monetary
obligations under this Lease and the foregoing shall never apply to the
performance of monetary obligations.
22. END OF TERM. Upon expiration or other
termination of the term of this Lease, Tenant shall peaceably and quietly quit
and surrender the Demised Premises and all Alterations in the good order and
condition Tenant is required to maintain the same and remove all trade fixtures,
equipment and other personal property whether or not bolted or otherwise
attached and all of Tenant’s signs wherever located; and in all cases shall
repair damage that results from such removal. Any fixtures and equipment that
Tenant or Owner/Secured Party does not remove following the expiration or other
termination of the Term of this Lease shall be deemed to be abandoned by Tenant,
shall at once become the property of Landlord, and may be disposed of in such
manner as Landlord shall see fit; and Tenant shall pay the cost of removal and
disposal to Landlord within thirty (30) days after demand; provided, however,
that if this Lease shall be terminated as the result of a default by Tenant,
then trade fixtures and equipment shall not be deemed abandoned until sixty (60)
days after notice of such termination is given to Owner/Secured Party. Tenant or
Owner/Secured Party shall have the right at any time prior to the date such
fixtures and equipment shall be deemed abandoned to remove the same from the
Demised Premises. Should Tenant or anyone claiming by, through or under Tenant
hold over in possession after the Expiration Date or earlier termination of this
Lease, such holding over shall not be deemed to extend the Term or to renew this
Lease, but without limiting Landlord’s other rights and remedies on account of
such breach the tenancy thereafter shall continue as a tenancy at sufferance
from month-to-month upon the terms and conditions herein contained, provided,
however that rent shall be charged and paid at one hundred fifty percent (150%)
of the Fixed Annual Rent and Additional Rent in effect during the twelve (12)
month period immediately preceding the Expiration Date or earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply with any of its
express obligations set forth in this Lease within thirty (30) days following
written notice and opportunity to cure; provided, however, Landlord will not be
in default if said default could not reasonably be cured within such period of
thirty (30) days, and Landlord promptly commences and thereafter proceeds with
due diligence and in good faith to cure such default.
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B. In the event that a Fee Mortgagee shall have given written notice to Tenant
that it is the holder of a mortgage covering the Demised Premises, and provided
such notice includes the address to which notices to the Fee Mortgagee are to be
sent, Tenant agrees that in the event it shall give written notice to Landlord
to cure a default of Landlord as provided for in this Section, Tenant shall give
a copy of said notice to the Fee Mortgagee. Tenant agrees that the Fee Mortgagee
may cure or remedy such default within the time permitted to Landlord pursuant
to this Section; provided that in addition the Fee Mortgagee shall be entitled
to such further time as may be reasonably necessary for the Fee Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Fee Mortgagee’s reasonable control
impairing its ability to cure or remedy, to obtain possession of the Demised
Premises and thereafter to commence and diligently prosecute such cure or remedy
to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in
default hereunder, Landlord, after thirty (30) days notice that Landlord intends
to cure such default (but only ten (10) days notice if such default concerns any
breach of Tenant’s insurance obligations under Section 11), shall have the
right, but not the obligation, to cure such default and Tenant shall pay to
Landlord, upon demand, as Additional Rent, the reasonable cost thereof. Other
than such insurance defaults, Landlord shall not commence to cure any default of
such a nature that it could not reasonably be cured within such period of thirty
(30) days, if Tenant commences to cure same within said period, and thereafter
proceeds with reasonable diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of this Section; or if a petition is filed by Tenant
(or Guarantor) for insolvency or for appointment of a receiver, trustee or
assignee or for adjudication, reorganization or arrangement under any bankruptcy
act or other applicable law or if any similar petition is filed against Tenant
(or Guarantor) and such petition is not dismissed within sixty (60) days
thereafter; or if Tenant fails to perform any other covenant or condition under
this Lease, Landlord may give Tenant a written notice specifying the nature of
the default of such other covenant or condition and if Tenant does not, within
thirty (30) days after receipt of such written notice (but only three (3) days
in the case of failure to perform Tenant’s insurance obligations under
Section 11), cure such other default or, if such default is of such a nature
that it could not reasonably be cured within such period of thirty (30) days,
and Tenant does not commence and proceed with reasonable diligence and in good
faith to cure such default then, after the expiration of such thirty (30) day
period (or longer period if such default cannot reasonably be cured within said
thirty (30) day period), Landlord shall have the right, in addition to the
rights set forth in the preceding sentence, to seek damages or an injunction as
to such failure to perform, or after the expiration of such thirty (30) day
period Landlord may, but only during the continuance of such default, send a
notice to Tenant terminating this Lease and reenter the Demised Premises and
dispossess Tenant and any other occupants thereof, remove their effects not
previously removed by them, and hold the Demised Premises as if this Lease had
not been made; and Tenant waives the service of any additional notice of
intention to reenter or to institute legal proceedings to that end. If any
payment of
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Fixed Annual Rent, Additional Rent, or other sum owing Landlord is not paid
within five (5) days after the same is due, then in addition to all other
remedies hereunder Tenant shall pay an administrative late charge to Landlord
equal to five percent (5%) of the overdue amount in question, which late charge
will be due upon demand as Additional Rent.
B. After a termination, dispossess or
removal in accordance with this Section, (1) the Fixed Annual Rent and
Additional Rent shall be paid up to the date of such dispossess or removal,
(2) Landlord may re-let the Demised Premises or any part or parts thereof either
in the name of Landlord or otherwise, for a term or terms which may, at the
option of Landlord, be less than or exceed the period which would otherwise have
constituted the balance of the term of this Lease, and (3) Tenant shall pay to
Landlord, as liquidated damages, any deficiency between the Fixed Annual Rent
and Additional Rent due hereunder and the amount, if any, of the rents actually
collected by Landlord on account of the new lease or leases of the Demised
Premises for each month of the period which would otherwise have constituted the
balance of the term of this Lease (not including any Renewal Periods, the
commencement of which shall not have occurred prior to such dispossess or
removal). In computing such liquidated damages there shall be added to said
deficiency the expenses which Landlord incurs in connection with re-letting the
Demised Premises, including reasonable attorneys’ and brokerage fees, tenant
inducements such as free rent, moving expense reimbursements, tenant improvement
allowances, brokerage commissions, fees for legal services, and other expenses
of preparing the Demised Premises for reletting (“Reletting Expenses”). Such
Reletting Expenses shall be paid to Landlord within ten (10) days of demand and
all other liquidated damages shall be paid by Tenant in monthly installments on
the dates specified in this Lease for payment of Fixed Annual Rent and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Landlord to collect the deficiency for any
subsequent month by a similar proceeding. Landlord shall not be liable for
failure to re-let the Demised Premises or, in the event that the Demised
Premises are re-let, for failure to collect the rent under such re-letting,
unless Landlord shall not have used its commercially reasonable efforts to
re-let the Demised Premises for the reasonable rental value thereof and to
collect the rent under such re-letting. Landlord shall use its commercially
reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any
and all rights granted by or under any present or future laws to reenter the
Demised Premises, to dispossess Tenant or any other occupant thereof or to
remove their effects not previously removed by them, or to terminate this Lease
for any reason or in any manner other than as set forth in this Section 25.
Tenant hereby expressly waives any and all rights granted by or under any
present or future laws to remain in possession, cure any defaults or redeem its
leasehold for any reason or in any manner other than as set forth in this
Section 25. The provisions of this Section 25 shall survive the early
termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five (5) days
after the same is due, such amount shall bear interest from the date due at the
rate of one and one-half (1 1/2%) percent for each month (or ratable portion
thereof) the same remains unpaid. Nothing in this Lease shall limit the right of
Landlord to prove and obtain in proceedings for bankruptcy or insolvency an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time; and Tenant agrees that the fair value for occupancy of all or any part
of the
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Demised Premises at all times shall never be less than the Fixed Annual Rent and
all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material inducement to
Landlord’s entering into this Lease. If at any time the Guarantor of this Lease
shall sell all or a material portion of its assets or shall merge or consolidate
with another entity and, in either case, if (1) Guarantor (including the
resulting entity of any merger or consolidation) has a tangible net worth
immediately after the transaction that is less than Guarantor’s tangible net
worth immediately prior to the transaction, and (2) Guarantor’s tangible net
worth immediately after the transaction is less than the Minimum Credit Test,
then the transaction shall be a default under this Lease for which there is no
cure period entitling Landlord to exercise all of the rights and remedies under
this Section. If at any time the existing Guarantor desires to assign the
Guaranty to another person and for such person to assume all of the obligations
and liabilities under the Guaranty, and if the proposed successor Guarantor’s
tangible net worth is greater than the Minimum Credit Test, Tenant may present
evidence of such proposed successor Guarantor’s tangible net worth to Landlord
in the form of financial statements for (A) the most recent fiscal year of the
proposed successor Guarantor audited by a nationally recognized firm of
certified public accountants and (B) the most recent fiscal quarters since such
fiscal year certified to by Guarantor’s chief financial officer, together with a
form of Guaranty identical in form to the form of Guaranty attached to this
Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial statements to Landlord demonstrating that it continues
to meet the Minimum Credit Test for those provisions of this Lease requiring
such as a condition of being relieved from certain Lease obligations otherwise
applicable. As used in this Lease “Guarantor” means the Guarantor then fully
liable under its Guaranty to Landlord. “Tangible net worth” means the net worth
as shown on such financial statements prepared in accordance with generally
accepted accounting principles consistently applied and disregarding any value
attributable to good will or other intangible assets and amounts owed by
shareholders, officers or Affiliates except to the extent such amounts owed by
Affiliates would ordinarily and customarily be consolidated on Tenant’s
financial statements. “Minimum Credit Test” means a tangible net worth as shown
on such fiscal year and fiscal quarter financial statements of at least Five
Hundred Million Dollars ($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements, or casualty
insured under casualty insurance Landlord is obligated to carry under Exhibit G
(hereinafter called “Destruction”) to all or any part of the Improvements
including but not limited to those portions, if any, of the Common Area as is
insurable under such insurance, Landlord shall
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commence promptly, and with due diligence continue subject to Section 21, to
restore same to substantially the same condition as existed immediately
preceding the Destruction to the extent permitted by applicable law, the
availability of insurance proceeds (so long as Landlord has maintained the
casualty insurance Landlord is obligated to carry under Exhibit G) and except as
otherwise provided in this Section. If the Destruction is partial, Landlord
shall complete the restoration within two hundred seventy (270) days after the
Destruction subject to Section 21. If the Destruction is total, Landlord shall
complete the restoration within eighteen (18) months after the Destruction,
subject to Section 21. If the Destruction is to the Demised Premises and is
total, then Tenant shall have the right to request that Landlord to make changes
to the Tenant’s Building within one (1) month after such Destruction as are
reasonably and mutually agreed to by Landlord and Tenant (which changes may not
expand the footprint of Tenant’s Building unless Landlord and Tenant so agree
and agree to such extra rent therefore, such agreement to be in the form of an
amendment to this Lease) and provided that Tenant deposits with Landlord at the
time of commencement of such restoration work the extra cost reasonably
estimated to Landlord of the design and construction of such Tenant requested
changes.
B. If, as a result of any Destruction,
(1) fifty (50%) percent or more of the total floor area of the Tenant’s Building
is damaged, destroyed or, in Tenant’s reasonable opinion, rendered untenantable
when less than two (2) years remain under the term of this Lease and, if said
term shall have been extended, then this provision shall apply only to the last
two (2) years of the then existing Renewal Period, or (2) Landlord refuses to
restore because of the non-availability of insurance proceeds, then Landlord or
Tenant may elect to terminate this Lease by giving notice to the other of such
election on or before the date which is ninety (90) days after the Destruction,
stating the date of termination, which shall be not more than thirty (30) days
after the date on which such notice of termination shall have been given, and
(1) upon the date specified in such notice this Lease and the term hereof shall
cease and expire and (2) any Fixed Annual Rent and Additional Rent shall be paid
until such date of termination and any such amounts paid for a period after such
date of termination shall be promptly refunded to Tenant upon demand. Landlord’s
notice of termination hereunder shall be null and void if (x) in the case of
(1) above, Tenant, within thirty (30) days after receipt of such notice from
Landlord, is then permitted by the terms of this Lease to give, and shall give,
notice of the exercise of an option to extend the term for the next succeeding
Renewal Period; or (y) in the case of (2) above, Tenant, within thirty (30) days
after receipt of such notice from Landlord, elects, at its sole option, to
receive an assignment of any available insurance proceeds and restore the
Demised Premises at Tenant’s sole cost.
C. If, as a result of any Destruction,
Tenant loses the use of the whole or any part of the Tenant’s Building or the
whole or any part of the Common Area, Fixed Annual Rent and Additional Rent
shall nevertheless continue to be paid hereunder, it being agreed that Tenant
may insure against any such loss of business and Landlord shall have no such
insurance obligation.
D. Insurance proceeds allocable to any partial or total Destruction of Tenant’s
Building shall be deposited in trust with a bank or trust company acceptable to
Tenant and under the control of Landlord and Tenant, as trustees, or, if the Fee
Mortgagee on the Shopping Center shall be a bank, trust company or insurance
company, or other entity engaged in mortgage lending then such proceeds shall be
deposited with such Fee Mortgagee and shall be held and
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disbursed by it, as trustee, for restoration in accordance with customary
construction lending practice and procedures and as otherwise required by this
Lease.
27. EMINENT DOMAIN.
A. In the event of a taking for any
public or quasi-public use by any lawful power or authority by exercise of the
right of condemnation or of eminent domain or by agreement between Landlord and
those having the authority to exercise such right (hereinafter called “Taking”)
of the entire Tenant’s Building, then (1) this Lease and the term hereof shall
cease and expire as of the date of vesting of title or transfer of possession,
whichever occurs earlier, as a result of the Taking, and (2) any Fixed Annual
Rent and Additional Rent paid for a period after such date of termination shall
be refunded to Tenant upon demand.
B. 1. In the event of a Taking of any
part of the Demised Premises, or in the event of a Taking resulting in a
reduction of twenty (20%) percent or more of the parking spaces (unless Landlord
provides adequate and sufficient additional contiguous parking areas in
substitution therefor reasonably acceptable to Tenant), or in the event of a
Taking resulting in a divided Shopping Center or parking area such that passage
between the divided portions of the parking area is not possible, or in the
event of permanent denial of reasonably adequate access to the Shopping Center
on account of a Taking which in Tenant’s reasonable judgment makes it
economically unfeasible to operate Tenant’s business at the Demised Premises,
then Tenant may elect to terminate this Lease by giving notice of termination to
Landlord on or before the date which is ninety (90) days after receipt by Tenant
of notice that the Taking in question. Said notice of termination shall state
the date of termination, which date of termination shall be not more than thirty
(30) days after the date on which such notice of termination is given to
Landlord, and (a) upon the date specified in such notice of termination this
Lease and the term hereof shall cease and expire, and (b) any Fixed Annual Rent
and Additional Rent shall be paid until the date of termination and any such
amounts paid for a period after such date of termination shall be promptly
refunded to Tenant upon demand.
2. If Tenant does not elect to terminate this Lease as aforesaid, then the award
or payment for the Taking shall be paid to and used by Landlord for restoration
as hereinafter set forth and Landlord shall promptly commence and with due
diligence continue to restore the portion of the Common Area and the Demised
Premises remaining after the Taking to substantially the same condition and
tenantability as existed immediately preceding the Taking, subject to applicable
law, Section 21 and the Taking proceeds received by Landlord. If the Taking
occurs to Tenant’s Building, Tenant shall have the same right to request changes
to the Tenant’s Building in the course of such restoration as Tenant has in
Section 26. Landlord shall complete the restoration within two-hundred seventy
(270) days after the Taking subject to Section 21. Taking proceeds shall be
paid, held and disbursed in the same manner as insurance proceeds under
Section 26C and there shall be no abatement or reduction in Fixed Annual Rent or
any Additional Rent. Any taking proceeds remaining after the restoration is
complete shall be divided equally between Landlord and Tenant.
C. If this Lease is terminated under any provision of this Section 27, so long
as Tenant is not then in breach of this Lease beyond any applicable cure period,
any specific damages that are expressly awarded to Tenant on account of its
relocation expenses and
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specifically so designated shall belong to Tenant. Except as provided in the
preceding sentence of this paragraph, Landlord reserves to itself, and Tenant
releases and assigns to Landlord, all rights to damages accruing on account of
any Taking or by reason of any act of any public authority for which damages are
payable. Tenant agrees to execute such further instruments of assignment as may
be reasonably requested by Landlord, and to turn over to Landlord any damages
that may be recovered in any proceeding or otherwise; and Tenant irrevocably
appoints Landlord as its attorney-in-fact with full power of substitution so to
execute and deliver in Tenant’s name, place and stead all such further
instruments if Tenant shall fail to do so after 10 days notice.
28. THIRD PARTY LITIGATION. If Landlord,
Landlord’s adviser or its mortgagees are made parties to any litigation
commenced by or against Tenant by or against any person claiming through Tenant
with respect to the Demised Premises, Tenant agrees to indemnify Landlord in the
manner provided in Section 38 and in addition pay, as Additional Rent, all costs
of Landlord in connection with such litigation including reasonable counsel fees
and litigation costs, except in the sole instance where Landlord or Tenant have
legal claims in the litigation against one another or where Landlord has been
adjudicated in any litigation to have acted with gross negligence or willful
misconduct. Without limitation, the foregoing includes foreclosure or
enforcement of any lien, attachment or mortgage on the Demised Premises
resulting from the act or omission of Tenant, but shall not include any Fee
Mortgage or other lien created by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby
expressly waives any and all rights granted by or under any present or future
laws to levy or distrain for rent, in arrears, in advance or both, upon all
goods, merchandise, equipment, trade fixtures, furniture and personal property
of Tenant or any nominee of Tenant in the Demised Premises, delivered or to be
delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any time and
from time to time, Landlord and Tenant agree to execute and deliver to the
other, within thirty (30) days after such request, a written instrument that may
be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid, (c) stating whether or
not, to the knowledge of the party executing such instrument, the other party
hereto is in default and, if such party is in default, stating the nature of
such default, (d) stating the Commencement Date and Expiration Date, (e) stating
which options to renew the term have been exercised, if any; and (f) any other
information that may reasonably requested by the requesting party and
customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
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or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of the Senior Vice President of Real Estate, and another shall be
delivered to the attention of the Senior Director of Properties and
Administration, all at 2 Paragon Drive, Montvale, New Jersey 07645 or to such
other addresses as Tenant may designate by notice to Landlord. Any such Notice
shall be deemed given three (3) business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, and one business
(1) day when sent by overnight delivery. A party’s attorney may give Notices on
behalf of such party.
32. BROKER. Each party represents and
warrants to each other there is no broker, agent, finder or other person with
whom it has dealt in connection with the negotiation, execution and delivery of
this Lease other than those persons named in that certain Agreement of Sale and
Leaseback dated as of November 2, 2010 entered into between Tenant and Landlord
(or Affiliates of each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised
Premises (and Landlord’s interest therein) and Tenant’s leasehold (and Tenant’s
interest therein) free of, and shall within thirty (30) days discharge, any
attachment, lien, security interest or other encumbrance that arises as a result
of any act or omission of Tenant or persons acting by, through or under Tenant.
Without limitation, Tenant will not permit or suffer any mechanic’s or
materialmen’s or other liens to stand against the Demised Premises for any labor
or material furnished in connection with work of any character performed, any
services provided or any other act, omission or obligation on the part or at the
direction of Tenant or persons claiming by, through or under Tenant, and
Landlord will not permit any such liens for work or material furnished the
Landlord to stand against said premises (the foregoing shall not imply that
Landlord has any responsibility to furnish any work or material). However,
Landlord and Tenant shall respectively have the right to contest the validity or
amount of any such lien, provided that the payment of such amount is bonded
during the pendency of such contest, but upon the final determination of such
contest the party responsible for such lien shall immediately pay any judgment
rendered with all proper costs and charges (including reasonable attorneys’
fees) and shall have the lien released at its own expense. In lieu of bonding
either party may obtain other security acceptable to the other party in such
party’s sole discretion. Any contest hereunder shall be subject to all
requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means Landlord
named herein and any subsequent owner of Landlord’s estate hereunder. Any owner
of Landlord’s estate hereunder shall be relieved of all liability under this
Lease after the date that it ceases to be the owner of Landlord’s estate (except
for any liability arising prior to such date) and the party succeeding to
Landlord’s estate shall assume all liability of Landlord arising from and after
it becomes owner of Landlord’s estate. The foregoing shall be self-operative but
Landlord and Tenant shall upon the request of either execute and deliver an
instrument acknowledging the foregoing.
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35. ADJOINING OR ADJACENT PROPERTY. Landlord
and Tenant shall each promptly forward to the other any notice or other written
communication received by it from any owner of property adjoining or adjacent to
the Demised Premises or from any municipal or other governmental authority in
connection with any hearing or other administrative proceeding relating to the
use of the Demised Premises or any adjoining or adjacent property. Tenant may,
at its sole cost and expense, in its own name and/or in the name of Landlord,
appear in any such proceeding. Landlord shall fully cooperate with Tenant (so
long as Landlord’s cooperation does not involve incurring obligations or
liability or material expense to Landlord unreimbursed by Tenant) and shall,
without limitation, make such appearances and furnish such information as may be
reasonably required by Tenant. Landlord agrees to execute any instruments
reasonably requested by Tenant in connection with any such proceeding.
36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4) the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5) the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Shopping Center prior to the
Commencement Date, it being acknowledged that Tenant or its Affiliate owned the
Shopping Center prior to the Commencement Date; provided, however, that Tenant
shall not be responsible for Hazardous Materials migrating on to the Land from
the land of third parties.
C. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials brought on or migrating from the Demised Premises after the
Commencement Date, and Tenant shall be responsible for all Hazardous Materials
brought onto the Shopping Center after the Commencement Date by Tenant or
persons acting by, through or under Tenant. Except to the extent Tenant is
required to do so under this Section 36, Landlord, at its sole cost and expense,
shall until the Expiration Date of this Lease comply with all Environmental Laws
and shall be
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responsible for all Hazardous Materials except to the extent Tenant is required
to do so under this Section 36.
D. Landlord and Tenant shall provide
each other with copies of any notices pertaining to any governmental proceedings
or actions under any Environmental Law (including requests or demands for entry
onto the Demised Premises and/or Land for purposes of inspection regarding the
handling, disposal, clean-up or remediation of Hazardous Materials or claims,
penalties, fines or assessments) within fifteen (15) days after receipt thereof.
E. If required by governmental
authority or if Landlord has a reasonable basis to believe a release of
Hazardous Materials may have occurred or a threat of release exists on or from
the Demised Premises or Hazardous Materials activities have taken place on the
Demised Premises that do not conform to Environmental Laws, then Landlord may,
but need not, perform appropriate testing in a commercially reasonable manner
and the reasonable costs thereof shall be reimbursed to Landlord by Tenant upon
demand as Additional Rent. Tenant shall execute affidavits, representations and
the like from time to time at Landlord’s request concerning Tenant’s actual
knowledge and belief regarding the presence or absence of Hazardous Materials at
the Land and Demised Premises. In all events, and without limitation, Tenant
shall indemnify all Indemnitees, expressly including without limitation all Fee
Mortgagees, in the manner elsewhere provided in this Lease with respect to its
obligations under this Section 36 (and for these purposes, the loss indemnified
shall include without limitation any costs of investigation or remediation, and
any claim of personal injury or property damage to any person);. The covenants
of this Section shall survive the Term. Tenant shall from time to time upon
Landlord’s request confirm all of the foregoing covenants directly to
mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without limitation, any
subtenant of Tenant), may, from time to time and without Landlord’s prior
written consent, mortgage all or any portion of its right, title and interest in
and to this Lease under one leasehold mortgage at any one time, or two leasehold
mortgages given as part of a single financing transaction, to an Institutional
Lender (each, a “Leasehold Mortgage”), and assign any or all rights under this
Lease and any subleases as collateral security for such Leasehold Mortgage;
provided that all rights acquired under such Leasehold Mortgage shall be subject
to all of the terms, covenants and conditions of this Lease, and to all rights
and interests of Landlord, none of which terms, covenants or conditions is or
shall be waived by Landlord by reason of the right given to so mortgage such
interest in this Lease. In no event shall Tenant have any right to mortgage or
encumber Landlord’s fee interest in the Demised Premises. The term “Leasehold
Mortgage” shall include whatever security instruments that may be used in the
locale of the Demised Premises, such as, without limitation, deeds of trust,
security deeds and conditional deeds, as well as financing statements,
assignment of leases and rents, security agreements and other documentation
required pursuant to the Uniform Commercial Code. The term “Leasehold Mortgage”
shall also include any instruments required in connection with a sale-leaseback
transaction. An “Institutional Lender” is a bank, trust company, savings and
loan association, pension fund, endowment fund, insurance company, other
institutional pool of recognized status or a governmental authority empowered to
make loans or issue bonds or any other recognized institution regularly engaged
in the making of mortgage loans that has not less than
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$100,000,000 in assets. The holder of any Leasehold Mortgage shall be called a
“Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but not limited
to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and if Tenant
shall send to Landlord a true copy thereof, together with a notice specifying
the name and address of the Leasehold Mortgagee (“Mortgage Notice”), Landlord
agrees that as long as any such Leasehold Mortgage shall remain unsatisfied of
record or until a notice of satisfaction is given by the Leasehold Mortgagee to
Landlord, the following provisions shall apply:
(1) There shall be no cancellation,
surrender or modification of this Lease by joint action of Landlord and Tenant
without the prior consent of the Leasehold Mortgagee;
(2) Landlord shall, upon serving Tenant
with any notice of default, simultaneously serve a copy of such notice upon the
Leasehold Mortgagee. The Leasehold Mortgagee shall thereupon have the same
period to remedy or cause to be remedied the defaults complained of, and
Landlord shall accept such performance by or at the instigation of such
Leasehold Mortgagee as if the same had been done by Tenant; provided that in the
case of defaults that cannot be cured by the payment of money in addition the
Leasehold Mortgagee shall be entitled to such further time to remedy or cause to
be remedied the defaults complained of as may be reasonably necessary for the
Leasehold Mortgagee to remove any stay in bankruptcy and/or to commence and
complete foreclosure proceedings or remove any cause beyond the Leasehold
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.. Nothing herein shall be
construed as requiring a Leasehold Mortgagee to cure any default. Landlord’s
failure to deliver any such copy to a Leasehold Mortgagee shall not affect the
Landlord’s exercise of any right or remedy under the Lease in any way
whatsoever;
(3) If any default shall occur which,
pursuant to any provision of this Lease, entitles Landlord to terminate this
Lease, and if before the expiration of twenty (20) days from the date of the
giving of notice of termination upon such Leasehold Mortgagee, such Leasehold
Mortgagee shall have notified Landlord of its desire to nullify such notice and
shall have paid to Landlord all Fixed Annual Rent and Additional Rent herein
provided for which are then in default, and shall have complied (or caused
compliance) with all of the other requirements of this Lease, if any are then in
default, then, in such event, Landlord shall not be entitled to terminate this
Lease and any notice of termination previously given shall be void and of no
effect;
(4) Notwithstanding anything in this Lease
to the contrary, any sale of Tenant’s leasehold interest in any proceeding for
the foreclosure of the Leasehold Mortgage, or the assignment or transfer of
Tenant’s leasehold interest in lieu of the foreclosure of any Leasehold
Mortgage, shall be deemed to be a permitted sale, transfer or assignment;
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(5) If not required to be held by the Fee
Mortgagee, the proceeds from any insurance policies or arising from a Taking may
be held by any institutional Leasehold Mortgagee and distributed pursuant to the
provisions of this Lease;
(6) The Leasehold Mortgagee may be added to
the “Loss Payable Endorsement” of any and all insurance policies required to be
carried by Tenant hereunder on the condition that the insurance proceeds are to
be applied in the manner specified in this Lease and that the Leasehold Mortgage
shall so agree; except that the Leasehold Mortgage may provide a manner for
disposition of such proceeds as remain after full compliance with the
restoration covenants of this Lease, if any, otherwise payable to Tenant (but
not such proceeds, if any, payable to Landlord, any Fee Mortgagee or jointly to
Landlord or Tenant) pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of any legal
proceeding or arbitration between Landlord and Tenant. Unless the Leasehold
Mortgage provided otherwise, Leasehold Mortgagee shall have the right to
intervene in any such proceeding and be made a party to such proceeding, and the
parties hereby consent to such intervention. Landlord’s failure to
deliver any such notice to a Leasehold Mortgagee shall not affect the Landlord’s
exercise of any right or remedy under the Lease in any way whatsoever.
Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease, Tenant
shall assume exclusive control of the Demised Premises and all areas pertaining
thereto including all appurtenances, improvements, utilities, water bodies,
grounds, sidewalks, walkways, driveways and parking facilities, and Tenant shall
bear the sole risk of all related tort liabilities. To the greatest extent
permitted by applicable law, Tenant shall indemnify, save harmless and defend
Landlord, Landlord’s adviser and mortgagees and their respective officers,
directors, managers, members, partners, agents and employees, (“Indemnitees”)
from all liability, claim, damage, cost or loss (including reasonable fees and
litigation costs) arising in whole or in part out of, or in any manner connected
with (i) any injury, loss, theft or damage to any person or property while on or
about the Demised Premises, or (ii) any condition of the Demised Premises, or
the possession and use thereof (including any failure to vacate at the end of
the Term) or any activity permitted or suffered on the Demised Premises
(including Hazardous Materials), or (iii) any breach of any covenant,
representation or certification by Tenant or persons acting under Tenant, or
(iv) any negligent act or omission anywhere by Tenant or persons acting under
Tenant, in each case paying the same to Landlord on demand as Additional Rent,
except to the extent such liability results from the negligence or willful
misconduct of Landlord or the other Indemnitees. Without implying that other
covenants do not survive, the covenants of this Section shall survive the Term.
Tenant shall immediately respond and assume the investigation, defense and
expense
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of all of the foregoing matters. Landlord or any Indemnitee, at its sole cost
and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY.
Notwithstanding anything contained to the contrary in this Lease, whether
express or implied, it is agreed that Tenant will look only to Landlord’s fee
interest in and to the Demised Premises for the collection of any judgment (or
other judicial process) requiring the payment of money by Landlord in the event
of a breach or default under this Lease by Landlord with respect to any claim
whatsoever related to the Demised Premises, and no other property or assets of
Landlord or of Landlord’s adviser or of any Fee Mortgagee or its or their
managers, members, directors, officers, trustees, beneficiaries, shareholders,
partners, joint venturers (disclosed or undisclosed) shall be subject to suit or
to levy, execution or other enforcement procedures for the satisfaction of any
such judgment (or other judicial process). No officer, director, manager,
member, shareholder, trustee, beneficiary, partner, agent, attorney or employee
of Landlord or of Landlord’s adviser or of any Fee Mortgagee shall ever be
personally or individually liable; nor shall Landlord, Landlord’s adviser or any
Fee Mortgagee or such persons ever be answerable or liable in any equitable
judicial proceeding or order beyond the extent of their interest in the Demised
Premises. In no event shall Landlord, Landlord’s adviser or any Fee Mortgagee or
any such persons ever be liable to Tenant for indirect or consequential damages.
40. BOOKS AND RECORDS. Tenant shall at all
times keep and maintain full and correct records and books of account of the
operations of the Demised Premises in accordance with generally accepted
accounting principals consistently applied and shall accurately record and
preserve the records of such operations in accordance with its customary records
retention policy. Notwithstanding that there has been no Percentage Rent Event,
Tenant shall report the gross sales from the Demised Premises to Landlord
annually for each fiscal year of Tenant no later than thirty (30) days following
the end of such fiscal year, such report to be certified by Tenant’s chief
financial officer. Landlord shall keep such information confidential at all
times in accordance with the terms of Exhibit K and may only release such
information to Landlord’s constituent members, and so long as such persons
execute and deliver to Tenant a Confidentiality Agreement with Tenant in the
form attached hereto as Exhibit K (“Confidentiality Agreement”) whether or not
Tenant signs such Confidentiality Agreement, also to its lenders and prospective
lenders and to prospective purchasers of Landlord’s interest in the Demised
Premises. Upon an Event of Default, Tenant shall permit Landlord, Landlord’s
accountants and Fee Mortgagees reasonable access thereto, with the right to make
copies and excerpts therefrom upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by
applicable law, Tenant shall have the right to place on the roof or wall of the
Demised Premises at Tenant’s sole cost and expense, a satellite dish
(hereinafter called the “Dish”) for transmission of data (both receiving and
sending) between Tenant’s various operations and its headquarters in accordance
with all laws and governmental regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord
and Tenant agree and acknowledge that this Lease has been freely negotiated by
Landlord and Tenant. In any event of any ambiguity, controversy, dispute or
disagreement over the interpretation, validity or enforceability of this Lease
or any of its covenants, terms or conditions, no inference,
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presumption or conclusion whatsoever shall be drawn against Tenant by virtue of
Tenant’s having drafted this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The
covenants and agreements contained in this Lease shall bind and inure to the
benefit of the successors and assigns of each party. As used in this Lease
“Affiliate” (whether or not capitalized) shall mean, with respect to any person,
any person controlled by, controlling, or under common control with such person;
and “control” shall mean any direct ownership interest or right through the
exercise of voting or approval rights or otherwise, to exercise decision-making
authority generally.
44. CAPTIONS. The captions preceding the
Sections of this Lease are intended only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease or the
intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any
provision of this Lease shall be invalid or unenforceable, the remainder of the
provisions of this Lease shall not be affected thereby and each and every
provision of this Lease shall be enforceable to the fullest extent permitted by
law.
46. CHOICE OF LAW/JURISDICTION. This Lease,
and the rights and obligations of the parties hereto, shall be interpreted and
construed in accordance with the laws where the Demised Premises are located
(the “State”), without regard to the State’s internal conflict of law
principles. Any disputes arising out of this Lease or between Landlord and
Tenant shall be subject to the exclusive jurisdiction of the state courts of the
State.
47. NO WAIVER. The failure of either party to
seek redress for violation of or to insist upon the strict performance of, any
term, covenant or condition contained in this Lease shall not prevent a similar
subsequent act from constituting a default under this Lease. Without limitation,
no written consent by Landlord or Tenant to any act or omission that otherwise
would be a default shall be construed to permit other similar acts or omissions.
Neither party’s failure to seek redress for violation or to insist upon the
strict performance of any covenant, nor the receipt by Landlord of rent with
knowledge of any breach of covenant, shall be deemed a consent to or waiver of
such breach. No breach of covenant shall be implied to have been waived unless
such is in writing, signed by the party benefiting from such covenant and
delivered to the other party; and no acceptance by Landlord of a lesser sum than
the Fixed Annual Rent, Additional Rent or any other sum due shall be deemed to
be other than on account of the installment of such rent or other sum due. Nor
shall any endorsement or statement on any check or in any letter accompanying
any check or payment be deemed an accord and satisfaction; and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such installment or pursue any other right or remedy. The
delivery of keys (or any other act) to Landlord shall not operate as a
termination of the Term or an acceptance or surrender of the Demised Premises.
The acceptance by Landlord of any rent following the giving of any default
and/or termination notice shall not be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either
Landlord or Tenant employ an attorney to enforce or defend any of the
conditions, covenants, rights or obligations of this Lease
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(including, without limitation, a default by either party), then the prevailing
party shall be entitled to all reasonable attorney fees and all other reasonable
out-of-pocket litigation costs (including, but not limited to filing fees,
expert reports and testimony, court costs and other usual costs of litigation of
this type) incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent
such waiver is permitted by law, the parties waive trial by jury in any action
or proceeding brought in connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than contemporaneous
instruments executed and delivered of even date, if any, this Lease contains all
of the agreements between Landlord and Tenant relating in any way to the Demised
Premises and supersedes all prior agreements and dealings between them. There
are no oral agreements between Landlord and Tenant relating to this Lease or the
Demised Premises. This Lease may be amended only by a written instrument
executed and delivered by both Landlord and Tenant. The provisions of this Lease
shall bind Landlord and Tenant and their respective successors and assigns.
Where the phrases “persons acting under” Landlord or Tenant or “persons claiming
through” Landlord or Tenant or similar phrases are used, the persons included
shall be assignees, sublessees, licensees or other transferees or successors of
Landlord or Tenant as well as invitees or independent contractors of Landlord or
Tenant, and all of the respective employees, servants, contractors, agents and
invitees of Landlord, Tenant and any of the foregoing. As used herein, “monetary
default” shall mean a default that can be substantially cured solely by the
payment of money and nothing more and “non-monetary default” shall mean a
default that cannot be substantially cured solely by the payment of money and
northing more. If either party is granted any extension, election or other
option, to be effective the exercise (and notice thereof) shall be
unconditional, irrevocable and must be made strictly in accordance with the
prescribed terms and times; otherwise its purported exercise shall be void and
ineffective. The enumeration of specific examples of a general provisions or use
of the word “including” shall not be construed as a limitation of the general
provision. Unless a party’s approval or consent is required by the express terms
of this Lease not to be unreasonably withheld, such approval or consent may be
withheld in the party’s sole discretion. The submission of a form of this Lease
or any summary of its terms shall not constitute an offer by Landlord to Tenant;
the leasehold shall only be created and the parties bound when this Lease is
executed and delivered by both Landlord and Tenant. Nothing herein shall be
construed as creating the relationship between Landlord and Tenant of principal
and agent, or of partners or joint venturers or any relationship other than
landlord and tenant. This Lease and all consents, notices, approvals and all
other related documents may be reproduced by any party by any electronic means
or by electronic, photographic or other reproduction process and the originals
may be destroyed; and each party agrees that any reproductions shall be as
admissible in evidence in any proceeding as the original itself (whether or not
the original is in existence and whether or not reproduction was made in the
regular course of business), and that any further reproduction of such
reproduction shall likewise be admissible. If any payment in the nature of
interest provided for in this Lease shall exceed the maximum interest permitted
under controlling law, as established by final judgment of a court, then such
interest shall instead be at the maximum permitted interest rate as established
by such judgment. Landlord and Tenant expressly agree that there are and shall
be no implied warranties of merchantability, habitability, suitability, fitness
for a particular purpose or of any other kind arising out of this Lease, and
there are no warranties or representations other than those expressly set forth
in this Lease. Without
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limitation, where Tenant in this Lease indemnifies or covenants for the benefit
of present and future Fee Mortgagees, such agreements are for the benefit of
present and future Fee Mortgagees as third party beneficiaries; and at the
request of Landlord, Tenant from time to time will confirm such matters directly
with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed
in any number of counterparts, each of which shall be deemed to be one and the
same instrument. A facsimile, email, PDF or electronic signature shall be deemed
an original signature.
52. EXHIBITS. The exhibits attached to the
Lease shall be deemed to be incorporated into this Lease as if set forth hereon,
and where terms of any Exhibit conflict with the terms within the Lease, the
terms of this Exhibit shall prevail and govern the Lease.
53. INCORPORATION OF STATE LAW PROVISIONS. Certain provisions/ sections of this
Lease and certain additional provisions/sections that are applicable or required
by laws of the state in which the Demised Premises are located may be amended,
described or otherwise set forth in more detail on Exhibit J attached hereto,
which such Exhibit by this reference, is incorporated into and made a part of
this Lease. In the event of any conflict between such state law provisions and
any provision herein, the state law provisions shall control.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Lease has been duly executed under as of the Effective
Date.
WITNESS:
WE APP OZONE PARK LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a Delaware corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Vice President and Secretary
Signature Page to Lease By and Between
WE APP OZONE PARK LLC and PATHMARK STORES, INC.
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
[g36891mq081i001.jpg]
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EXHIBIT B1
LEGAL DESCRIPTION OF THE LAND
BLOCK 9027 LOT 11 AND BLOCK 9028 LOT 1 ON THE TAX MAP OF QUEENS COUNTY
Parcel 1 and 2 (Composite Description)
All that certain plot, piece or parcel of land with the buildings or
improvements thereon, erected, situate, lying and being in the Borough and
County of Queens, City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the northwesterly line of
95th Avenue (a/k/a University Place, f/k/a Chichester Avenue) (60 feet wide)
with the southwesterly line of 93rd Street (a/k/a Clinton Place, f/k/a Woodhaven
Avenue) (60 feet wide) and from said point of BEGINNING;
RUNNING THENCE along said northwesterly line of 95th Avenue, South 40 degrees 26
minutes 58 seconds West, a distance of 299.96 feet to a point;
THENCE along the dividing line between Lot 1, Block 9028 and Lot 51 (n/f reputed
owner 7 Horizon Corp.), Block 9027, the following three (3) courses and
distances:
1. NORTH 49 degrees 33 minutes 02 seconds West, a distance of
74.03 feet to a point;
2. THENCE South 40 degrees 26 minutes 58 seconds West, a distance
of 3.85 feet to a point;
3. THENCE North 49 degrees 33 minute 02 seconds West, a distance of 24.97 feet
to a point;
THENCE along the dividing line between Lot 11, Lot 51 and Lot 65 (n/f reputed
owner 7 Horizon Corp.), Block 9027, South 40 degrees 26 minutes 58 seconds West,
a distance of 466.97 feet to a point;
THENCE along the dividing line between Lot 11 and Lot 80 (n/f reputed owner
Realex Development Corporation) and Lot 8 (n/f reputed owner Sutton
Associates, Inc.), Block 9027, North 49 degrees 33 minutes 02 seconds West, a
distance of 301.65 feet the southeasterly line of Atlantic Avenue (LIRR
division, 120.01 feet wide);
THENCE along said southeasterly line of Atlantic Avenue, North 40 degrees 26
minutes 58 seconds East, a distance of 50.48 feet to a point;
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THENCE along the dividing line between Lot 11 and Lot 102 (n/f reputed owner
Jack Sloane), Block 9027, the following five (5) courses and distances:
1. SOUTH 49 degrees 33 minutes 02 seconds East, a distance of
38.53 feet to a point;
2. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 19.75 feet to a point;
3. THENCE South 49 degrees 33 minutes 02 seconds East, a distance
of 15.00 feet to a point;
4. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 45.00 feet to a point;
5. THENCE North 49 degrees 33 minutes 02 seconds West, a distance of 15.00 feet
a point;
THENCE continuing along the dividing line between Lot 11, Lot 102 and Lot 12
(n/f reputed owner Plainbridge, Inc.,) Block 9027, North 40 degrees 26 minutes
58 seconds East, a distance of 314.94 feet to a point;
THENCE continuing along the dividing line between Lot 11 and Lot 12, Block 9027,
the following four (4) courses and distances:
1. SOUTH 49 degrees 33 minutes 02 seconds East, a distance of
11.67 feet to a point;
2. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 14.00 feet to a point;
3. THENCE North 49 degrees 33 minutes 02 seconds West, a distance
of 11.67 feet to a point;
4. THENCE North 40 degrees 26 minutes 58 seconds East, a distance
of 66.31 feet to a point;
THENCE along the dividing line between Lot 1, Block 9028 and Lot 12, Block 9027,
North 49 degrees 33 minutes 02 seconds West, a distance of 38.53 feet to a point
of the aforementioned southeasterly line of Atlantic Avenue;
THENCE along said southeasterly line of Atlantic Avenue, North 40 degrees 26
minutes 58 seconds East, a distance of 260.30 feet to a point on the
aforementioned southwesterly line of 93rd Street;
THENCE along said southwesterly line of 93rd Street, South 49 degrees 33 minutes
02 seconds East, a distance of 400.65 feet to the corner aforesaid, the point or
place of BEGINNING.
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Together with the benefit and burden of that certain Declaration of Easement by
Plainbridge, Inc. dated as of 1/11/1996 recorded 2/16/1996 in Reel 4278
Page 358. (affects Parcels 1 and 2)
BLOCK 9027, LOT(S) 51 AND 65 ON THE TAX MAP OF QUEENS COUNTY
Parcel 3
ALL that certain lot, piece or parcel of land, situate, lying and being at
Woodhaven in the Fourth Ward of the Borough and County of Queens, City and State
of New York, bounded and described as follows:
BEGINNING at a point on the northerly side of 95th Avenue, formerly University
Place and Chichester Avenue distance 39.66 feet westerly from the corner formed
by the intersection of the northerly side of 95th Avenue with the former
westerly side of 92nd Street, discontinued and closed, (formerly Bigelow Avenue
or Place);
RUNNING THENCE northerly at right angles to 95th Avenue, 74.03 feet;
THENCE westerly and parallel with 95th Avenue, 3.85 feet;
THENCE northerly at right angles to 95th Avenue, 24.97 feet;
THENCE westerly parallel with 95th Avenue, 466.97 feet;
THENCE southerly at right angles to 95th Avenue and part of the distance through
a party wall, 99 feet to the northerly side of 95th Avenue;
THENCE easterly along said northerly side of 95th Avenue, 470.82 feet to the
point or place of BEGINNING.
ALL the herein distances and dimensions being according to the United States
Standard of Measurement.
Together with the benefit and burden of that certain Declaration of Easement by
and between Supermarkets General Corporation and 7 Horizon Corp., dated as of
August 7, 1987 and recorded November 17, 1987 in Reel 2494, Page 1380. (affects
Parcels 1, 2 and a portion of Parcel 3)
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EXHIBIT B2
TITLE MATTERS AND ENCUMBRANCES
1. Taxes, tax liens, tax sales, water
rates, sewer rents and assessments, not yet due and payable.
2. Road Closing Waiver and Easement
Agreement dated 8/2/84 between Supermarkets General Corporation and the City of
New York recorded 10/16/85 in Reel 1942 cp 943.
3. Reservation of a permanent perpetual
easement contained in a deed between The City of New York and Supermarkets
General Corporation dated 1/11/85 recorded 3/25/86 in Reel 2051, Page 235.
4. Declaration of Easements by and between
Supermarkets General Corporation and 7 Horizon Corp., dated as of 8/7/87
recorded 11/17/87 in Reel 2494, Page 1380.
5. Grant of Easement by and between
Supermarkets General Corporation and The Consolidated Edison Company dated
8/9/84 recorded 1/13/87 in Reel 2272, Page 2056.
6. Declaration of Easement by
Plainbridge, Inc., dated as of 1/11/96 recorded 2/16/96 in Reel 4278, Page 358.
7. Parking, Ingress and Egress Easement
dated as of 11/26/08 by Plainbridge, Inc., converted into Plainbridge LLC on
4/18/01 and Clocknorse Realty LLC recorded 10/27/09 as CRFN 2009000351215.
8. Grant of Easement by Supermarkets
General Corporation to the Brooklyn Union Gas Company dated 8/9/84 recorded
3/20/86 in Liber 2046 cp 358.
9. Terms and Condition of an unrecorded lease
dated 8/12/85 and between Supermarkets General Corporation and S.L.G. Burger as
amended by the unrecorded First Amendment of Lease dated as of 1/5/99 by and
between Pathmark Stores, Inc., (formerly known as Supermarkets General
Corporation and Atlantic Restaurant Associates, Inc., (successor by merger to
S.L.G. Burger, Inc., as evidenced by a Memorandum of Lease between the same
parties dated as of 1/21/99 recorded 3/1/99 in Reel 5130 Page 2052 as amended by
an unrecorded Amendment of Lease between the same parties dated as of 5/1/06 as
evidenced by a Modification of Memorandum of Lease dated as of 8/28/07, between
the same parties, recorded 10/1/07 as CRFN 2007000499568.
10. UCC Financing Statement with 7 Horizon Corp,
as Debtor, New York Community Bank, as Secured Party filed as No. 02Q00781 on
1/25/02 continued by CRFN200600063 1285 on 11/14/06. NOTE: This affects the fee
interest in Parcel 3 only.
11. Terms and conditions of an unrecorded Lease dated
as of August 8, 1987 between 7 Horizon Corp., as Landlord and Supermarkets
General Corporation, as Tenant as
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evidenced by a Memorandum of Lease between the same parties dated as of
August 7, 1987 recorded November 17, 1987 in Reel 2949 Page 1373, as amended by
an unrecorded First Amendment to Lease dated as of September 10, 2010 by and
between 7 Horizon Corp., Landlord and Pathmark Stores, Inc., Tenant, as affected
by an Assignment and Assumption of Lease by and between 7 Horizon Corp., as
Landlord, Pathmark Stores, Inc., as Assignor and WE APP WILMINGTON LLC, as
Assignee dated and recorded in Reel ,
Page .
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: $325,000.00
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and
among , a , and its successors and
assigns, having an office at (hereinafter
together with its successors and assigns called “Mortgagee”), WE APP Ozone Park
LLC, a Delaware limited liability company, having an office c/o Winstanley
Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord, Massachusetts
01742 (hereinafter called “Landlord”) and Pathmark Stores, Inc., a Delaware
corporation having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”).
WITNESSETH:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a
promissory Note secured by, among other securities, a mortgage or deed of trust
(hereinafter, as the same may be amended, supplemented or otherwise modified
from time to time, called the “Mortgage”) covering a parcel or parcels of land
owned by Landlord and described on Exhibit A annexed hereto and made a part
hereof, together with the improvements now or hereafter erected thereon (said
parcel or parcels of land and improvements thereon being hereinafter called the
“Mortgaged Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments
being hereinafter collectively called the “Lease”), Landlord leased to Tenant
the Mortgaged Premises together with the building now or hereafter erected on
all or a portion of said premises (the Mortgaged Premises and the improvements
on or to be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on
November , 2010 in the in Book ,
Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and
approves the Lease.
2. Tenant covenants and agrees with
Mortgagee that the Lease and any extensions, renewals, replacements or
modifications thereof and Tenant’s interest in the premises under the Lease are
and at all times shall subject and subordinate to the lien of the Mortgage,
without regard to the order of priority of recording of the Mortgage and the
Memorandum of the Lease, subject, however, to the provisions of this Agreement.
3. Tenant certifies that the Lease is
presently in full force and effect.
4. Mortgagee agrees that so long as
the Lease shall be in full force and effect and so long as Tenant is not in
default (beyond any applicable notice and cure period) in the payment of fixed
rent as set forth in the Lease, or in the performance of any of the terms,
covenants or conditions of the Lease on Tenant’s part to be performed:
A. Tenant shall not be named or joined as
a party defendant or otherwise in any suit, action or proceeding for the
foreclosure of the Mortgage or to enforce any rights under the Mortgage or the
bond or note or other obligations secured thereby unless required by law to do
so; and
B. The possession by Tenant of the
Demised Premises and the Tenant’s rights thereto shall not be disturbed,
affected or impaired by, nor will the Lease or the term thereof be terminated or
otherwise affected by (i) any suit, action or proceeding upon the Mortgage or
the bond or note or other obligation secured thereby, or for the foreclosure of
the Mortgage or the enforcement of any rights under the Mortgage or any other
documents held by the Mortgagee, or by any judicial sale or execution or other
sale of the Mortgaged Property, or by any deed given in lieu of foreclosure, or
by the exercise of any other rights given to the Mortgagee by any other
documents or as a matter of law, or (ii) any default under the Mortgage or the
bond or note or other obligation secured thereby.
5. Mortgagee hereby acknowledges and
agrees that all trade fixtures and equipment whether owned by Tenant or any
subtenant or leased by Tenant from a Landlord/Owner in the Demised Premises
shall be subject to the provisions of Section 17 of the Lease.
6. If the Mortgagee shall become the
owner of the Mortgaged Property by reason of foreclosure of the Mortgage or
otherwise, or if the Mortgaged Property shall be sold as a result of any action
or proceeding to foreclose the Mortgage or by a deed given in lieu of
foreclosure, the Lease shall continue in full force and effect, without
necessity for executing any new lease, as a direct lease between Tenant, as
tenant thereunder, and the then owner of the Mortgaged Property, as landlord
thereunder, upon all of the same terms, covenants and provisions contained in
the Lease, and in such event:
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A. Tenant shall be bound to such new
owner under all of the terms, covenants and provisions of the Lease for the
remainder of the term thereof (including the Renewal Periods, if Tenant elects
or has elected to exercise its options to extend the term) and Tenant hereby
agrees to attorn to such new owner and to recognize such new owner as landlord
under the Lease; and
B. Such new owner shall be bound to
Tenant under all of the terms, covenants and provisions of the Lease for the
remainder of the term thereof (including the Renewal Periods, if Tenant elects
or has elected to exercise its options to extend the term) which terms,
covenants and provisions such new owner hereby agrees to assume and perform;
provided, however, that such new owner shall not be (i) obligated to complete
any construction work required to be done by Landlord within or outside of the
Demised Premises pursuant to the provisions of the Lease or to reimburse Tenant
for any construction work done by Tenant; however this provision shall not
relieve such new owner from any repair or maintenance obligations of Landlord
expressly set forth in the Lease accruing or arising following new owner’s
acquisition of fee title to the Mortgaged Property or impair any express setoff
rights of Tenant expressly set forth in the Lease accruing or arising following
new owner’s acquisition of fee title to the Mortgaged Property; (ii) required to
make any repairs to the Mortgaged Property or to the Demised Premises or to
perform any other construction or other work, including without limitation the
restoration of the Demised Premises following any casualty or taking;
(iii) liable for the return of security deposits or letters of credit, if any,
paid or delivered by or on behalf of Tenant to Landlord, except to the extent
such sums are actually received by such new owner (or any Mortgagee if such
Mortgagee is not the new owner); (iv) bound by any payment of rents, additional
rents or other sums which Tenant may have paid more than one (1) month in
advance to any prior Landlord unless such sums are actually received by
Mortgagee or if such prepayment shall have been expressly approved of in writing
by such new owner (or any Mortgagee if such Mortgagee is not the new owner);
(v) bound by any agreement amending, modifying or terminating the Lease made
without Mortgagee’s prior written consent; (vi) bound by any assignment of the
Lease or sublease of the Demised Premises, or any portion thereof, made prior to
the time such new owner succeeded to Landlord’s interest other than if made
pursuant to the provisions of the Lease; (vii) liable on account of any default
on the part of Landlord occurring prior to such new owner’s succeeding to
Landlord’s estate; or (viii) subject to any counterclaims, offsets or defenses
that Tenant might have against Landlord.
7. If Landlord shall default in the
performance of the Lease Tenant shall give written notice thereof to Mortgagee
and Mortgagee shall have the right, but not the obligation, to cure such default
in accordance with Section 23 of the Lease (and as provided therein the
Mortgagee shall be entitled to such further time to cure as may be reasonably
necessary for the Mortgagee to remove any stay in bankruptcy and/or to commence
and complete foreclosure proceedings or remove any cause beyond the Mortgagee’s
reasonable control impairing its ability to cure or remedy, to obtain possession
of the Demised Premises and thereafter to commence and diligently prosecute such
cure or remedy to completion)
8. Landlord has agreed in the
Mortgage and other loan documents that the rents payable under the Lease shall
be paid directly by Tenant to Mortgagee upon the occurrence of a default by
Landlord under the Mortgage or any other loan document. Accordingly, after
notice is given by Mortgagee to Tenant that the rents under the Lease should be
paid to or at the
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications
given under this Agreement shall be in writing and shall be given by registered
or certified mail, return receipt requested, postage prepaid, (a) if to
Mortgagee at the address of Mortgagee as hereinabove set forth or at such other
address as Mortgagee may designate by notice, or (b) if to Landlord at the
address of Landlord as hereinabove, or at such other address as Landlord may
designate by notice, or (c) if to Tenant, then one copy shall be delivered to
the attention of the Senior Vice President of Real Estate of Tenant, another
shall be delivered to the attention of General Counsel of Tenant, and another
shall be delivered to the Director of Properties & Administration of Tenant, all
at 2 Paragon Drive, Montvale, New Jersey 07645 or at such other addresses as
Tenant may designate by notice. During the period of any postal strike or other
interference with the mail, personal delivery shall be substituted for
registered or certified mail.
10. This Agreement shall bind and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, personal representatives, successors and assigns.
11. This Agreement contains the entire
agreement between the parties and cannot be changed, modified, waived or
cancelled except by an agreement in writing executed by the party against whom
enforcement of such modification, change, waiver or cancellation is sought.
12. This Agreement and the covenants herein
contained are intended to run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WE APP OZONE PARK LLC, a Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a Delaware corporation
Name:
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
375
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WITNESS:
LANDLORD:
MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of 2010, before me, the subscriber, personally
appeared to me known, who being by me duly sworn, did depose
and say that he is of the corporation described
in and which executed the within instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation
and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me, the undersigned
notary public, personally appeared , proved to me
through satisfactory evidence of identification, which was a [current driver’s
license] [a current U.S. passport] [my personal knowledge], to be the person
whose name is signed on the preceding instrument and acknowledged the foregoing
instrument to be his/her free act and deed as of WE APP Ozone
Park LLC.
Notary Public
My Commission Expires:
376
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before me, the
subscriber, personally came Christopher W. McGarry, to me known, who being by me
duly sworn, did depose and say that he is Vice President and Secretary of
Pathmark Stores, Inc., the corporation described in and which executed the
within instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his name
thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
377
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
378
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP OZONE
PARK LLC, a Delaware limited liability company, having an office at c/o
Winstanley Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord,
Massachusetts 01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and
PATHMARK STORES, INC., a Delaware corporation, having an office at 2 Paragon
Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
WITNESSETH:
1. For and in consideration of the sum
of TEN and no/100 Dollars ($10.00) and of other valuable considerations paid by
Tenant to Landlord, the receipt and sufficiency of which are hereby acknowledged
by Landlord, Tenant and Tenant hereby takes from Landlord that certain parcel of
land (hereinafter called “Land”) described on Exhibit B and the buildings and
other improvements now or hereafter erected on the Land together with the
benefit of any and all easements, appurtenances, rights and privileges now or
hereafter belonging thereto. The land is currently improved by an existing
building consisting of 62,668 square feet of space (the “Building), as more
particularly shown on the site plan attached hereto as Exhibit A. The Building
and any buildings and improvements now or hereafter erected on the Land shall be
hereinafter called “Improvements”. The Land and any Improvements now or
hereafter erected thereon are hereinafter collectively called the “Demised
Premises.” The Demised Premises have been leased to Tenant upon and subject to
the covenants and agreements set forth in a certain agreement between Landlord
and Tenant bearing even date herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The
original term of the Lease shall continue to and include the date which is
twenty (20) years after the day before the Commencement Date if the Commencement
Date is the first day of a month, or twenty years (20) years after the last day
of the month in which the Commencement Date occurs if the Commencement Date is
not the first day of a month.
3. Tenant has the right and option to
extend the term of the Lease from the date upon which it would otherwise expire
for ten (10) separate renewal periods of five (5) years each (each such period
being known as a “Renewal Period”). Said right and option, if exercised by
Tenant, shall be in accordance with the terms and conditions of Section 4 of the
Lease.
4. The Lease contains the entire
agreement between the parties. All persons are hereby put on notice of the
existence of the Lease and are referred to the Lease for its terms and
conditions. The Lease is on file in the offices of Tenant and the Landlord as
hereinabove set forth.
5. This Memorandum of Lease is
prepared, signed and acknowledged solely for recording purposes under the laws
of the State of New York, and is in no way intended to
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change, alter, modify, amend or in any other way affect the rights, duties and
obligations of Landlord and Tenant pursuant to the Lease; it being specifically
understood and agreed between the parties that each has rights, duties and
obligations imposed upon it in the Lease which are not expressly contained
herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP OZONE PARK LLC, a
Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
Name: Craig H. Feldman
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
380
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EXHIBIT B
DEMISED PREMISES
381
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
382
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared , proved to me
through satisfactory evidence of identification, which was a [current driver’s
license] [a current U.S. passport] [my personal knowledge], to be the person
whose name is signed on the preceding instrument and acknowledged the foregoing
instrument to be his/her free act and deed as of WE APP
Ozone Park LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
383
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UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 9210 Atlantic Avenue, Queens, New York, with WE APP Ozone Park LLC, a
Delaware limited liability company (“Landlord”). (Terms used herein and not
otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and
absolutely guarantees to Landlord (which shall include its legal
representatives, successors and assigns) the due and punctual performance of
each and all of the Tenant’s obligations under or related to the Lease,
including the timely payment of all sums due therein. Tenant’s obligations
hereby guaranteed include, without limitation, those arising under amendments or
modifications to the Lease hereafter entered into by Tenant and Landlord, all of
which shall be so guaranteed even though Guarantor hereafter does not consent to
or approve the same (Guarantor hereby waiving all rights of consent or approval
with respect to such amendments or modifications).
2. Guarantor waives presentment for
payment or performance, notice of nonpayment or performance, notice of default,
demand, protest or notice or acceptance of this Guaranty, any rights Guarantor
may have by reason of any forbearance, modification, amendment, extension or any
indulgence whatsoever that Landlord may grant or to which Landlord and the
Tenant may agree with respect to the Lease, any and all notice of every kind to
which Guarantor might otherwise be entitled with respect to the incurring of any
further obligation or liability by Tenant to Landlord, demand for payment, the
presentment of any instrument for payment, the protest or nonpayment thereof and
any and all defenses whatsoever excepting only Tenant’s performance as required
by the terms of the Lease. Guarantor also waives, unless and until all of the
obligations of Tenant are fully paid and performed, any right to be subrogated
in whole or in part to any right or claim of Landlord against Tenant and any
right to require the marshalling of any assets of the Tenant, which right of
subrogation or marshalling might otherwise arise from any partial payment by the
Guarantor. It is expressly understood and agreed that Guarantor’s liability
hereunder shall be unaffected by (i) any amendment or modification whatsoever of
the provisions of the Lease, (ii) any extension of time for performance under
the Lease, (iii) any delay by Landlord in exercising any right under the Lease
or this Guaranty (none of which shall ever operate as a waiver of such right),
or (iv) the release of Tenant or any other guarantor from performance or
observance of any of the agreements or conditions contained in the Lease by
operation of law or otherwise, whether made with or without notice to Guarantor,
including without limitation any impairment, modification, change, release,
rejection, disaffirmance, or limitation of the liability of Tenant, or any other
guarantor of the Lease, of their estate in
384
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EXHIBIT F
bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of
suretyship as well as of guaranty, and Landlord, without being required to
proceed first against Tenant or any other person or entity, may proceed directly
against Guarantor whenever Tenant fails to make any payment due or fails to
perform any obligation now or hereafter owed to Landlord without first resorting
to or exhausting any other remedy and without first having recourse to the
Lease; provided, however, that nothing herein contained shall prevent Landlord
from suing on the Lease with or without making Guarantor a party to the suit or
from exercising any other rights thereunder and if such suit, or other remedy,
is availed of, only the net proceeds therefrom, after deduction of all
Landlord’s Costs of Collection (defined below) shall be applied in reduction of
the amount then due on this Guaranty.
4. Guarantor agrees to pay to
Landlord, on demand, all costs and expenses, including reasonable attorneys’
fees and litigation expenses, which Landlord may incur in the enforcement of
Tenant’s obligations under the Lease or the liability of Guarantor hereunder
(“Costs of Collection”). “Costs of Collection” includes, without limitation, all
out of pocket expenses incurred by the Landlord’s attorneys and all costs
incurred by Landlord including, without limitation, costs and expenses
associated with travel on behalf of Landlord, which costs and expenses are
related to or in respect of Landlord’s efforts to collect and/or to enforce any
of the obligations and/or to enforce any of its rights, remedies or powers
against or in respect of either or both Tenant or Guarantor (whether or not suit
is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has either examined
the Lease or has had an opportunity to examine the Lease and has waived the
right to examine; (ii) that it (and the individual acting on its behalf) has the
full power, authority and legal right to execute and deliver this Guaranty;
(iii) that this Guaranty is a binding legal obligation and is fully enforceable
against Guarantor in accordance with its terms; (iv) that there is no action or
proceeding pending or, to its knowledge, threatened against Guarantor before any
court or administrative agency which might result in any material adverse change
in its business or condition or in its assets; (v) that neither the execution
nor delivery of this Guaranty nor fulfillment of nor compliance with the terms
and provisions thereof will constitute a default under or result in the creation
of any lien, charge or encumbrance upon any property or assets of Guarantor
under any agreement or instrument to which it is now a party or by which
Guarantor may be bound; and (vi) that Guarantor is the sole owner of all the
common stock of Tenant and expects to derive financial benefit from the Lease.
385
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6. This Agreement shall be binding
upon Guarantor and its legal representatives, successors and assigns, and shall
inure to the benefit of Landlord and its legal representatives, successors and
assigns, and is irrevocable until released in writing by Landlord. Each and
every right, remedy and power hereby granted to Landlord or allowed it by law or
other agreement shall be cumulative and not exclusive of any other, and may be
exercised by Landlord at any time and from time to time. The validity,
construction and performance of this Guaranty shall be governed by the laws of
the State where the Demised Premises are located (the “State”), without regard
to conflict of law principles. If any clause or provision of this Guaranty
should be held illegal or invalid by any court, the invalidity of such clause or
provisions shall not affect any of the remaining clauses or provisions hereof.
In case any agreement or obligation contained in this Guaranty should be held to
be in violation of law, then such agreement or obligation shall be deemed to be
the agreement or obligation of the Guarantor, as the case may be, to the full
extent permitted by law. Each and every default hereunder or under the Lease
shall give rise to a separate cause of action hereunder. The obligations and
liabilities of hereunder shall be joint and several with any other guarantees
given to Landlord in connection with the Lease. This Guaranty may be amended
only by instrument in writing executed and delivered by both Landlord and
Tenant. The provisions of this Guaranty shall bind Guarantor and its respective
successors and assigns, and shall inure to the benefit of Landlord and its
successors and assigns. This Guaranty and all consents, notices, approvals and
all other documents relating hereto may be reproduced by photographic,
microfilm, microfiche or other reproduction process and the originals thereof
may be destroyed; and each party agrees that any reproductions shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not
reproduction was made in the regular course of business) and that any further
reproduction of such reproduction shall likewise be admissible in evidence.
7. Guarantor consents to and agrees
that the courts of the State shall have personal jurisdiction over Guarantor for
any action brought on this Guaranty including the right to grant judgment
against Guarantor personally together with interest on any judgment obtained by
Landlord at the interest rate set forth in the Lease for late payments (but if
the same shall be unlawful for any reason, then at the highest permissible
interest rate). Guarantor further agrees and consents that venue, if any, for
any such action shall be as set forth in the Lease. Guarantor waives and
relinquishes any and all rights to removal of any such action to any other
court. Guarantor also waives trial by jury in any judicial proceeding involving
any matter in any way arising out of or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand made under
this Guaranty shall be in writing and shall be deemed given at the earlier of
(i) the date received or (ii) three (3) business days after the date deposited
in a United States Postal Service Depository, postage prepaid first class
certified or registered mail, return receipt requested, addressed to Guarantor
or Landlord, as the case may be, at the respective addresses set forth opposite
their names below:
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Landlord:
WE APP Ozone Park LLC
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303 Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., a Maryland corporation
Name: Craig H. Feldman
By:
Name: Christopher W. McGarry
Title: Senior Vice President
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EXHIBIT G
INSURANCE
1. INSURANCE.
A. Tenant Coverage. Tenant shall purchase and maintain insurance during the
entire Term of the Lease and any period Tenant (or any party claiming by,
through or under Tenant) occupies any portion of the Demised Premises, for the
benefit of the Tenant and Landlord (as their interest may appear), and with such
increases in limits as Landlord may from time to time reasonably request, but
initially Tenant shall maintain the following coverages in the following
amounts:
(1) Commercial General Liability Insurance
naming Landlord, Landlord’s management, leasing and development agents and
Landlord’s mortgagee(s) from time to time as additional insureds, with coverage
for premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Workers’ Compensation Insurance and
Employers Liability Insurance with statutory limits and automobile liability
insurance (coverage must include owned, leased, hired and non owned vehicles)
with a limit of at least $1,000,000 Combined Single Limit-Bodily Injury &
Property Damage.
(3) Tenant shall purchase or shall cause each Tenant contractor performing work
on the Demised Premises to carry insurance protecting against claims set forth
below which may arise out of or result from the contractor’s operations on the
Premises and naming Landlord, Landlord’s management, leasing and development
agents as additional insureds for Premises Operations and Completed Operations.
Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s
compensation, disability benefit and other similar employee benefit acts—in
amounts as required by law;
(2) claims for damages because of bodily
injury, occupational sickness or disease, or death of his employees or any other
person and other personal injury and motor vehicle liability — Public Liability
- Single Limit (Combined) Per Occurrence. Bodily Injury/Property Damage
$1,000,000 w/ $2,000,000 General/Completed Operations Aggregate. Automobile
Liability - Single Limit (Combined) Per Occurrence Bodily Injury and Property
Damage $1,000,000. Excess Liability Umbrella covering all above items $5,000,000
per Occurrence; and
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(3) claims for damages, other than the work of the contractor itself, because of
injury to or destruction of tangible property, including loss of use resulting
therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
B. Landlord Coverage
1. Landlord agrees to maintain insurance policies providing against loss by
fire, lightning, the perils of extended coverage and malicious mischief covering
the Demised Premises and the other Improvements in the Shopping Center. The
policies covering the Demised Premises required under this Section 13 shall
contain the following endorsements:
(a) An endorsement providing for thirty (30) day notice of cancellation of
insurance to all who are or become additional insureds as required under this
Lease;
(b) An endorsement naming Tenant [and any future occupant(s) of the
Demised Premises designated by Tenant] as an additional insured; and
(c) An endorsement whereby insurer acknowledges that Landlord has waived any and
all rights of recovery against Tenant and any other occupant(s) of the Demised
Premises and their agents and employees for damage or destruction to any or all
of the Improvements including, without limitation, Tenant’s Building, whether or
not caused by acts or negligence of Tenant or said occupant(s) or any of their
agents or employees.
All policies of insurance required under this Section shall be for the full
replacement value of Tenant’s Building and other Improvements required to be
insured hereunder. Such policy or policies shall provide that the proceeds of
any loss shall be payable to Landlord and Tenant and to the holder (as its
interest may appear) of any mortgage to which this Lease is subordinate so long
as such holder and future holders of such mortgage are obligated to apply
proceeds of insurance in the manner provided for in this Lease.
2. Landlord shall maintain at its own cost and expense public liability
insurance for the Common Areas having minimum limits of coverage of Five Million
($5,000,000.00) Dollars per occurrence combined single limit for bodily injury,
personal injury and property damage. Tenant shall be named as an additional
insured
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C. General Requirements. All policies of insurance required under this shall be
written and signed by solvent and responsible insurance companies and with
insurers having a minimum A.M. Best rating of at least A/X and authorized to do
business in the jurisdiction wherein the Shopping Center is located. Each party
shall provide the other with certificates of such party’s insurers evidencing
the insurance coverage required under this Section. Each party shall deliver to
the other renewal policies or certificates thereof not later than thirty (30)
days prior to the expiration of any policies which such party is required to
carry hereunder. Notwithstanding anything to the contrary contained herein, if
any party required to carry insurance hereunder has a Tangible Net Worth in
excess of One Hundred Million ($100,000,000.00) Dollars, then such insurance may
be carried in whole or in part under a program of self-insurance.
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EXHIBIT H
PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark.
“Gross Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $81,000,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise would be made at, in, on, about, from or with respect to the
Premises, nor the amount of any cash
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or credit refund made upon any sale where the merchandise sold, or some part
thereof, is thereafter returned by the purchaser and accepted by Tenant, nor
sales of fixtures which are not a part of Tenant’s stock in trade. Each sale
upon installment, credit or layaway shall be treated as a sale for the full
price in the month during which such sale shall be made, irrespective of the
time when Tenant shall receive payments from its customers, and no deduction
shall be allowed for uncollectible payment by customer or uncollected or
uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior month to Landlord without demand, provided that if such
amount exceeds the Percentage Rent
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that would be payable with respect to such month if Percentage Rent were
calculated on the basis of Gross Sales for all months elapsed in the then
current calendar year, Tenant shall not be required to pay any amount on account
of such month unless and until such amount shall later be payable as part of the
annual adjustment. Upon receipt by Landlord of each Annual Statement of Gross
Sales there shall be an adjustment between Landlord and Tenant to the end that
Landlord shall receive the exact amount of Percentage Rent due hereunder. Any
overpayments by Tenant hereunder shall be credited against the next payments due
under this Section. Any underpayments by Tenant shall be immediately due and
payable. With respect to the calendar year in which the Term ends, the
adjustments shall be prorated for the portion of the calendar year included in
the Term.
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EXHIBIT I
SPECIAL SHOPPING CENTER PROVISIONS
1. REMAINDER OF THE IMPROVEMENTS.
A. Landlord has induced Tenant to execute and deliver this Lease by
making the following warranties, representations and agreements: (1) the
Shopping Center, as shown on Exhibit A, shall not be modified in any material
manner whatsoever without first obtaining Tenant’s consent thereto which consent
shall not be unreasonably withheld, conditioned or delayed if such modification
does not materially and adversely affect Tenant; (2) all buildings in the
Shopping Center shall at all times be located entirely within the building sites
shown on Exhibit A and the perimeter lines of such building sites shall be
deemed to represent maximum building limits and no buildings shall extend beyond
said limits or be constructed in whole or in part on any other portion of the
Shopping Center without Tenant’s consent, which consent shall not be
unreasonably withheld, conditioned or delayed if such modification does not
materially and adversely affect Tenant; (3) the exterior of buildings for other
tenants in the Shopping Center shall be similar in appearance to and harmonious
with the exterior of the Tenant’s Building to the extent existing on the
Commencement Date; and (4) except for the Tenant’s Building, no improvement or
structure in the Shopping Center shall contain more than one (1) story or
contain a basement or mezzanine from which retail sales are conducted to the
public.
B. Landlord shall use commercially reasonable efforts not permit
the Common Area to be used for parking or any other purpose by any occupant or
occupants of adjacent or contiguous property (which includes property which
would be adjacent or contiguous to the Common Area but for any intervening road,
street, highway or waterway) or by customers or invitees of such occupant or
occupants, and upon request of Tenant, Landlord shall erect (and maintain as
part of the Common Area and as a Common Area Charge) a fence or fences or any
other barriers meeting Tenant’s reasonable requirements to separate the Common
Area from any such adjacent or contiguous property. Tenant shall pay its
Proportionate Share of the cost of constructing said fence, fences or other
barrier.
C. There shall be no flashing or animated sign, roof or
free-standing sign or exposed neon sign in the Shopping Center other than any
signs which exist on the Commencement Date or may be permitted under any
Shopping Center leases existing on the Commencement Date. Except for signs which
exist on the Commencement Date or may be permitted under any Shopping Center
leases existing on the Commencement Date, all exterior signs shall be affixed
parallel to, and shall not project more than twelve (12) inches from any
building or canopy, except that Tenant shall have a free-standing sign or signs
as hereinafter provided and any other sign provided for in the Criteria
Drawings. There shall be no restrictions with respect to Tenant’s interior
signs. Tenant may remove any or all of its signs at or prior to the Expiration
Date.
D. All portions of water, gas, electricity, sewage and other
utility lines within the Shopping Center and not within the exterior walls of
any structure or enclosed area may be installed above ground provided Landlord
first obtains Tenant’s consent to the location and height thereof such consent
not to be unreasonably withheld, conditioned or delayed.
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2. COMMON AREA.
A. Landlord shall, at its sole cost and expense but as a Common Area
Charge, keep and maintain the Common Area in good condition and repair,
including but not limited to, re-striping; repairing and replacing paving and
the sub-strata thereof; keeping the Common Area properly policed, drained, free
of snow, ice, water, rubbish and obstructions, and in a neat, clean, orderly,
and sanitary condition; keeping the Common Area suitably lighted in accordance
with the lighting facilities existing on the Commencement Date during and for
appropriate periods [in any event not less than one (1) hour] before and after
Tenant’s business hours; maintaining signs, markers and other means and methods
of pedestrian and vehicular traffic control; and maintaining any existing
plantings and landscaped areas.
B. Except as otherwise expressly provided herein, the parking
spaces in the Common Area shall be used only for the parking of private vehicles
of customers, invitees and employees of tenants of the Shopping Center and for
no other purpose. The roads, streets and drives shall be used for pedestrian and
vehicular traffic serving the Shopping Center and for no other purpose.
Employees of the tenants of the Shopping Center shall not park their automobiles
in the Common Area except in that portion thereof designated as Employee Parking
and Landlord shall require all other tenants of the Shopping Center to use their
best efforts to prevent any violation of this provision. Tenant shall use its
best efforts to prevent any such violation by its employees.
C. Landlord shall not exact any charge or permit others to exact
any charge for use of the Common Area from Tenant or its customers, invitees or
employees or of any other tenant or from any other parties using the Shopping
Center in accordance with the terms of this Lease.
D. There shall be no advertisements or signs in the Common Area
except the sign pylon or pylons and/or the announcement signs hereinbefore
provided for and traffic control signs and any other signs existing on the
Commencement Date. No merchandise shall be sold or displayed in the Common Area.
Notwithstanding the foregoing, any occupant of the Demised Premises may use the
sidewalk within the Shopping Center and immediately adjacent to the Demised
Premises for selling and for the storage of shopping carts, may erect a cart
corral or similar device thereon and may use said sidewalk for any other lawful
purpose or purposes.
E. Landlord shall indemnify and hold harmless Tenant, its employees and agents
from any and all claims, causes of action, damages, expenses and liability,
including reasonable attorney’s fees, sustained or incurred by any persons
(other than Tenant, its employees and agents) which are based upon or arise out
of illness or injury, including death of any person or property damage to any
property and which arise from, or in any manner grow out of, any negligent act
or omission of Landlord, its agents, partners or employees in the Common Area to
the extent not due to the negligence of Tenant, its agents, partners or
employees. Landlord shall promptly respond to and assume the investigation,
defense and expense of all claims and causes of action arising out of or in
connection with occurrences within the Common Area as provided above. Tenant
may, at its sole cost and expense, join in such defense with counsel of its
choosing.
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3. COMMON AREA COSTS.
A. “Common Area Costs” shall mean all amounts paid or incurred by
Landlord and its designees for maintenance and repair of the Common Areas
(meaning all parking areas, walkways and driveways of the Shopping Center and
related lighting fixtures, drainage and other facilities), including, without
limitation, cleaning, snow and ice removal, planting, replanting and replacing
flowers and landscaping, maintenance, repair and replacement of such areas,
lighting, premiums for insurance and workers’ compensation insurance,
unemployment, social security and salaries (including employee benefits) of any
property management personnel directly and actually performing services in
connection with the Common Areas (but there shall be excluded salaries of other
office personnel such as secretaries and accountants, and the cost of all work
done at Landlord’s main office), sales and use taxes on material, equipment,
supplies and services purchased for maintenance of the common areas, fees for
required licenses and permits, supplies, operation of loudspeakers and any other
equipment supplying music to the common areas or any part thereof, operation of
public toilets, if any, policing the Common Areas (including costs relating to
controlling traffic thereto and therefrom) and affording protection thereof,
reasonable depreciation of movable equipment used in the operation, reasonable
rental of movable equipment used in the operation, repair and maintenance of the
common areas (but in any such case without duplication as to depreciation
charges on any such movable equipment), and all other similar direct costs
properly chargeable to operation of the common areas. Common Area Costs shall
not include the cost of maintaining, repairing or replacing any building in the
Shopping Center. If Landlord, in its reasonable discretion, installs a new or
replacement capital item to the common areas, the cost of such item together
with an interest factor at three percentage points above the then “Prime Rate”
(as published in the Wall Street Journal or comparable financial publication
reasonably selected by Landlord) at the time such cost is incurred, shall be
considered as though such cost and interest comprised a direct reduction loan
amortizing over the useful life of such item, and the annual amortization amount
shall be included in Common Area Costs. In addition, there shall be a five (5%)
percent administrative fee payable to Landlord multiplied by all other Common
Area Costs (excluding insurance and capital items) included within Common Area
Costs.
B. Tenant’s annual pro-rata share of Common Area Costs (herein
called “Tenant’s Common Area Charge”) shall be the product of Common Area Costs
and Tenant’s Proportionate Share.
C. Landlord shall estimate Tenant’s Common Area Charge each year and l/12th of
the amount so estimated shall be payable as Additional Rent on the first day of
each calendar month in advance. Within 90 days after the end of each calendar
year, Landlord shall furnish Tenant a statement (“CAM Statement”) in reasonable
detail of the actual amount of Tenant’s Common Area Charge prepared in
accordance with GAAP, and there shall be an adjustment between Landlord and
Tenant, with payment as Additional Rent to, or repayment by, Landlord, as the
case may be within thirty (30) days of Landlord’s statement, so that Landlord
shall receive the entire amount of Tenant’s Common Area Charge for such period.
All CAM Statements shall be accompanied by copies of all third party invoices
and other supporting documentation.
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D. If Tenant is open for business during the period commencing at
1:00 P.M. and ending at 7:00 A.M. (herein called “Extended Period”), Tenant
shall pay its proportionate share of the additional costs of operating the
Common Area arising out of and directly attributable to the operation of the
Common Area during the Extended Period. If any other tenants are operating
during all or any part of the Extended Period, Tenant shall be responsible for
payment of an amount equal to the product of (a) said additional costs and (b) a
fraction, the numerator of which shall be the gross floor area of the Demised
Premises, and the denominator of which shall be the total gross floor area of
all premises (including the Demised Premises) open during all or any part of the
Extended Period, appropriately adjusted to reflect the number of hours that each
business remains open during the Extended Period. Tenant’s share of said
additional costs shall be paid to Landlord as Additional Rent together with the
payment of Tenant’s Common Area Charge as set forth in this Exhibit, but none of
said additional costs shall be included in Common Area Costs or Tenant’s Common
Area Charge.
E. Tenant may at any time during the twelve (12) month period after
the CAM Statement in question audit Landlord’s books and records pertaining to
Common Area Costs. Landlord shall cooperate with Tenant and shall make all such
books and records available to Tenant at Landlord’s offices or another place
within the municipality where the Demised Premises are located. If any audit
discloses that Tenant paid in excess of its Common Area Charge, Landlord shall
pay such excess to Tenant within fifteen (15) days after Landlord’s receipt of
Tenant’s demands therefor. If any error is in excess of three (3%) percent of
the amount actually payable by Tenant, then Landlord shall pay Tenant the
reasonable out-of-pocket cost of such audit within ten (10) days after
Landlord’s receipt of Tenant’s demand therefore. As a condition of auditing
Landlord’s books and records, Tenant shall represent to Landlord that the person
conducting such audit is not being compensated on any contingency of percentage
basis whereby the amount of such compensation is determined in whole or in part
by any excess payments made by Tenant.
F. In the event that Landlord is required to maintain, repair or replace any
gas, water, electric and other utility lines in the Common Area that exclusively
serve the Demised Premises, then the cost of the maintenance, repair or
replacement shall not be a Common Area Charge, but rather Tenant shall pay
reimburse Landlord for all of such costs (i.e. one hundred percent (100%)) as
Additional Rent within thirty (30) days following Tenant’s receipt of the
invoice for same.
4. RESTRICTIVE COVENANT.
A. Subject to the leases of the existing tenants in the Shopping Center and all
extensions or renewals thereof, and subject also to the exclusion of the Burger
King premises immediately adjacent to the Demised Premises which shall not be
subject to the provisions of this sentence prohibiting the sale of food
including beverages and food for off-premises consumption, Landlord covenants
and agrees that, except for the Demised Premises (and the foregoing), it shall
not lease, rent or occupy or permit any premises in the Shopping Center to be
occupied for the sale of food, including, but not limited to, beverages and pet
food, for off-premises consumption, the sale of health and beauty aids and/or
the sale of prescription drugs. Landlord further covenants and agrees that it
shall not lease, rent or occupy or permit any premises in the Shopping Center to
be occupied for any noxious or offensive use, for
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manufacturing or for use as a restaurant, theater, bowling alley, funeral
parlor, warehouse, office (except for such office or warehouse use as shall be
incidental to a permitted retail use) or non-retail use (nothing herein intended
to characterize the uses listed in this sentence as retail uses).
B. Landlord expressly agrees that the covenants contained in this Article shall
run with the Land during the Term of the Lease, and Landlord agrees that the
covenants contained above may be included in any memorandum of lease in form for
recording.
398
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EXHIBIT J
LOCAL LAW ADDENDUM
(Attached)
399
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Lease Addendum (NY)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Ozone Park LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”).
Capitalized terms used in this Addendum without definition shall have the
meanings set forth in the Lease. This Addendum is to be construed as
supplemental to, and part of, the Lease. In the event of any inconsistency
between the Lease and this Addendum, the terms and provisions of this Addendum
shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Construction Lien. Nothing in the Lease shall be deemed to
constitute Landlord’s consent or request, express or implied, by inference or
otherwise: (a) to any contractor, subcontractor, laborer, or material supplier
for the performance of any labor or the furnishing of any materials for any
improvement, alteration or repair of the Demised Premises; or (b) to subject the
Demised Premises to any mechanic’s lien.
2. Maintenance of Property.
A. To the extent the Lease requires Tenant to maintain or repair any
sidewalk, Tenant shall perform all obligations of Landlord (and shall indemnify
Landlord in the manner provided in the Lease against any liability of Landlord
arising) under New York City Administrative Code §2- 710 and -711.
B. Tenant shall not clean any window in or about the Demised
Premises (or require, permit, suffer, or allow any window to be cleaned) from
the outside in violation of New York Labor Law §202.
3. Landlord’s Remedies.
A. Notwithstanding anything to the contrary in New York Real
Property Actions and Proceedings Law (N.Y. RPAPL) §711(2) or any other
applicable law or rule of procedure, Landlord’s acceptance of any partial
payment on account of rent, even if such payment has been acknowledged or
receipted for in writing, shall not be deemed to constitute Landlord’s “express
consent in writing to permit Tenant to continue in possession” as referred to in
N.Y. RPAPL §711(2) unless Landlord’s written acceptance expressly states that:
“Landlord consents to Tenant’s remaining in possession notwithstanding
nonpayment of rent.” Any such part payment shall merely constitute a payment on
account and nothing more, and shall not limit any rights or remedies of
Landlord.
B. Tenant expressly waives and releases, for itself and for any
person claiming by, through or under Tenant, any rights that Tenant or such
person may have under New York civil practice law and rules §220 1 (or any other
law or rule of procedure, including any provisions of the New York real property
actions and proceedings law), in connection with any holdover proceedings or
other action or proceeding regarding this Lease, Tenant’s rights as a tenant of
the Building, or Tenant’s possession of the Demised Premises.
400
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4. Casualty. The provisions of Article 26 of this Lease on
destruction shall be deemed an express agreement as to damage or destruction of
the Demised Premises by fire or other casualty. New York Real Property Law §227
(and any similar or successor statute), providing for such a contingency in the
absence of an express agreement, shall have no application.
5. Redemption. Tenant specifically waives the right of redemption
provided for in New York Real Property Actions and Proceedings Law §761, and any
similar or successor statute.
6. Landmarks. Tenant acknowledges and agrees that it shall not
seek or support a landmark designation, unless such landmark designation is
specifically sought by Landlord, pursuant to the New York City Administrative
Code §25-322 for the Demised Premises or any part of the Building.
7. Zoning Lot. Tenant acknowledges that Tenant has no rights to or
interest in any development rights, “air rights,” rights to construct additional
floor area, or comparable rights appurtenant to the Demised Premises. Tenant
consents, without further consideration, to Landlord’s utilization or transfer
of such rights in any manner. Tenant shall promptly execute and deliver any
instruments that Landlord may reasonably request, including without limitation,
instruments merging zoning lots, or waiving Tenant’s right to join in such
instruments, to evidence such acknowledgment and consent. The provisions of this
paragraph are and shall be deemed to be and shall be construed as Tenant’s
express waiver and release of any interest Tenant may have as a “party in
interest” (as defined under the definition of “Zoning Lot” in § 12-10 of the New
York City Zoning Resolution or any similar or successor statute) in the Demised
Premises.
401
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EXHIBIT K
Confidentiality Agreement
(Attached)
402
--------------------------------------------------------------------------------
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as
of , 2010 (the “Effective Date”) by and between [TENANT],
a , having an address at
(“Company”)
and , a , having an
address at (“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without regard to conflict of law principles. The exclusive
jurisdiction for any disputes concerning this Agreement shall be the Superior
Court of New Jersey,
403
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Bergen County, and the parties hereby submit to such jurisdiction and waive all
defenses relating to jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
404
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
405
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EXHIBIT B-6
LEASE FORM FOR WILMINGTON, DE
406
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KEY NO:
LEASE
BY AND BETWEEN
WE APP WILMINGTON LLC,
LANDLORD
AND
PATHMARK STORES, INC.,
TENANT
DEMISED PREMISES
AT
3901 LANCASTER PIKE, WILMINGTON, DELAWARE
407
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TABLE OF CONTENTS
Page
1.
EXHIBITS
1
2.
DEMISED PREMISES
1
3.
TERM
2
4.
RENEWAL PERIODS
2
5.
RENT
3
6.
USE AND OCCUPANCY
5
7.
TAXES
7
8.
SIGNAGE
8
9.
TRUE LEASE
9
10.
REPAIRS
9
11.
INSURANCE
9
12.
REQUIREMENTS OF LAW AND FIRE INSURANCE
10
13.
ALTERATIONS
11
14.
ACCESS TO DEMISED PREMISES
11
15.
UTILITIES
11
16.
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
11
17.
TRADE FIXTURES
12
18.
ASSIGNMENT
13
19.
TITLE AND AUTHORITY
14
20.
QUIET ENJOYMENT
15
21.
UNAVOIDABLE DELAYS
15
22.
END OF TERM
15
23.
LANDLORD’S DEFAULT
16
24.
ADDITIONAL CHARGES
16
25.
TENANT’S DEFAULT
17
26.
DESTRUCTION
19
27.
EMINENT DOMAIN
20
28.
THIRD PARTY LITIGATION
21
29.
WAIVER OF DISTRAINT
21
30.
ESTOPPEL CERTIFICATES
21
31.
NOTICES
21
408
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TABLE OF CONTENTS
(continued)
Page
32.
BROKER
22
33.
LIENS
22
34.
DEFINITION OF LANDLORD
22
35.
ADJOINING OR ADJACENT PROPERTY
22
36.
ENVIRONMENTAL LAWS
23
37.
LEASEHOLD MORTGAGE
24
38.
INDEMNITY
26
39.
LIMITATION OF LANDLORD’S LIABILITY
26
40.
BOOKS AND RECORDS
27
41.
SATELLITE DISH
27
42.
NO PRESUMPTION AGAINST DRAFTER
27
43.
SUCCESSORS AND ASSIGNS; AFFILIATES
27
44.
CAPTIONS
27
45.
INVALIDITY OF CERTAIN PROVISIONS
27
46.
CHOICE OF LAW/JURISDICTION
28
47.
NO WAIVER
28
48.
ATTORNEY’S FEES
28
49.
WAIVER OF TRIAL BY JURY
28
50.
MISCELLANEOUS
28
51.
COUNTERPARTS
29
52.
INCORPORATION OF STATE LAW PROVISIONS
29
409
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LEASE
THIS LEASE (this “Lease”), made as of November 2010 (the “Effective
Date”), by and between WE APP WILMINGTON LLC, a Delaware limited liability
company with an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue
Extension, Suite 303 Concord, Massachusetts 01742 Attn: Adam Winstanley
(hereinafter called “Landlord”), and PATHMARK STORES, INC., a Delaware
corporation, having an office at 2 Paragon Drive, Montvale, New Jersey 07645
(hereinafter called “Tenant”). This Lease is guaranteed by The Great Atlantic &
Pacific Tea Company, Inc., a Maryland corporation (“Guarantor”) pursuant to a
guaranty of even date herewith (as the same may be amended, supplemented or
modified from time to time, the “Guaranty”).
WITNESSETH:
Landlord and Tenant covenant and agree as follows:
1. EXHIBITS. The following Exhibits are annexed hereto and made a part
hereof:
A. Exhibit A, Site Plan of the Demised Premises;
B. Exhibit B1, Legal Description of the Land;
C. Exhibit B2, Existing Encumbrances on Land
D. Exhibit C, Remedial Work
E. Exhibit D, Form of Subordination, Non-Disturbance and Attornment
Agreement;
F. Exhibit E, Memorandum of Lease;
G. Exhibit F, Form of Guaranty;
H. Exhibit G, Insurance Requirements;
I. Exhibit H, Percentage Rent;
J. Exhibit I, Local Law Addendum; and
K. Exhibit J, Confidentiality Agreement.
2. DEMISED PREMISES.
A. Landlord hereby leases to Tenant and Tenant hereby takes from Landlord that
certain parcel of land (hereinafter called “Land”) commonly known as 3901
Lancaster Pike Wilmington, Delaware and more particularly described on
Exhibit B1 and the buildings and other improvements now or hereafter erected on
the Land together with the benefit of and subject to any and all easements,
appurtenances, rights and privileges and other matters of record now or
hereafter arising including those described in Exhibit B2. The land is currently
improved by an
410
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existing building consisting of approximately 48,622 square feet of space (the
“Building”), as more particularly shown on the Site Plan attached hereto as
Exhibit A. The Building and any other buildings and improvements now or
hereafter erected on the Land shall be hereinafter called “Improvements.” The
Land and any Improvements are hereinafter collectively called the “Demised
Premises.”
B. Tenant or its Affiliates owned or leased the Demised Premises prior to their
being purchased by Landlord. Landlord shall have no obligation or risk
whatsoever with respect to the condition of the Demised Premises, Tenant taking
the Demised Premises “AS IS, WHERE IS, WITH ALL FAULTS”. Tenant acknowledges
that it has had full opportunity to inspect the Demised Premises with
engineering and other consultants of its choice. Tenant’s commencing possession
under this Lease shall be deemed an acknowledgment that the condition of the
Demised Premises is satisfactory. Tenant further acknowledges that neither
Landlord nor any person acting under Landlord has made or implied any
representations or warranties whatsoever concerning the Demised Premises, their
condition or this Lease except as set forth in Section 19.
3. TERM.
A. The term of this Lease (“Term”) shall commence (the “Commencement
Date”) on the Effective Date and shall continue to and include the date (the
“Expiration Date”) that is twenty (20) years after the day before the
Commencement Date if the Commencement Date is the first day of a month, or
twenty (20) years after the last day of the month in which the Commencement Date
occurs if the Commencement Date is not the first day of a month.
B. The term “Lease Year” shall mean the following: the first Lease
Year shall be the 12 month period commencing on the Commencement Date if the
Commencement Date is the first day of a month, or on the first day of the month
immediately following the month in which the Commencement Date occurs if the
Commencement Date is not the first day of a month; and each succeeding 12 month
period thereafter shall be a Lease Year.
4. RENEWAL PERIODS. Tenant shall have the right and option to extend the Term of
this Lease from the date upon which it would otherwise expire for ten
(10) separate consecutive renewal periods of five (5) years each (each such
period being hereinafter called a “Renewal Period”) upon the same terms and
conditions as are herein set forth except the rent for such Renewal Period shall
be as provided in Section 5 below; provided, however, that at the time of so
electing to extend and also at the time any Renewal Period commences Tenant is
not in default beyond any applicable notice and cure period, and this Lease is
then in full force and effect. If Tenant fails timely so to exercise its option
for any Renewal Period, time being of the essence, Tenant shall have no further
extension rights hereunder. All references to the Term shall mean the Initial
Term as it may be extended by any Renewal Period. If Tenant elects to exercise
any one or more of said options to renew, it shall do so by giving written
notice (“Renewal Notice”) of such election to Landlord at any time during the
term of this Lease (including any Renewal Periods) on or before the date which
is three hundred sixty five (365) days before the beginning of the Renewal
Period or Renewal Periods for which the term hereof is to be renewed by the
exercise of such option or options. If Tenant elects to exercise any one or more
of said options to renew by serving a Renewal Notice in accordance with the
foregoing, the
411
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Term of this Lease shall be automatically extended for the Renewal
Period(s) covered by the Renewal Notice without execution of an extension or
renewal lease. If Tenant shall not have given notice of such election to
Landlord by such date in respect of any Renewal Period, Landlord shall (unless
notice shall have been given as hereinafter specifically permitted) give notice
to Tenant that Tenant has failed to give notice of such election to Landlord
(hereinafter called the “Option Notice”). Tenant’s time to give notice of such
election shall continue until the date which is sixty (60) days after receipt of
the Option Notice. Landlord shall not give the Option Notice prior to the date
which is four hundred twenty-five (425) days before the Expiration Date. If
Landlord shall not have given the Option Notice prior to the date which is four
hundred twenty-five (425) days before the beginning of the next succeeding
Renewal Period, the term of this Lease shall be extended beyond the Expiration
Date to the date which is four hundred twenty-five (425) days after the date on
which the Option Notice is given by Landlord.
5. RENT.
A. Beginning on the Commencement Date and continuing throughout the Term, Tenant
covenants and agrees to pay Landlord for the Demised Premises, without previous
demand therefor, fixed annual rent (“Fixed Annual Rent”) as follows:
Lease Year
Fixed Annual Rent
Fixed Monthly Rent
1-5
$
777,952.00
$
64,829.33
6-10
$
816,849.60
$
68,070.80
11-15
$
857,692.08
$
71,474.34
16-20
$
900,576.68
$
75,048.06
First Renewal Period
21-25
$
945,605.52
$
78,800.46
Second Renewal Period
26-30
$
992,885.79
$
82,740.48
Third Renewal Period
31-35
$
1,042,530.08
$
86,877.51
Fourth Renewal Period
36-40
$
1,094,656.59
$
91,221.38
Fifth Renewal Period
41-45
$
1,149,389.42
$
95,782.45
Sixth Renewal Period
46-50
$
1,206,858.89
$
100,571.57
Seventh Renewal Period
51-55
$
1,267,201.83
$
105,600.15
412
--------------------------------------------------------------------------------
Eighth Renewal Period
56-60
$
1,330,561.92
$
110,880.16
Ninth Renewal Period
61-65
$
1,397,090.02
$
116,424.17
Tenth Renewal Period
66-70
$
1,466,944.52
$
122,245.38
B. All Fixed Annual Rent shall be payable by Tenant in equal
monthly installments in advance on the first day of every calendar month during
the Term of this Lease (and any Renewal Periods), and shall be payable at the
office of the Landlord first above set forth or at such other address as
Landlord shall have given in a notice to Tenant) in current U.S. currency by
check drawn on a clearinghouse bank and payable directly to Landlord (or, if
requested by Landlord from time to time by electronic fund transfer, to an
account designated by Landlord). Rent for a part of a month shall be prorated on
a daily basis and paid on the Commencement Date. Further, the rent for the first
full month shall be paid on the Commencement Date.
C. Beginning on the Commencement Date and continuing throughout the
Term, Tenant covenants and agrees to pay, without previous demand therefor, all
sums other than Fixed Annual Rent due under or required to be paid by this Lease
(all of the foregoing being “Additional Rent” regardless of however defined or
described in this Lease).
D. It is the intention of the parties hereto that the Fixed Annual Rent payable
hereunder shall be net to Landlord free of cost, charge, offset, diminution or
other deduction, so that this Lease shall yield to Landlord the net Fixed Annual
Rent specified herein during the Term of this Lease. Notwithstanding applicable
law to the contrary and with the sole exception of those costs, expenses and
obligations expressly stated in this Lease to be the sole responsibility of
Landlord (or the responsibility of third parties as provided in Section 36C),
all costs, expenses and obligations of every kind and nature whatsoever relating
to this Lease, the Demised Premises or imposed on Landlord under applicable law
either now existing or hereafter enacted and whether or not within the
contemplation of the parties on account of this Lease, the Demised Premises or
Landlord’s interest in the Demised Premises are assumed and shall be paid by
Tenant when and as due as Additional Rent. Without limiting the generality of
the foregoing, Tenant shall at its sole expense (which expense shall be deemed
Additional Rent hereunder) be responsible for payment of all Taxes, all
electricity, telecommunication service, gas, water, sewer, telephone, refuse
disposal, and other charges for utilities and services supplied to the Demised
Premises, insurance costs, amounts due under any title encumbrance matter
described in Exhibit B2, and all costs of cleaning, maintaining, repairing and
replacing the Demised Premises or any portion thereof and of complying with all
laws now existing or hereafter enacted including all Environmental Laws (defined
below). Any cost, expense or obligation directly relating to the Demised
Premises that is not expressly declared in this Lease to be that of Landlord
shall be deemed to be an obligation of Tenant to be performed by Tenant at
Tenant’s sole expense, and to the greatest extent permitted by law Tenant shall
indemnify and defend Landlord against, and hold Landlord harmless from, the
same, and Tenant’s liability for the payment and performance of such amounts and
obligations that shall arise during the Term is
413
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hereby expressly provided to survive the expiration of the Term or early
termination of this Lease. Fixed Annual Rent, Additional Rent, and all other
sums payable hereunder by Tenant, shall be paid without notice or demand, and
without set off, counterclaim, recoupment, abatement, suspension, deduction, or
defense (other than payment) whatsoever. Except as otherwise expressly set forth
in this Lease with respect to certain events of casualty in Section 26 or
condemnation in Section 27, Tenant shall in no event have any right to terminate
this Lease, and any right so to terminate (or to abate, suspend, set off or
otherwise deduct from Fixed Annual Rent or Additional Rent) under applicable law
is hereby waived to the greatest extent permitted by law. It is the intention of
the parties that the obligations of Tenant hereunder shall be separate and
independent covenants and shall not be discharged or otherwise affected by any
law or regulation now or hereafter applicable to the Demised Premises or any
other restriction on Tenant’s use, and that Fixed Annual Rent, Additional Rent,
and all other sums payable by Tenant hereunder shall continue to be payable in
all events, and that the obligations of Tenant hereunder shall continue
unaffected throughout the Term. Landlord, at its sole cost and expense, shall be
responsible for the following: (i) payment of any amounts relating to Fee
Mortgages or other encumbrances or liens created by Landlord, (ii) management
fees, administrative costs, professional fees and any other costs incidental to
its fee ownership of the Demised Premises; and (iii) and cost, expense, or
liability resulting from the negligent or willful misconduct of Landlord, its
employees or agents. For the avoidance of doubt, Tenant shall be responsible for
all costs, expenses and obligations of Landlord in that certain Lease (as
amended or otherwise modified from time to time, the “Ground Lease”) dated as of
September 8, 1997 by and between Commonwealth Trust Co. and 909 Group, L.P., as
amended by that certain Amendment of Lease dated February 28, 1979, as further
amended by that certain Amendment of Lease dated December 11, 1979, as further
affected by that certain Assignment of Lease dated November 29, 1994, as further
affected by that certain Assignment of Lease dated June 11, 1980, as further
affected by that certain Renewal Notice dated March 3, 1997, as further affected
by that certain Renewal Notice dated January 31, 2002, as further affected by
that certain Notice dated August 9, 2007, as further affected by that certain
Notice dated February 6, 2009.
E. If any person (other than an Affiliate of the initial Guarantor (being The
Great Atlantic & Pacific Tea Company, Inc.) or a successor by merger of
acquisition) becomes an assignee of this Lease or sublets all or substantially
all of the Demised Premises or otherwise becomes or is a Tenant under this
Lease, such occurrence shall be a Percentage Rent Event and the provisions of
Exhibit H shall immediately become applicable for the remainder of the Term.
6. USE AND OCCUPANCY.
A. The Demised Premises may be used and occupied for the operation of a
supermarket, drugstore, automated teller machine, bank, all other uses customary
and incidental to a supermarket and, so long as the Minimum Credit Test (defined
in Section 25D) is then met, all other lawful purpose or purposes.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to open, to conduct or to remain open for the conduct of any
business in the Demised Premises but shall nevertheless pay Fixed Annual Rent
and all Additional Rent when and as the same is due. At all times Tenant shall
comply with all laws, ordinances and bylaws, regulations, codes, (including,
without limitation, the Americans With Disabilities Act of 1990, or “ADA”)
permits, orders and conditions of any special permits or other governmental
approvals (“law” or “laws”) applicable from time to time to the Demised
414
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Premises or Tenant or both, foreseen or unforeseen, and whether or not the same
interfere with Tenant’s occupancy. Tenant shall procure all approvals, licenses
and permits, in each case promptly giving Landlord true and complete copies of
the same and all applications therefor. Tenant shall never overload any of the
Building systems, including the floors and mechanical, electrical and structural
systems, and shall also keep the Demised Premises equipped with appropriate
safety appliances and comply with all requirements of insurance and of insurance
inspection or rating bureaus. Tenant shall not itself, nor shall Tenant permit
or suffer persons acting under Tenant to, either with or without negligence,
injure, overload, deface, damage or otherwise harm the Demised Premises or any
part thereof or use the Demised Premises contrary to any law or in a manner
likely to create any nuisance. It is intended that Tenant bear the sole risk of
all present or future laws affecting the Demised Premises, and Landlord shall
not suffer any reduction in any rent on account of the enforcement of laws.
B. Subject to Landlord’s consent, not to be unreasonably withheld,
delayed or conditioned, Tenant shall have the right to enter into agreements
with utility companies creating easements in favor of the utility companies as
are required in order to service the Demised Premises. Also subject to
Landlord’s consent, not to be unreasonably withheld, delayed or conditioned,
Tenant may enter into reciprocal parking agreements and easements for ingress
and egress as are required in order to service the Demised Premises and any
adjoining or adjacent land designated by Tenant. Landlord covenants and agrees
to execute any and all documents, instruments or certificates reasonably
required in connection with such matters to which it has given its consent, and
to take all other action, in order to effectuate the same, all at Tenant’s cost
and expense. In no event, however, shall Landlord be required to consent to nor
shall Tenant have the power to enter into any easement or reciprocal parking
agreement (i) that is for a term in excess of the term of this Lease (as the
same may be renewed or extended) except for utility and access easements that
may be perpetual or otherwise extend beyond the term of this lease, or (ii) that
diminishes the economic value of the Land. Landlord further covenants and
agrees, upon request of tenant, to convey without compensation therefor,
insubstantial perimeter portions of the Land for highway or roadway purposes, to
the state in which the demised premises are situate or any other municipal or
governmental body, provided, however, that any such conveyance shall not
constitute a taking (as defined in section 28 below) nor constitute grounds for
tenant to terminate this Lease. Notwithstanding anything to the contrary or
otherwise set forth herein, any encumbrance on the Demised Premises shall be
subject to any requirements imposed by any Fee Mortgage (provided that Landlord
shall reasonably cooperate with Tenant, at no out of pocket cost to Landlord, in
connection with obtaining any requisite consent from any Fee Mortgagee as
defined below).
C. The provisions of this paragraph shall only apply if and only if
the Minimum Credit Test is not met. If Tenant either gives Landlord written
notice of Tenant’s intention to discontinue permanently the operation of its
business in the Demised Premises or any part of the Demised Premises or
discontinues the operation of its business in the Demised Premises or any part
of the Demised Premises for a period of one (1) year for any reason (other than
Destruction or Taking that pursuant to the applicable provisions of this Lease
entitles Tenant to terminate this Lease), then Landlord may terminate this Lease
as to the Demised Premises, or if applicable, the part of the Demised Premises
with respect to which Tenant has given notice of its intention to discontinue,
or in which Tenant has discontinued, its operations, by thirty (30) days’
written notice to Tenant of Landlord’s election to terminate this Lease (or, if
415
--------------------------------------------------------------------------------
applicable, Landlord’s election to terminate this Lease as to the part of the
Demised Premises with respect to which Tenant has given notice of its intention
to discontinue, or in which Tenant has discontinued, its operations). Tenant may
override Landlord’s election only once by, as applicable, resuming operations of
its business in the Demised Premises within twenty-five (25) days after receipt
of Landlord’s notice or by rescinding its notice of its intention to discontinue
its business in writing to Landlord delivered within twenty-five (25) days after
receipt of Landlord’s notice.
7. TAXES.
A. Tenant shall, during the term of this Lease, as Additional Rent,
pay and discharge punctually, as and when the same shall become due and payable,
all taxes, special and general assessments, water rents, rates and charges,
sewer rents and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, including rent and/or
occupancy taxes (hereinafter collectively referred to as “Taxes”), and each and
every installment thereof that shall or may during the term of this Lease,
become due and payable, or liens upon the Demised Premises or any part thereof,
together with all interest and penalties thereon, under or by virtue of all
present or future laws, ordinances, requirements, orders, directives, rules or
regulations of the Federal, State, County, Town and City Governments and of all
other governmental authorities whatsoever (all of which shall also be included
in the term “Taxes” as heretofore defined).
B. To the extent permitted by law, Tenant or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installments. Landlord agrees to permit the application
for the foregoing conversion to be filed in Landlord’s name, if necessary, and
shall execute any and all documents, instruments or certificates reasonably
requested by Tenant to accomplish the foregoing.
C. Tenant shall be deemed to have complied with the covenants of
this Lease if payment of Taxes shall have been made either within any period
allowed by law or by the applicable governmental authority during which payment
is permitted without penalty so long as the Taxes shall never become subject to
a tax sale on the Demised Premises or subject Landlord to any civil or criminal
liability. Tenant shall produce and exhibit to Landlord satisfactory evidence of
payment prior to the expiration of any such period.
D. All Taxes shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of such year during which the
Term shall be in effect. Notwithstanding anything to the contrary contained
herein, if the Term hereof terminates prior to the date which would have been
the expiration thereof but for the earlier termination, then Tenant shall pay
those Taxes which would have been paid by Tenant to and including the term
expiration date and this obligation shall expressly survive such termination.
E. So long as the requirements of Paragraph C of this Section are complied with,
Tenant or its designees shall have the right to contest or review all Taxes by
legal proceedings, or in such other manner as it may deem suitable. Tenant or
its designees shall inform Landlord of any such proceedings and conduct such
proceedings promptly at its own cost
416
--------------------------------------------------------------------------------
and expense, and free of any expenses to Landlord, and if necessary, in the name
of and with the cooperation of Landlord (so long as Landlord’s cooperation does
not involve incurring obligations or liability or material expense to Landlord
unreimbursed by Tenant). Landlord shall execute all documents, instruments or
certificates reasonably necessary and correct to accomplish the foregoing.
Notwithstanding anything to the contrary or otherwise set forth herein, any such
contest shall be subject to compliance with all applicable provisions of any Fee
Mortgage (provided that Landlord shall reasonably cooperate with Tenant, at no
material out of pocket cost to Landlord, in connection with such compliance).
F. Landlord covenants and agrees that any refunds or rebates on
account of Taxes paid by Tenant pursuant to the provisions of this Lease shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and as such are to be received by Landlord in trust and paid to Tenant
forthwith. Landlord will, upon the request of Tenant, sign any receipts that may
be necessary to secure the payment of any such refund or rebate, directly to
Tenant and/or will pay over to Tenant such refund or rebate as received by
Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant’s application (if
legally required) for separate tax assessments for such portions of the Demised
Premises as Tenant shall at any time, and from time to time, reasonably
designate. Landlord hereby agrees, upon request of Tenant, to execute all
documents, instruments or certificates as shall reasonably be required by Tenant
(so long as the same impose no material obligations on Landlord or expose
Landlord to any liability).
G. Nothing herein or in this Lease otherwise contained shall
require or be construed to require Tenant to pay any inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, that are or may
be imposed upon Landlord, its successors or assigns, whether arising out of
Landlord’s ownership of the Demised Premises, this Lease or otherwise; provided,
however, that if at any time hereafter there is levied any tax on Landlord in
lieu of real estate taxes based solely upon the ownership of real property, by
property owners, in general, within the tax jurisdiction within which the
Demised Premises are located, then such tax shall be considered to be an item of
Taxes but for purposes of computing the amount of such tax payable by Tenant,
the Demised Premises shall be deemed to be the sole real property owned by
Landlord.
H. In the event that any fee mortgagee (“Fee Mortgagee”) requires the escrow of
Real Estate Taxes or insurance premiums, Tenant shall pay to such Fee Mortgagee
in escrow, on the first day of each and every month during the term of this
Lease, one twelfth (1/12) of all estimated charges for the ensuing twelve (12)
month period as reasonably estimated by the Fee Mortgagee based on current bills
for same. Tenant shall deposit at least ten (10) days prior to the first date on
which any interest or penalty will accrue such additional amounts as may be
necessary so that there shall at all times be sufficient funds in escrow to pay
such charges.
8. SIGNAGE. Tenant and any assignee or subtenant of Tenant shall have the right
to install, maintain and replace in, on or in front of any Improvement or
location on the Demised Premises or in any part thereof such signs and
advertising matter as Tenant, and with Tenant’s consent, any such assignee or
subtenant of Tenant may desire, provided that Tenant shall comply with any
applicable requirements of governmental authorities having jurisdiction and
shall obtain
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any necessary permits for such purposes. As used in this Section, the word
“sign” shall be construed to include any placard, pylon, logo, light or other
advertising symbol or object, irrespective or whether same be temporary or
permanent. All signs shall be Tenant’s personal property and shall be maintained
and removed by Tenant upon termination of this Lease at Tenant’s sole expense.
9. TRUE LEASE. It is the intent of Landlord and Tenant and the
parties agree that this Lease is a true lease and that this Lease does not
represent a financing agreement. Each party shall reflect the transaction
represented hereby in all applicable books, records, and reports (including
income tax filings) in a manner consistent with “true lease” treatment rather
than “financing” treatment.
10. REPAIRS. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, keep and maintain or cause to be kept
and maintained in repair and good condition the Building and improvements at any
time erected on the Demised Premises. Without limitation, Tenant shall perform
the Remedial Work described in Exhibit C. Landlord shall not be required to
furnish services or facilities or to make any improvements, repairs,
replacements or alterations in or to the Demised Premises whatsoever during the
Term of this Lease. Without limiting the generality of the foregoing, Tenant
shall be responsible for the entire Demised Premises and shall manage, maintain,
repair, replace, clean, secure, protect, defend and keep in compliance with all
governmental requirements, now existing or hereafter enacted, the Demised
Premises and all improvements and appurtenances and all utilities, facilities,
installations and equipment used in connection therewith, including all walls,
all floor coverings, glass, windows, doors, partitions, exterior and interior
lighting, signage, elevators, electrical, plumbing, heating, ventilating, fire
protection and life safety, security and other building systems, water and
sewage systems and other fixtures or equipment serving the Demised Premises,
keeping the Demised Premises and all improvements and appurtenances in at least
as good condition as on the Commencement Date. Without limitation, Tenant shall
provide all cleaning, painting, janitorial services, rubbish disposal, periodic
exterior waterproofing treatments to the Building, window caulking, maintenance
of all gas, water, electric and other utility lines from public ways to the
Demised Premises, and shall repair, maintain and replace all landscaping, roads,
parking areas, and walkways appurtenant to the Demised Premises, and shall
provide all snowplowing services thereto. Tenant shall provide a copy of all
current vendor contracts, if any, relating to the foregoing to Landlord at least
annually and from time to time otherwise upon Landlord’s request.
11. INSURANCE.
A. Tenant shall maintain at its own cost and expense insurance
policies insuring against loss by fire, lightning, the perils of extended
coverage and malicious mischief covering the Demised Premises and the other
Improvements in the Demised Premises and other perils as more fully described in
Exhibit G.
B. So long as Tenant performs its obligations in Paragraph A of
this Section, Landlord hereby waives all rights of recovery against Tenant and
any other occupant(s) of the Demised Premises and any of their agents and
employees for damage or destruction to any and all of the Improvements,
including without limitation, the Building, arising out of fire or other
casualty whether or not caused by acts or negligence of the aforementioned
persons. Tenant
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hereby waives all rights of recovery against Landlord, its agents and employees
for damage or destruction to any and all of the Improvements, including without
limitation, the Building and to Tenant’s trade fixtures, equipment and inventory
arising out of fire or other casualty whether or not caused by the acts or
negligence of Landlord, its agents or employees.
C. Tenant shall maintain at its own cost and expense public
liability and other insurance in accordance with the requirements of Exhibit G.
D. Any insurance required to be provided by Tenant pursuant to this
Lease may be provided by blanket insurance covering the Demised Premises and
other locations of Tenant, provided such blanket insurance complies with all of
the other requirements of this Lease with respect to the type of insurance
covered by blanket policies. If Tenant elects to insure the Demised Premises
under any blanket insurance policy, Tenant shall furnish to Landlord a
certificate of insurance showing the Demised Premises as a location insured
under any such blanket insurance policy to the extent of the limits required in
Exhibit G. Tenant shall furnish to Landlord and any Fee Mortgagee as to which
Tenant has received a notice containing such mortgagee’s name and address a
duplicate original copy or certificate of the policies of insurance required to
be carried by Tenant.
E. Notwithstanding anything to the contrary contained herein,
Tenant may carry any required insurance on trade fixtures and equipment
described in Section 17 under a program of self-insurance or to carry insurance
with deductibles in excess of part or all of the amounts of insurance required
under Exhibit G hereunder.
F. If Tenant fails to perform any covenant in this Section and such
failure continues for more than three (3) days after written notice, then,
without limiting any of Landlord’s other rights and notwithstanding any other
provision of this Lease concerning notice and cure of defaults, Landlord may but
need not obtain such insurance, and Tenant shall pay the cost thereof upon
demand as Additional Rent.
12. REQUIREMENTS OF LAW AND FIRE INSURANCE. Tenant shall comply with
and shall from time to time conform the Demised Premises to every applicable
requirement of law, duly constituted authority, Board of Fire Underwriters
having jurisdiction or of the carriers of all insurance on the Demised Premises
(all of the foregoing being hereinafter called “Legal Requirements”). Tenant
shall have the right upon giving notice to Landlord to contest any obligations
imposed upon Tenant pursuant to the provisions of this Section and to defer
compliance during the pendency of such contest, if the failure of Tenant to so
comply will not subject Landlord to civil or criminal penalty or liability.
Landlord shall cooperate with Tenant in such contest (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall execute any documents
reasonably required in furtherance of such purpose. Tenant shall not apply for
any change in zoning applicable to the Land or the Demised Premises without
Landlord’s prior written consent, not to be unreasonably withheld, conditioned
or delayed.
13. ALTERATIONS. Tenant may at its own expense from time to time,
during the term hereof, make such alterations, additions, improvements and
changes, structural or otherwise (hereinafter called “Alterations”), in and to
the Demised Premises which it may deem necessary
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or desirable, provided such Alterations shall not reduce the value of the
Demised Premises. Tenant, in making any Alterations, shall use materials of
equal or better quality than those used in the construction of the Demised
Premises and comply with all Legal Requirements. Tenant shall obtain or cause to
be obtained all building permits, licenses, temporary and permanent certificates
of occupancy and other governmental approvals that may be required in connection
with the making of Alterations. Landlord shall cooperate with Tenant in the
obtaining thereof (so long as Landlord’s cooperation does not involve
(a) incurring obligations or liability or material expense to Landlord
unreimbursed by Tenant or (b) breach of any covenants binding on Landlord or the
Demised Premises, including, without limitation, any mortgage) and shall execute
any documents required in furtherance of such purpose. Tenant may, but shall not
be obligated to, remove any Alteration so long as such removal does not
materially and adversely affect any heating, ventilating, mechanical,
electrical, structural, roof or life safety elements of the Building and Tenant
shall repair all damage that results from such removal and restore the Demised
Premises to a functional condition (including the filling of all floor and wall
holes, the removal of all disconnected wiring back to junction boxes and the
replacement of all damaged ceiling tiles). Upon completion of any Alteration
that is not Cosmetic Work, Tenant shall promptly deliver to Landlord plans
showing such Alteration as built. “Cosmetic Work” shall mean painting, carpeting
and wall coverings and the like and the addition or deletion of interior non
structural partitions, provided such work does not materially and adversely
affect any roof, structural, mechanical, electrical, utility, fire protection or
life safety systems or other systems or equipment of the Building.
14. ACCESS TO DEMISED PREMISES. Tenant shall permit Landlord to enter
upon the Demised Premises at all reasonable times approved by Tenant to examine
the Demised Premises, and during the six (6) month period preceding the
Expiration Date, to exhibit the Demised Premises to prospective tenants,
provided that Landlord shall not unreasonably interfere with the conduct of
business therein.
15. UTILITIES.
A. Tenant shall arrange and pay for any and all utility services to
the Demised Premises, including, without limitation, telecommunications, water,
gas, electricity and fuel used by it in the Demised Premises. Tenant shall pay
all sewer charges assessed by the municipal authority having jurisdiction. The
failure or interruption of any utility services shall be at Tenant’s sole risk
and Landlord shall not suffer any reduction in any rent on account thereof.
B. Tenant shall have the sole right to apply for, claim and receive
any rebate, reimbursement, credit, or payment from any utility company providing
service to the Building resulting from Tenant’s installation of energy saving
equipment in or on the Building.
16. SUBORDINATION, NON DISTURBANCE AND ATTORNMENT. This Lease shall become
subject and subordinate to the lien of any Fee Mortgagee of the entire fee
interest of the Demised Premises, and any renewals, modifications or extensions
thereof, provided that a Subordination, Non Disturbance and Attornment Agreement
(“SNDA”) substantially in the form annexed hereto as Exhibit D (or a reasonably
equivalent form that is reasonably acceptable to Tenant and the applicable Fee
Mortgagee) is executed, acknowledged
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and delivered by such Fee Mortgagee to Tenant. If the Fee Mortgagee requires
that this Lease have priority over such mortgage, Tenant shall, upon request of
the Fee Mortgagee, execute, acknowledge and deliver to the Fee Mortgagee an
agreement acknowledging such priority.
17. TRADE FIXTURES.
A. All trade fixtures and equipment whether owned by Tenant or
leased by Tenant from a Lessor/Owner (hereinafter called the “Equipment Lessor”)
installed in the Demised Premises, regardless of the manner or mode of
attachment, shall be and remain the property of Tenant or any such Equipment
Lessor and may be removed by Tenant or any such Equipment Lessor at any time. In
no event (including a default under this Lease) shall Landlord have any liens,
rights or claims in Tenant’s or Equipment Lessor’s trade fixtures and equipment
and Landlord agrees to execute and deliver to Tenant and Equipment Lessor,
within ten (10) days after request therefor, any document reasonably required by
Tenant or Equipment Lessor in order to evidence the foregoing, so long as the
same is reasonably acceptable to Landlord and any Fee Mortgagee. Tenant shall
promptly repair all damage to the Building caused by the removal of any such
trade fixtures or equipment. Notwithstanding anything to the contrary in this
Lease, the following shall not constitute trade fixtures or equipment for
purposes of this Lease and neither Tenant nor any Equipment Lessor shall own or
have any right to remove the same (and, without limiting the generality of the
foregoing, the following shall not be subject to the provisions of this
Paragraph A or Paragraph B of this Section 17): (i) the HVAC system, plumbing,
alarm, electric, life safety and other building systems used to operate the
Building or maintain the certificate of occupancy, and (ii) any “fixtures” as
such term is defined in the applicable Uniform Commercial Code.
B. In the event Tenant shall enter into any arrangement to finance
all or any portion of its trade fixtures or equipment either before or after the
installation thereof in the Demised Premises and whether such financing shall be
in the form of a mortgage, financing agreement, equipment lease, equipment sale
leaseback or otherwise and in the event the lessor or secured party thereunder
shall provide written notice to Landlord that it requires a copy of any default
sent by Landlord to Tenant under this Lease also to be sent to such person
(hereinafter called the “Owner/Secured Party”), then Landlord upon receipt of
such requirement shall simultaneously send a copy of any default notice to such
Owner/Secured Party at the address furnished to Landlord; provided that
Landlord’s failure to deliver any such copy to the Owner/Secured Party shall not
affect Landlord’s exercise of any right or remedy under this Lease in any way
whatsoever. The copy of any such default notice shall be sent to such
Owner/Secured Party in the same manner as notices are required to be sent and in
the same manner as such notice is being sent to Tenant hereunder. Landlord
further agrees that any such Owner/Secured Party shall have the right, but not
the obligation, to remedy or cure any default of Tenant under this Lease within
the same period of time granted to Tenant to remedy or cure any such default
under this Lease.
C. All trade fixtures and other personal property (which term shall include
without limitation food and inventory) of any person that is located on the
Demised Premises shall be at the sole risk of Tenant. Landlord shall not be
liable for any loss or damage to person or property resulting from any accident,
theft, vandalism or other occurrence on the Demised Premises, including damage
resulting from water, wind, ice, steam, explosion, fire, smoke,
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chemicals, the rising of water or leaking or bursting of pipes or sprinklers,
defect, failure or any other cause.
18. ASSIGNMENT.
A. Subject to paragraph (B) of this Section, Tenant may sublet all
or any part of the Demised Premises, or license the use of any portion thereof
or assign this Lease, but Tenant and Guarantor shall nevertheless continue to
remain liable hereunder. Any assignee of the Lease and any sublessee or licensee
of all or substantially all of the Demised Premises shall become jointly and
severally liable to Landlord, and any such transferee shall upon Landlord’s
request execute and deliver an instrument in confirmation thereof. In the case
of any assignment of this Lease or any sublease or licensee of all or
substantially all of the Demised Premises, Tenant shall promptly deliver to
Landlord a true and complete copy of the transfer instruments. No transfer of
all or any portion of the Demised Premises or Landlord’s consent thereto shall
be deemed a waiver of the provisions of this Section, or a release of Tenant or
any Guarantor.
B. So long as the Minimum Credit Test is not met (however the
following provisions of this paragraph B shall not apply at any time when the
Minimum Credit Test is met), Tenant shall not assign this Lease or sublet or
license all or substantially all of the Demised Premises to any transferee
unless (x) such transferee (1) operates at least five (5) other grocery stores
and (2) has Tangible Net Worth” (as defined in Section 25 below) of at least One
Hundred Million Dollars ($100,000,000) or (y) if such transferee does not meet
the requirements of (1) and (2) then such transferee must be approved by
Landlord, such approval not to be unreasonably withheld, conditioned or delayed.
If Tenant desires to so transfer this Lease to a person who does not meet the
requirements of (1) and (2) in the preceding sentence, then Tenant shall give
notice of such intended transfer to Landlord together with reasonable
information on its grocery store business and its audited financial statements
for the three most recent years showing the credit of the proposed transferee
and the proposed terms of the transfer. Upon receiving such information Landlord
shall have thirty (30) days to elect by written notice to Tenant to do one of
the following (and any failure of Landlord to affirmatively elect one or the
other shall be deemed to be an election by Landlord to consent to such transfer:
(a) approve such transfer, (b) disapprove such transfer, or (c) terminate the
Term of this Lease on any date which is no sooner than one-hundred twenty (120)
days after such election notice and no later than one-hundred eighty (180) days
after such election. If Landlord elects to terminate this Lease and thereafter
within one-hundred twenty (120) days enters into a lease or other agreement with
Tenant’s proposed transferee, any transfer payment that was to have been made to
Tenant by such transferee as specifically disclosed in writing as such to
Landlord in the proposed terms of the transfer furnished to Landlord as provided
above shall be paid by Landlord to Tenant out of the first rent amounts received
by Landlord from such transferee until the transfer payment is paid to Tenant in
full. For purposes of the previous sentence, a “transfer payment” shall include
proposed sublease income in excess of the rent under this Lease, and in such
cases Landlord’s payment to Tenant shall be a liquidated amount equal to such
excess rent at a discount rate of ten percent (10%).
C. If Tenant assigns this Lease, Landlord, when giving notice to said assignee
with respect to any default, shall also give a copy of such notice upon Tenant
originally named herein or its successor of whom Landlord shall have been given
written notice (being herein
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called “Original Tenant”), and no notice of default shall be effective as
against a Tenant until a copy thereof is given to the Original Tenant. The
Original Tenant shall have the same period after the giving of such notice to
cure such default as is given to Tenant under this Lease. If this Lease
terminates or this Lease and the Term hereof cease and expire because of a
default of such assignee, Landlord shall promptly give the Original Tenant
notice thereof. The Original Tenant shall have the option, to be exercised by
notifying Landlord in writing within thirty (30) days after receipt by the
Original Tenant of Landlord’s notice, to cure any default and become Tenant
under a new lease for the remainder of the term of this Lease (including any
Renewal Periods if applicable) upon all of the same terms and conditions of this
Lease as it may have been amended by agreement between Landlord and Original
Tenant, provided, however, that at the time of making any such election Original
Tenant cures all defaults under the Lease. In the event Original Tenant assigns
this Lease and it shall thereafter be rejected in a bankruptcy or similar
proceeding brought by or against such assignee, a new lease identical to this
Lease shall be entered into between Landlord and Original Tenant, provided that
Original Tenant cures any monetary defaults and any other defaults that are
capable of being cured. Any new lease created under this Section shall commence
on the date of termination or rejection of this Lease, as applicable.
Notwithstanding the foregoing, if Landlord, in its sole discretion delivers to
the Original Tenant and Guarantor a release as to all liability under this Lease
as theretofore amended, the Original Tenant shall not have the foregoing option.
D. In the case of a sublease of all or substantially all of the Demised Premises
for the remainder of the Term and so long as the Minimum Credit Test or the
requirements of Section 1 8B are met, Landlord shall, within thirty (30) days
following Tenant’s request, deliver to Tenant a recognition and attornment
agreement following the form attached hereto as Exhibit D and otherwise subject
to Landlord’s reasonable approval, executed and acknowledged by Landlord, for
the benefit of such subtenant; provided that such subtenant executes and
delivers an instrument reasonably satisfactory to Landlord confirming that such
subtenant is jointly and severally liable under this Lease. Further, Landlord
shall, within ten (10) days after Tenant’s request, shall request its Fee
Mortgagee to deliver to Tenant an SNDA for the benefit of any such subtenant
(and Landlord shall reasonably cooperate with Tenant, at no out of pocket cost
to Landlord, in connection with obtaining any requisite consent from any Fee
Mortgagee).
19. TITLE AND AUTHORITY.
A. Landlord warrants and represents that Landlord is the owner of
the fee simple of the Demised Premises and that other than any mortgages held by
Fee Mortgagees that have provided an SNDA to Tenant in accordance with this
Lease or such other liens or encumbrances that do not interfere with Tenant’s
use of the Demised Premises or liens or encumbrances arising on account of any
act or omission by Tenant or persons acting under Tenant or on account of
Tenant’s failure to perform its obligations under this Lease, or matters set
forth in Exhibit B 1, Landlord shall not voluntarily impose any other lien or
encumbrance on the Demised Premises.
B. Landlord and Tenant each warrant and represent to the other that
(a) each is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which such entity was organized; (b) each has the
authority to own its property and to carry on its business as contemplated under
this Lease; (c) each has duly executed and delivered this
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Lease; (d) the execution, delivery and performance by each of this Lease (i) are
within its powers, (ii) have been duly authorized by all requisite action,
(iii) will not violate any provision of law or any order of any court or agency
of government, or any agreement or other instrument to which it is a party or by
which it or any of its property is bound, (iv) will not render it insolvent or
(v) will not result in the imposition of any lien or charge on any of its
property, except by the provisions of this Lease; and (e) the Lease is a valid
and binding obligation of each in accordance with its terms.
C. Landlord and Tenant have executed the Memorandum of Lease (hereinafter called
the “Memorandum”) attached hereto as Exhibit E simultaneously with the execution
of this Lease. Upon the expiration of the Term each agree to execute and deliver
a recordable termination of the Memorandum, which covenant shall survive
termination. Tenant irrevocably appoints Landlord its attorney in fact so to
execute such termination of the Memorandum if Tenant fails to do so within ten
(10) days of written request, which power is coupled with an interest and shall
automatically be transferred to any successor or assign of Landlord’s interest
in the Demised Premises.
20. QUIET ENJOYMENT. Landlord covenants and agrees that provided no
default remains uncured beyond any applicable notice and cure period, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises and all
rights, easements, appurtenances and privileges belonging or in anyway
appertaining thereto during the full term of this Lease and any extension
thereof subject always to the terms of this Lease, provisions of law, and
matters of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other so called quiet enjoyment covenant, whether
express or implied.
21. UNAVOIDABLE DELAYS. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any condition under this
Lease by any strike, lockout, labor dispute, inability to obtain labor or
material, Act of God, governmental restriction, regulation or control, enemy or
hostile governmental action, civil commotion, insurrection, sabotage, fire or
other casualty or by any other event similar to the foregoing and beyond the
control of such party, then the time to perform such obligation or to satisfy
such condition shall be postponed by the period of time consumed by the delay.
Time is of the essence for the performance of all monetary obligations under
this Lease and the foregoing shall never apply to the performance of monetary
obligations.
22. END OF TERM. Upon expiration or other termination of the term of this Lease,
Tenant shall peaceably and quietly quit and surrender the Demised Premises and
all Alterations in the good order and condition Tenant is required to maintain
the same and remove all trade fixtures, equipment and other personal property
whether or not bolted or otherwise attached and all of Tenant’s signs wherever
located; and in all cases shall repair damage that results from such removal.
Any fixtures and equipment that Tenant or Owner/Secured Party does not remove
following the expiration or other termination of the Term of this Lease shall be
deemed to be abandoned by Tenant, shall at once become the property of Landlord,
and may be disposed of in such manner as Landlord shall see fit; and Tenant
shall pay the cost of removal and disposal to Landlord within thirty (30) days
after demand; provided, however, that if this Lease shall be terminated as the
result of a default by Tenant, then trade fixtures and equipment shall not be
deemed abandoned until sixty (60) days after notice of such termination is given
to
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Owner/Secured Party. Tenant or Owner/Secured Party shall have the right at any
time prior to the date such fixtures and equipment shall be deemed abandoned to
remove the same from the Demised Premises. Should Tenant or anyone claiming by,
through or under Tenant hold over in possession after the Expiration Date or
earlier termination of this Lease, such holding over shall not be deemed to
extend the Term or to renew this Lease, but without limiting Landlord’s other
rights and remedies on account of such breach the tenancy thereafter shall
continue as a tenancy at sufferance from month-to-month upon the terms and
conditions herein contained, provided, however that rent shall be charged and
paid at one hundred fifty percent (150%) of the Fixed Annual Rent and Additional
Rent in effect during the twelve (12) month period immediately preceding the
Expiration Date or earlier termination.
23. LANDLORD’S DEFAULT.
A. Landlord shall be in default hereunder if its fails to comply
with any of its express obligations set forth in this Lease within thirty (30)
days following written notice and opportunity to cure; provided, however,
Landlord will not be in default if said default could not reasonably be cured
within such period of thirty (30) days, and Landlord promptly commences and
thereafter proceeds with due diligence and in good faith to cure such default.
B. In the event that a Fee Mortgagee shall have given written
notice to Tenant that it is the holder of a mortgage covering the Demised
Premises, and provided such notice includes the address to which notices to the
Fee Mortgagee are to be sent, Tenant agrees that in the event it shall give
written notice to Landlord to cure a default of Landlord as provided for in this
Section, Tenant shall give a copy of said notice to the Fee Mortgagee. Tenant
agrees that the Fee Mortgagee may cure or remedy such default within the time
permitted to Landlord pursuant to this Section; provided that in addition the
Fee Mortgagee shall be entitled to such further time as may be reasonably
necessary for the Fee Mortgagee to remove any stay in bankruptcy and/or to
commence and complete foreclosure proceedings or remove any cause beyond the Fee
Mortgagee’s reasonable control impairing its ability to cure or remedy, to
obtain possession of the Demised Premises and thereafter to commence and
diligently prosecute such cure or remedy to completion.
24. ADDITIONAL CHARGES. If Tenant shall be in default hereunder, Landlord, after
thirty (30) days notice that Landlord intends to cure such default (but only ten
(10) days notice if such default concerns any breach of Tenant’s insurance
obligations under Section 11), shall have the right, but not the obligation, to
cure such default and Tenant shall pay to Landlord, upon demand, as Additional
Rent, the reasonable cost thereof. Other than such insurance defaults, Landlord
shall not commence to cure any default of such a nature that it could not
reasonably be cured within such period of thirty (30) days, if Tenant commences
to cure same within said period, and thereafter proceeds with reasonable
diligence and in good faith to cure such default.
25. TENANT’S DEFAULT.
A. If Tenant fails to pay Fixed Annual Rent or Additional Rent when due and such
default continues for ten (10) days after written notice; or if a default occurs
on account of any asset sale, merger or consolidation on the part of Guarantor
in violation of paragraph D of
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this Section; or if a petition is filed by Tenant (or Guarantor) for insolvency
or for appointment of a receiver, trustee or assignee or for adjudication,
reorganization or arrangement under any bankruptcy act or other applicable law
or if any similar petition is filed against Tenant (or Guarantor) and such
petition is not dismissed within sixty (60) days thereafter; or if Tenant fails
to perform any other covenant or condition under this Lease, Landlord may give
Tenant a written notice specifying the nature of the default of such other
covenant or condition and if Tenant does not, within thirty (30) days after
receipt of such written notice (but only three (3) days in the case of failure
to perform Tenant’s insurance obligations under Section 11), cure such other
default or, if such default is of such a nature that it could not reasonably be
cured within such period of thirty (30) days, and Tenant does not commence and
proceed with reasonable diligence and in good faith to cure such default then,
after the expiration of such thirty (30) day period (or longer period if such
default cannot reasonably be cured within said thirty (30) day period), Landlord
shall have the right, in addition to the rights set forth in the preceding
sentence, to seek damages or an injunction as to such failure to perform, or
after the expiration of such thirty (30) day period Landlord may, but only
during the continuance of such default, send a notice to Tenant terminating this
Lease and reenter the Demised Premises and dispossess Tenant and any other
occupants thereof, remove their effects not previously removed by them, and hold
the Demised Premises as if this Lease had not been made; and Tenant waives the
service of any additional notice of intention to reenter or to institute legal
proceedings to that end. If any payment of Fixed Annual Rent, Additional Rent,
or other sum owing Landlord is not paid within five (5) days after the same is
due, then in addition to all other remedies hereunder Tenant shall pay an
administrative late charge to Landlord equal to five percent (5%) of the overdue
amount in question, which late charge will be due upon demand as Additional
Rent.
B. After a termination, dispossess or removal in accordance with this Section,
(1) the Fixed Annual Rent and Additional Rent shall be paid up to the date of
such dispossess or removal, (2) Landlord may re-let the Demised Premises or any
part or parts thereof either in the name of Landlord or otherwise, for a term or
terms which may, at the option of Landlord, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease,
and (3) Tenant shall pay to Landlord, as liquidated damages, any deficiency
between the Fixed Annual Rent and Additional Rent due hereunder and the amount,
if any, of the rents actually collected by Landlord on account of the new lease
or leases of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the term of this Lease (not including
any Renewal Periods, the commencement of which shall not have occurred prior to
such dispossess or removal). In computing such liquidated damages there shall be
added to said deficiency the expenses which Landlord incurs in connection with
re-letting the Demised Premises, including reasonable attorneys’ and brokerage
fees, tenant inducements such as free rent, moving expense reimbursements,
tenant improvement allowances, brokerage commissions, fees for legal services,
and other expenses of preparing the Demised Premises for reletting (“Reletting
Expenses”). Such Reletting Expenses shall be paid to Landlord within ten
(10) days of demand and all other liquidated damages shall be paid by Tenant in
monthly installments on the dates specified in this Lease for payment of Fixed
Annual Rent and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord shall not
be liable for failure to re-let the Demised Premises or, in the event that the
Demised Premises are re-let, for failure to collect the rent under such
re-letting, unless Landlord shall not have used its commercially reasonable
efforts to re-let the Demised Premises for the reasonable
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rental value thereof and to collect the rent under such re-letting. Landlord
shall use its commercially reasonable efforts to mitigate damages.
C. Landlord hereby expressly waives any and all rights granted by
or under any present or future laws to reenter the Demised Premises, to
dispossess Tenant or any other occupant thereof or to remove their effects not
previously removed by them, or to terminate this Lease for any reason or in any
manner other than as set forth in this Section 25. Tenant hereby expressly
waives any and all rights granted by or under any present or future laws to
remain in possession, cure any defaults or redeem its leasehold for any reason
or in any manner other than as set forth in this Section 25. The provisions of
this Section 25 shall survive the early termination of the Term.
D. Any sum due from Tenant under this Lease is not paid within five
(5) days after the same is due, such amount shall bear interest from the date
due at the rate of one and one-half (11/2%) percent for each month (or ratable
portion thereof) the same remains unpaid. Nothing in this Lease shall limit the
right of Landlord to prove and obtain in proceedings for bankruptcy or
insolvency an amount equal to the maximum allowed by any statute or rule of law
in effect at the time; and Tenant agrees that the fair value for occupancy of
all or any part of the Demised Premises at all times shall never be less than
the Fixed Annual Rent and all Additional Rent payable from time to time.
E. The Guaranty given by Guarantor of this Lease is a material inducement to
Landlord’s entering into this Lease. If at any time the Guarantor of this Lease
shall sell all or a material portion of its assets or shall merge or consolidate
with another entity and, in either case, if (1) Guarantor (including the
resulting entity of any merger or consolidation) has a tangible net worth
immediately after the transaction that is less than Guarantor’s tangible net
worth immediately prior to the transaction, and (2) Guarantor’s tangible net
worth immediately after the transaction is less than the Minimum Credit Test,
then the transaction shall be a default under this Lease for which there is no
cure period entitling Landlord to exercise all of the rights and remedies under
this Section. If at any time the existing Guarantor desires to assign the
Guaranty to another person and for such person to assume all of the obligations
and liabilities under the Guaranty, and if the proposed successor Guarantor’s
tangible net worth is greater than the Minimum Credit Test, Tenant may present
evidence of such proposed successor Guarantor’s tangible net worth to Landlord
in the form of financial statements for (A) the most recent fiscal year of the
proposed successor Guarantor audited by a nationally recognized firm of
certified public accountants and (B) the most recent fiscal quarters since such
fiscal year certified to by Guarantor’s chief financial officer, together with a
form of Guaranty identical in form to the form of Guaranty attached to this
Lease as Exhibit F to be executed and delivered by the proposed successor
Guarantor. Upon Landlord’s written approval of such financial statements as
demonstrating a tangible net worth of the proposed successor Guarantor greater
than the Minimum Credit Test (which approval will not be unreasonably withheld,
conditioned or delayed) and upon the execution and delivery to Landlord of such
form of Guaranty by the proposed successor Guarantor, the existing Tenant (if,
but only if the Lease is being assigned to a successor Tenant) and Guarantor
shall be released from all liability under the Lease and Guaranty and the
successor Tenant and Guarantor shall become fully liable to Landlord under the
Lease and Guaranty. Thereafter and as an obligation of the then successor Tenant
under this Lease, such successor Guarantor shall annually and quarterly continue
to provide such financial
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statements to Landlord demonstrating that it continues to meet the Minimum
Credit Test for those provisions of this Lease requiring such as a condition of
being relieved from certain Lease obligations otherwise applicable. As used in
this Lease “Guarantor” means the Guarantor then fully liable under its Guaranty
to Landlord. “Tangible net worth” means the net worth as shown on such financial
statements prepared in accordance with generally accepted accounting principles
consistently applied and disregarding any value attributable to good will or
other intangible assets and amounts owed by shareholders, officers or Affiliates
except to the extent such amounts owed by Affiliates would ordinarily and
customarily be consolidated on Tenant’s financial statements. “Minimum Credit
Test” means a tangible net worth as shown on such fiscal year and fiscal quarter
financial statements of at least Five Hundred Million Dollars ($500,000,000).
26. DESTRUCTION.
A. In the event of any damage or destruction by fire, the elements,
or casualty (hereinafter called “Destruction”) to all or any part of the
Building or any other Improvements in the Demised Premises, Tenant shall
commence promptly, and with due diligence continue to restore same to
substantially the same condition as existed immediately preceding the
Destruction, except as otherwise provided in paragraph B of this Section. If the
Destruction is partial, Tenant shall complete the restoration within two hundred
seventy (270) days after the Destructions, subject to Unavoidable Delays. If the
Destruction is total, Tenant shall complete the restoration within eighteen (18)
months following the Destruction, subject to Unavoidable Delays. In no event
shall Fixed Annual Rent or any Additional Rent abate on account of any
Destruction.
B. If, as a result of any Destruction, fifty percent (50%) or more
of the total floor area of the Building is damaged, destroyed or, in Tenant’s
reasonable opinion rendered untenantable, during the last two (2) years of the
Initial Term or during any Renewal Term (but this shall not apply at any other
time), Tenant may elect to terminate this Lease by giving notice to Landlord of
such election on or before the date that is ninety (90) days after the
Destruction, stating the date of termination, which shall be not more than
thirty (30) days after the date on which such notice of termination shall have
been given, and (1) upon the date specified in such notice this Lease and the
term hereof shall cease and expire and (2) any Fixed Annual Rent and Additional
Rent shall be paid until such date of termination and any such amounts paid for
a period after such date of termination shall be promptly refunded to Tenant. In
the event that Tenant elects to terminate this Lease as a result of the
Destruction referenced above, Tenant shall cause all insurance proceeds to be
paid to Landlord including business interruption insurance proceeds.
C. Except in the case of paragraph B of this Section, Insurance proceeds shall
be deposited with a bank or trust company acceptable to Landlord and Tenant and
under the control of Landlord and Tenant, as trustees, or, if the Fee Mortgagee
shall be a bank, trust company, insurance company or other entity engaged in
mortgage lending then such proceeds shall be deposited with such Fee Mortgagee
and shall be held and disbursed by it, as trustee, for restoration in accordance
with customary construction lending practice and procedures. Any excess
insurance proceeds shall be paid to Tenant at the conclusion of the restoration
so long as Tenant is not then in default beyond any applicable cure period.
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27. EMINENT DOMAIN.
A. In the event of an actual taking for any public or quasi-public
use by any lawful power or authority by exercise of the right of condemnation or
of eminent domain or by agreement between Landlord and those having the
authority to exercise such right (hereinafter called “Taking”) of the entire
Building, then (1) this Lease and the Term shall cease and expire as of the date
of vesting of title or transfer of possession, whichever occurs earlier, as a
result of the Taking, and (2) any Fixed Annual Rent and Additional Rent shall be
paid until such termination and any such amounts paid for a period after such
date of termination shall be promptly refunded to Tenant.
B. (1) In the event of a Taking of twenty (20%) or more of the
Demised Premises, or in the event of a Taking resulting in a reduction of twenty
(20%) percent or more of the parking spaces (unless Landlord provides adequate
and sufficient additional contiguous parking areas in substitution therefor
reasonably acceptable to Tenant), or in the event of a Taking resulting in a
divided Building or parking area such that passage between the divided portions
of the parking area is not possible, or in the event of permanent denial of
reasonably adequate access to the Demised Premises or Building on account of a
Taking which in Tenant’s reasonable judgment makes it economically unfeasible to
operate Tenant’s business at the Demised Premises, then Tenant may elect to
terminate this Lease by giving notice of termination to Landlord on or before
the date which is ninety (90) days after receipt by Tenant of notice that the
Taking in question. Said notice of termination shall state the date of
termination, which date of termination shall be not more than thirty (30) days
after the date on which such notice of termination is given to Landlord, and
(a) upon the date specified in such notice of termination this Lease and the
term hereof shall cease and expire, and (b) any Fixed Annual Rent and Additional
Rent shall be paid until the date of termination and any such amounts paid for a
period after such date of termination shall be promptly refunded to Tenant.
(2) If Tenant does not elect to terminate this Lease as aforesaid, then the
award or payment for the Taking shall be used by Tenant for restoration as
hereinafter set forth and Tenant shall promptly commence and with due diligence
continue to restore the portion of the Demised Premises remaining after the
Taking to substantially the same condition and tenantability as existed
immediately preceding the Taking. Tenant shall complete the restoration within
two hundred seventy (270) days after the Destruction, subject to Unavoidable
Delays. Taking proceeds shall be paid, held and disbursed in the same manner as
insurance proceeds under Section 26C and there shall be no abatement or
reduction in Fixed Annual Rent or any Additional Rent. Any taking proceeds
remaining after the restoration is complete shall be divided equally between
Landlord and Tenant.
C. If this Lease is terminated under any provision of this Section 27, so long
as Tenant is not then in breach of this Lease beyond any applicable cure period,
any specific damages that are expressly awarded to Tenant on account of its
relocation expenses and specifically so designated shall belong to Tenant.
Except as provided in the preceding sentence of this paragraph, Landlord
reserves to itself, and Tenant releases and assigns to Landlord, all rights to
damages accruing on account of any Taking or by reason of any act of any public
authority for which damages are payable. Tenant agrees to execute such further
instruments of assignment as may be reasonably requested by Landlord, and to
turn over to Landlord any
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damages that may be recovered in any proceeding or otherwise; and Tenant
irrevocably appoints Landlord as its attorney-in-fact with full power of
substitution so to execute and deliver in Tenant’s name, place and stead all
such further instruments if Tenant shall fail to do so after 10 days notice.
28. THIRD PARTY LITIGATION. If Landlord, Landlord’s adviser or its
mortgagees are made parties to any litigation commenced by or against Tenant by
or against any person claiming through Tenant with respect to the Demised
Premises, Tenant agrees to indemnify Landlord in the manner provided in
Section 38 and in addition pay, as Additional Rent, all costs of Landlord in
connection with such litigation including reasonable counsel fees and litigation
costs, except in the sole instance where Landlord or Tenant have legal claims in
the litigation against one another or where Landlord has been adjudicated in any
litigation to have acted with gross negligence or willful misconduct. Without
limitation, the foregoing includes foreclosure or enforcement of any lien,
attachment or mortgage on the Demised Premises resulting from the act or
omission of Tenant, but shall not include any Fee Mortgage or other lien created
by Landlord.
29. WAIVER OF DISTRAINT. Landlord hereby expressly waives any and all
rights granted by or under any present or future laws to levy or distrain for
rent, in arrears, in advance or both, upon all goods, merchandise, equipment,
trade fixtures, furniture and personal property of Tenant or any nominee of
Tenant in the Demised Premises, delivered or to be delivered thereto.
30. ESTOPPEL CERTIFICATES. Upon the request of either party, at any time and
from time to time, Landlord and Tenant agree to execute and deliver to the
other, within thirty (30) days after such request, a written instrument that may
be relied upon by the requesting party, its potential purchasers, lenders,
investors, subtenants and/or assignees (and any of their respective successors
and assigns), duly executed, (a) certifying if such is the case that this Lease
has not been modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and effect as
modified, stating such modifications, (b) specifying the dates to which the
Fixed Annual Rent and Additional Rent have been paid, (c) stating whether or
not, to the knowledge of the party executing such instrument, the other party
hereto is in default and, if such party is in default, stating the nature of
such default, (d) stating the Commencement Date and Expiration Date, (e) stating
which options to renew the term have been exercised, if any; and (f) any other
information that may reasonably requested by the requesting party and
customarily addressed in an estoppel certificate.
31. NOTICES. Any notices, consents, approvals, submissions or demands
(“Notices”) given under this Lease or pursuant to any law or governmental
regulation, including, without limitation, those by Landlord to Tenant or by
Tenant to Landlord shall be in writing. Unless otherwise required by law,
governmental regulation or this Lease, any such Notice shall be deemed given if
sent by registered or certified mail, return receipt requested, postage prepaid
or by nationally recognized overnight delivery service (a) to Landlord, at the
address of Landlord as hereinabove set forth and with like copy given to Daniel
A. Taylor, Esq. or Primo Fontana, Esq., DLA Piper, 33 Arch Street 26th Floor,
Boston MA 02110 and/or such other persons and addresses as Landlord may
designate by notice to Tenant; or (b) to Tenant, then one copy shall be
delivered to the attention of the General Counsel, another shall be delivered to
the attention of
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the Senior Vice President of Real Estate, and another shall be delivered to the
attention of the Senior Director of Properties and Administration, all at 2
Paragon Drive, Montvale, New Jersey 07645 or to such other addresses as Tenant
may designate by notice to Landlord. Any such Notice shall be deemed given three
(3) business days after being sent by registered or certified mail, return
receipt requested, postage prepaid, and one business (1) day when sent by
overnight delivery. A party’s attorney may give Notices on behalf of such party.
32. BROKER. Each party represents and warrants to each other there is
no broker, agent, finder or other person with whom it has dealt in connection
with the negotiation, execution and delivery of this Lease other than those
persons named in that certain Agreement of Sale and Leaseback dated as of
November 2, 2010 entered into between Tenant and Landlord (or Affiliates of
each) regarding a transaction that led to this Lease.
33. LIENS. Tenant shall keep the Demised Premises (and Landlord’s
interest therein) and Tenant’s leasehold (and Tenant’s interest therein) free
of, and shall within thirty (30) days discharge, any attachment, lien, security
interest or other encumbrance that arises as a result of any act or omission of
Tenant or persons acting by, through or under Tenant. Without limitation, Tenant
will not permit or suffer any mechanic’s or materialmen’s or other liens to
stand against the Demised Premises for any labor or material furnished in
connection with work of any character performed, any services provided or any
other act, omission or obligation on the part or at the direction of Tenant or
persons claiming by, through or under Tenant, and Landlord will not permit any
such liens for work or material furnished the Landlord to stand against said
premises (the foregoing shall not imply that Landlord has any responsibility to
furnish any work or material). However, Landlord and Tenant shall respectively
have the right to contest the validity or amount of any such lien, provided that
the payment of such amount is bonded during the pendency of such contest, but
upon the final determination of such contest the party responsible for such lien
shall immediately pay any judgment rendered with all proper costs and charges
(including reasonable attorneys’ fees) and shall have the lien released at its
own expense. In lieu of bonding either party may obtain other security
acceptable to the other party in such party’s sole discretion. Any contest
hereunder shall be subject to all requirements set forth in any Fee Mortgage.
34. DEFINITION OF LANDLORD. The term “Landlord” as used herein, means
Landlord named herein and any subsequent owner of Landlord’s estate hereunder.
Any owner of Landlord’s estate hereunder shall be relieved of all liability
under this Lease after the date that it ceases to be the owner of Landlord’s
estate (except for any liability arising prior to such date) and the party
succeeding to Landlord’s estate shall assume all liability of Landlord arising
from and after it becomes owner of Landlord’s estate. The foregoing shall be
self-operative but Landlord and Tenant shall upon the request of either execute
and deliver an instrument acknowledging the foregoing.
35. ADJOINING OR ADJACENT PROPERTY. Landlord and Tenant shall each
promptly forward to the other any notice or other written communication received
by it from any owner of property adjoining or adjacent to the Demised Premises
or from any municipal or other governmental authority in connection with any
hearing or other administrative proceeding relating to the use of the Demised
Premises or any adjoining or adjacent property. Tenant may, at its sole cost and
expense, in its own name and/or in the name of Landlord, appear in any such
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proceeding. Landlord shall fully cooperate with Tenant (so long as Landlord’s
cooperation does not involve incurring obligations or liability or material
expense to Landlord unreimbursed by Tenant) and shall, without limitation, make
such appearances and furnish such information as may be reasonably required by
Tenant. Landlord agrees to execute any instruments reasonably requested by
Tenant in connection with any such proceeding.
36. ENVIRONMENTAL LAWS.
A. “Environmental Laws” shall mean all federal, state or local laws, ordinances,
rules, regulations, or policies, whether now or hereafter enacted, governing the
use, clean-up, remediation storage, treatment, transportation, manufacture,
refinement, handling, release, production or disposal of Hazardous Materials
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (42 U.S.C. Sections 9601, et. seq.) as
amended by the Superfund Amendments and Reauthorization Act; (2) the Hazardous
and Solid Waste Act amendments of 1984 Pub L 98-616 (42 U.S.C. Section 699);
(3) the Hazardous Materials Transportation Act, (49 U.S.C. Section 1801, et.
seq.); (4) the Resource Conservation and Recovery Act of 1976, (42 U.S.C.
Sections 6901, et. seq.); or (5) the Toxic Substances Control Act, and any
amendments thereto and any regulations adopted and publications promulgated
pursuant thereto, or any other federal, state or local environmental laws,
ordinances, rules, or regulations whether now or hereafter enacted. “Hazardous
Materials” shall mean any hazardous wastes or hazardous substances as defined in
any Environmental Law including, without limitation, any asbestos, PCB, toxic,
noxious or radioactive substances, methane, volatile hydrocarbons, petroleum,
petroleum by-products, industrial solvents or any other material or substance
which could cause or constitute a health, safety or other environmental hazard
to any person or property.
B. Tenant, at its sole cost and expense, shall until the Expiration Date of this
Lease comply with all Environmental Laws and shall be responsible for all
Hazardous Materials on or migrating from the Land and Demised Premises prior to,
on and after the Commencement Date, it being acknowledged that Tenant or its
Affiliate owned the Land and Demised Premises prior to the Commencement Date.
Tenant shall provide Landlord with copies of any notices pertaining to any
governmental proceedings or actions under any Environmental Law (including
requests or demands for entry onto the Demised Premises and/or Land for purposes
of inspection regarding the handling, disposal, clean-up or remediation of
Hazardous Materials or claims, penalties, fines or assessments) within fifteen
(15) days after receipt thereof. Landlord shall cooperate with Tenant (so long
as Landlord’s cooperation does not involve incurring obligations or liability or
material expense to Landlord unreimbursed by Tenant) and provide such documents,
affidavits and information as may be reasonably necessary for Tenant to comply
with all Environmental Laws.
C. If required by governmental authority or if Landlord has a reasonable basis
to believe a release of Hazardous Materials may have occurred or a threat of
release exists on or from the Land or Demised Premises or Hazardous Materials
activities have taken place on the Land or Demised Premises that do not conform
to Environmental Laws, then Landlord may, but need not, perform appropriate
testing in a commercially reasonable manner and the reasonable costs thereof
shall be reimbursed to Landlord by Tenant upon demand as Additional Rent. Tenant
shall execute affidavits, representations and the like from time to time at
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Landlord’s request concerning Tenant’s actual knowledge and belief regarding the
presence or absence of Hazardous Materials at the Land and Demised Premises. In
all events, and without limitation, Tenant shall indemnify all Indemnitees,
expressly including without limitation all Fee Mortgagees, in the manner
elsewhere provided in this Lease with respect to Hazardous Materials on or
migrating from the Land and Demised Premises prior to, on and after the
Commencement Date (and for these purposes, the loss indemnified shall include
without limitation any costs of investigation or remediation, and any claim of
personal injury or property damage to any person); provided, however, that such
indemnity shall not include and Tenant shall not be responsible for Hazardous
Materials migrating on to the Land from the land of third parties. The covenants
of this Section shall survive the Term. Tenant shall from time to time upon
Landlord’s request confirm all of the foregoing covenants directly to
mortgagees.
37. LEASEHOLD MORTGAGE.
A. Tenant, and its successors and assigns (including, without
limitation, any subtenant of Tenant), may, from time to time and without
Landlord’s prior written consent, mortgage all or any portion of its right,
title and interest in and to this Lease under one leasehold mortgage at any one
time, or two leasehold mortgages given as part of a single financing
transaction, to an Institutional Lender (each, a “Leasehold Mortgage”), and
assign any or all rights under this Lease and any subleases as collateral
security for such Leasehold Mortgage; provided that all rights acquired under
such Leasehold Mortgage shall be subject to all of the terms, covenants and
conditions of this Lease, and to all rights and interests of Landlord, none of
which terms, covenants or conditions is or shall be waived by Landlord by reason
of the right given to so mortgage such interest in this Lease. In no event shall
Tenant have any right to mortgage or encumber Landlord’s fee interest in the
Demised Premises. The term “Leasehold Mortgage” shall include whatever security
instruments that may be used in the locale of the Demised Premises, such as,
without limitation, deeds of trust, security deeds and conditional deeds, as
well as financing statements, assignment of leases and rents, security
agreements and other documentation required pursuant to the Uniform Commercial
Code. The term “Leasehold Mortgage” shall also include any instruments required
in connection with a sale-leaseback transaction. An “Institutional Lender” is a
bank, trust company, savings and loan association, pension fund, endowment fund,
insurance company, other institutional pool of recognized status or a
governmental authority empowered to make loans or issue bonds or any other
recognized institution regularly engaged in the making of mortgage loans that
has not less than $100,000,000 in assets. The holder of any Leasehold Mortgage
shall be called a “Leasehold Mortgagee.”
B. If Tenant and/or Tenant’s successors and assigns (including, but
not limited to, any sublessee of Tenant) shall grant a Leasehold Mortgage, and
if Tenant shall send to Landlord a true copy thereof, together with a notice
specifying the name and address of the Leasehold Mortgagee (“Mortgage Notice”),
Landlord agrees that as long as any such Leasehold Mortgage shall remain
unsatisfied of record or until a notice of satisfaction is given by the
Leasehold Mortgagee to Landlord, the following provisions shall apply:
(1) There shall be no cancellation, surrender or modification of this Lease by
joint action of Landlord and Tenant without the prior consent of the Leasehold
Mortgagee;
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(2) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee. The
Leasehold Mortgagee shall thereupon have the same period to remedy or cause to
be remedied the defaults complained of, and Landlord shall accept such
performance by or at the instigation of such Leasehold Mortgagee as if the same
had been done by Tenant; provided that in the case of defaults that cannot be
cured by the payment of money in addition the Leasehold Mortgagee shall be
entitled to such further time to remedy or cause to be remedied the defaults
complained of as may be reasonably necessary for the Leasehold Mortgagee to
remove any stay in bankruptcy and/or to commence and complete foreclosure
proceedings or remove any cause beyond the Leasehold Mortgagee’s reasonable
control impairing its ability to cure or remedy, to obtain possession of the
Demised Premises and thereafter to commence and diligently prosecute such cure
or remedy to completion.. Nothing herein shall be construed as requiring a
Leasehold Mortgagee to cure any default. Landlord’s failure to deliver any such
copy to a Leasehold Mortgagee shall not affect the Landlord’s exercise of any
right or remedy under the Lease in any way whatsoever;
(3) If any default shall occur which, pursuant to any provision of
this Lease, entitles Landlord to terminate this Lease, and if before the
expiration of twenty (20) days from the date of the giving of notice of
termination upon such Leasehold Mortgagee, such Leasehold Mortgagee shall have
notified Landlord of its desire to nullify such notice and shall have paid to
Landlord all Fixed Annual Rent and Additional Rent herein provided for which are
then in default, and shall have complied (or caused compliance) with all of the
other requirements of this Lease, if any are then in default, then, in such
event, Landlord shall not be entitled to terminate this Lease and any notice of
termination previously given shall be void and of no effect;
(4) Notwithstanding anything in this Lease to the contrary, any sale
of Tenant’s leasehold interest in any proceeding for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of Tenant’s leasehold interest
in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment;
(5) If not required to be held by the Fee Mortgagee, the proceeds
from any insurance policies or arising from a Taking may be held by any
institutional Leasehold Mortgagee and distributed pursuant to the provisions of
this Lease;
(6) The Leasehold Mortgagee may be added to the “Loss Payable
Endorsement” of any and all insurance policies required to be carried by Tenant
hereunder on the condition that the insurance proceeds are to be applied in the
manner specified in this Lease and that the Leasehold Mortgage shall so agree;
except that the Leasehold Mortgage may provide a manner for disposition of such
proceeds as remain after full compliance with the restoration covenants of this
Lease, if any, otherwise payable to Tenant (but not such proceeds, if any,
payable to Landlord, any Fee Mortgagee or jointly to Landlord or Tenant)
pursuant to the terms of this Lease; and
(7) Landlord shall provide Leasehold Mortgage with prompt notice of
any legal proceeding or arbitration between Landlord and Tenant. Unless the
Leasehold Mortgage provided otherwise, Leasehold Mortgagee shall have the right
to intervene in any such
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proceeding and be made a party to such proceeding, and the parties hereby
consent to such intervention. Landlord’s failure to deliver any such notice to a
Leasehold Mortgagee shall not affect the Landlord’s exercise of any right or
remedy under the Lease in any way whatsoever.
Tenant, in any Mortgage Notice served upon Landlord under this Section, may
exclude any or more of the above provisions, and if so excluded, such provisions
shall not be effective.
C. Landlord shall, upon request, execute, acknowledge and deliver to each
Leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Tenant, in form reasonably satisfactory to such Leasehold Mortgagee and
Landlord, between Landlord, Tenant and Leasehold Mortgagee, separately agreeing
to all of the provisions of this Section.
38. INDEMNITY. Except as otherwise expressly set forth in this Lease,
Tenant shall assume exclusive control of the Demised Premises and all areas
pertaining thereto including all appurtenances, improvements, utilities, water
bodies, grounds, sidewalks, walkways, driveways and parking facilities, and
Tenant shall bear the sole risk of all related tort liabilities. To the greatest
extent permitted by applicable law, Tenant shall indemnify, save harmless and
defend Landlord, Landlord’s adviser and mortgagees and their respective
officers, directors, managers, members, partners, agents and employees,
(“Indemnitees”) from all liability, claim, damage, cost or loss (including
reasonable fees and litigation costs) arising in whole or in part out of, or in
any manner connected with (i) any injury, loss, theft or damage to any person or
property while on or about the Demised Premises, or (ii) any condition of the
Demised Premises, or the possession and use thereof (including any failure to
vacate at the end of the Term) or any activity permitted or suffered on the
Demised Premises (including Hazardous Materials), or (iii) any breach of any
covenant, representation or certification by Tenant or persons acting under
Tenant, or (iv) any negligent act or omission anywhere by Tenant or persons
acting under Tenant, in each case paying the same to Landlord on demand as
Additional Rent, except to the extent such liability results from the negligence
or willful misconduct of Landlord or the other Indemnitees. Without implying
that other covenants do not survive, the covenants of this Section shall survive
the Term. Tenant shall immediately respond and assume the investigation, defense
and expense of all of the foregoing matters. Landlord or any Indemnitee, at its
sole cost and expense, may join in such defense with counsel of its choice.
39. LIMITATION OF LANDLORD’S LIABILITY. Notwithstanding anything
contained to the contrary in this Lease, whether express or implied, it is
agreed that Tenant will look only to Landlord’s fee interest in and to the
Demised Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of a breach or default
under this Lease by Landlord with respect to any claim whatsoever related to the
Demised Premises, and no other property or assets of Landlord or of Landlord’s
adviser or of any Fee Mortgagee or its or their managers, members, directors,
officers, trustees, beneficiaries, shareholders, partners, joint venturers
(disclosed or undisclosed) shall be subject to suit or to levy, execution or
other enforcement procedures for the satisfaction of any such judgment (or other
judicial process). No officer, director, manager, member, shareholder, trustee,
beneficiary, partner, agent, attorney or employee of Landlord or of Landlord’s
adviser or of any Fee Mortgagee shall ever be personally or individually liable;
nor shall Landlord, Landlord’s adviser or any Fee Mortgagee or such persons ever
be answerable or liable in any equitable judicial
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proceeding or order beyond the extent of their interest in the Demised Premises.
In no event shall Landlord, Landlord’s adviser or any Fee Mortgagee or any such
persons ever be liable to Tenant for indirect or consequential damages.
40. BOOKS AND RECORDS. Tenant shall at all times keep and maintain
full and correct records and books of account of the operations of the Demised
Premises in accordance with generally accepted accounting principals
consistently applied and shall accurately record and preserve the records of
such operations in accordance with its customary records retention policy.
Notwithstanding that there has been no Percentage Rent Event, Tenant shall
report the gross sales from the Demised Premises to Landlord annually for each
fiscal year of Tenant no later than thirty (30) days following the end of such
fiscal year, such report to be certified by Tenant’s chief financial officer.
Landlord shall keep such information confidential at all times in accordance
with the terms of Exhibit J and may only release such information to Landlord’s
constituent members, and so long as such persons execute and deliver to Tenant a
Confidentiality Agreement with Tenant in the form attached hereto as Exhibit J
(“Confidentiality Agreement”) whether or not Tenant signs such Confidentiality
Agreement, also to its lenders and prospective lenders and to prospective
purchasers of Landlord’s interest in the Demised Premises. Upon an Event of
Default, Tenant shall permit Landlord, Landlord’s accountants and Fee Mortgagees
reasonable access thereto, with the right to make copies and excerpts therefrom
upon reasonable advance notice to Tenant.
41. SATELLITE DISH. If permitted by applicable law, Tenant shall have
the right to place on the roof or wall of the Demised Premises at Tenant’s sole
cost and expense, a satellite dish (hereinafter called the “Dish”) for
transmission of data (both receiving and sending) between Tenant’s various
operations and its headquarters in accordance with all laws and governmental
regulations.
42. NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant agree and
acknowledge that this Lease has been freely negotiated by Landlord and Tenant.
In any event of any ambiguity, controversy, dispute or disagreement over the
interpretation, validity or enforceability of this Lease or any of its
covenants, terms or conditions, no inference, presumption or conclusion
whatsoever shall be drawn against Tenant by virtue of Tenant’s having drafted
this Lease.
43. SUCCESSORS AND ASSIGNS; AFFILIATES. The covenants and agreements
contained in this Lease shall bind and inure to the benefit of the successors
and assigns of each party. As used in this Lease “Affiliate” (whether or not
capitalized) shall mean, with respect to any person, any person controlled by,
controlling, or under common control with such person; and “control” shall mean
any direct ownership interest or right through the exercise of voting or
approval rights or otherwise, to exercise decision-making authority generally.
44. CAPTIONS. The captions preceding the Sections of this Lease are
intended only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
45. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Lease
shall be invalid or unenforceable, the remainder of the provisions of this Lease
shall not be
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affected thereby and each and every provision of this Lease shall be enforceable
to the fullest extent permitted by law.
46. CHOICE OF LAW/JURISDICTION. This Lease,
and the rights and obligations of the parties hereto, shall be interpreted and
construed in accordance with the laws where the Demised Premises are located
(the “State”), without regard to the State’s internal conflict of law
principles. Any disputes arising out of this Lease or between Landlord and
Tenant shall be subject to the exclusive jurisdiction of the state courts of the
State.
47. NO WAIVER. The failure of either party to
seek redress for violation of or to insist upon the strict performance of, any
term, covenant or condition contained in this Lease shall not prevent a similar
subsequent act from constituting a default under this Lease. Without limitation,
no written consent by Landlord or Tenant to any act or omission that otherwise
would be a default shall be construed to permit other similar acts or omissions.
Neither party’s failure to seek redress for violation or to insist upon the
strict performance of any covenant, nor the receipt by Landlord of rent with
knowledge of any breach of covenant, shall be deemed a consent to or waiver of
such breach. No breach of covenant shall be implied to have been waived unless
such is in writing, signed by the party benefiting from such covenant and
delivered to the other party; and no acceptance by Landlord of a lesser sum than
the Fixed Annual Rent, Additional Rent or any other sum due shall be deemed to
be other than on account of the installment of such rent or other sum due. Nor
shall any endorsement or statement on any check or in any letter accompanying
any check or payment be deemed an accord and satisfaction; and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such installment or pursue any other right or remedy. The
delivery of keys (or any other act) to Landlord shall not operate as a
termination of the Term or an acceptance or surrender of the Demised Premises.
The acceptance by Landlord of any rent following the giving of any default
and/or termination notice shall not be deemed a waiver of such notice.
48. ATTORNEY’S FEES. In the event that either
Landlord or Tenant employ an attorney to enforce or defend any of the
conditions, covenants, rights or obligations of this Lease (including, without
limitation, a default by either party), then the prevailing party shall be
entitled to all reasonable attorney fees and all other reasonable out-of-pocket
litigation costs (including, but not limited to filing fees, expert reports and
testimony, court costs and other usual costs of litigation of this type)
incurred by such prevailing party.
49. WAIVER OF TRIAL BY JURY. To the extent
such waiver is permitted by law, the parties waive trial by jury in any action
or proceeding brought in connection with this Lease or the Demised Premises.
50. MISCELLANEOUS. Other than
contemporaneous instruments executed and delivered of even date, if any, this
Lease contains all of the agreements between Landlord and Tenant relating in any
way to the Demised Premises and supersedes all prior agreements and dealings
between them. There are no oral agreements between Landlord and Tenant relating
to this Lease or the Demised Premises. This Lease may be amended only by a
written instrument executed and delivered by both Landlord and Tenant. The
provisions of this Lease shall bind Landlord and Tenant and their respective
successors and assigns. Where the phrases “persons
437
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acting under” Landlord or Tenant or “persons claiming through” Landlord or
Tenant or similar phrases are used, the persons included shall be assignees,
sublessees, licensees or other transferees or successors of Landlord or Tenant
as well as invitees or independent contractors of Landlord or Tenant, and all of
the respective employees, servants, contractors, agents and invitees of
Landlord, Tenant and any of the foregoing. As used herein, “monetary default”
shall mean a default that can be substantially cured solely by the payment of
money and nothing more and “non-monetary default” shall mean a default that
cannot be substantially cured solely by the payment of money and northing more.
If either party is granted any extension, election or other option, to be
effective the exercise (and notice thereof) shall be unconditional, irrevocable
and must be made strictly in accordance with the prescribed terms and times;
otherwise its purported exercise shall be void and ineffective. The enumeration
of specific examples of a general provisions or use of the word “including”
shall not be construed as a limitation of the general provision. Unless a
party’s approval or consent is required by the express terms of this Lease not
to be unreasonably withheld, such approval or consent may be withheld in the
party’s sole discretion. The submission of a form of this Lease or any summary
of its terms shall not constitute an offer by Landlord to Tenant; the leasehold
shall only be created and the parties bound when this Lease is executed and
delivered by both Landlord and Tenant. Nothing herein shall be construed as
creating the relationship between Landlord and Tenant of principal and agent, or
of partners or joint venturers or any relationship other than landlord and
tenant. This Lease and all consents, notices, approvals and all other related
documents may be reproduced by any party by any electronic means or by
electronic, photographic or other reproduction process and the originals may be
destroyed; and each party agrees that any reproductions shall be as admissible
in evidence in any proceeding as the original itself (whether or not the
original is in existence and whether or not reproduction was made in the regular
course of business), and that any further reproduction of such reproduction
shall likewise be admissible. If any payment in the nature of interest provided
for in this Lease shall exceed the maximum interest permitted under controlling
law, as established by final judgment of a court, then such interest shall
instead be at the maximum permitted interest rate as established by such
judgment. Landlord and Tenant expressly agree that there are and shall be no
implied warranties of merchantability, habitability, suitability, fitness for a
particular purpose or of any other kind arising out of this Lease, and there are
no warranties or representations other than those expressly set forth in this
Lease. Without limitation, where Tenant in this Lease indemnifies or covenants
for the benefit of present and future Fee Mortgagees, such agreements are for
the benefit of present and future Fee Mortgagees as third party beneficiaries;
and at the request of Landlord, Tenant from time to time will confirm such
matters directly with such Fee Mortgagee.
51. COUNTERPARTS. This Lease may be executed
in any number of counterparts, each of which shall be deemed to be one and the
same instrument. A facsimile, email, PDF or electronic signature shall be deemed
an original signature.
52. INCORPORATION OF STATE LAW PROVISIONS.
Certain provisions/ sections of this Lease and certain additional
provisions/sections that are applicable or required by laws of the state in
which the Demised Premises are located may be amended, described or otherwise
set forth in more detail on Exhibit I attached hereto, which such Exhibit by
this reference, is incorporated into and made a part of this Lease. In the event
of any conflict between such state law provisions and any provision herein, the
state law provisions shall control.
438
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[SIGNATURE PAGE FOLLOWS]
439
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IN WITNESS WHEREOF this Lease has been
Date.
duly executed under as of the Effective
WITNESS:
WE APP WILMINGTON LLC, a
Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
By:
Name: Craig H. Feldman
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
Signature Page to Lease By and Between
WE APP WILMINGTON LLC and PATHMARK STORES, INC.
440
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EXHIBIT A
SITE PLAN OF DEMISED PREMISES
[g36891mq097i001.jpg]
441
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EXHIBIT B442
LEGAL DESCRIPTION OF THE LAND
Premises A:
ALL that certain lot, piece or parcel of land with the improvements erected
thereon, situate in Christiana Hundred, New Castle County and State of Delaware,
being more particularly bounded and described in accordance with that certain
ALTA/ACSM Land Title Survey prepared by Van DeMark & Lynch, Inc. for Pathmark
Stores, Inc. dated July 6, 1998, as revised (File No 333l6-L) as follows to wit:
BEGINNING at a monument found on the northeasterly side of the Lancaster Pike,
(S.R. 48) said point being a corner for lands now or formerly of Penn mark Real
Estate Group, L.LC. (Deed Record 1848, Page 87), leased by Supermarkets General
Corporation Deed Record X, Volume 110, Page 272, said northeasterly side of
Lancaster Pike being distant northeasterly 53 feet therefrom at right angles
thereto the centerline, said point Beginning distant the three following
described courses and distances measured along the sides of the said Lancaster
Pike from a corner of lands now or formerly of E.I. DuPont DeNemours & Company:
(1) North 62 degrees 13 minutes 60 seconds West, 242.24 feet to a point;
(2) North 27 degrees 08 minutes 30 seconds East, 5.63 feet to a set drill hole;
and
(3) North 48 degrees 21 minutes 59 seconds West, 51.64 feet to the point of
Beginning
THENCE from said point of Beginning and continuing along the various courses of
the said northeast side of Lancaster Pike, the three following described courses
and distances:
(1) North 62 degrees 13 minutes 50 seconds West, 197.03 feet to a found
monument;
(2) North 70 degrees 23 minutes 36 seconds West, 53.52 feet to a found monument;
and
(3) North 64 degrees 24 minutes 10 seconds West, 141.71 feet to a found monument
in the line of lands said point being distant northeasterly 40.10 feet therefrom
measured at right angles thereto the said centerline of the Lancaster Pike;
THENCE partially along the southeasterly line and along the northeasterly line
of said lands now or formerly of Shellhorn & Hill Incorporated, the two
following courses and distances:
(1) North 18 degrees 18 minutes 30 seconds East, 106.42 feet to a set iron pin;
and
(2) North 62 degrees 13 minutes 50 seconds West 130.35 feet to a found monument
in the line of lands now or formerly of Mother African UFCMP Church (Deed Record
1649, Page 27);
THENCE along lines of said lands now or formerly of Mother African UFCMP Church
the three following described courses and distances;
(1) North 28 degrees 21 minutes 00 seconds East, 40.00 feet to a found monument;
(2) North 62 degrees 13 minutes 50 seconds West, 3.02 feet to a found monument;
and
(3) North 27 degrees 35 minutes 03 seconds East, 250.00 feet to a point, a
corner for lands now or formerly of Bellevue Office Plaza as shown on a Record
Land Development Plan recorded in the Office of the Recorder of Deeds in and for
New Castle County on Microfilm No. 6686;
442
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EXHIBIT B443
THENCE, partially along the southwesterly line of said lands now or formerly of
Bellevue Office Plaza, South 62 degrees 13 minutes 50 seconds East, 538.93 feet
to a set nail, a corner for said lands leased by Supermarkets General
Corporation;
THENCE THEREBY, South 27 degrees 08 minutes 30 seconds West, 382.02 feet to a
point on the said northeasterly side of Lancaster Pike and the point and place
of Beginning.
Premises B:
ALL that certain parcel of land situate in Christiana Hundred, New Castle County
and State of Delaware, being more particularly bounded and described as follows,
to wit:
Beginning at a point on the northeasterly side of Lancaster Turnpike, at 70 feet
wide, said point of Beginning being North 62 degrees 13 minutes 50 seconds West
242.24 feet measured along the said northeasterly side of Lancaster Turnpike
from a corner common to lands of Commonwealth Trust Co., and lands now or
formerly of E.I. DuPont deNemours & Co.; thence from said point of Beginning and
along said northeasterly side of the Lancaster Turnpike, North 62 degrees 13
minutes 50 seconds West, 50.00 feet to a point, a corner for lands now or
formerly of Lancaster Investments, Inc.; thence thereby North 27 degrees 08
minutes 30 seconds East 400.02 feet to a corner; thence continuing along the
said line of lands of Lancaster Investments, Inc., South 62 degrees 13 minutes
50 seconds East 50.00 feet to a point; thence by a new line through lands of
Commonwealth Trust Co. South 27 degrees 08 minutes 30 seconds West 400.02 feet
to the first mentioned point and place of Beginning. Be the contents thereof
what they may.
443
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TITLE MATTERS AND ENCUMBRANCES
1. Subject to sanitary sewer assessment and rent, not yet due and
payable.
2. Right of Way Agreements recorded in Deed Record M, Vol. 98, Page 39,
Deed Record K, Vol. 113, Page 270 and Deed Record W, Vol. 122, Page 75
444
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EXHIBIT C
REMEDIAL WORK
(Tenant Performs Construction with Landlord Reimbursement)
Reimbursement Cap: $375,000.00
Remedial Work Completion Date: the third anniversary of the Effective Date of
the Lease
C. 1 Construction Documents. Tenant shall prepare, at Tenant’s expense, and
deliver to Landlord Construction Documents (meaning plans and specifications
prepared by design professionals licensed to prepare such plans and
specifications which reasonably fix and describe the work to be performed by
Tenant contractors) for roof replacements, parking area repairs and
replacements, heating, ventilating and air conditioning upgrades, environmental
remediation, asbestos abatement and automation improvements in an amount
totaling at least the amount of the Reimbursement Cap, all as Landlord and
Tenant shall reasonably and mutually agree. The Construction Documents shall
substantially conform to and describe such work as so agreed, and when such
Construction Documents are approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed, the work described therein shall
be the “Remedial Work” referred to herein. Tenant shall provide at least 6
copies of the Construction Documents to Landlord. Tenant shall be solely
responsible for the liabilities and expenses of all architectural and
engineering services relating to the Remedial Work and for the adequacy and
completeness of the Construction Documents submitted to Landlord and for the
Remedial Work itself, notwithstanding Landlord’s approval thereof.
C.2 Remedial Work Reimbursement. Upon Landlord’s approval of the Construction
Documents showing the Remedial Work to be performed, Tenant shall cause the
Remedial Work to be performed in accordance with all of the terms and
requirements of the Lease including Exhibit G, and the reasonable out-of-pocket
costs to Tenant of performing the Remedial Work shall be eligible for
Reimbursement in the manner provided below up to but not in excess of the
Reimbursement Cap listed above. All costs for the Remedial Work in excess of the
Reimbursement Cap shall be paid for entirely by Tenant, and Landlord shall not
provide any reimbursement therefor. Any Remedial Work not completed by the
Remedial Work Completion Date listed above shall be ineligible for reimbursement
from Landlord, and such Remedial Work shall be paid for solely by Tenant.
Notwithstanding anything in the Lease to the contrary, prior to the Remedial
Work Completion Date Tenant shall have no obligation to perform any Remedial
Work if the cost of same will exceed the Reimbursement Cap, unless Tenant
determines, in its sole, reasonable judgment, that such work is necessary and
prudent for the proper maintenance and operation of the Demised Premises.
Reimbursement of the reasonable out-of-pocket costs to Tenant of performing
Remedial Work up to the Reimbursement Cap and by the Remedial Work Completion
Date shall be disbursed to Tenant by Landlord in no more than four disbursements
the requests for each of which shall not
445
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be submitted more frequently than monthly. For each disbursement, Tenant shall
submit a requisition package to Landlord with (1) an itemization of the costs
being requisitioned, (2) a certificate by an officer of Tenant that all such
costs are reasonable out-of-pocket costs to Tenant of performing Remedial Work
and have been incurred and paid for by Tenant, that to the actual knowledge of
Tenant the Remedial Work included within the requisition has been performed
substantially in accordance with the Construction Documents and in accordance
with the Lease, (3) appropriate back-up documentation including, without
limitation, lien releases (in a form reasonably approved by Landlord) and paid
invoices and bills and (4) a statement by Tenant’s chief financial officer that
such officer knows of no default under the Lease on the part of Tenant nor of
any event which with the giving of notice or the passage of time or both could
ripen into a default under the Lease. The final requisition package shall
further include a copy of all applications for and copies of all governmental
permits issued in connection with the Remedial Work and the plans referred to in
Section 13 of the Lease for any Alterations. Notwithstanding anything herein or
in the Lease to the contrary, Landlord shall not be obligated to reimburse any
costs of Remedial Work if a default under the Lease has occurred and is
continuing. Landlord shall pay the reimbursement to Tenant within thirty (30)
days following Landlord’s receipt of the completed package. In the event that
Landlord fails to pay the reimbursement within such thirty (30) day period,
Tenant may deduct the reimbursebable amount against Rent due under the Lease.
C.3 Performance of Remedial Work by Tenant. No Remedial Work for which
reimbursement is sought shall be performed except in accordance with the
Construction Documents. In connection with its approval thereof, Landlord may
delete from the Construction Documents any items or aspects of Remedial Work
which in Landlord’s reasonable judgment (i) would increase the cost of operating
the Building or performing any other work in the Building, (ii) are incompatible
with the design, quality, equipment or systems of the Building, (iii) would
require unusual expense to readapt the Premises to general grocery store use or
(iv) otherwise do not comply with the provisions of this Lease. Prior to
commencing any Remedial Work, Tenant shall submit to Landlord certificates of
insurance on the part of Tenant contractors meeting the requirements of
Exhibit G paragraph 1A (4). If any such Tenant contractor or any other person
ever makes a claim against any Indemnitee (as such term is defined in
Section 38) in connection with any Remedial Work, then Tenant shall indemnify
such Indemnitee in the manner provided in the Lease against such claim.
C.4 Re-allocation of Reimbursement Cap. Upon the completion of the Remedial Work
up to $20,000 of the Reimbursement Cap may be allocated to increase the
“Reimbursement Cap” under any other lease between Tenant and any Affiliate of
Landlord (except for that certain lease for space at 9210 Atlantic Avenue,
Queens (Ozone Park), New York).
446
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EXHIBIT D
FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
KEY NO:
THIS AGREEMENT, made as of 2010, by and
among ,
a , and its successors and assigns, having
an office at (hereinafter together with its successors and
assigns called “Mortgagee”), WE APP Wilmington LLC, a Delaware limited liability
company, having an office c/o Winstanley Enterprises, LLC, 150 Baker Avenue
Extension, Suite 303 Concord, Massachusetts 01742 (hereinafter called
“Landlord”) and Pathmark Stores, Inc., a Delaware corporation having an office
at 2 Paragon Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
WHEREAS, Mortgagee has made a loan, or is about to make a loan to Landlord in
the original principal amount of $ evidenced by a promissory
Note secured by, among other securities, a mortgage or deed of trust
(hereinafter, as the same may be amended, supplemented or otherwise modified
from time to time, called the “Mortgage”) covering a parcel or parcels of land
owned by Landlord and described on Exhibit A annexed hereto and made a part
hereof, together with the improvements now or hereafter erected thereon (said
parcel or parcels of land and improvements thereon being hereinafter called the
“Mortgaged Property”);
WHEREAS, by a certain lease heretofore entered into between Landlord and Tenant
dated as of November 2010 and amended by [ ] (said lease and amendments
being hereinafter collectively called the “Lease”), Landlord leased to Tenant
the Mortgaged Premises together with the building now or hereafter erected on
all or a portion of said premises (the Mortgaged Premises and the improvements
on or to be erected thereon being thereinafter called the “Demised Premises”);
WHEREAS, a Memorandum of Lease dated November 2010 was recorded on
November , 2010 in the in Book ,
Page ;
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt of
which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make said loan to Landlord unless the Lease
is subordinate to the lien of the Mortgage; and
WHEREAS, Section 16 of the Lease provides that the Lease shall become subject
and subordinate to the lien of a mortgage of the fee interest of the Demised
Premises if and when a non-disturbance agreement is entered into with respect to
such mortgage; and
WHEREAS, the parties desire to subordinate the Lease to the lien of the
Mortgage, and to provide for the non-disturbance of Tenant by Mortgagee.
447
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Mortgagee hereby consents to and
approves the Lease.
2. Tenant covenants and agrees with
Mortgagee that the Lease and any extensions, renewals, replacements or
modifications thereof and Tenant’s interest in the premises under the Lease are
and at all times shall subject and subordinate to the lien of the Mortgage,
without regard to the order of priority of recording of the Mortgage and the
Memorandum of the Lease, subject, however, to the provisions of this Agreement.
3. Tenant certifies that the Lease is
presently in full force and effect.
4. Mortgagee agrees that so long as
the Lease shall be in full force and effect and so long as Tenant is not in
default (beyond any applicable notice and cure period) in the payment of fixed
rent as set forth in the Lease, or in the performance of any of the terms,
covenants or conditions of the Lease on Tenant’s part to be performed:
A. Tenant shall not be named or joined as
a party defendant or otherwise in any suit, action or proceeding for the
foreclosure of the Mortgage or to enforce any rights under the Mortgage or the
bond or note or other obligations secured thereby unless required by law to do
so; and
B. The possession by Tenant of the
Demised Premises and the Tenant’s rights thereto shall not be disturbed,
affected or impaired by, nor will the Lease or the term thereof be terminated or
otherwise affected by (i) any suit, action or proceeding upon the Mortgage or
the bond or note or other obligation secured thereby, or for the foreclosure of
the Mortgage or the enforcement of any rights under the Mortgage or any other
documents held by the Mortgagee, or by any judicial sale or execution or other
sale of the Mortgaged Property, or by any deed given in lieu of foreclosure, or
by the exercise of any other rights given to the Mortgagee by any other
documents or as a matter of law, or (ii) any default under the Mortgage or the
bond or note or other obligation secured thereby.
5. Mortgagee hereby acknowledges and
agrees that all trade fixtures and equipment whether owned by Tenant or any
subtenant or leased by Tenant from a Landlord/Owner in the Demised Premises
shall be subject to the provisions of Section 17 of the Lease.
6. If the Mortgagee shall become the
owner of the Mortgaged Property by reason of foreclosure of the Mortgage or
otherwise, or if the Mortgaged Property shall be sold as a result of any action
or proceeding to foreclose the Mortgage or by a deed given in lieu of
foreclosure, the Lease shall continue in full force and effect, without
necessity for executing any new lease, as a direct lease between Tenant, as
tenant thereunder, and the then owner of the Mortgaged Property, as landlord
thereunder, upon all of the same terms, covenants and provisions contained in
the Lease, and in such event:
448
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A. Tenant shall be bound to such new
owner under all of the terms, covenants and provisions of the Lease for the
remainder of the term thereof (including the Renewal Periods, if Tenant elects
or has elected to exercise its options to extend the term) and Tenant hereby
agrees to attorn to such new owner and to recognize such new owner as landlord
under the Lease; and
B. Such new owner shall be bound to
Tenant under all of the terms, covenants and provisions of the Lease for the
remainder of the term thereof (including the Renewal Periods, if Tenant elects
or has elected to exercise its options to extend the term) which terms,
covenants and provisions such new owner hereby agrees to assume and perform;
provided, however, that such new owner shall not be (i) obligated to complete
any construction work required to be done by Landlord within or outside of the
Demised Premises pursuant to the provisions of the Lease or to reimburse Tenant
for any construction work done by Tenant; however this provision shall not
relieve such new owner from any repair or maintenance obligations of Landlord
expressly set forth in the Lease accruing or arising following new owner’s
acquisition of fee title to the Mortgaged Property or impair any express setoff
rights of Tenant expressly set forth in the Lease accruing or arising following
new owner’s acquisition of fee title to the Mortgaged Property; (ii) required to
make any repairs to the Mortgaged Property or to the Demised Premises or to
perform any other construction or other work, including without limitation the
restoration of the Demised Premises following any casualty or taking;
(iii) liable for the return of security deposits or letters of credit, if any,
paid or delivered by or on behalf of Tenant to Landlord, except to the extent
such sums are actually received by such new owner (or any Mortgagee if such
Mortgagee is not the new owner); (iv) bound by any payment of rents, additional
rents or other sums which Tenant may have paid more than one (1) month in
advance to any prior Landlord unless such sums are actually received by
Mortgagee or if such prepayment shall have been expressly approved of in writing
by such new owner (or any Mortgagee if such Mortgagee is not the new owner);
(v) bound by any agreement amending, modifying or terminating the Lease made
without Mortgagee’s prior written consent; (vi) bound by any assignment of the
Lease or sublease of the Demised Premises, or any portion thereof, made prior to
the time such new owner succeeded to Landlord’s interest other than if made
pursuant to the provisions of the Lease; (vii) liable on account of any default
on the part of Landlord occurring prior to such new owner’s succeeding to
Landlord’s estate; or (viii) subject to any counterclaims, offsets or defenses
that Tenant might have against Landlord.
7. If Landlord shall default in the
performance of the Lease Tenant shall give written notice thereof to Mortgagee
and Mortgagee shall have the right, but not the obligation, to cure such default
in accordance with Section 23 of the Lease (and as provided therein the
Mortgagee shall be entitled to such further time to cure as may be reasonably
necessary for the Mortgagee to remove any stay in bankruptcy and/or to commence
and complete foreclosure proceedings or remove any cause beyond the Mortgagee’s
reasonable control impairing its ability to cure or remedy, to obtain possession
of the Demised Premises and thereafter to commence and diligently prosecute such
cure or remedy to completion)
8. Landlord has agreed in the
Mortgage and other loan documents that the rents payable under the Lease shall
be paid directly by Tenant to Mortgagee upon the occurrence of a default by
Landlord under the Mortgage or any other loan document. Accordingly, after
notice is given by Mortgagee to Tenant that the rents under the Lease should be
paid to or at the
449
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direction of Mortgagee, Tenant shall pay to Mortgagee, or in accordance with the
directions of Mortgagee, all rents and other monies thereafter due and to become
due under the Lease. Tenant shall have no responsibility to ascertain whether
such demand by Lender is permitted under the Mortgage or any other loan
document. Landlord hereby waives any right, claim or demand it may have nor or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment to Mortgagee shall discharge the obligations of Mortgagee to make
such payment under the Lease.
9. Any notices or communications
given under this Agreement shall be in writing and shall be given by registered
or certified mail, return receipt requested, postage prepaid, (a) if to
Mortgagee at the address of Mortgagee as hereinabove set forth or at such other
address as Mortgagee may designate by notice, or (b) if to Landlord at the
address of Landlord as hereinabove, or at such other address as Landlord may
designate by notice, or (c) if to Tenant, then one copy shall be delivered to
the attention of the Senior Vice President of Real Estate of Tenant, another
shall be delivered to the attention of General Counsel of Tenant, and another
shall be delivered to the Director of Properties & Administration of Tenant, all
at 2 Paragon Drive, Montvale, New Jersey 07645 or at such other addresses as
Tenant may designate by notice. During the period of any postal strike or other
interference with the mail, personal delivery shall be substituted for
registered or certified mail.
10. This Agreement shall bind and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, personal representatives, successors and assigns.
11. This Agreement contains the entire
agreement between the parties and cannot be changed, modified, waived or
cancelled except by an agreement in writing executed by the party against whom
enforcement of such modification, change, waiver or cancellation is sought.
12. This Agreement and the covenants herein
contained are intended to run with and bind all lands affected thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
WITNESS:
MORTGAGEE:
, a
Name:
By:
Name:
Title:
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WE APP WILMINGTON LLC, a
Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
TENANT:
PATHMARK STORES, INC., a
Delaware corporation
Name:
By:
Name:
Christopher W. McGarry
Title:
Vice President and Secretary
451
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WITNESS:
LANDLORD:
MORTGAGEE ACKNOWLEDGMENT
STATE OF )
SS:
COUNTY OF )
ON THIS day of 2010, before me, the subscriber,
personally appeared to me known, who being by me duly sworn, did
depose and say that he is of the corporation
described in and which executed the within instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
LANDLORD ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of 2010, before me, the
undersigned notary public, personally appeared
, proved to me through satisfactory
evidence of identification, which was a [current driver’s license] [a current
U.S. passport] [my personal knowledge], to be the person whose name is signed on
the preceding instrument and acknowledged the foregoing instrument to be his/her
free act and deed as of WE APP Wilmington LLC.
Notary Public
My Commission Expires:
452
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TENANT ACKNOWLEDGMENT
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of , 2010, before me,
the subscriber, personally came Christopher W. McGarry, to me known, who being
by me duly sworn, did depose and say that he is Vice President and Secretary of
Pathmark Stores, Inc., the corporation described in and which executed the
within instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his name
thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
453
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EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
(Attached)
454
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EXHIBIT E
KEY NO:
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE made as of November , 2010 by WE APP
WILMINGTON LLC, a Delaware limited liability company, having an office at c/o
Winstanley Enterprises, LLC, 150 Baker Avenue Extension, Suite 303 Concord,
Massachusetts 01742 Attn: Adam Winstanley (hereinafter called “Landlord”), and
PATHMARK STORES, INC., a Delaware corporation, having an office at 2 Paragon
Drive, Montvale, New Jersey 07645 (hereinafter called “Tenant”).
W I T N E S S E T H:
1. For and in consideration of the sum
of TEN and no/100 Dollars ($10.00) and of other valuable considerations paid by
Tenant to Landlord, the receipt and sufficiency of which are hereby acknowledged
by Landlord, Tenant and Tenant hereby takes from Landlord that certain parcel of
land (hereinafter called “Land”) described on Exhibit B and the buildings and
other improvements now or hereafter erected on the Land together with the
benefit of any and all easements, appurtenances, rights and privileges now or
hereafter belonging thereto. The land is currently improved by an existing
building consisting of 48,622 square feet of space (the “Building), as more
particularly shown on the site plan attached hereto as Exhibit A. The Building
and any buildings and improvements now or hereafter erected on the Land shall be
hereinafter called “Improvements”. The Land and any Improvements now or
hereafter erected thereon are hereinafter collectively called the “Demised
Premises.” The Demised Premises have been leased to Tenant upon and subject to
the covenants and agreements set forth in a certain agreement between Landlord
and Tenant bearing even date herewith (hereinafter called the “Lease”).
2. The Lease is in effect. The
original term of the Lease shall continue to and include the date which is
twenty (20) years after the day before the Commencement Date if the Commencement
Date is the first day of a month, or twenty years (20) years after the last day
of the month in which the Commencement Date occurs if the Commencement Date is
not the first day of a month.
3. Tenant has the right and option to
extend the term of the Lease from the date upon which it would otherwise expire
for ten (10) separate renewal periods of five (5) years each (each such period
being known as a “Renewal Period”). Said right and option, if exercised by
Tenant, shall be in accordance with the terms and conditions of Section 4 of the
Lease.
4. The Lease contains the entire
agreement between the parties. All persons are hereby put on notice of the
existence of the Lease and are referred to the Lease for its terms and
conditions. The Lease is on file in the offices of Tenant and the Landlord as
hereinabove set forth.
5. This Memorandum of Lease is
prepared, signed and acknowledged solely for recording purposes under the laws
of the State of Delaware, and is in no way intended to change,
455
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alter, modify, amend or in any other way affect the rights, duties and
obligations of Landlord and Tenant pursuant to the Lease; it being specifically
understood and agreed between the parties that each has rights, duties and
obligations imposed upon it in the Lease which are not expressly contained
herein but are included herein by reference.
6. Upon expiration of the Lease term Landlord and its successors and assigns has
irrevocably been named attorney-in-fact by Tenant in the Lease to execute,
deliver and record a notice of termination of this Memorandum.
IN WITNESS WHEREOF this Memorandum of Lease has been duly executed as of the day
and year first above written.
WITNESS:
WE APP WILMINGTON LLC, a
Delaware limited liability company
Name:
By:
Name:
Title:
WITNESS:
PATHMARK STORES, INC., a
Delaware corporation
Name: Craig H. Feldman
By:
Name: Christopher W. McGarry
Title: Vice President and Secretary
456
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EXHIBIT B
DEMISED PREMISES
457
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
458
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COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this day of November 2010, before me, the undersigned notary
public, personally appeared ,
proved to me through satisfactory evidence of identification, which was a
[current driver’s license] [a current U.S. passport] [my personal knowledge], to
be the person whose name is signed on the preceding instrument and acknowledged
the foregoing instrument to be his/her free act and deed
as of WE APP Wilmington LLC.
Notary Public
My Commission Expires:
STATE OF NEW JERSEY)
SS
COUNTY OF BERGEN)
ON THIS day of November, 2010, before me, the subscriber, personally
came Christopher W. McGarry, to me known, who being by me duly sworn, did depose
and say that he is the Vice President and Secretary of Pathmark Stores, Inc.,
the corporation described in and which executed the within instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal the day and
year first above written.
Notary Public
459
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UNCONDITIONAL GUARANTY
WHEREAS, Pathmark Stores, Inc., a Delaware corporation (“Tenant”) desires to
enter into a certain lease (“Lease”) of even date concerning Demised Premises
known as 3901 Lancaster Pike, Wilmington, Delaware, with WE APP Wilmington LLC,
a Delaware limited liability company (“Landlord”). (Terms used herein and not
otherwise defined will have the meaning given in the Lease.)
WHEREAS, as an inducement to entering into the Lease Landlord has required that
the undersigned The Great Atlantic & Pacific Tea Company, Inc. (“Guarantor”)
unconditionally guarantees the performance of all obligations of Tenant under
the Lease.
NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound hereby, Guarantor agrees as follows:
1. Guarantor unconditionally and absolutely guarantees to Landlord
(which shall include its legal representatives, successors and assigns) the due
and punctual performance of each and all of the Tenant’s obligations under or
related to the Lease, including the timely payment of all sums due therein.
Tenant’s obligations hereby guaranteed include, without limitation, those
arising under amendments or modifications to the Lease hereafter entered into by
Tenant and Landlord, all of which shall be so guaranteed even though Guarantor
hereafter does not consent to or approve the same (Guarantor hereby waiving all
rights of consent or approval with respect to such amendments or modifications).
2. Guarantor waives presentment for payment or performance, notice
of nonpayment or performance, notice of default, demand, protest or notice or
acceptance of this Guaranty, any rights Guarantor may have by reason of any
forbearance, modification, amendment, extension or any indulgence whatsoever
that Landlord may grant or to which Landlord and the Tenant may agree with
respect to the Lease, any and all notice of every kind to which Guarantor might
otherwise be entitled with respect to the incurring of any further obligation or
liability by Tenant to Landlord, demand for payment, the presentment of any
instrument for payment, the protest or nonpayment thereof and any and all
defenses whatsoever excepting only Tenant’s performance as required by the terms
of the Lease. Guarantor also waives, unless and until all of the obligations of
Tenant are fully paid and performed, any right to be subrogated in whole or in
part to any right or claim of Landlord against Tenant and any right to require
the marshalling of any assets of the Tenant, which right of subrogation or
marshalling might otherwise arise from any partial payment by the Guarantor. It
is expressly understood and agreed that Guarantor’s liability hereunder shall be
unaffected by (i) any amendment or modification whatsoever of the provisions of
the Lease, (ii) any extension of time for performance under the Lease, (iii) any
delay by Landlord in exercising any right under the Lease or this Guaranty (none
of which shall ever operate as a waiver of such right), or (iv) the release of
Tenant or any other guarantor from performance or observance of any of the
agreements or conditions contained in the Lease by operation of law or
otherwise, whether made with or without notice to Guarantor, including without
limitation any impairment, modification, change, release, rejection,
disaffirmance, or limitation of the liability of Tenant, or any other guarantor
of the Lease, of their estate in
460
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EXHIBIT F
bankruptcy or insolvency resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar or insolvency statute,
or from the decision of any court. Guarantor covenants that Guarantor will cause
Tenant to maintain and preserve the enforceability of the Lease, as the same may
hereafter be modified or amended, and will not permit it to take or to fail to
take action of any kind the taking of which or the failure to take might be the
basis for a claim that Guarantor has any defense to its obligation hereunder
other than timely performance in full of the Lease in accordance with its terms.
The joint and several liability of Guarantor hereunder shall exist irrespective
of the validity or enforceability of the Lease.
3. This shall be an agreement of suretyship as well as of guaranty,
and Landlord, without being required to proceed first against Tenant or any
other person or entity, may proceed directly against Guarantor whenever Tenant
fails to make any payment due or fails to perform any obligation now or
hereafter owed to Landlord without first resorting to or exhausting any other
remedy and without first having recourse to the Lease; provided, however, that
nothing herein contained shall prevent Landlord from suing on the Lease with or
without making Guarantor a party to the suit or from exercising any other rights
thereunder and if such suit, or other remedy, is availed of, only the net
proceeds therefrom, after deduction of all Landlord’s Costs of Collection
(defined below) shall be applied in reduction of the amount then due on this
Guaranty.
4. Guarantor agrees to pay to Landlord, on demand, all costs and
expenses, including reasonable attorneys’ fees and litigation expenses, which
Landlord may incur in the enforcement of Tenant’s obligations under the Lease or
the liability of Guarantor hereunder (“Costs of Collection”). “Costs of
Collection” includes, without limitation, all out of pocket expenses incurred by
the Landlord’s attorneys and all costs incurred by Landlord including, without
limitation, costs and expenses associated with travel on behalf of Landlord,
which costs and expenses are related to or in respect of Landlord’s efforts to
collect and/or to enforce any of the obligations and/or to enforce any of its
rights, remedies or powers against or in respect of either or both Tenant or
Guarantor (whether or not suit is instituted in connection with such efforts).
5. Guarantor represents and warrants to Landlord that (i) it has
either examined the Lease or has had an opportunity to examine the Lease and has
waived the right to examine; (ii) that it (and the individual acting on its
behalf) has the full power, authority and legal right to execute and deliver
this Guaranty; (iii) that this Guaranty is a binding legal obligation and is
fully enforceable against Guarantor in accordance with its terms; (iv) that
there is no action or proceeding pending or, to its knowledge, threatened
against Guarantor before any court or administrative agency which might result
in any material adverse change in its business or condition or in its assets;
(v) that neither the execution nor delivery of this Guaranty nor fulfillment of
nor compliance with the terms and provisions thereof will constitute a default
under or result in the creation of any lien, charge or encumbrance upon any
property or assets of Guarantor under any agreement or instrument to which it is
now a party or by which Guarantor may be bound; and (vi) that Guarantor is the
sole owner of all the common stock of Tenant and expects to derive financial
benefit from the Lease.
461
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6. This Agreement shall be binding upon Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Landlord and its legal representatives, successors and assigns, and is
irrevocable until released in writing by Landlord. Each and every right, remedy
and power hereby granted to Landlord or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by
Landlord at any time and from time to time. The validity, construction and
performance of this Guaranty shall be governed by the laws of the State where
the Demised Premises are located (the “State”), without regard to conflict of
law principles. If any clause or provision of this Guaranty should be held
illegal or invalid by any court, the invalidity of such clause or provisions
shall not affect any of the remaining clauses or provisions hereof. In case any
agreement or obligation contained in this Guaranty should be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Guarantor, as the case may be, to the full extent
permitted by law. Each and every default hereunder or under the Lease shall give
rise to a separate cause of action hereunder. The obligations and liabilities of
hereunder shall be joint and several with any other guarantees given to Landlord
in connection with the Lease. This Guaranty may be amended only by instrument in
writing executed and delivered by both Landlord and Tenant. The provisions of
this Guaranty shall bind Guarantor and its respective successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns. This
Guaranty and all consents, notices, approvals and all other documents relating
hereto may be reproduced by photographic, microfilm, microfiche or other
reproduction process and the originals thereof may be destroyed; and each party
agrees that any reproductions shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not reproduction was made in the regular course
of business) and that any further reproduction of such reproduction shall
likewise be admissible in evidence.
7. Guarantor consents to and agrees that the courts of the State
shall have personal jurisdiction over Guarantor for any action brought on this
Guaranty including the right to grant judgment against Guarantor personally
together with interest on any judgment obtained by Landlord at the interest rate
set forth in the Lease for late payments (but if the same shall be unlawful for
any reason, then at the highest permissible interest rate). Guarantor further
agrees and consents that venue, if any, for any such action shall be as set
forth in the Lease. Guarantor waives and relinquishes any and all rights to
removal of any such action to any other court. Guarantor also waives trial by
jury in any judicial proceeding involving any matter in any way arising out of
or relating to this Guaranty or the Lease.
8. Any notice, communication, request or other document or demand
made under this Guaranty shall be in writing and shall be deemed given at the
earlier of (i) the date received or (ii) three (3) business days after the date
deposited in a United States Postal Service Depository, postage prepaid first
class certified or registered mail, return receipt requested, addressed to
Guarantor or Landlord, as the case may be, at the respective addresses set forth
opposite their names below:
462
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Landlord:
WE APP Wilmington LLC
c/o Winstanley Enterprises, LLC
150 Baker Avenue Extension, Suite 303
Concord, MA 01742
Attn. Adam Winstanley
with a copy similarly sent to:
DLA Piper LLP (US)
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Daniel A. Taylor, Esq. or Primo Fontana, Esq.
Guarantor:
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: Senior Vice President of Real Estate
with a copy similarly sent to
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, New Jersey 07645
Attn: General Counsel
Either party may change an address to which any such notice, communication,
request or other document or demand is to be delivered to it or delivery of
copies thereof by furnishing written notice of such change to the other party.
Each party shall, when giving notices, send at least one (1) copy by Federal
Express, U.S. Express Mail, or other overnight delivery service, to the
addressee.
IN WITNESS WHEREOF, Guarantor has executed and sealed this Guaranty the day of
November , 2010.
WITNESS:
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., a Maryland corporation
By:
Name: Craig H. Feldman
Name: Christopher W. McGarry
Title: Senior Vice President
463
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EXHIBIT H
INSURANCE
This Exhibit G shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this
Exhibit shall prevail and govern the Lease.
1. INSURANCE.
A. Coverage. Tenant shall purchase and maintain insurance during the entire Term
of the Lease and any period Tenant (or any party claiming by, through or under
Tenant) occupies any portion of the Demised Premises, for the benefit of the
Tenant and Landlord (as their interest may appear) with terms and coverages
reasonably satisfactory to Landlord, and with insurers having a minimum A.M.
Best rating of at least A/X, and with such increases in limits as Landlord may
from time to time reasonably request, but initially Tenant shall maintain the
following coverages in the following amounts:
(1) Commercial General Liability Insurance naming Landlord,
Landlord’s management, leasing and development agents and Landlord’s
mortgagee(s) from time to time as additional insureds, with coverage for
premises/operations, personal and advertising injury, products/completed
operations and contractual liability with combined single limits of liability of
not less than $1,000,000 for bodily injury and property damage per occurrence
and not less than 2,000,000 in the aggregate and excess liability insurance with
a limit not less than $20,000,000 per occurrence and aggregate. Notwithstanding
anything to the contrary contained herein, Tenant’s obligation to maintain
general liability insurance may be satisfied through a program of self-insurance
whereby Tenant self-insures the first $3,000,000.00 per claim as long as the
program is supported by an A-rated insurance company and its third party
administrator.
(2) Property insurance covering property damage and business
interruption for the entire Demised Premises. Covered property shall include the
Building, boilers and machinery, all tenant improvements, office furniture,
trade fixtures, office equipment, merchandise and all other items Tenant’s
property on the Demised Premises. Such insurance shall name Landlord and Fee
Mortgagee(s) from time to time as additional loss payees as their interests may
appear. Such insurance shall be written on an “all risk” of physical loss or
damage basis including but not limited to the perils of fire, extended coverage,
windstorm, vandalism, malicious mischief, terrorism, sprinkler leakage, flood,
windstorm and earthquake, for the full replacement cost value of the covered
items and other endorsements as Landlord shall reasonably request from time to
time and in amounts that meet any co insurance clause of the policies of
insurance with a deductible amount not to exceed $750,000. Such insurance shall
include rent continuation coverage of no less than twelve (12) months. Such
policy or policies shall provide that the proceeds of any loss shall be payable
to Landlord and Tenant and to the holder (as its interest may appear) of any Fee
Mortgage to which this Lease is subordinate so long as such holder and future
holders of such Fee Mortgage are obligated to apply proceeds of insurance in the
manner provided for in this Lease.
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EXHIBIT H
(3) Workers’ Compensation Insurance and Employers Liability
Insurance with statutory limits and automobile liability insurance (coverage
must include owned, leased, hired and non owned vehicles) with a limit of at
least $1,000,000 Combined Single Limit-Bodily Injury & Property Damage.
(4) Tenant shall purchase or shall cause each Tenant contractor
performing work on the Demised Premises to carry insurance protecting against
claims set forth below which may arise out of or result from the contractor’s
operations on the Premises and naming Landlord, Landlord’s management, leasing
and development agents as additional insureds for Premises Operations and
Completed Operations. Waiver of Subrogation to apply under all policies.
(1) claims under workers’ or workmen’s compensation, disability
benefit and other similar employee benefit acts—in amounts as required by law;
(2) claims for damages because of bodily injury, occupational sickness
or disease, or death of his employees or any other person and other personal
injury and motor vehicle liability — Public Liability - Single Limit (Combined)
Per Occurrence. Bodily Injury/Property Damage $1,000,000 w/ $2,000,000
General/Completed Operations Aggregate. Automobile Liability - Single Limit
(Combined) Per Occurrence Bodily Injury and Property Damage $1,000,000. Excess
Liability Umbrella covering all above items $5,000,000 per Occurrence; and
(3) claims for damages, other than the work of the contractor itself,
because of injury to or destruction of tangible property, including loss of use
resulting therefrom — $1,000,000 per occurrence.
Tenant shall, prior to the commencement of the Term and on each anniversary of
the renewal date thereof, furnish to Landlord certificate(s) evidencing such
coverage, which certificate(s) shall state that such insurance coverage may not
be canceled without at least thirty (30) days’ prior written notice to Landlord
and Tenant. The insurance maintained by Tenant shall be deemed to be primary
insurance and any insurance maintained by Landlord (acknowledging that Landlord
has no obligation to maintain any insurance) shall be deemed secondary thereto.
On all liability insurance Landlord, (and if requested, Landlord’s Fee
Mortgagees and Landlord’s management, leasing and development agents shall be
named as additional insureds with such coverage to be primary. Tenant agrees
from time to time to deliver true and complete copies of all policies to
Landlord upon request.
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PERCENTAGE RENT
If any Percentage Rent Event occurs as described in Section 5(E) of the Lease,
then the following provisions shall immediately take effect, shall become a part
of the Lease for the remainder of the Term and Tenant shall, in addition to all
other rent provided for in the Lease, also pay Percentage Rent to Landlord in
accordance with the following:
Section 5(E) Percentage Rent
5(E)(1) Percentage Rent - General Covenant. As used in this Section 5(E) the
following terms have these meanings:
“Percentage Rent Rate” means one percent (1%) of Excess Gross Sales.
“Excess Gross Sales” means Gross Sales above the Gross Sales Benchmark.
“Gross Sales” has the meaning given below in Section 5 (E)(2).
“Gross Sales Benchmark” means $32,500,000.00, which amount is increased by five
(5%) every five years at the same time Fixed Annual Rent increases under
Section 5 (A) of the Lease.
Tenant covenants and agrees to pay to Landlord, as Additional Rent, the amount,
if any, of Tenant’s Excess Gross Sales during any calendar month or part thereof
during the Term, multiplied by the Percentage Rent Rate (“Percentage Rent”).
(For any period less than a full calendar month the Excess Gross Sales and the
Gross Sales Benchmark shall be prorated.) Such amounts payable hereunder are
referred to as “Percentage Rent” and are also included in the term “Additional
Rent.”
5 (E)(2) Gross Sales - Definition. “Gross Sales” means the total amount in
dollars of the actual price charged (including finance charges), by Tenant and
any sublease, assignee, licensee or other person conducting sales from or with
respect to the Demised Premises, whether for cash or on credit, for all sales of
merchandise, food, beverages, services, gift or merchandise certificates, and
all other receipts of business conducted at, in, on, about or from the Premises,
including, but not limited to, all mail or telephone orders, all internet sales,
and all catalog sales and all home delivery sales received or filled at, from or
with respect to the Premises, and including all deposits not refunded to
purchasers, all orders taken in, from or with respect to the Premises, whether
or not such orders are filled elsewhere, receipts of sales through any vending
machine or other coin or token operated device or otherwise at, in, on, about,
from or with respect to the Premises, and sales and receipts occurring or
arising as a result of solicitation off the Premises conducted by personnel
operating from or reporting to, or under the supervision of any employee of
Tenant located at the Demised Premises. Gross Sales shall not, however, include
any separately stated sums collected and remitted for any retail sales tax or
retail excise tax imposed by any duly constituted governmental authority, nor
shall they include any exchange of goods or merchandise between the stores of
Tenant where such exchange of goods or merchandise is made solely for the
convenient operation of the business of Tenant and neither for the purpose of
consummating a sale which has theretofore been made at, in, on, about or from
the Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise
466
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would be made at, in, on, about, from or with respect to the Premises, nor the
amount of any cash or credit refund made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures which are not a part of Tenant’s stock in
trade. Each sale upon installment, credit or layaway shall be treated as a sale
for the full price in the month during which such sale shall be made,
irrespective of the time when Tenant shall receive payments from its customers,
and no deduction shall be allowed for uncollectible payment by customer or
uncollected or uncollectible credit accounts.
5(E)(3) Records and Reporting of Gross Sales. Tenant shall utilize, and cause to
be utilized, cash registers equipped with consecutive serialized tapes and/or
such other devices for recording sales as are normally used in Tenant’s type of
business to record all sales and Tenant shall keep for at least 36 months after
expiration of each calendar year or part thereof during the Term, full, true and
accurate books of account and records (“books”) conforming to generally accepted
accounting principles showing all Gross Sales transacted at, in, from and upon
the Premises for such calendar year or part thereof, including all tax reports,
dated cash register tapes, sales slips, sales checks, sales books, bank deposit
records and other supporting data. Such books shall be kept on the Premises
during the Term. Within fifteen (15) days after the end of each calendar month
or portion thereof included in the Term, Tenant shall furnish to Landlord a
statement of Gross Sales transacted during such previous month or portion
thereof; and on or before each February 1 included in the Term and within thirty
(30) days after the end of the Term Tenant shall furnish to Landlord a statement
(the “Annual Statement”) certified by an independent public accountant of Gross
Sales itemized on a calendar month by calendar month basis transacted during the
preceding calendar year or part thereof. In the event of Tenant’s failure to
furnish any statement of Gross Sales required hereunder, in addition to all
other remedies afforded it under this Lease, Landlord shall be entitled to have
an accountant of Landlord’s selection conduct an audit of Tenant’s books for
such period or periods for which Tenant has failed to furnish such statements.
Such audit shall be at Tenant’s expense and Tenant shall promptly reimburse
Landlord for the costs of such audit. All such costs shall be deemed additional
charges. Notwithstanding the foregoing, Landlord shall have the right from time
to time by its accountants or representatives to audit all statements of Gross
Sales and in connection with such audits to examine all of Tenant’s books
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales; and Tenant shall make all books readily
available for such examination. Failure of Tenant to make all books readily
available for such examination shall be deemed a default under this Lease; and
in addition to all other remedies afforded it under this Lease, Tenant shall
promptly reimburse Landlord for the costs of such audit. All such costs shall be
deemed additional charges. If any such audit discloses that the actual Gross
Sales for any month transacted by Tenant exceed those reported by more than two
percent, Tenant shall forthwith pay to Landlord the cost of such audit and
examination together with any additional Percentage Rent payable to Landlord.
Any information obtained by Landlord pursuant to the provisions of this
Section shall be treated as confidential, except in any litigation or
arbitration proceedings between the parties, and, except further, that Landlord
may disclose such information to existing Lenders and to prospective buyers and
lenders.
5 (E)(4) Payment. On or before the 15th day after the expiration of each full or
partial calendar month included in the Term, Tenant shall pay all Percentage
Rent due for such prior
467
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month to Landlord without demand, provided that if such amount exceeds the
Percentage Rent that would be payable with respect to such month if Percentage
Rent were calculated on the basis of Gross Sales for all months elapsed in the
then current calendar year, Tenant shall not be required to pay any amount on
account of such month unless and until such amount shall later be payable as
part of the annual adjustment. Upon receipt by Landlord of each Annual Statement
of Gross Sales there shall be an adjustment between Landlord and Tenant to the
end that Landlord shall receive the exact amount of Percentage Rent due
hereunder. Any overpayments by Tenant hereunder shall be credited against the
next payments due under this Section. Any underpayments by Tenant shall be
immediately due and payable. With respect to the calendar year in which the Term
ends, the adjustments shall be prorated for the portion of the calendar year
included in the Term.
468
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EXHIBIT I
LOCAL LAW ADDENDUM
(Attached)
469
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Lease Addendum (DE)
This Lease Addendum (“Addendum”) is supplemental to and made a part of that
certain Lease dated as of November , 2010 (the “Lease”) by and between WE
APP Wilmington LLC (“Landlord”) and Pathmark Stores, Inc. (“Tenant”).
Capitalized terms used in this Addendum without definition shall have the
meanings set forth in the Lease. This Addendum is to be construed as
supplemental to, and part of, the Lease. In the event of any inconsistency
between the Lease and this Addendum, the terms and provisions of this Addendum
shall prevail.
Notwithstanding the terms and conditions contained in the Lease, and to the
limited extent hereof, the parties agree as follows:
1. Notwithstanding any provision contained in Section 7(G) of the
Lease to the contrary, the term “Taxes” as it is used in the Lease shall
include, without limitation, any and all taxes and license fees required to be
paid by Landlord under 30 Del. C. § 2301(a)(6) and 30 Del. C. § 2301(d).
2. In addition to all other remedies of Landlord provided in the
Lease, Landlord may maintain an action for summary possession under 25 Del. C. §
5702 for any default of Tenant as provided in Section 25 of the Lease or for any
other breach by Tenant of the terms, covenants and conditions contained in the
Lease, including, without limitation, the holding over in possession of Tenant
after the Expiration Date or earlier termination of the Lease.
3. Notwithstanding any provision contained in Section 22 of the
Lease to the contrary, Tenant’s holding over in possession of the Demised
Premises after the Expiration Date or earlier termination of the Lease,
including, without limitation, the collection of rent by Landlord during the
period of such holding over, shall in no way constitute Landlord’s permission to
Tenant to hold over in possession of the Demised Premises after the Expiration
Date or earlier termination of the Lease.
470
--------------------------------------------------------------------------------
EXHIBIT J
Confidentiality Agreement
(Attached)
471
--------------------------------------------------------------------------------
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into as of
, 2010 (the “Effective Date”) by and between
[TENANT], a , having an address at
(“Company”) and
, a , having an
address at (“Disclosee”).
In connection with Disclosee’s interest in obtaining information concerning the
business of Company, Company is furnishing or has furnished Disclosee with
certain written information concerning Company’s gross sales that is either
non-public, confidential or proprietary in nature. This information furnished to
Disclosee or its affiliates, agents, representatives or employees
(“Representatives”), together with analyses, compilations, forecasts, studies or
other documents prepared by Disclosee or its Representatives that contain or
otherwise reflect such information is hereinafter referred to as the
“Information.” In consideration of Company furnishing Disclosee with the
Information, Disclosee agrees that:
1. The Information is Company’s property and will be kept
confidential and shall not, without Company’s prior written consent, be
disclosed by Disclosee or Representatives in any manner whatsoever, in whole or
in part, and shall not be used by Disclosee or its Representatives in any manner
to compete with the business of Company. Moreover, Disclosee may reveal the
Information only to its Representatives who need to know the Information, are
informed by Disclosee of the confidential nature of the Information and who
shall agree to act in accordance with the terms and conditions of this
Agreement. Disclosee shall be responsible for any breach of this Agreement by
its Representatives.
2. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other than
as a result of a disclosure by Disclosee or its Representatives, or (ii) become
available to Disclosee on a non-confidential basis from a source (other than
Company or its Representatives) that is not prohibited from disclosing such
Information to Disclosee by a legal, contractual or fiduciary obligation to
Company; or (iii) must be disclosed in order to comply with any applicable law,
order, regulation or ruling; (iv) is already known to Disclosee or its
Representatives or is already in its or their possession prior to disclosure by
Company hereunder, or (v) is independently developed by Disclosee or its
Representatives without reference to the Information.
3. In the event that Disclosee or anyone to whom Disclosee transmits
the Information pursuant to this Agreement becomes legally compelled to disclose
any of the Information, Disclosee will provide Company with prompt notice so
that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement, Disclosee will furnish only
that portion of the Information that Disclosee is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. Disclosee acknowledges that remedies at law may be inadequate or
protect against breach of this Agreement, and Disclosee hereby in advance agrees
that Company may seek injunctive relief without proof of actual damages. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without regard to conflict of law principles. The exclusive
jurisdiction for any disputes concerning this Agreement shall be the Superior
Court of New Jersey,
472
--------------------------------------------------------------------------------
Bergen County, and the parties hereby submit to such jurisdiction and waive all
defenses relating to jurisdiction, venue and forum non convenience.
5. Disclosee hereby defends, indemnifies and holds harmless Company
and its Representatives and their respective successors and assigns against and
from any loss, liability or expense, including attorney’s fees, arising out of
any uncured breach by Disclosee or by its Representatives of any of the terms of
this Agreement
6. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute the same
Agreement. A facsimile, email, pdf or electronic signature shall be deemed an
original signature.
[SIGNATURE PAGE FOLLOWS]
473
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
COMPANY:
[TENANT], a
By:
Name:
Title:
DISCLOSEE:
, a
By:
Name:
Title:
474
--------------------------------------------------------------------------------
EXHIBIT C-1
RENT ROLL FOR SHOPPING CENTER PROPERTY
RENT ROLL FOR SHOPPING CENTER PROPERTY
LEASE ENTITY / TENANT NAME
MONTHLY RENT
ANNUAL RENT
START
END
SIZE - S.F.
RENT/ S.F.
SECURITY
DEPOSIT
*Aj PET DISTRIBUTORS
$8,002.13
$96,025.56
4/1/2005
3/31/2008
2,480
$38.72
*Tenant is M-to-M
ATLANTIC RESTAURANT (BURGER KING)
$10,416.67
$125,000.04
5/1/2006
4/30/2011
2,996
$41.72
$5,000.00
STEP
$12,083.33
$144,999.96
5/1/2011
4/30/2016
2,996
$48.40
STEP
$14,166.67
$170,000.04
5/1/2016
4/30/2020
2,996
$56.74
STEP
$15,833.33
$189,999.96
5/1/2020
4/30/2024
2,996
$63.42
STEP
$17,083.33
$204,999.96
5/1/2024
4/30/2026
2,996
$68.42
% Rent: 6% over 5% break point
COACH NAILS & SKIN CARE
$1,975.00
$23,700.00
1 1/1/2006
10/31/2011
600
$39.50
$5,000.00
EYEGLASS SERVICE INDUSTRY
$5,370.56
$64,446.72
1 1/1/2008
10/31/2011
1,323
$48.71
$10,425.38
STEP
$5,639.09
$67,669.08
11/1/2011
10/31/2014
1,323
$51.15
STEP
$5,751.87
$69,022.44
11/1/2014
10/31/2015
1,323
$52.17
OPTION
$5,866.91
$70,402.92
11/1/2015
10/31/2016
1,323
$53.21
STEP
$5,984.25
$71,811.00
11/1/2016
10/31/2017
1,323
$54.28
STEP
$6,163.78
$73,965.36
11/1/2017
10/31/2018
1,323
$55.91
STEP
$6,348.69
$76,184.28
11/1/2018
10/31/2019
1,323
$57.58
STEP
$6,539.15
$78,469.80
11/1/2019
10/31/2020
1,323
$59.31
FASHION BUG
$16,893.33
$202,720.00
11/01/2010
10/31/2015
5,068
$40.00
% rent of 4% over $5,068,000
GAMESTOP
$5,685.63
$68,227.56
8/1/2008
7/31/2013
2,481
$27.50
OZONE PARK WINES & LIQUORS
$4,198.06
$50,376.72
11/1/2007
10/31/2012
1,204
$41.84
$7,800.00
STEP
$4,827.77
$57,933.24
11/1/2012
10/31/2017
1,204
$48.12
475
--------------------------------------------------------------------------------
Rent and CAM Prorations
Rent
Cam
Tax
Total
Nov 1 - 3
Nov 4 - 30
Open Bal
as of Nov.3
072-6626
All Pet Distributors, Inc.
$8,002.13
$423.75
$1,299.06
$9,724.94
$972.49
$8,752.45
A
$9,724.94
Atlantic Restaurant Assoc., Inc.
$10,416.67
$511.29
$1,567.12
$12,495.08
$1,249.51
$11,245.57
B
$13,024.49
Coach Nails & Skin Care, Inc.
$1,975.00
$182.57
$313.42
$2,470.99
$247.10
$2,223.89
A
$2,470.99
Eyeglass Service Industries
$5,370.56
$226.01
$692.83
$6,289.40
$628.94
$5,660.46
A
$6,289.40
Fashion Bug of Ozone Park, Inc.
$16,893.33
$847.55
$2,598.12
$20,339.00
$2,033.90
$18,305.10
A
$20,339.00
Gamestop, Inc.
$5,685.63
$423.77
$1,299.06
$7,408.46
$740.85
$6,667.61
C
$46,586.10
Ozone Park Wines & Liquors
$4,198.06
$205.81
$630.97
$5,034.84
$503.48
$4,531.36
D
$10,273.52
A
Representing Nov. 2010 rent, cam and tax.
C
Nov. 2010 rent, cam & tax
$7,408.46
2009 Cam Adj.
$419.03
B
Nov. 2010 rent, cam & tax
$12,495.08
Rent arrears from June-Oct. 2010
$38,758.61
2009 Cam Adj.
$505.35
$46,586.10
Oct. 2010 cam
$24.06
$13,024.49
D
Oct. 2010 rent, cam & tax
$5,034.84
Nov. 2010 rent, cam & tax
$5,034.84
2009 Cam Adj.
$203.84
$10,273.52
476
--------------------------------------------------------------------------------
EXHIBIT C-2
GROUND LEASES
1. That certain Lease between Commonwealth Trust Co. (Lessor) and 909 Group,
L.P. (Lessee) dated as of September 8, 1977, as amended or otherwise modified by
the documents listed below:
(a) Amendment of Lease dated February 28, 1979
(b) Amendment of Lease dated December 11, 1979
(c) Assignment of Lease date November 29, 1994
(d) Assignment of Lease dated June 11, 1980
(e) Renewal Notice [9/8/97 — 9/7/02] dated March 3, 1997
(f) Renewal Notice [9/8/02 — 9/7/07] dated January 31, 2002
(g) Notice [Transfer of Ownership] dated August 9, 2007
(h) Notice [Transfer of Ownership] dated February 6, 2009
(i) Assignment and Assumption of Lease dated September 3, 2009
2. That certain Lease between 7 Horizon Corp. (Landlord) and Pathmark Stores,
Inc. formerly known as Supermarkets General Corporation (Tenant) dated as of
August 7, 1987, as amended or otherwise modified by the documents listed below:
(a) Declaration of Easement dated August 7, 1987
(b) Letter Agreement dated March 28, 1990
(c) Assignment of Lessor’s Interest in Lease date March 29, 1990
(e) Renewal Notice [6/1/8 — 5/31/13] dated July 25, 2007
(f) First Amendment to Lease dated September 10, 2010
477
--------------------------------------------------------------------------------
EXHIBIT C-3
SURVEYS
The Great Atlantic & Pacific Tea Company, Inc.
Sixty Ninth Street
Upper Darby Township, Delaware County
Commonwealth of Pennsylvania
Dated: 9/1/10, Revised 10/4/10
by Control Point Associates, Inc.
The Great Atlantic & Pacific Tea Company, Inc.
Gloucester Pike & White Horse Pike
Borough of Lawnside
Camden County, State of New Jersey
Dated: 11/20/07, Revised 10/4/10
by Control Point Associates, Inc.
The Great Atlantic & Pacific Tea Company, Inc.
4055 Merrick Road
Seaford, Town of Hempstead, Nassau County
State of New York
Dated: 9/8/10, Revised 10/5/10
by Control Point Associates, Inc.
The Great Atlantic & Pacific Tea Company, Inc.
1764 Grand Avenue
Lots 580, 592, 593, 594, 595, 597, 598 & 600
Baldwin, Town of Hempstead, Nassau County
State of New York
Dated: 9/8/10, Revised 10/29/10
by Control Point Associates, Inc.
The Great Atlantic & Pacific Tea Company, Inc.
92-10 Atlantic Avenue
Ozone Park, Borough and County of Queens
City and State of New York
Dated: 12/6/07, Revised 11/4/2010
by Control Point Associates, Inc.
The Great Atlantic & Pacific Tea Company, Inc.
3901 Lancaster Pike
Christiana Hundred Township, New Castle County
State of Delaware
Dated: 9/1/10; Revised 10/7/10
by Control Point Associates, Inc.
478
--------------------------------------------------------------------------------
EXHIBIT C-4
TITLE CONDITIONS
I. Standard Requirements
1 Title Affidavits in a form reasonably acceptable to Title Company
2 Gap Indemnity
3 Updated rent rolls, as required
II. Authority Requirements
1 For the entities on the attached Schedule A or their successor
entities, as the case may be, the following authority documents:
a. a copy of the Certificate of Formation (or equivalent) from the
jurisdiction of formation;
b. a current Certificate of Good Standing from the jurisdiction of
formation;
c. if state of formation is different than where the property is
located, a current Certificate of Registration (or equivalent) from the state
where the property is located, evidencing authority to conduct business in that
jurisdiction (foreign entity only);
d. the Operating Agreement (for a Limited Liability Company (“LLC”))
or Partnership Agreement (for a Limited Partnership (“LP”)) or Articles of
Organization (for a Corporation), and any and all amendments thereto;
e. a Resolution and Incumbency Certificate authorizing the
transaction which is the subject of the applicable commitment and identifying
and directing the necessary persons to execute and deliver the documents
necessary to consummate the transaction.
2 For the entities on the attached Schedule B, the following
authority documents:
a. a copy of the Certificate of Formation (or equivalent) from the
jurisdiction of formation;
b. a current Certificate of Good Standing from the jurisdiction of
formation;
c. the Operating Agreement, Partnership Agreement or Articles of
Organization, as applicable, and any and all amendments thereto;
479
--------------------------------------------------------------------------------
d. Resolution and Incumbency Certificate authorizing the transaction
which is the subject of the applicable commitment and identifying and directing
the necessary persons to make, execute and deliver the documents necessary to
consummate the transaction
III. Discharge of Existing Financing — Funds and/or documentation
sufficient to obtain discharges for the financing documents listed on Schedule C
attached hereto.
IV. Termination of Affiliate Ground Leases — Termination of the
following Pathmark/A&P affiliate ground leases, as well as documentation
sufficient to terminate any recorded notice or memorandum of lease related
thereto:
1 421 South 69th Blvd, Upper Darby, PA — Lease between Upper Darby
Stuart, Inc., a Delaware corporation and Pathmark Stores, Inc., a Delaware
corporation, and Memorandum of Lease recorded in Volume 1787 Page 71
2 130 White Horse Pike, Lawnside, NJ — Lease between Plainbridge,
Inc. and Pathmark Stores, Inc. recorded in Deed Book 5114, Page 746.
3 4055 Merrick Road, Seaford, NY — Lease between Delaware Stuart,
Inc., as Lessor and Supermarkets General Corporation, as Lessee, dated as of
June 1, 1968, as evidenced by a memorandum of lease between same parties dated
June 1, 1968, recorded June 14, 1968 in Liber 7838, cp 109.
4 1764 Grand Avenue, Baldwin, NY — Lease between Delaware Stuart,
Inc., as Landlord and Supermarkets General Corporation as Tenant dated as of
October 1, 1966, as evidenced by a memorandum of lease dated October 13, 1966
between the same parties recorded October 19, 1966 in Liber 7590, cp 56.
5 92-10 Atlantic Avenue, Queens, NY — Unrecorded Lease between
Plainbridge LLC, as successor by conversion from Plainbridge Inc., as Landlord
and Pathmark Stores, Inc., as Tenant, as referred to in a mortgage by
Plainbridge, LLC to Bank of America, N.A. as collateral agent for the secured
parties, dated 12/27/2007 recorded 05/14/2008 as CRFN 2008000193420.
6 3901 Lancaster Pike, Wilmington, DE — Lease between Lancaster
Pike Stuart, Inc., as Landlord, and Pathmark Stores, Inc., as Tenant, as
evidenced by Memorandum of Lease dated September 21, 1998 and recorded in Book
2528, Page 158.
V. Property- and State-Specific Requirements
1 421 South 69th Blvd, Upper Darby, PA
a. Deed of Correction from Upper Darby Stuart, Inc. to Upper Darby
Stuart, LLC as referenced as Exception No. 22 in Schedule B, Section 1.
2 130 White Horse Pike, Lawnside, NJ — N/A
480
--------------------------------------------------------------------------------
3 4055 Merrick Road, Seaford, NY
a. Statement in an affidavit sufficient to remove Exceptions No. 9
and 22 of Schedule B.
4 1764 Grand Avenue, Baldwin, NY
a. Statement in an affidavit sufficient to remove Exception No. 8
from Schedule B.
b. Proof of payment of Franchise Tax and/or license fees on
Plainbridge, Inc. from date of incorporation to date of closing.
5 92-10 Atlantic Avenue, Queens, NY
a. Pathmark Stores, Inc., (formerly known as Supermarkets General
Corporation) must join in the conveyance documents in order to remove Exception
No. 14 from Schedule B.
b. Ground Lease estoppel from 7 Horizon Corp. (Exception No. 19,
Schedule B)
c. Indemnity Agreement sufficient to remove Exception No. 24 from
Schedule B
d. Statement in an affidavit sufficient to remove Exception No. 34
from Schedule B
6 3901 Lancaster Pike, Wilmington, DE
a. Statements in an affidavit sufficient to remove the following
exceptions:
Judgment between Luraleen Lutz (Plaintiff) vs. Lancaster Pike Stuart, LLC and
Pathmark Stores, Inc. recorded October 30, 2007 in Judgment Record S, Volume 24,
Page 171
Judgment between James Hackett (Plaintiff) vs. Pathmark Stores, Inc. recorded
December 8, 2007 in Judgment Record H, Volume 24, Page 406
481
-------------------------------------------------------------------------------- |
Name: COMMISSION REGULATION (EC) No 1022/95 of 5 May 1995 amending Regulation (EEC) No 1700/84 laying down detailed rules for implementing the system of advance fixing certificates for refunds in the pigmeat sector
Type: Regulation
Subject Matter: trade policy; animal product; international trade; European construction
Date Published: nan
No L 103/22 HEN ! Official Journal of the European Communities 6. 5. 95 COMMISSION REGULATION (EC) No 1022/95 of 5 May 1995 amending Regulation (EEC) No 1700/84 laying down detailed rules for implementing the system of advance fixing certificates for refunds in the pigmeat sector following the day when the application was submitted, provided that no special measures are taken during that period by the Commission . These measures may include, where the applications for advance fixing certificates exceed, or where there is a risk that applications will exceed, the normal sales pattern : suspension of the application of this Regulation for maximum of five working days ; in this case, appli cations for advance fixing certificates lodged during the period of suspension will be rejected ; the setting of a single percentage by which the quantities in the applications for advance fixing certificates are accepted ; suspension of the lodging of applications for advance fixing certificates until the end of the current month. These measures may be adjusted according to the type of certificate applied for in accordance with Regulation (EC) No 974/95 Q. 2. Where quantities applied for are rejected or reduced, the security shall be released immediately for the quantity or part of quantity which was not awarded. THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 2759/75 of 29 October 1975 on the common organization of the market in the pigmeat sector ('), as last amended by Council Regulation (EC) No 3290/94 (2), and in particular Article 24 thereof, Having regard to Council Regulation (EC) No 3290/94, and in particular Article 3 ( 1 ) thereof, Whereas Commission Regulation (EC) 1700/84 (3), as last amended by Regulation (EEC) No 2440/89 (4), has intro duced a period of reflection for the applications of certifi cates of advance fixing of refunds for certain products in the pigmeat sector ; whereas it is necessary, in order to ensure a harmonious transitions from the regime existing before the date of entry into force of the agreement on agriculture in the Uruguay Round to that existing after that date, to apply that period of reflection to all products for which applications for certificates of advance fixing have been lodged ; Whereas Commission Regulation (EC) No 974/95 of 28 April 1995 on certain transitional measures concerning the application of the agreement on agriculture of the Uruguay Round (*) provides for a quantitative restriction of the certificates of advance fixing for which the period of validity exceeds 30 June 1995 ; whereas it is therefore necessary, to specify the measures which the Commission can take in order to respect this restriction ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Pigmeat, HAS ADOPTED THIS REGULATION : 0 OJ No L 97, 29 . 4. 1995, p. 66.' 2. The text of Article 5 first indent is replaced by the following : ' for all products listed in Article 1 (3), on the Wednesday and Friday of each week, a list of the advance fixing certificates for refunds which have been applied for since the last such communica tion. This list is drawn up separately for applica tions with or without the comment in section 20, Transitional certificate Regulation (EC) No 974/95".' 3 . The Annex is deleted. Article 1 Regulation (EEC) No 1700/84 is amended as follows : 1 . Article 4 is replaced by the following : 'Article 4 1 . Advance fixing certificates for the products listed in Article 1 (3) shall be issued on the fifth working day (') OJ No L 282, 1 . 11 . 1975, p. 1 . (2) OJ No L 349, 31 . 12. 1994, p. 105. 0 OJ No L 161 , 19. 6. 1984, p. 7. (4) OJ No L 231 , 9 . 8 . 1989, p. 6. (5) OJ No L 97, 29. 4. 1995, p. 66. Article 2 This Regulation shall enter into force on 8 May 1995. 6. 5. 95 UN Official Journal of the European Communities No L 103/23 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 5 May 1995. For the Commission Franz FISCHLER Member of the Commission |
Title: [California] Family in apartment complex is trying lying about my support dog trying to get us in trouble
Question:[deleted]
Answer #1: Contact your landlord, tell them the complaints are unfounded and invite them to either visit you with the dog/dogs or ask if you can bring the dogs by.
Make sure you have all your documentation from the training. |
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
RONALD W. FRAZIER THOMAS E. WHEELER
Frazier Law Firm Frost Brown Todd LLC
Indianapolis, Indiana Indianapolis, Indiana
Apr 30 2013, 9:26 am
IN THE
COURT OF APPEALS OF INDIANA
DONNA CHAPMAN and LORA HOAGLAND,1 )
)
Appellant-Plaintiff, )
)
vs. ) No. 49A05-1209-PL-478
)
CENTRAL INDIANA EDUCATIONAL )
SERVICE CENTER and FRANKLIN TOWNSHIP)
COMMUNITY SCHOOL CORPORATION, )
)
Appellee-Defendant. )
INTERLOCUTORY APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Theodore M. Sosin, Judge
Cause No. 49D02-1111-PL-42082
April 30, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
KIRSCH, Judge
1
We note that Lora Hoagland (“Hoagland”) was a plaintiff below and that Franklin Township
Community School Corporation (“FTCSC”) was a defendant below. FTCSC was not a part of the
dismissal order issued by the trial court and did not file an appellate brief with this court; although
Hoagland’s complaint against CIESC was dismissed by the trial court, she did not file an appellate brief.
However, pursuant to Indiana Appellate Rule 17(A), a party of record in the trial court shall be a party on
appeal.
Donna Chapman (“Chapman”) interlocutorily appeals the trial court’s order
dismissing her claim against Central Indiana Educational Service Center (“CIESC”) and
raises the following restated issue for our review: whether the trial court erred when it
dismissed her complaint against CIESC for failure to state a claim.
We affirm.
FACTS AND PROCEDURAL HISTORY
Franklin Township Community School Corporation (“FTCSC”) is a public school
corporation organized and existing under the laws of the State of Indiana and serving
approximately 8,000 students in southeastern Marion County, Indiana. Chapman resides
in Franklin Township, and her son attended Franklin Township Middle School East
during the 2011-2012 school year. Prior to the 2011-2012 school year, Chapman’s son
rode the bus to and from school each day.
In 2010, faced with a large budget deficit, the FTSCS School Board voted to
discontinue bus service for most of the students in the township’s public schools.
Beginning in the 2011-2012 school year, bus service was offered by a private vendor,
CIESC. Chapman and other Franklin Township parents were given the option of making
their own arrangements for transportation or utilizing the services of CIESC. Parents
who chose to have CIESC transport their children were asked to sign a contract and pay a
non-refundable registration fee of $20 per student to apply for bus transportation.
Families who used the CIESC bus service had to pay an annual fee of $475 for the first
child and $405 for each additional child. Chapman signed a contract with CIESC and
paid the fees to have her son ride a bus operated by CIESC.
2
On November 1, 2011, Chapman “on behalf of herself and all others similarly
situated” filed an initial complaint against FTCSC, alleging it violated its constitutional
duties when it ceased providing bus transportation to the students attending its schools.
On December 8, 2011, Chapman filed an amended complaint, adding CIESC as
defendant and seeking declaratory judgment that the CIESC contract was void and
unenforceable. CIESC filed a motion to dismiss Chapman’s complaint pursuant to
Indiana Trial Rule 12(B)(6) failure to state a claim upon which relief can be granted. On
April 24, 2012, the trial court granted CIESC’s motion to dismiss as to Chapman for all
claims, “with the exception of claims for a refund of prepaid monies for services not
provided.” Appellant’s App. at 104. Chapman now appeals.
DISCUSSION AND DECISION
Chapman argues that the trial court erred when it dismissed her claims against
CIESC for failure to state a claim. The standard of review of a trial court’s grant or
denial of a motion to dismiss for failure to state a claim under Indiana Trial Rule 12(B)(6)
is de novo. Gordon v. Purdue Univ., 862 N.E.2d 1244, 1250 (Ind. Ct. App. 2007). We
do not defer to the trial court’s decision because deciding a motion to dismiss based upon
failure to state a claim involves a pure question of law. Id. “A motion to dismiss under
[Trial] Rule 12(B)(6) tests the legal sufficiency of a complaint: that is, whether the
allegations in the complaint establish any set of circumstances under which a plaintiff
would be entitled to relief.” Trail v. Boys & Girls Clubs of Nw. Ind., 845 N.E.2d 130,
134 (Ind. 2006). “Thus, while we do not test the sufficiency of the facts alleged with
regards to their adequacy to provide recovery, we do test their sufficiency with regards to
3
whether or not they have stated some factual scenario in which a legally actionable injury
has occurred.” Id. “A court should ‘accept[ ] as true the facts alleged in the complaint,’
and should not only ‘consider the pleadings in the light most favorable to the plaintiff,’
but also ‘draw every reasonable inference in favor of [the non-moving] party.’” Id.
(internal citations omitted).
Indiana Trial Rule 8(A), this state’s notice pleading provision, requires only “a
short and plain statement of the claim showing that the pleader is entitled to relief.”
Although the plaintiff need not set out in precise detail the facts upon which the claim is
based, she must still plead the operative facts necessary to set forth an actionable claim.
Trail, 845 N.E.2d at 135 (citing Miller v. Mem’l Hosp. of South Bend, Inc., 679 N.E.2d
1329, 1332 (Ind. 1997)). Under notice pleading, we review the granting of a motion to
dismiss for failure to state a claim under a stringent standard, and affirm the trial court’s
grant of the motion only when it is “apparent that the facts alleged in the challenged
pleading are incapable of supporting relief under any set of circumstances.” McQueen v.
Fayette Cnty. Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct. App. 1999), trans. denied.
Here, Chapman alleged in her complaint that “the CIESC contract is an
unenforceable adhesion contract, that it is illegal, that it unlawfully purports to limit
parents’ remedy and is void as against public policy.” Appellant’s App. at 12. Chapman
does not further allege why the CIESC contract is an adhesion contract, why it is illegal,
why it unlawfully limited parents’ remedy, or how it is void against public policy.
Chapman entered into a contract with CIESC, under which CIESC, a private vendor, was
to transport her child to school in exchange for a fee paid by Chapman. Chapman paid
4
the fee and received bus services from CIESC for the 2011-2012 school year, and that
contract between the parties is now completed.
The facts alleged in Chapman’s complaint are incapable of supporting relief as to
CIESC under any set of circumstances. It is, therefore, legally insufficient. The trial
court did not err in dismissing Chapman’s complaint against CIESC.
Affirmed.
ROBB, C.J., and PYLE, J., concur.
5
|
Exhibit 10.12
深 圳 市
劳
动
合
同
（适用全日制用工）
Shenzhen
Contract
(Apply to full-time work)
1
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深圳市劳动和社会保障局编制
Compiled by Shenzhen Labor and Social Security Administration
甲方（用人单位）
乙方（员工）
Party A (Employer)
Party B (Employee)
名称 深圳市网合科技股份有限公司
姓名： 童南方
Name: Shenzhen Wonhe Technology Co.Ltd.
Name:Nanfang Tong
住所深圳市南山区松坪山路1号源兴科技大厦南座1001室
性别：男
Address: Room 1001, South Block, Yuanxing Technology Plaza, No.1,
Beisongpingshan Road, North Area, High-tech zone, Nanshan District, Shenzhen
Gender: Male
法定代表人
身份证（护照）号码
（主要负责人）
Legal representative
ID number (Passport):429001197211033130
(Principal)
联系人
住址
Contact
Address
联系电话
联系电话
Contact Number
Contact Number
2
--------------------------------------------------------------------------------
根据《中华人名共和国劳动法》（一下简称《劳动法》）、《中华人民共和国劳动合同法》（以下简称《劳动合同法》）等有关法律法规的规定，甲乙双方遵循合法、公平、平等自愿、协商一致、诚实信用的原则，签订本合同，共同遵守本合同所列条款。
The contract is hereby concluded by both parties in accordance with Labor Law of
the People's Republic of China (“Labor Law”), Labor Contract Law of the People’s
Republic of China(“Labor Contact Law”), in the principles of fairness,
legitimacy, equality, voluntariness, consensus through negotiation and good
faith.
一、 合同期限
Ⅰ Term
（一） 甲乙双方同意按以下第1种方式确定本合同期限。
A. Both parties agree to determine the contract term as the first way below.
1、有固定期限：从2011年9月1日起至2012年8月31日止。
a. Fixed term: from Sep.1st, 2011 to August 31st, 2012.
2、无固定期限：从年月日起。
b. non-fixed term: from \ to \ .
3、以完成一定工作任务为期限：从年月日起至 工作任务完成时止。完成工作任务的标志是
c. The term is based on the completion of a specific amount of work: from
\ to the completion of the work.
The symbol of the completion of the work is \ .
3
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（二）试用期为无（试用期包括在合同期限内，如无试用期，则填写“无”）。
B. Qualifying period: None (qualifying period is within the term of contract. If
not, please mark “none”.)
二、工作内容和工作地点
Ⅱ Job duties and work address
乙方的工作内容（岗位或工种）：负责公司全面工作
Job duties of Party B (position or type of work)：responsible for the the
company’s overall operating.
乙方的工作地点 深圳
Work address of Party B: Shenzhen
三、工作时间和休息休假
Ⅲ working time and rest time
（一） 甲乙双方同意按以下第1种方式确定乙方的工作时间。
A. Both parties agree to determine the working time as the first way below.
1、 标准工时制，即每日工作8小时（不超过8小时），每周工作40小时（不超过40小时），每周至少休息一日。
a. Standard working hours system, i.e. 8 hour(s)/day (at most 8 hours), 40
hour(s)/week (at most 40 hours), at least one day off per week.
4
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2、 不定时工作制，即经劳动保障行政部门审批，乙方所在岗位实行不定时工作制。
b. Non-fixed working hours system approved by the labor and social security
department.
3、 综合计算工时工作制，即经劳动保障行政部门审批，乙方所在岗位实行综合计算工时工作制。
c. Cumulative working hour system approved by the labor and social security
department.
（二） 甲方由于生产经营需要延长工作时间的，按《劳动法》第四十一条执行。
B. If Party A needs to prolong the working time because of operation, execute
Article 41 of the Labor Law.
（三） 乙方依法享有法定节假日、婚假、产假、丧假等假期。
C. Party B shall be entitled to holidays and leaves as stipulated by State,
marriage leave, maternity leave, funeral leave, etc.
（四） 乙方的其他休息休假安排:按国家规定享有有薪年假。
D. Other arrangements of holidays of Party B are paid holidays according to
State Regulations.
三、 劳动报酬
Ⅲ Compensation
5
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（一） 甲方依法制定工资分配制度，并告知乙方，甲方支付给乙方的工资不得低于市政府公布的当年度最低工资。
A. Party A set the payment distribution system by law, and notices Party B.
Party A pays to Party B must not be lower than the minimum wage standards set
forth by the local authorities.
（二） 乙方每月工资2000元（其中试用期每月工资\元）或按\执行。
B. The monthly salary of Party B is 2000 Yuan (qualifying period Yuan/month)
or implement according to \ .
（三） 甲方每月10日发放工资，甲方至少每月以货币形式向乙方支付一次工资。
C. Party A shall pay the wage on the 10th of every month, and at least once a
month, Party A shall pay to Party B in cash.
（四） 乙方加班工资、假期工资及特殊情况下的工资支付按有关法律、法规的规定执行。
D. In the case of overtime wage, vacation wage and payment in special
situations, execute as relevant laws and regulations.
（五） 甲乙双方对工资的其它约定 \ 。
F. Other agreements about salary by both parties \ .
6
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四、社会保险和福利待遇
Ⅳ social insurance and welfare
（一） 甲乙双方按照国家和省、市有关规定，参加社会保险。缴纳社会保险费。
A. Party A and Party B shall pay premiums for social security insurance in
accordance with the relevant national and local regulations.
（二）乙方患病或非因公负伤，甲方应按国家和省、市的有关规定给予乙方享受医疗期和医疗待遇。
B. In case of illnesses or injuries unrelated to work, the salary during the
remedial period as well as medical treatment shall be paid in accordance with
relevant national and local laws and regulations.
（三）乙方患职业病、因公负伤的，甲方按《职业病防治法》、《工商保险条例 》等有关法律法规的规定执行。
C. The salary and Medicare benefits of Party B in case of occupational diseases
or work-related injuries shall be paid in accordance with chemical control for
occupational disease and industry and commerce insurance regulations.
（四）甲方为乙方提供以下福利待遇 \ 。
D. Party A shall provide welfare as follows for Party B \ .
7
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五、劳动保护、劳动条件和职业危害防护
Ⅴ Labor protection, labor condition and protection of occupational hazard
（一） 甲方按国家和省、市有关劳动保护规定，提供符合国家安全卫生标准的劳动作业场所和必要的劳动防护用品，切实保护乙方在生产工作中的安全和健康。
A. according to laws and regulations related to labor production provided by
nation, principle and city, Party A shall provide working conditions and
articles of labor protection corresponding with National safety and health
standards to ensure Party B’s safety and health during production work.
（二） 甲方按国家和省、市有关规定，做好女员工和未成年工的特殊劳动保护工作。
B. Party A shall be through with special labor protection work for women and
under age workers according to relevant regulations of State, province and city.
（三）乙方从事 \ 作业，可能生产 \ 职业危害，甲方应采取 \ 防护措施，并每年组织乙方健康检查 \次。
C. Party B’s job is \ , which may cause \ occupational hazard. Party A should
take \ protection measure, and organize to have health examination for Party B
times/year.
（四）乙方有权拒绝甲方的违章指挥，强令冒险作业；对甲方危害生命安全和身体健康的行为，乙方有权要求改正或向有关部门举报。
D. Party B has the right to refuse commands against rules or force operating
risks from Party A.
8
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七、规章制度
VII. Rules and Regulations
（一） 甲方依法制定的规章制度，应当告知乙方。
A. Party A should notice Party B about the rules and regulations made by laws.
（二）乙方应遵守国家和省、市有关法律法规和甲方乙方制定的规章制度，按时完成工作任务，提高职业技能，遵守安全操作规程和职业道德。
B. Party B should finish tasks on time, improve the professional skills and
abide by rules of safe operations and professional ethics.
（三）乙方自觉遵守国家和省、市计划生育的有关规定。
C. Party B should abide by the rules and regulations relevant to family planning
of the State, province and city.
八、合同变更
VIII. Modification of the Contract
甲乙双方经协商一致，可以变更合同。变更合同采用书面形式。变更后的合同文本双方各执一份。
The contract may be modified through both parties’ consensus. The modified
contract should be in writing and each party holds one.
九、合同解除和终止
IX. Cancellation and termination of the contract
（一） 甲乙双方协商一致，可以解除合同。
A. The contract may be cancelled through both parties’ consensus.
9
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（二）乙方提前三十日以书面形式通知甲方，可以解除劳动合同；乙方试用期内提前三日通知甲方，可以解除劳动合同。
B. Party B may cancel the contract by noticing Party A in writing 30 days in
advance. Party B may cancel the contract by noticing Party A 3 days in advance
during probation period.
（三）甲方有下列情形之一的，乙方可以通知甲方解除劳动合同；
C. Party B may notify Party A of terminating the contract, in case any of the
following occurs:
１、未按照劳动合同规定提供劳动保护或者劳动条件的；
a. not provide labor protection or labor condition in accordance with the
contract;
２、未及时足额支付劳动报酬的；
b. not pay for the full salary in time;
３、未依法为乙方交纳劳动报酬的；
c. not pay for the salary for Party B by laws;
４、甲方的规章制度违反法律、法规的规定，损害乙方权益的；
d. the rules and regulations of Party A are against laws, and harm the Party B’s
rights and interests;
５、甲方以欺诈、胁迫的手段或者乘人之危，使乙方在违背真实意思的情况下订立或者变更本合同，致使劳动合同无效的；
e. Party A uses such means as fraud, coercion or taking advantage of party B’s
unfavorable position to sign the labor contract against his or her genuine will,
so that the contract becomes invalid;
10
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６、甲方免除自己的法定责任、排除乙方权利，致使劳动合同无效的；
f. Party A avoids the statutory duty of his/her own and neglects Party B’s
right, which made the contract invalid;
７、甲方违反法律、执行法规规定乙方可以解除劳动合同的其他情形。
g. Other situations that Party B may dissolve the contract in case that Party A
disregards of laws.
（四）甲方以暴力、威胁或者非法限制人身自由的手段强迫乙方劳动的，或者甲方违章指挥、强令冒险作业危及乙方人身安全的，乙方可以解除劳动合同，不需事先告知甲方。
D. In case that Party A forces Party B to work by violence, threat or illegal
limitations in violation of Party B’s freedom, or Party A breaks rules and
regulations to command and force Party B to do dangerous work which endangers
Party B’s personal safety, Party B may dissolve contract without notice Party A
in advance.
（五）乙方有下列情形之一的，甲方可以解除劳动合同：
E. Party A may notify Party B of terminating the contract, in case any of the
following occurs:
１、在试用期间被证明不符合录用条件的；
a. Party B is proven to be unqualified for Party A’s employment conditions
during probation period;
２、严重违反甲方的规章制度的；
b. Party B seriously violates rules and regulations;
11
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３、严重失职，营私舞弊，给甲方造成重大损害的；
c. Party B seriously neglects his/her duty and grafts resulting in Party A’s
great loss.
４、乙方同时与其他用人单位建立劳动关系，对完成本单位的工作任务照成严重影响，或者经甲方提出，拒不改正的；
d. Party B establishes labor relations with other employing unit simultaneously,
which seriously influences on finishing the work of his/her own unit, or put
forward by Party A, but refuse to correct.
５、乙方以欺诈、胁迫的手段或者乘人之危，使甲方在违背真实意思的情况下订立或者变更本合同，致使劳动合同无效的；
e. Party B uses such means as fraud, coercion or taking advantage of party A’s
unfavorable position to sign the labor contract against his or her genuine will,
so that the contract becomes invalid;
６、被依法追究刑事责任的。
f. The Employee is being charged with criminal offences
（六）有下列情形之一的，甲方提前三十日以书面形式通知乙方或者额外支付乙方一个月工资后，可以解除劳动合同：
F. Party A may cancel the contract upon 30 days’ prior written notice to Party B
(Probation: 3 days in advance), in case any of the following occurs:
１、乙方患病或非因工受伤，在规定的医疗期满后不能从事原工作，也不能从事甲方另行安排的工作的；
a. Party B, due to sickness or injury inflicted off the job, cannot resume
his/her work or do the other job reassigned by Party A after specified period of
medical treatment;
12
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２、乙方不能胜任工作，经过培训或者调整工作岗位，仍不能胜任工作的；
b. Party B is unqualified, even after a training or job adjustment;
３、劳动合同订立时所依据的客观情况发生重大变化，致使劳动合同无法履行，经甲乙双方协商，未能就变更劳动合同内容达成协议的。
c. The basis for the conclusion of the contract has greatly changed so that the
contract can no longer be carried out, while both parties cannot reach an
agreement on modifying the contract by mutual negotiation.
（七）有下列情形之一，甲方需要裁减人员二十人以上或者裁减不走二十人但占甲方职工总数百分之十以上的，甲方应提前三十日向工会或者全体员工说明情况，在听取工会或者职工的意见，并将裁减人员方案向劳动行政部门报告后，可以裁减人员：
G. Party A needs to lay off 20 more employees or cannot lay off 20 employees but
take more than 10% of the whole staff, Party A should express the situation to
the labor union or the whole staff 30 days in advance. After consider about the
suggestions from the Labor Union or the whole staff, Party A submit the report
about laying off staff to the labor administrative department, and then can
execute it:
１、依照企业破产法规定进行重整的；
a. Reforming in accordance with the Enterprise Bankruptcy Law;
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２、生产经营发生严重困难的；
b. Having serious difficulty in operation;
３、企业转产、重大技术革新或者经营方式调整，经变更劳动合同后，仍需剪裁人员的；
c. Still needs to lay off staff after exchange of contract caused by changing
the line of production, significant technology innovation or adjustment of
business pattern;
４、其他因劳动合同订立时所依据的客观经济情况发生重大变化，致使劳动合同无法履行的。
d. The basis for the conclusion of the contract has greatly changed so that the
contract can no longer be carried out.
（八）有下列情形之一的，劳动合同终止：
H. The contract will terminate in case any of the following occurs:
１、劳动合同期满的；
a. The labor contract expires;
２、乙方开始依法享受基本养老保险待遇的；
b. Party B begins to enjoy the basic old-age insurance treatments;
３、乙方死亡，或者被人民法院选购死亡或者宣告失踪的；
c. Party B is dead, pronounced dead or pronounced missing by the people's court;
14
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４、甲方被依法宣告破产的：
d. Party A is declared bankruptcy legally;
５、甲方被吊销营业执照、责令关闭、撤销或者甲方决定提前解散的；
e. Party A’s business license is revoked; Party A is compelled to close down or
dissolve; or Party A decides to dissolve in advance;
６、法律、行政法规定的其他情形。
e. Other situations stipulated in laws and administrative provisions.
十、经济补偿
X. Financial compensation
（一）符合下列情形之一的，甲方应当向乙方支付经济补偿：
A. Party A should pay financial compensation to Party B in case any of the
following occurs:
１、甲方依据本合同第九条第（一）项规定向乙方提出解除劳动合同并与乙方协商一致解除劳动合同的；
a. Party A puts forward to dissolve the contract in accordance with Item A of
Article IX, and the contract may be dissolved after both parties’ agreement
through negotiation;
２、乙方依据本合同第九条第（三）项、第（四）项规定解除劳动合同的；
b. Party B puts forward to dissolve the contract in accordance with Item C and
Item D of Article IX;
15
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３、甲方依据本合同第九条第（六）项规定解除劳动合同的；
c. Party A puts forward to dissolve the contract in accordance with Item F of
Article IX;
４、甲方依照本合同第九条第（七）项规定解除劳动合同的；
d. Party A puts forward to dissolve the contract in accordance with Item G of
Article IX;
５、除甲方维持或者提高劳动合同约定条件续订劳动合同，乙方不同意续订的情形外，依据本合同第九条第（八）项第１目规定终止固定期限劳动合同的；
e. The fixed-term contract may be terminated in accordance with Item H of
Article IX, except that Party A maintain or improve the terms of contract in
order to renew it but Party B refuses;
６、依据本合同第九条第（八）项第４目、第５目规定终止劳动合同的；
f. The contract may be terminated in accordance with section d and e of Item H
of Article IX;
７、法律、行政法规规定的其他情形。
g. Other situations by laws and administrative laws and regulations.
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（二）甲乙双方解除或终止合同的，经济补偿的发放标准应按《劳动合同法》和国家和省、市有关规定执行。甲方依法应向乙方支付经济补偿的，应在乙方办结工作交接时支付。
B. When revocation or termination of contract occurs, the standard of financial
compensation should be in accordance with Labor Contract Laws and National,
provincial and municipal related regulations. Party A should pay the financial
compensation to Party B by laws after Party B carries out his/her handover.
十一、合同解除和终止手续
XI. The Revocation and Termination of the contract
甲乙双方解除和终止本合同的，乙方应按双方约定，办理工作交接等手续。甲方应依法向乙方出具书面证明，并在十五日内为乙方办理档案和社会保险关系转移手续。
When revocation and termination occur, Party B should deal with some procedures
like work handover according to the agreement. Party A should provide written
document for Party B according to the law, and deal with the transformer
procedure of files and social insurance within 15 days.
十二、争议处理
甲乙双方发生劳动争议的，应先协商解决。协商不成的，可以向本单位工会寻求解决或向本单位劳动争议调解委员会申请调解；也可以直接向劳动争议仲裁委员会申请仲裁。对仲裁裁决无异议的，双方必须履行；对仲裁裁决不服的，可以向人民法院起诉。
XII. If labor dispute occurs, both parties shall resolve it through
consultation. In case of failing to reach an agreement, each party may submit
the dispute to the labor union of the unit or the Committee of labor dispute
mediation of the unit; or submit the dispute to Labor Dispute Arbitration
Committee having jurisdiction. If accepting the award, each party must fulfill
it; if rejecting the award, each party can take a proceeding.
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十三、双方认为需要约定的其他事项：
XIII. Supplementary provisions:
１、
严格遵守《公司保密协议》及公司各项规章制度。
A.
Follow close to <Confidentiality Agreement> and regulations of the company.
２、
《公司保密协议》和公司各项规章制度具有同等效力。
B.
<Confidentiality Agreement> has the same effect as the regulations of the
company.
十四、其它
XIV. Others
（一） 本合同未尽事宜或合同条款与现行法律法规规定有抵触的，按现行法律法规执行。
A. The existing laws and regulations shall apply to any item which is not
mentioned in this contract or against the existing laws and regulations.
（二） 本合同自甲乙双方签字盖章之日起生效，涂改或未经书面授权代签无效。
B. This Contract shall become effective upon the date on which this Contract
signed or seal affixed by both Parties, any alternation or signature without
written authorization is invalid
18
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（三） 本合同一式两份，甲乙双方各执一份。
C. the agreement in duplicate, each party holds one.
甲方：（盖章）
乙方：（签名）:Nanfang Tong
Party A: (seal)
Party B: (signature)
法定代表人：Qing Tong
Legal representative:
（主要负责人）
(Principal)
Date: July 28, 2011
Date: July 28, 2011
19
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832 So. 2d 1209 (2002)
John M. GIBSON
v.
ALLSTATE INSURANCE COMPANY.
No. 02-0892.
Court of Appeal of Louisiana, Third Circuit.
December 11, 2002.
*1210 William Howard Goforth, Lafayette, LA, for Plaintiff/Appellee, John M. Gibson.
David Chalavon Forrester, Forrester, Jordan & Dick, L.L.C., Baton Rouge, LA, for Defendant/Appellant, Allstate Insurance Company.
Court composed of JOHN D. SAUNDERS, BILLIE COLOMBARO WOODARD and MARC T. AMY, Judges.
*1211 AMY, Judge.
The plaintiff brought an action against his homeowner's insurer to recover losses from an alleged burglary. The trial court awarded the plaintiff damages in the amount of $15,226.94 for his loss in the burglary, together with $1,500 as penalties, and $4,503.42 in attorney's fees. The defendant appealed, and the plaintiff answered seeking additional attorney's fees. For the following reasons, we affirm and award additional attorney's fees for work performed on appeal.
Factual and Procedural Background
This case arises out of an alleged burglary on June 1, 2000, in Rayne, Louisiana. The plaintiff, John Gibson, testified that he and his family were away from their home between the hours of 9:30 or 10:00 p.m. until shortly after midnight. When the plaintiff and his family returned, the plaintiff's oldest son noticed glass on the ground, and the plaintiff testified that he subsequently noticed that the glass on the side door of his home was shattered. Thereafter, the plaintiff and his family left the home and went to the Rayne Police Department. The plaintiff testified that, upon returning to the home with the police, he found the window in the side door damaged, two windows in his bedroom damaged, the bedroom ransacked, and many items from his home missing. The Rayne Police Department took pictures at the scene, and these pictures were admitted into evidence. There is no indication, however, that the Rayne Police Department conducted any follow-up investigation.
On July 3, 2000, the plaintiff made a claim with his homeowner's insurer, Allstate Insurance Company. The claim was initially handled by Allen Beasley. However, Officer Carroll Stelly of the Rayne Police Department testified that he contacted Mr. Beasley and stated that the circumstances surrounding the burglary were suspicious. Specifically, Officer Stelly told Mr. Beasley that he suspected that the burglary was staged. As a result, the plaintiff's claim was transferred and assigned to an Allstate special investigator in Arkansas, Mack Hicks.
Mr. Hicks testified that he opened the file on July 26, 2002. On July 27, 2002, Mr. Hicks took the plaintiff's statement by telephone. Notably, this is the only statement that was recorded by Mr. Hicks. Mr. Hicks also requested that the plaintiff produce more proof of ownership of a few of the things that were claimed to be stolen. On July 28, 2002, Mr. Hicks phoned the Rayne Police Department hoping to speak to Officer Stelly. However, Mr. Hicks was only able to speak to an unnamed dispatcher. Nevertheless, Mr. Hicks eventually interviewed Officer Stelly by telephone on August 9, 2002. Although the plaintiff's claim was denied because Allstate believed the plaintiff falsified the burglary, Mr. Hicks sent a letter to the plaintiff on August 30 informing him that his claim was denied because he failed to provide sufficient proof of ownership. Allstate never canceled the plaintiff's policy or told the plaintiff that it believed that he staged the burglary. The plaintiff brought the instant action to recover his alleged losses.
After a trial on the merits, the trial court found that it was more probable than not that a burglary did occur. Further, the trial court found that the plaintiff provided sufficient proof that he owned the items which were claimed to have been stolen. The trial court additionally found that Allstate failed to act in good faith when dealing with the plaintiff. Consequently, *1212 the trial court rendered judgment in favor of the plaintiff in the amount of $15,226.94 for his loss in the burglary, together with $1,500.00 as penalties, and $4,503.42 in attorneys' fees. Allstate now appeals raising the following assignments of error:
I. The trial court erred in finding that Mr. Gibson's story about that alleged burglary and his acquisition of the recording equipment were not knowing misrepresentations of material fact;
II. The trial court erred in finding that a burglary occurred at the plaintiff's dwelling; and,
III. The trial court erred in finding that Allstate violated La.R.S. 22:658 and in awarding plaintiff penalties and attorney's fees under that statute.
Discussion
Testimony of Mr. Gibson and the Burglary
Raising several arguments in support of these assignments of error, Allstate generally contends that the trial court's conclusion that it was more probable than not that a burglary did occur is clearly erroneous. Allstate asserts that Mr. Gibson gave incredible, contradictory statements and testimony. Further, Allstate contends that Mr. Gibson made misrepresentations of material fact. In turn, Allstate argues that the trial court's reliance on Mr. Gibson's testimony was misplaced and led to an erroneous conclusion. We find that Allstate's argument lacks merit.
In its written reasons for ruling, the trial court explained:
It is more probable than not that the burglary did occur. The facts at the scene are consistent with a burglary, with the possible exception of a lack of mud in the bedroom (if you believe Officer Stelly's recollection to be correct) and even that is suspect. I reviewed the pictures and did not find the lawn to be freshly mowed. In fact the grass was rather long. Furthermore, wet yards do not yield muddy footprints if there is a sufficiently thick lawn.
Officer Stelly testified, after reviewing the pictures in evidence, that he believes the side door and one window were broken from the outside. The other he believes was broken from the inside. (Hicks' notes say Stelly couldn't tell.) This seems consistent with a break-in, and no evidence suggested the second window was not the most convenient place to off-load the items stolen, particularly since the stolen computer was located directly in front of that window.
Finally, I find Mr. Gibson's testimony to be credible. He was confident and unwavering, and no credible evidence was presented that he was being anything but truthful. The Court does not believe he would be so devious as to fabricate a burglary and thereafter close his bank account (checks were stolen), remove the alarm system because he believed it was flawed and add burglar bars to the home in an effort to make his story more believable.
. . . .
Has Gibson provided sufficient proof that he owned the items he claims were stolen?
The Court concluded he has. Except for being unable to find some sellers, there was no other evidence to suggest otherwise. I find little probative value in the fact that Gibson claims that he did *1213 not retain e-mail addresses anywhere but his computer. (Neither does this Trial Judge). And while it may be risky to do business with money orders, it seems to have worked for Gibson when buying items on the Internet.
An appellate court may not set aside a trial court's finding of fact in the absence of manifest error or unless it is clearly wrong. Stobart v. State, 617 So. 2d 880 (La.1993). Further, in Rosell v. ESCO, 549 So. 2d 840, 844-45 (La.1989), the Louisiana Supreme Court stated:
When findings are based on determinations regarding the credibility of witnesses, the manifest error-clearly wrong standard demands great deference to the trier of fact's findings; for only the fact finder can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding and belief in what is said. Where documents or objective evidence so contradict the witness's story, or the story itself is so internally inconsistent or implausible on its face, that a reasonable fact finder would not credit the witness's story, the court of appeal may well find manifest error or clear wrongness even in a finding purportedly based upon a credibility determination. But where such factors are not present, and a fact finders's finding is based on its decision to credit the testimony of one of two or more witnesses, that finding can virtually never be manifestly erroneous or clearly wrong.
(Citations omitted.)
Although Allstate provides several interpretations of the testimony and evidence, the trial court's interpretations of the testimony and evidence are reasonable. The trial court's written reasons for ruling provide that the trial court found that Mr. Gibson was credible; and, we do not find Mr. Gibson's testimony inconsistent or implausible on its face such that a reasonable fact finder could not credit his testimony. On the other hand, the trial court found that Officer Stelly's testimony was suspect. Accordingly, in light of Rosell, the trial court's finding that it is more probable than not that the burglary did occur is not manifestly erroneous or clearly wrong.
Penalties and Attorney's Fees
In its brief, Allstate argues that the trial court erred in finding that it was arbitrary, capricious or without probable cause in its denial to pay Mr. Gibson's claim because Allstate asserts that it had a reasonable basis to suspect fraud. As a result, Allstate argues that the trial court's ruling assessing penalties and attorney's fees should be reversed. We find that Allstate's argument lacks merit.
In its written reasons for ruling, the trial court stated:
Apparently, the extent of Mr. Hicks' investigation was to speak by telephone with a person or persons with the Rayne Police Department and take a taped statement of Gibson by telephone. No other recorded statements were taken or interviews conducted. In fact, nothing else was done. A review of Gibson's recorded statement provides no evidence the burglary was staged.
Thereafter, Allstate, through Hicks, informed Gibson his claim was being denied because of a lack of proof of ownership submitted by him (Gibson). He was not notified that it believed the burglary was staged.
. . . .
Not only did Allstate not respond within 30 days, it clearly misrepresented *1214 its position to Gibson in its Aug. 30, 2000 letter. (Unless, of course, its position has changedin which case this would be a strong indication of bad faith on its part. See La. Maintenance Services, Inc. v. Certain Underwriters at Lloyd's of London, et al, 616 So. 2d 1250 (La. 1993).)
The Court is troubled most by the lack of effort by Allstate to thoroughly investigate the claim. It was happy to write the policy and, presumably, believed Gibson and his family were a good risk, yet it seemed to deny the claim before making an honest effort to determine its validity. It did no more than speak with the Rayne Police Department by telephone and later, receive its file (what little there is). Even an untrained investigator (which Mr. Hicks is not) would see that the Rayne Police Department did no [email protected]. And the hearsay opinion of a "dispatcher" can hardly be helpful in evaluating the claim. Allstate forwarded the case to an out-of-state investigator who made a few phone calls. No real effort was made to determine if the items claimed stolen existed until after the claim was denied. Gibson was misled (presumably) with respect to why the claim was rejected. At the very least, it failed to act in good faith. It has spent far more time and effort to defeat the claim than it ever did investigating it in the first place.
A trial court may award penalties and attorney's fees against insurers under La. R.S. 22:658 or 22:1220. First, La.R.S. 22:658 provides:
A. (1) All insurers issuing any type of contract, other than those specified in R.S. 22:656, R.S. 22:657, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950, shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any other party in interest.
. . . .
(3) Except in the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim and of a claim for reasonable medical expenses within fourteen days after notification of loss by the claimant. In the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim within thirty days after notification of loss by the claimant. Failure to comply with the provisions of this Paragraph shall subject the insurer to the penalties provided in R.S. 22:1220.
. . . .
B. (1) Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor, as provided in R.S. 22:658(A)(1), or within thirty days after written agreement or settlement as provided in R.S. 22:658(A)(2) when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of loss, of ten percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured, or to any said employees, together with all reasonable attorney fees from the prosecution and collection of such loss, or in the event a partial payment or tender has been made, ten percent of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney fees for the prosecution and collection of such amount.
*1215 . . . .
Second, La.R.S. 22:1220 provides:
A. An insurer, including but not limited to a foreign line and surplus line insurer, owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.
B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer's duties imposed in Subsection A:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to any [email protected].
. . . .
(5) Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.
C. In addition to any general or special damages to which a claimant is entitled for breach of the imposed duty, the claimant may be awarded penalties assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater. Such penalties, if awarded, shall not be used by the insurer in computing either past or prospective loss experience for the purpose of setting rates or making rate filings.
Addressing these statutes, the Louisiana Supreme Court stated:
The determination that an insurer's handling of a claim is arbitrary and capricious is a factual finding which may not be disturbed unless manifestly erroneous. Brinston v. Automotive Cas. Ins. Co., 96-1982 (La.App. 4 Cir. 12/3/97), 703 So. 2d 813, 816; Marcel v. Allstate Ins. Co., 536 So. 2d 632 (La.App. 1 Cir.1988), writ denied, 539 So. 2d 631 (La. 1989). We have described an insurer's action as "arbitrary and capricious" when its willful refusal of a claim is not based on a good faith defense, Louisiana Maintenance Servs., Inc. v. Certain Underwriter's at Lloyd's of London, 616 So. 2d 1250, 1253 (La.1993), or is unreasonable without probable cause, Darby v. Safeco Ins. Co., 545 So. 2d 1022, 1029 (La.1989). However, where the insurer has legitimate doubts about coverage, the insurer has the right to litigate these questionable claims without being subjected to damages and penalties. Darby, supra.
Calogero v. Safeway Ins. Co. of Louisiana, 99-1625, p. 5 (La.1/19/00); 753 So. 2d 170, 173. Recognizing the relationship between La.R.S. 22:658 and La.R.S. 22:1220, the Louisiana Supreme Court also stated:
We have previously recognized the close relationship between the conduct prohibited in La. R.S. 22:658, subd. A(1) and the conduct prohibited in La. R.S. 22:1220, subd. B(5). Theriot v. Midland Risk Ins. Co., 95-2895 (La.5/20/97); 694 So. 2d 184, 192, n. 14. In fact, the conduct prohibited is virtually identical, i.e., failure to timely pay a claim after receiving satisfactory proof of loss when that failure to pay is arbitrary, capricious or without probable cause. The primary difference is that under La. R.S. 22:658, subd. A(1), the insurer must pay the claim within 30 *1216 days of receiving satisfactory proof of loss, rather than the longer 60-day period allowed under La. R.S. 22:1220, subd. B(5).
Id. at pp. 6-7; 174. A panel of this court has interpreted La.R.S. 22:658 "to require that the insurer take some substantive and affirmative step to accumulate the facts that are necessary to evaluate the claim." McClendon v. Economy Fire & Cas. Ins. Co., 98-1537, p. 7 (La.App. 3 Cir. 4/7/99); 732 So. 2d 727, 731. Thus, if an insurer has questions regarding the validity of a claim, the insurer must nevertheless investigate that claim within the statutory period. See Id.
Mr. Hicks testified that his entire investigation was done through phone calls made from Arkansas. Mr. Hicks never visited Rayne, Louisiana or met with Mr. Gibson in person. Furthermore, no agent of Allstate inspected Mr. Gibson's home or met with Mr. Gibson in person. Mr. Hicks primarily relied on his telephone conversations with members of the Rayne Police Department. However, the investigation file indicates that the Rayne Police Department conducted little initial investigation and no follow-up investigation.
When he spoke to Mr. Gibson on the telephone, Mr. Hicks stated that he requested that Mr. Gibson provide more proof of ownership and that Mr. Gibson complied. Notably, Mr. Hicks admitted at trial that Mr. Gibson provided sufficient proof of ownership of the claimed items. But, Mr. Hicks mailed a letter to Mr. Gibson providing Allstate was declining payment because Mr. Gibson failed to provide documentation to verify the loss or sufficient proof of ownership. Due to the fact that Mr. Gibson's claim was denied because Allstate suspected that Mr. Gibson falsified the burglary claim, Mr. Hicks also admitted that this letter was misleading.
Mr. Gibson testified that he was never told by Allstate that it suspected that the burglary was staged until he brought this action against Allstate. In addition, Mr. Gibson stated that he telephoned Allstate to inquire about his claim, but he was told by Allstate that everything was fine. Mr. Gibson also testified that, although his policy with Allstate contained a cancellation clause for misrepresentation, Allstate never canceled his policy and accepted premiums until Mr. Gibson canceled the policy himself.
Initially, we note that, due to the trial court's findings, penalties could have been arguably assessed pursuant to La.R.S. 22:1220. However, it appears from the trial court's discussion and the amounts awarded that the penalties were assessed according to La.R.S. 22:658. In light of the evidence, we conclude that the trial court's determination to assess penalties and attorney's fees is not clearly wrong or manifestly erroneous under the particular facts of this case.
Attorney's Fees on the Appeal
Mr. Gibson's counsel has answered the appeal seeking an increase in the award of attorney's fees for work done on this appeal. The trial court awarded $4,503.42 in attorney's fees for work performed in the prosecution of this case in the court below. See La.R.S. 22:658. When an award of attorney's fees, pursuant to La.R.S. 22:658, is affirmed, the appellate court may award additional attorney's fees for work done on appeal, provided that the plaintiff has requested the increase through proper appellate procedure. See Hayes v. Allstate Ins. Co., 99-1558 (La.App. 3 Cir. 3/1/00); *1217 758 So. 2d 900, writ denied, 00-1597 (La.8/31/00); 766 So. 2d 1280; La.Code Civ.P. art 2133. Accordingly, we award additional attorney's fees in the amount of $2,500.00 against Allstate for work done on this appeal.
DECREE
For the foregoing reasons, the judgment of the trial court is affirmed. An additional $2,500.00 in attorney's fees is awarded against the defendant, Allstate Insurance Company, for work done on this appeal. All costs of this appeal are assigned to the defendant, Allstate Insurance Company.
AFFIRMED; ADDITIONAL ATTORNEY'S FEES AWARDED.
|
Case 2:16-cV-05478-S.]F-AYS Document 40 Filed 10/08/18 Page 1 of 2 Page|D #: 976
The Law Oche Of
M|NDY KALLUS
3220 Nether|and Avenue, Suite 5D, Bronx, New York 10463
Ph: (450)840-0203
Ka|lusesq@gmai|.com
October 8, 2018
VIA MA]L AND EAMIL
Lewis Silverrnan, Esq.
Caroline Lineen, Esq.
Silverrnan and Associates
445 Hamilton Avenue, Suite 1102
White Plains, New York
Re.' Peritz v. BOCES
Docket No: 1 6-cv-5 4 78
Dear Mr. Silverrnan and Ms. Lineen:
I am writing to inform you that the Court has reset the in person pretrial
conference from October 11, 2018 to Novernber 13, 2018 at 11:15 a.m. in Courtroom
1010 at the Central Islip federal courthouse Attached is the Court’s Notice of Hearing.
Very Truly Yours,
/s/Mindy Kallus
Mindy -Kallus
cc: U.S.D.J. Feuerstein(V ia ECF)
Case 2:16-cV-05478-S.]F-AYS Document 40 Filed 10/08/18 Page 2 of 2 Page|D #: 977
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
X Docket No.:16-cv-5478
DIANE PERITZ, (SJF) (AYS)
Plainfiff, PROOF OF SERVICE
-against-
NASSAU COUNTY BOARD OF COOPERATIVE
EDUCATIONAL SERVICES, BONNIE HELLER,
JANET WEISEL,
Defendants.
MINDY KALLUS, counsel for Plaintiff, affirms under penalties of
perjury, as follows:
(1) On October 3, 2018, this Court adjourned the pre-trial conference
set for October 11, 2018 to Novernber 13, 2018 at 11:15 a.m. at
the United States District Court for the Eastem District of New
York, 100 Federal Plaza, Courtroom 1010, Central Islip, New
York,
(2) On October 8, 2018, I served a copy of the Court’s Notice of
Hearing served upon counsel for Defendants, Silverman &
Associates, 445 Hamilton Avenue, Suite 1102, White Plains, New
York via US. Mail and email.
/s/ Mindy Kallus
Dated: Bronx, New York
October 8, 2018
|
The question involved in this appeal is identical with that decided in City of Gary v. Roper (1931), ante 445,175 N.E. 242, and upon the authority of that case, the judgment herein is reversed, and the cause is remanded with instructions to the trial court to dismiss appellee's amended complaint and for further proceedings under the original complaint as provided by § 10569 Burns 1926. *Page 449 |
236 S.E.2d 243 (1977)
James J. FOX
v.
The BOARD OF EDUCATION OF DODDRIDGE COUNTY et al.
No. 13920.
Supreme Court of Appeals of West Virginia.
July 15, 1977.
*244 *245 Stephen A. Wickland, Clarksburg, for appellant.
Lucien R. Sammons, Jr., West Union, for appellees.
HARSHBARGER, Justice:
James J. Fox, a West Virginia teacher for twenty-three years and employed by the Doddridge County Board of Education since 1958, was dismissed by the board for wilful neglect of duty because he missed a parent-teacher conference. He appealed to his circuit court, which affirmed and hence here.
The charges against him were set forth in a February 5, 1975 letter by the Doddridge County School Superintendent:
1. Failure to inform the high school principal of his intention to be absent from a scheduled parent-teacher conference held on January 29, 1975;
2. failure to attend the scheduled parent-teacher conference thereby not affording parents an opportunity to discuss mutual educational concerns of their children;
3. failure to provide an explanation of his absence to the school principal upon his arrival at school on January 30, 1975; and
4. failure to provide a valid excuse for his absence from the parent-teacher conference when requested to do so by the principal on January 30, 1975.
He was given a hearing by the board before he was fired by its unanimous vote, pursuant to W.Va.Code, 18A-2-8.
The evidence was undisputed that he did not attend the conference. There was considerable conflict about the other derelictions with which he was charged.
This Court does not sit a a super-Board of Education. We do not substitute our judgment for that of the school authorities of Doddridge County. We readily accept the degree of import which the superintendent and board ascribe to the parent-teacher conference and its role in public education and we understand the need for teacher discipline. However, what may be a wholly appropriate basis for one type of disciplinary action may not support another unduly severe and overbearing form of punishment.
Syllabus point 3 in Beverlin v. Board of Education of Lewis County, W.Va., 216 S.E.2d 554 (1975), states, "The authority of a county board of education to dismiss a teacher under W.Va.Code 1931, 18A-2-8, as amended, must be based upon the just causes listed therein and must be exercised reasonably, not arbitrarily or capriciously."
We find that Fox was not deprived of any constitutional rights. The Court's analysis in Beverlin, supra, at 557 is applicable:
We do not believe this case has constitutional infirmities. Although the petitioner was deprived of a substantial contractual right, such state action as was taken by the superintendent and the Board of Education satisfied due process requirements. Beverlin was accorded actual notice, a meaningful (albeit unsuccessful) hearing, the opportunity to confront his accusers, assistance of counsel and the availabilities of remedies for review. In that regard, he cannot ask for more. We do not question that Beverlin is entitled to equal protection under the law. He is entitled to treatment that is customarily and regularly given to others in a similar position. James v. West Virginia Board of Regents, 322 F. Supp. 217 (S.D.W.Va.1971). Nevertheless, the fact that some other teachers occasionally left school, without prior permission, because of illness within their families ... does not demonstrate that Beverlin was treated differently and unfairly in comparison with others similarly situate. That evidence does not rise to a level necessary to substantiate a denial of equal protection.
*246 In this action, Fox was given actual notice, a meaningful hearing, the opportunity to confront his accusers, assistance of counsel and has exercised his right to judicial review.
Thus, the only question before us is whether his unexcused absence from the parent-teacher conference constituted wilful neglect of duty warranting his dismissal. We believe it did not for the simple reason that the punishment does not fit the misdeed. Unexcused absence from those occasions at which attendance is expected may be valid grounds for disciplinary action such as a temporary suspension from teaching responsibilities.[*] But it does not follow that the same recalcitrant conduct calls for permanent banishment of the errant teacher from the school system. Suspension, responsibly exercised, may be a reasonable means of maintaining order and authority over school board employees. Dismissal undoubtedly has therapeutic disciplinary qualities, but we believe that dismissal predicated upon an isolated incident of unexcused absence from a parent-teacher conference is so unduly severe as to be arbitrary and unreasonable.
Our determination involves balancing the wrong complained of against the strong contract interest a teacher of some twenty-three years has in continuing his lifetime profession. This approach is not new. Our Court has previously recognized that the teacher's rights must be considered. "A teacher may not be lightly shorn of the privileges for which he fairly contracted." White v. Board of Education of Lincoln County, 117 W.Va. 114, 125, 184 S.E. 264, 268 (1936). See also, Neal v. Board of Education of Putnam County, 116 W.Va. 435, 181 S.E. 541 (1935).
We do not attempt to formulate a comprehensive definition of "wilful neglect of duty" that would reasonably support a teacher's permanent dismissal. A continuing course of lesser infractions may well, when viewed in the aggregate, be sufficient. And we may envision a single act of malfeasance, whereby severe consequences are generated, that merits a dismissal.
Fox's absence caused inconvenience to parents expecting to confer with him at the scheduled conference and embarrassment to school authorities. But the harm caused was of comparatively small magnitude and dismissal was an unreasonable and arbitrary punishment. The record supports the board's and the court's finding that Fox misconducted himself. Some measure of discipline by way of suspension was appropriate.
We must therefore order Fox's reinstatement with back pay from February 20, 1975. We note that he was suspended without pay on January 31, 1975, and hold that the twenty day suspension which our ruling, in effect, levies, is an adequate disciplinary penalty for his misconduct.
Reversed and remanded.
Justice NEELY dissents for the reasons set forth in his dissenting opinion in Beverlin v. Board of Education, W.Va., 216 S.E.2d [email protected].
NOTES
[*] Fox argues that parent-teacher conferences are optional even though "[i]nstructors are encouraged to attend, are paid to attend, and must make up absences" in order to ensure that they fulfill the employment schedule mandated by W.Va.Code, 18-5-15. The question is not raised, nor do we decide whether attendance at parent-teacher conferences scheduled on week-day evenings is or should be mandatory or optional. Based on School Law Interpretations of the State Superintendent of Schools dated April 11, 1973 and August 29, 1973, we assume that attendance is optional. Mere optional attendance, however, would not relieve a teacher from his responsibility to cooperate with school administrators by informing them of his intention to attend or not attend and the reasons therefor.
|
192 N.W.2d 731 (1971)
Elmer G. SIMKINS, d/b/a Simkins Lumber Company, Plaintiff and Respondent,
v.
Paul T. BECHTOL and Marian B. Bechtol, Defendants and Appellants.
No. 10949.
Supreme Court of South Dakota.
December 17, 1971.
Donald L. Heck, Kadoka, for defendants and appellants.
Charles Rick Johnson, Gregory, for plaintiff and respondent.
PER CURIAM.
This action was commenced on July 6, 1961, to recover under an oral contract for materials and labor, mostly extras, allegedly used in the construction of a dwelling house. Issue was joined on August 2, 1961, by service of an answer. Notice of trial was served by plaintiff on August 4, 1961 and filed on August 7, 1961. Depositions of the defendants, who are husband and wife, as adverse parties, were taken on December 15, 1961. It appears a genuine dispute exists between the parties on the claim made.
The record reveals there was no correspondence or communication between counsel concerning the case from January 19, 1962 to at least May 1970, when a garnishment was served upon a party to whom defendants had sold their ranch. At that time plaintiff employed new counsel with the consent of his former counsel.[*]
*732 In October 1970 plaintiff's present counsel contacted the court for a trial date which was fixed for December 22, 1970. On November 17, 1970, defendants moved to dismiss the action for failure to prosecute. The motion was heard upon affidavits on November 27, 1970. The court denied the motion from the bench. An order denying the motion was entered on January 12, 1971. On March 17, 1971 this court allowed an appeal from that order.
SDCL 15-6-41(b) provides: "For failure of the plaintiff to prosecute * * * a defendant may move for dismissal of an action or of any claim against him. * * *" Its predecessor, SDC 33.1704(4) is essentially the same. This statute was considered and discussed in two recent cases. Potts v. Starr, 76 S.D. 91, 72 N.W.2d 924 and C. & N. W. Ry. Co. v. Bradbury, 80 S.D. 610, 129 N.W.2d 540.
These decisions make it clear that the trial court is vested with inherent authority to dismiss an action for failure to prosecute. It is necessary in the management of its own affairs and in order to achieve an orderly and expeditious disposition of cases. While a discretionary power, because of drastic consequences it should be exercised cautiously and granted only in case of an unreasonable and unexplained delay in prosecution. Each case must be considered on its own facts and circumstances and ordinarily a determination by the trial court will not be interfered with. It is a plaintiff's burden to proceed with the action.
With these principles in mind we have examined the record before the trial court and before us on appeal. As reasons and excuses for not proceeding with the prosecution, plaintiff says, following the taking of the depositions it appeared a great deal of investigation was necessary to determine what was owed him; that defendants had no liquid assets at that time and he did not wish to sell their home. Upon inquiry his attorney on several occasions advised him there was no danger of his claim being barred since an action was filed. In late 1969 or early 1970, plaintiff learned defendants had sold considerable property and this was the first time he had knowledge they had liquid assets available to pay the claim. His present counsel maintains he has proceeded diligently since his association with the action, and this may be true, and he also urges this to support the court's order.
In summation he says he at no time intended to waive his claim and the delay was not wilful and was caused "primarily because of the indications that we received from our lawyer that we would not have to complete the action until the defendants were in a better condition to pay the same."
Prior to September 1968, defendants resided in South Dakota. They now live in Fort Lauderdale, Florida. Defendant, Paul T. Bechtol, has a very bad case of emphysema.
In our opinion plaintiff has failed to show good excuse for the delay in prosecution. Although a judgment may be uncollectible, this does not excuse an unreasonable delay. Helmer v. Nagle, 202 Minn. 59, 277 N.W. 359. We do not hesitate to label a delay of trial for nearly nine years as unreasonable and virtually inexcusable.
Where a showing included inability to pay an attorney's fee necessary to secure prompt prosecution, the court said "that there was no abuse of discretion (in dismissing) * * * but also that the facts are such as to have made the order almost, if not quite, inescapable. It is a clear case of aggravated laches. There is no ground upon which plaintiffs' conduct can have judicial approval or even the condonation implied by a refusal to dismiss." Conrad v. Certified Ice & Fuel Co., 201 Minn. 366, 276 N.W. 286.
When there was a delay of nine years, and an attempt was made to excuse the delay *733 by an offer of proof which the court refused before dismissing, the Wisconsin court said "taking the offers of proof * * * as established verities" if the trial court had "held the delay excusable, we could not have upheld his decision as the exercise of sound discretion." Wisconsin Lumber & Supply Co. v. Dahl, 214 Wis. 137, 252 N.W. 714.
Although both Minnesota and Wisconsin have statutes formulating the inherent authority of the court to dismiss for failure to prosecute after five years, and we have no similar statute, the authority of the court to so do is recognized and does not depend on statute or rule. 24 Am.Jur.2d, Dismissal, Discontinuance and Nonsuit, § 59, p. 50. See C. & N. W. Ry. Co. v. Bradbury, supra.
Here we have no request for delay, negotiations for settlement or acquiescence as in the Bradbury case. Diligence by present counsel does not correct prior derelictions. Neither does plaintiff's purported reliance on the advice of his former counsel afford a legitimate excuse. A slumbering action should not be permitted as an avoidance of a statute of limitations. Conrad v. Certified Ice & Fuel Co., supra.
In our opinion under the facts and circumstances of this case, the trial court abused its discretion when it refused to dismiss the action.
The cause is remanded with directions to enter an order of dismissal.
BIEGELMEIER, P. J., and HANSON, WINANS and WOLLMAN, JJ., concur.
NOTES
[*] Plaintiff's counsel when the action was commenced is not his present counsel.
|
217 Cal. App. 2d 289 (1963)
THE PEOPLE, Plaintiff and Respondent,
v.
JOHN L. FLYNN, Defendant and Appellant.
Crim. No. 4147.
California Court of Appeals. First Dist., Div. One.
June 18, 1963.
John L. Flynn, in pro. per., and Salvador A. Liccardo, under appointment by the District Court of Appeal, for Defendant and Appellant.
Stanley Mosk, Attorney General, Albert W. Harris, Jr., and Derald E. Granberg, Deputy Attorneys General, for Plaintiff and Respondent.
BRAY, P. J.
Defendant appeals from judgment after jury verdicts, finding him guilty of 10 counts of abortion. [fn. 1]
Questions Presented.
1. Was poll of jury improperly conducted?
2. Was evidence of undenied accusations admissible?
3. Was evidence of defendant's relationship with one prosecutrix unduly limited?
4. Were the abortees corroborated?
5. Was instruction that defendant was lawfully entitled to possession of the instruments of abortion, properly refused?
Evidence.
Defendant was indicted on 11 counts of felony (abortion). Counts 1 through 6 related to abortion of Gloria McFadden; counts 7 through 8 to abortion of Donna Grundy; and counts 9 through 11 to abortion of Mona Manry. Defendant admitted two prior convictions of abortion. The jury acquitted defendant of the count 9 charge of abortion of Mona Manry in 1959.
On October 21, 1960, Mrs. Gloria McFadden and Mrs. Mona Manry, both in the early stages of pregnancy, contacted the defendant, John L. Flynn, at his house trailer at a trailer court in Redwood City. Both women wished to terminate their pregnancies and had contacted defendant for this purpose.
The defendant's fee for performing an abortion was $250. *293 As security for the payment of the fee, defendant insisted that both women allow him to take several photographs of them in the nude. After the photographs had been taken, defendant proceeded to perform an operation on Mrs. Manry whereby he inserted a catheter containing a wire into her uterus. The same procedure was then followed with Mrs. McFadden. The women were instructed to return if the procedure was not successful.
Mrs. McFadden returned on five other occasions, October 22, October 23, October 25, October 26 and October 28, defendant each time performing the same operation. She finally had to be hospitalized to complete the miscarriage.
Mrs. Manry returned on October 26 for another operation. Her miscarriage took place the following day without medical attention.
About the middle of November of 1960, Mrs. Donna Grundy contacted defendant at his trailer. She went there in the company of Mrs. McFadden for the purpose of obtaining an abortion. The fee was set at $250. On November 25, defendant performed the same operation on Mrs. Grundy as on the other two women, requiring nude photographs as security for the fee also. Mrs. Grundy returned on November 26 for a subsequent operation. On November 28, surgery was performed by her doctor to complete the miscarriage.
Sometime between March and May of 1961, Mrs. McFadden told the police of her dealings with defendant. He was arrested on October 31, 1961. A search of the trailer produced, among other things, a flash camera, a feminine syringe, a folder of pictures of nude women, a letter written by Mrs. Manry to defendant asking for a loan (another portion of the security defendant required to protect his fee), an item of wire, and the negatives of 25 photographs of nude women.
Defendant did not testify at the trial.
1. Poll of Jury.
[1a] On return of the jury with their verdicts, the clerk read the verdict as to each count separately and asked the jury as a whole if such was their verdict. The record shows that in each instance the jury responded that it was their verdict. No contention is made that the record in this respect is not correct. Then when the jury was dismissed, the following occurred: "Mr. Morley [defense counsel]: I was going to have the jury polled, Your Honor, as requested. The Court: Didn't I poll them? I asked them. Mr. *294 Morley: I didn't see the indication of all jurors that this was their verdict. I'm sorry, Your Honor. The Court: Well, you would have to have it all over again. I am not too sure in a criminal case if you are entitled to have a poll. We can ask a general question and ask if anyone disagrees with the verdicts as read by the clerk. Mr. Morley: I would appreciate at least that, Your Honor. The Court: That is simple. The gentleman says he would like to have the jury polled ... and if he had asked for it as we were going along, we would have done it. Mr. Morley: I was standing, and I thought you noticed me standing. The Court: I'm sorry, I didn't mean to disregard your efforts. You should have just talked out. I will ask you, you have heard the clerk read the results of the eleven different counts and verdicts, and I have told you before everybody has to agree in order to get a verdict on any count. Is there any one of you who disagrees with the verdicts which were read to you on any one of the counts, on any Counts I to XI inclusive? In other words, in Numbers I through VIII everybody is agreed to guilty, is that right? [Jurors nod.] The Court: Is there any question about it? [No response.] The Court: I can see where some of the jurors are tired. From I to VIII did everybody vote guilty? [Jurors nod.] The Court: Does that take care of those eight counts for you? Mr. Morley: Yes, Your Honor, apparently so. The Court: And on IX everybody voted not guilty, and the other two, X and XI everybody voted guilty? [Jurors nod.] The Court: Will that satisfy you? That will save us the time of going through it eleven times." Defense counsel made no further statements in this regard.
Section 1163, Penal Code, provides: "When a verdict is rendered, and before it is recorded, the jury may be polled, at the request of either party, in which case they must be severally asked whether it is their verdict, and if anyone answer in the negative, the jury must be sent out for further deliberation."
While section 1163 is phrased in terms which would appear to place the granting of a request to poll the jury in the discretion of the trial court, similar language has been construed as conferring an absolute right to have the jury polled upon the making of a proper request. (See 49 A.L.R. 2d 616, 621.) This would also appear to be the law in this state. (See People v. Lessard (1962) 58 Cal. 2d 447, 452 [25 Cal. Rptr. 78, 375 P.2d 46].) [2, 3] However, the right itself *295 may be waived (People v. Dean (1958) 158 Cal. App. 2d 572, 578 [322 P.2d 929]), as may be the right to assert defects in the manner of polling by failure to object to the method of polling employed by the trial court. (People v. Wilkins (1955) 135 Cal. App. 2d 371, 379-381 [287 P.2d 555]; People v. Lopez (1913) 21 Cal. App. 188, 190 [131 P. 104].) People v. Lessard, supra, 58 Cal. 2d 447, 452, holds: "Where a jury is incompletely polled and no request is made for correcting the error, such further polling may be deemed waived by defendant, who cannot sit idly by and then claim error on appeal when the inadvertence could have readily been corrected upon his merely directing the attention of the court thereto." (See also People v. Porter (1955) 136 Cal. App. 2d 461, 469 [288 P.2d 561].)
[1b] Evidencing such a waiver in the instant case is defendant's acquiescence in the method of polling which was used and his failure to object to the method when asked by the court if he was satisfied. It might also be drawn from the record that defendant failed to make a timely request to have the jury polled. In any event, since the record fails to disclose even a hint of disagreement among the jurors, the departure from the mode of polling prescribed by the Penal Code does not appear to have prejudiced the defendant in respect to any substantial right and should not invalidate the proceeding. (See Pen. Code, 1404.)
2. Undenied Accusations.
[4a] Inspector Jones of the Redwood City Police Department testified to two conversations with defendant, one at the latter's trailer at the time of arrest and one thereafter in the district attorney's office. In both conversations defendant denied committing the abortions but talked freely about taking the pictures of the three prosecutrixes and another woman while they were nude, and other matters. At the second interview after such a discussion Mrs. Manry was brought in and defendant was asked if he knew her. He said that he did. She, in his presence, was then asked successively if defendant was the person who aborted her on two separate occasions and also aborted Mrs. McFadden. In each instance she answered that he was. Defendant remained mute, although up to that point he had been answering all questions asked him by the officers. Objection by defense counsel that defendant's silence was not an admission due to the fact that the questioning occurred at the district attorney's office was overruled by the trial court. *296
[5] "It is ... for the trial court in the first instance to determine the import of the accusatory statement; that is, whether it has been made under such circumstances that it may furnish a foundation for proof of conduct. It is then for the jury to decide, on any statement properly admitted, whether the accused did reply to it, and whether if he did not do so, or his reply was evasive or equivocal, it showed criminal intent or a consciousness of guilt, or acquiescence." (People v. Simmons (1946) 28 Cal. 2d 699, 718 [172 P.2d 18].)
[6] The fact that an accused is in police custody does not of itself preclude the admissibility of such evidence and is simply one of the circumstances to consider in determining whether the accused was afforded an opportunity to deny the accusation and whether he was naturally called upon to do so. (See People v. Briggs (1962) 58 Cal. 2d 385, 409 [24 Cal. Rptr. 417, 374 P.2d 257]; People v. Bracamonte (1961) 197 Cal. App. 2d 385, 389 [17 Cal. Rptr. 62].)
[4b] From the fact that defendant, although denying the acts of abortion, talked freely to the officers concerning his relations with the women, but became silent when Mrs. Manry stated that he committed the abortions, a reasonable inference could be drawn by the jury that her statements were true.
Defendant contends that the admission of evidence of the undenied accusations constituted reversible error. Citing People v. Abbott (1956) 47 Cal. 2d 362, 372-373 [303 P.2d 730], and People v. McGee (1947) 31 Cal. 2d 229, 238-239 [187 P.2d 706], to the effect that silence in the face of an accusation is not admissible as an admission when that silence is upon the advice of counsel, defendant argues for a rule which in essence would require a holding that his silence must be presumed to have been based upon the advice he could expect to receive from any counsel he later retained. It is further asserted that to permit the use of his silence in the face of an accusation as an admission has the practical effect of denying him the right to counsel and due process of law.
There is no authority to support defendant's position. The cases cited by defendant state that the silence must be as a result of express advice of counsel. To adopt defendant's position would completely destroy the rule of admissibility. And, it in no way appears how there results a deprivation of due process or of the right to counsel in this situation. *297
3. Defendant's Relationship With Donna.
[7] Defendant next contends that he was improperly denied the opportunity to expose to the jury the bias and state of mind of the People's witness, Donna Grundy. On cross-examination of Mrs. Grundy defendant brought out the fact that subsequent to the abortions she saw defendant a number of times, had gone out with him socially at least two or three times, that defendant had been in her home, that she had gone bowling with him and had taken her children with her on one occasion, and that his relationship with her was "[r]eluctantly friendly and casual." Defense counsel then asked her if she had had sexual intercourse with defendant. The court sustained an objection to this question. Defense counsel stated the question was to tend to show bias or prejudice of the witness and the untruth of her testimony. The court stated that it did not think the question relevant for this purpose, that they were not trying her character, but that defendant could show "any animosity" but not by that question. Defendant did not pursue the matter. Later in discussing the matter with the court concerning a question asked of a witness as to whether he had seen defendant and Mrs. Grundy at a bowling alley, defense counsel contended that the testimony was admissible because of the probability that the friendly relationship between Mrs. Grundy and defendant might have changed when she found that he exhibited her picture in the nude and that she might have made up the abortion story. In the discussion that followed the court indicated it would allow further examination of the previous relationship between defendant and Mrs. Grundy if any showing of later animosity was made. The court commented that from his observation of her on the witness stand she seemed to show animosity towards the prosecution rather than towards defendant. No evidence was offered by defendant to show animosity of Mrs. Grundy toward defendant. In People v. Tate (1932) 124 Cal. App. 48 [12 P.2d 109], it was held that evidence of the meretricious relationship between a witness and the defendant was not proper for impeaching the credibility of the witness. "To go into the subject of the illicit relations existing between the prosecuting witness and the defendant would have been to run far afield and submit to the jury an issue which was wholly foreign to the case on trial." (P. 50.) In any event, as Mrs. Grundy admitted a friendly relationship with defendant had existed and no effort was made to *298 show any change in that relationship other than the fact that she testified against defendant under subpoena (the prosecution claimed that she was a reluctant witness as to them) there could have been no prejudice to defendant in sustaining the objection to the question of an illicit relationship. The same is true of the sustaining of an objection to a question asked witness Cochran if he had seen the two at the bowling alley. Mrs. Grundy had already admitted to going to a bowling alley with defendant, and the testimony would have been merely cumulative. Here again the court indicated that if some evidence of animosity on Mrs. Grundy's part was shown the question might be gone into.
4. Corroboration.
Section 1108 of the Penal Code provides: "Upon a trial for procuring or attempting to procure an abortion, or aiding or assisting therein ... the defendant cannot be convicted upon the testimony of the woman upon or with whom the offense was committed, unless she is corroborated by other evidence."
[8] People v. Ames (1957) 151 Cal. App. 2d 714 [312 P.2d 111], holds that the testimony of one abortee may be used to corroborate that of another. [9] Defendant contends, however, that this rule should not be applied here for the reason, he claims, that the abortees conspired by colluding to have him convicted of the abortions charged, to seek revenge upon him for the release by him of their pictures in the nude.
The record fails to support this claim of conspiracy. It is true that Gloria McFadden became angry with the defendant on account of the pictures being circulated and turned him in to the police. But Mona Manry testified that she had only mentioned the subject of the pictures to Gloria McFadden once, in February, 1961, and never again after that. The defendant was arrested in October, 1961. Donna Grundy's pictures were returned to her by the defendant. Thus, she would not even have the motive to conspire for the purposes asserted by defendant.
Whether the prosecutrixes were motivated as claimed by defendant and whether their testimony was true was a matter for the jury to determine. If the testimony was believed (and undoubtedly it was) the relevant testimony of each abortee would constitute corroboration of each of the others.
[10] The test of the sufficiency of corroborating evidence *299 is whether "it tends to connect the defendant with the commission of the crime in such a way as may reasonably satisfy the jury that the witness who must be corroborated is telling the truth." (People v. MacEwing (1955) 45 Cal. 2d 218, 224 [288 P.2d 257].) Such corroborating evidence is present in the [email protected].
[11a] Corroboration may be found in the testimony of each of the abortees showing that defendant had committed abortions on them in the same manner. (People v. Weiss (1958) 50 Cal. 2d 535, 568- 569 [327 P.2d 527]; People v. Davis (1954) 43 Cal. 2d 661, 675 [276 P.2d 801].) [12] Testimony relating to one count may be considered in corroboration of the testimony of a woman upon whom an abortion is alleged to have been performed in another count. (People v. Berger (1954) 128 Cal. App. 2d 509, 514 [275 P.2d 759]; People v. Kendall (1952) 111 Cal. App. 2d 204, 210-211 [244 P.2d 418].) [11b] The testimony of the abortees in the instant case shows a consistent pattern followed by defendant with regard to the abortions. Uniformly they were performed at his house trailer, the fee was always $250, nude photographs of the abortee were always required as collateral for the unpaid balance of the fee, and in each instance the operating technique employed was virtually identical.
[13] Any woman upon whom an abortion was performed may act as a corroborating witness with respect to matters she may have observed in connection with the abortion of another woman. (People v. Gallardo (1953) 41 Cal. 2d 57, 63 [257 P.2d 29].) Mrs. McFadden and Mrs. Manry were both present at defendant's trailer on October 21, 1960, and Mrs. McFadden saw the defendant perform an abortion on Mrs. Manry. Mrs. Manry said she did not watch the operation on Mrs. McFadden.
[14] Corroboration may also be found in the defendant's silence in the face of accusatory statements. (People v. Davis, supra, 43 Cal. 2d 661, 675; People v. Collins (1935) 4 Cal. App. 2d 86 [40 P.2d 542].)
[15] Corroboration may also come from the testimony of an accomplice. (People v. Gallardo, supra, 41 Cal. 2d 57, 63.) Thus, corroboration for Mrs. McFadden's testimony may be found in the testimony of Mr. Hooker, Mrs. McFadden's fiance, even though he be characterized as an accomplice. Hooker testified about taking Mrs. McFadden to defendant's trailer and picking her up on occasions and also about his payment of defendant's fee for aborting Mrs. McFadden, *300 partially by cash and partially by providing defendant with service, repairs and gasoline for his automobile.
5. Instruction on Lawful Possession.
[16] Lastly, defendant contends the court improperly rejected the following instruction: "The defendant in this case was lawfully entitled to have in his possession the articles found by police officers in his trailer at the time of his arrest." Although the instruction is couched in general terms, defendant now relates the term "articles" to mean specifically the feminine syringe, the wire and the camera found by the police. Defendant contends, citing People v. Pierson (1945) 69 Cal. App. 2d 285 [159 P.2d 39], and People v. Murphy (1943) 60 Cal. App. 2d 762 [141 P.2d 755], that failure to give the instruction left the jury with an assumption that possession of the items was illegal in itself since they constitute means with which to perform abortions.
Pierson and Murphy, relied on by defendant, are to the effect that in a prosecution of a doctor of medicine for abortion it is proper to instruct that the defendant is in lawful possession of instruments used in effecting miscarriages since under certain conditions a doctor is lawfully entitled to procure a miscarriage. However, even when the defendant is a doctor of medicine, where the significant factor is not that the defendant has possession of such instruments but rather is the showing of his engagement in an illicit use of them, it is not error to fail to instruct that he had the right to possess such instruments. (People v. Cummings (1956) 141 Cal. App. 2d 193, 203 [296 P.2d 610].)
The wire, syringe and camera were in themselves innocuous, and defendant was lawfully entitled to have them in his possession. It was the improper and illegal use of them which made their possession significant. There is no indication in the record that any contention was made that mere possession of any of these articles was illegal. Even assuming, arguendo, that the instruction should have been given, the failure to do so could not possibly, in view of the overwhelming evidence of guilt, have been prejudicial. (Cal. Const. art. VI, 4 1/2.)
The judgment is affirmed. The purported appeal from the order denying new trial is dismissed.
Sullivan, J., and Molinari, J., concurred.
NOTES
[fn. 1] 1. Defendant also purports to appeal from order denying new trial. As this order is nonappealable, the purported appeal must be dismissed.
|
350 F. Supp. 420 (1972)
BAY SOUND TRANSPORTATION CO.
v.
UNITED STATES of America.[*]
No. 63-H-73.
United States District Court, S. D. Texas, Houston Division.
May 26, 1972.
*421 Masquelette, Bailey, Donisi & Haynes, John A. Bailey, Houston, Tex., for plaintiffs.
Charles G. Barnett, Atty., Tax Div., Dept. of Justice, Dallas, Tex., for Government.
MEMORANDUM OPINION AND SUPPLEMENTAL FINDINGS OF FACT
HANNAY, District Judge.
These cases were tried to the Court without a jury. The Plaintiffs appealed to the United States Court of Appeals for the Fifth Circuit and that Court affirmed in part and remanded in part these cases for further proceedings not inconsistent with the determination of the appellate court. Plaintiffs thereafter filed a petition for a writ of certiorari with the United States Supreme Court and that petition was denied.
The only question now presented for determination by this Court is whether the principal purpose motivating the separate incorporation of the various barges and vessels acquired by the Edwards fleet[1] in 1955 and subsequent years was the evasion or avoidance of federal income taxes by securing the benefit of multiple surtax exemptions.
STATUTES INVOLVED
The statute pertinent to the unresolved issue in this case is set forth in the Appendix, infra.
See Bay Sound Transportation Company v. United States, (5 Cir.) 410 F.2d 505 at page 512:
"Section 269 provides that if any person acquires control of a corporation and the principal purpose of this acquisition is evasion of income taxes by securing the benefit of a deduction, credit, or other allowance, which he would not otherwise enjoy, then the deduction credit or allowance may be disallowed. The determination of the taxpayer's principal purpose in incorporation is a question of fact that depends upon the intent of the taxpayer at the time he acquires control of the corporation. See Airport Grove Corp. of Polk County, et al. v. United States of America, 5 Cir., 1969, 408 F.2d 870. The taxpayer has the burden of proving that control was not acquired for the unlawful purpose. American Pipe & Steel Corp. v. Commissioner, 243 F.2d 125 (9 Cir., 1957)."
In Bobsee Corporation v. United States, 411 F.2d 231 at 238, the Fifth Circuit held:
"The proscription of section 269 obtains where the principal purpose for the acquisition of a corporation is tax *422 avoidance. The IRS has determined that each of the appellant corporations was organized for the principal purpose of obtaining the surtax exemption and this determination is presumptively correct.2 The burden
2. Welch v. Helvering, 290 U.S. 111, 115, 54 S. Ct. 8, 78 L. Ed. 212 (1933).
of proving that tax avoidance was not the principal purpose is on the taxpayer.3 Theoretically the question of
3. Green Light Co. v. United States, 405 F.2d 1068, 1070 (5th Cir. 1968); Dorba Homes, Inc. v. Commissioner of Internal Revenue, 403 F.2d 502, 505 (2d Cir. 1968).
purpose is purely subjective; pragmatically, however, the trier of fact can only determine purpose from objective facts. Thus, unless the taxpayer can muster facts sufficiently plausible to convince the trier of the purity of his motives, the IRS will prevail.
"Under the definition of `control' in subsection 269(a), the presence of a principal tax-avoidance purpose on behalf of any fifty-percent interest in an acquired corporation renders the corporation subject to disallowance of the surtax exemption. Of course, the purpose of the actual fifty-percent shareholder may in certain circumstances be completely irrelevant. For example, if a business manager attends to all the details of a business including the organization of corporate formsthe owner's mind might be a perfect tabula rasa. The relevant `mind' is the person who actually has a purpose, that is, other than the general purpose of making money.4
4. Classical analysis would probably deem the general desire to make money a motive rather than a purpose. See Blum, Motive, Intent, and Purpose in Federal Income Taxation, 34 U.Chi.L. Rev. 485, 486-87 (1967). However, since triers of fact are not likely to observe such refinements, the terms are treated as synonymous in this largely pragmatic analysis.
Thus the statute cannot be sidestepped by merely divorcing purpose from ownership.5
5. In Dorba Homes, Inc. v. Commissioner of Internal Revenue, 403 F.2d 502 (2d Cir. 1968), the controlling owners of two corporationsLumar Homes, Inc. and Dewmar Construction Co., Inc.were the wives of the actual promoters. The Second Circuit held that, since the wives did not appear and testify on behalf of the taxpayer-corporations, the IRS could not prevail because the ownership of the controlling shares could not be attributed to the husbands. Id. 506-507. We cannot accept this analysis for two reasons. First, the burden of proof is on the corporations to prove that tax avoidance was not the principal purpose of their formation; if the purpose of the controlling owners is relevant and they do not come forward on behalf of the corporations, then the IRS must prevail. And second, the facts surrounding the formation of both wives' corporations indicate that the wives' purpose, if any was irrelevant.
"This court has held that the principal purpose is the purpose which exceeds all other purposes in importance.6 Citing Treas.Reg. § 1.269-3
6. Green Light Co. v. United States, 405 F.2d 1068, 1070 (5th Cir. 1968).
(1962), both parties state a standard different from the one adopted by the court, viz., that a purpose is the principal purpose if it exceeds in importance any other one purpose."
See Shaw Construction Co. v. C. I. R., 323 F.2d 316 and cases which are therein cited. U. S. Court of Appeals, Ninth Circuit, 1963.
In the Atlas Storage Company v. United States, (D.C.W.Va.) 306 F. Supp. 570 at 581, the Court stated:
"In any event, however, even if it be conceded that the advantages itemized by Maier were legitimate business purposes for this corporate arrangement, they are not sufficient to carry the day for the taxpayers in this litigation in the light of the overwhelming evidence of the tax advantages obtained thereby. It is not necessary *423 under the statute that tax avoidance be the sole purpose of the arrangement, but only that it be the `principal purpose.' See J. T. Slocomb Co. v. C. I. R. [(2 Cir. 1964) 334 F.2d 269] supra. As heretofore pointed out, the burden rests upon the taxpayer to show that such avoidance was not the principal purpose of the acquisition, and under the evidence in this case, it is my conclusion that the taxpayers have failed to carry that burden. Accordingly, it is my further conclusion that the taxpayer corporations were acquired for the principal purpose of evading or avoiding federal income taxes within the meaning of Section 269 of the Internal Revenue Code of 1954 and that the Commissioner of Internal Revenue properly disallowed the surtax exemption for the several taxpayer corporations except for one corporation in each of the three geographical areas."
The Atlas case was affirmed by the Fourth Circuit in 1971. See 437 F.2d 1319. This opinion which involved some eighteen warehouse corporations controlled by one person was affirmed as to fifteen of the eighteen warehouse corporations.
In Airport Grove Corp. of Polk County v. United States, 408 F.2d 870 (1969), decided by the Fifth Circuit in 1969, the Court wrote regarding some fifteen citrus groves separately incorporated that:
"Section 269 provides that if any person acquires control of a corporation and the principal purpose of this acquisition is evasion of income taxes by securing the benefit of a deduction, credit, or other allowance which he would not otherwise enjoy, then the deduction, credit, or allowance may be disallowed. The determination of the taxpayer's principal purpose in incorporation is a question of fact that depends upon the intent of the taxpayer at the time he acquires control of the corporation. See Southland Corp. v. Campbell, 5 Cir. 1966, 358 F.2d 333, 337; Green Light Co. v. United States, 5 Cir. 1968, 405 F.2d 1068. 7 Mertens, Law of Federal Income Taxation § 38.69 (1967). The Taxpayer has the burden of proving that control was not acquired for the unlawful purpose. American Pipe & Steel Corp. v. Commissioner of Internal Revenue, 9 Cir. 1957, 243 F.2d 125."
In Bobsee Corporation v. United States, (5th Cir., 1969) 411 F.2d 231, at page 238, "control" is defined as follows:
"Under the definition of "control" in subsection 269(a), the presence of a principal tax-avoidance purpose on behalf of any fifty-percent interest in an acquired corporation renders the corporation subject to disallowance of the surtax exemption."
Coming now to the questions of fact. While this Court has carefully examined, reviewed and studied the statement of facts in this case consisting of more than 1,827 pages of testimony and in addition thereto the pleadings and the exhibits, it is thought best to restate some of the testimony with reference to the question of multiple corporation issue: C. W. Edwards was the master mind and the ultimate decision maker in the organization of the eighteen new vessels incorporated. He alone let the contracts for the construction of the vessels and as they were completed and delivered, the corporations took title. The vessels were then placed in service with the Edwards fleet. Of the 20 corporations organized between 1955 and 1960, 14 each owned one barge, and 6 each owned one boat. (G. Exs. 7 & 8, pars. 37, 38, 44, 46, 48, 49, 50, 52, 54, 56, 58, 60, 62, 63, 65, 67, 69, 71, 73, 75, 76 and 77). Mr. Edwards was the major stockholder and chief executive officer of all the said corporations except the two in which his son was major stockholder and chief executive officer. None of the barge corporations had any employees. The only employees of the boat corporation *424 other than members of the crews, are as follow:
Name of employee Name of corporation-employer
Keith Edwards Christine Towing Co.
J. A. Hendricks " " "
(Maintenance)
Vera McNeilly Green Bay Transportation
(Bookkeeper)
(Tr. 449-457; P. Ex. 4, pp. 24-42).
Messrs. Edwards and Hendricks were also employees of either Barge Transport Co. or Edwards Transportation Co. and they drew the bulk of their pay from these organizations. (P. Ex. 4, pp. 39-42). The administrative personnel for the organization were employed by either Edwards Transportation Co. or Barge Transport Co. (Tr. 459-75).
The operation of Edwards Transportation Co. and Barge Transport Co., the several partnerships that owned vessels (Wilkins Barge Line, Louisiana Transportation Co., Buffalo Bayou Transportation Co., Barge Delta Joint Venture, and Sterling Barge Line), and the twenty vessel-owning corporations was essentially as follows:
(a) All of the companies utilized the same office address. (G. Exs. 7 & 8, pars. 34).
(b) Edwards Transportation Co. and Barge Transport Co. had telephone listings and were the only two companies known (other than Wilkins Barge Line for a time) to the general public; these two companies acting through Mr. C. W. Edwards obtained all business for the entire group of Edwards' companies. (G. Exs. 7 & 8, pars. 33, Tr. 479-480, 765-67, 852).
C. W. Edwards arranged for the corporations to be formed and arranged for the borrowing of the money to finance the construction of 20 boats and barges involved in this suit.
Edwards, in all but two of the companies, owned the majority of the stock. He personally solicited all of the business that was obtained for all of the companies. He personally directed which company would perform the services that were performed. There were no written or formal negotiations or contracts between Edwards Transportation Co. and/or Barge Transport Co. and the five partnerships and twenty vessel-owning corporations. Records governing all the transactions were maintained by either Edwards Transportation Co. or Barge Transport Co. Amounts to be collected from the boat corporations and partnership by all of the various barge corporations and partnerships were recorded on the books of the various barge corporations and partnerships as "accounts receivable". The amounts were then entered into the books of account of the boat corporations and partnerships as "accounts payable". Then the boat companies calculated the amounts "owed" them by either Edwards Transportation Co. or Barge Transport Co. for transportation services performed during the preceding month. Such amounts were recorded on the boat companies' books of account as "accounts receivable". (Tr. 458-473, 854-59).
Barge Transport Co. and Edwards Transportation Co. recorded the boat companies' charges as "accounts payable". Barge Transport Co. and/or Edwards Transportation Co. would then bill the person for whom the services were performed, such as Texaco, Inc., Gulf Refining Co., etc. When the money covering the invoices was received by Edwards Transportation Co. and/or Barge Transport Co., they drew checks on their respective bank accounts to pay the boat companies; the boat companies deposited the checks and drew checks of their own in favor of the barge companies. All of this bookkeeping work was accomplished in one office by five or six bookkeepers who were employees of Edwards Transportation Co. and/or Barge Transport Co. Books of account were maintained for each of the twenty new corporations and, of course, bank accounts were maintained. (Tr. 458-473, 854-59).
C. W. Edwards was a very astute businessman, keenly aware of the advantages to be obtained from the incorporation *425 of each of the vessels constructed during the period of 1955 to 1960. He was also greatly desirious of obtaining as much tax release as possible because he was then in a 90% plus income tax bracket. He was quite infirm and was of an advanced age. Mr. Keith Edwards, the only child of C. W. Edwards, stated that he was not at all concerned during the 1950's whether the next vessel or any vessel were placed in an existing corporation or in a new corporation.
C. W. Edwards was bitterly resentful of the fact that he was compelled to pay such a high percentage of his income out in federal taxes. The question that Plaintiff raised with reference to liability is not sustained by the claims for personal injury and property damage paid during the period material hereto.
An attempt to obtain tax advantages on two other questions, to-wit: depreciation of vessels and entertainment expenses, significantly shows his desire to avoid federal taxes.
In the case of Taylor v. Standard Gas & Electric Co., 96 F.2d 693 (C.A. 10th Cir.) reversed on other grounds, 306 U.S. 307, 59 S. Ct. 543, 83 L. Ed. 669 (1939), the Court held that in determining if a subsidiary is a mere instrumentality of the parent, many factors are relevant and some of the factors generally considered by courts are:
"When the operations of the plaintiffs are compared with the factors listed in the foregoing table, it becomes obvious that in any tort action, the plaintiffs were in greater danger of having their separate corporate existence ignored for the purpose of liability than in having a court find "ways of circumventing the Limitation [of Ship Owners' Liability] Act."
In this case, the only evidence that tax evasion or avoidance was not the principal motive behind the separate incorporation of the various barges and vessels acquired by the Edwards group in 1955 and subsequent years was the unsupported statements of Mr. Edwards, his son, his employees and agents. In American Properties, Inc. v. Commissioner, 28 T.C. 1100 (1957), the court, after noting that the issue present in that case also turned upon a question of intent, stated (p. 1111):
"The statement of an interested party of his intention and purpose is not necessarily conclusive. Helvering v. National Grocery Co., 304 U.S. 282 [58 S. Ct. 932, 82 L. Ed. 1346], affirming 35 B.T.A. 163. In R. L. Blaffer & Co. [v. C. I. R.], 37 B.T.A. 851, affd. (C.A.5) 103 F.2d 487, certiorari denied 308 U.S. 576 [60 S. Ct. 91, 84 L. Ed. 483], we stated that one's categorical statement may be of less weight than the facts and circumstances which affect it and that "[t]o be skeptical of the weight to be accorded an interested witness' statement in view of other evidence is not the same as wholly to reject the statement as if it were dishonest."
At trial, plaintiffs offered only the self-serving testimony of Mr. Edwards, his son, his employees, and his attorneys in an attempt to establish that tax avoidance played no part in the formation of a separate corporation for each barge or vessel acquired by the Edwards fleet. The principal thrust of this testimony was to the effect that the various barges and vessels of the Edwards fleet were separately incorporated for the purpose of limiting exposure to liability for claims arising out of the operation of the vessels. Plaintiffs also contend that the separate incorporation of barges and vessels reduced the possibility of the entire Edwards fleet being tied up by labor disputes.
Although defendant served numerous subpoenas duces tecum upon the plaintiffs in an effort to compel them to produce documentary evidence supporting their alleged purposes for the formation of multiple corporations, the only item produced in response thereto was a letter from plaintiffs' admiralty attorney dated December 7, 1961, long after the tax years involved, and contemporaneously with the assertion of the multiple corporation *426 issue by the Internal Revenue Service.
With regard to Christine Towing Company and Naptha Barge Company, plaintiffs have clearly failed to establish that the obtaining of additional surtax exemptions was not their principal purpose for separately incorporating each vessel. C. W. Edwards testified at trial that Keith Edwards decided to use multiple corporations in these two instances (Tr. 218); but Keith Edwards testified that he could not care less whether the vessels were placed in a corporation or a partnership (Tr. 1369-1370). The Government is entitled to prevail as to Christine Towing Company and Naptha Barge Company in default of any evidence covering intent with regard to those entities.
Although plaintiffs did put on some general testimony as to the purpose behind the formation of the remaining 18 corporations, such testimony will not stand the test of critical examination. All of plaintiffs' witnesses spoke of "liability from claims" as the significant reason motivating formation of the corporations. The limitation of liability which plaintiffs asserted as the purpose of incorporating each vessel, however, already existed to a substantial extent under the laws of the United States. The Act of March 3, 1851, c. 43, 9 Stat. 635, commonly known as the Limitation of Ship Owners' Laibility Act (46 U.S.C. §§ 183 through 196) provides that a ship owner could limit his liability to the value of his vessel in all instances where he was not personally privy to the tort committed or had knowledge of the liability incurred. Although Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 77 S. Ct. 443, 1 L. Ed. 2d 493 (1957), and related cases, may have increased an employer's liability, as previously understood in the industry, for injuries to employees under the Act of April 22, 1908, c. 149, 35 Stat. 165, as amended in 45 U.S.C. §§ 51 through 60 (commonly known as the Employers' Liability Act), and the Act of June 5, 1920, c. 250, 41 Stat. 933 (46 U.S.C. § 688) (commonly known as the Jones Act), those cases were not decided until February 25, 1957, some two years after the decision was made in 1955 to separately incorporate the plaintiffs' vessels.
Although plaintiffs' witness, Mr. Frank Emmett, testified that "courts are finding ways of circumventing the Limitation [of Ship Owners' Liability] Act" (Tr. 552, 553), he failed to point out with equal vigor that courts are similarly ignoring the separate corporate existence of entities such as the plaintiffs when to do so furthers the ends of justice. The principle is well established that a corporation which exercises actual control over another and operates the latter as a mere instrumentality or tool is liable for the torts and obligations of the corporation thus controlled. Steven v. Roscoe Turner Aeronautical Corp., 324 F.2d 157 (C.A. 7 Cir., 1963); Kimberly Coal Co. v. Douglas, 45 F.2d 25 (C.A. 6 Cir., 1930); Buie v. Chicago, R. I. & P. R. Co., 95 Tex. 51, 65 S.W. 27 (1901); Taylor v. Standard Gas & Electric Co., 96 F.2d 693 (C.A. 10, 1938), rev'd on other grounds, 306 U.S. 307, 59 S. Ct. 543, 83 L. Ed. 669 (1939). In Taylor v. Standard Gas & Electric Co., supra, the court noted (p. 704) that in determining if a subsidiary is a mere instrumentality of the parent, many factors are relevant; and some of the factors generally considered by courts are:
1. Common stock ownership.
2. Common directors or officers.
3. Financing of the subsidiary by the parent.
4. The incorporation of the subsidiary being caused by the parent.
5. Grossly inadequate capital for the subsidiary.
6. Payment by the parent of the salaries and other expenses or losses of the subsidiary.
7. The subsidiary receiving no business except that given to it by the parent.
8. The parent using the subsidiary's property as its own.
*427 9. The directors or officers of the subsidiary not acting independently in the interest of the subsidiary but taking their orders from the parent in the latter's interest.
When the operations of the plaintiffs are compared with the factors listed in the foregoing table, it becomes obvious that in any tort action, the plaintiffs were in greater danger of having their separate corporate existence ignored for the purposes of liability than in having a court find "ways of circumventing the Limitation [of Ship Owners' Liability] Act."
If the testimony of the plaintiffs' witnesses were taken at face value, it would appear that the major business concern of the Edwards group was the limitation of liability. Such testimony, however, loses much of its impact in light of the fact that Edwards Transportation Company, the largest operating unit of the Edwards group, has carried on business as a partnership since the mid-1930's. The next largest unit of the Edwards group was Barge Transport Company, which was organized in 1939, and which operated two tugboats, five barges, and one small boat without the necessity of separate corporations for each vessel. See paragraph 5 of the Court's memorandum opinion. C. W. Edwards' lack of concern about the limitation of liability is amply demonstrated by the Edwards Fleet's use of the partnership form of doing business with the barges and vessels owned by Barge Delta Joint Venture, Buffalo Bayou Transporation Company, Wilkins Barge Line, and Louisiana Transportation Company. It is also interesting to note that the largest and most valuable ship in the Edwards fleet, the pushboat "Letha C.," is operated by Sterling Barge Company, a partnership comprised of C. W. Edwards and his son, Keith.
In the Pepi, Inc. v. C. I. R. case the Second Circuit recently stated in 448 F.2d 141 at 144:
"In determining whether the principal purpose of an acquisition was the avoidance of tax liability, the factfinder must scrutinize all of the circumstances surrounding the transaction. I.R.C. Reg. § 1.269-3. Once the Commissioner had made the determination that the principal purpose of a transaction was tax avoidance, the taxpayer bears the burden of showing by a preponderance of the evidence that the Commissioner's determination was erroneous. J. T. Slocomb Co. v. Commissioner of Internal Revenue, 334 F.2d 269, 273-274 (2d Cir. 1964)."
The plaintiffs' argument that the use of separate corporations was a device for labor relations purposes is without merit.
This Court therefore makes the following additional Findings of Fact:
1. On June 13, 1969, the United States Court of Appeals for the Fifth Circuit entered a judgment which remanded the instant case "in part for further proceedings not inconsistent with the opinion of this Court."
2. On November 17, 1969, the Supreme Court of the United States denied plaintiffs' application for a writ of certiorari.
3. The findings of fact contained in the Memorandum Opinion of this Court filed August 30, 1967, are adopted, ratified, and incorporated herein as findings of fact of the Court upon remand.
4. Plaintiffs have failed to establish that the principal purpose motivating the separate incorporation of the various barges and vessels acquired by the Edwards fleet in 1955 and the years subsequent thereto was not the evasion or avoidance of federal income taxes by securing multiple surtax exemptions.
5. The preponderance of the evidence of record establishes that the principal purpose motivating the separate incorporation of the various barges and vessels acquired by the Edwards fleet in 1955 and the years subsequent thereto was the evasion or avoidance of federal income taxes by the securing of multiple surtax exemptions.
In Scroll, Inc. a Florida Corporation, v. Commissioner of Internal Revenue, the United States Court of Appeals, *428 Fifth Circuit, decided on August 13, 1971, 447 F.2d 612 at page 616, wherein Chief Judge Brown stated:
"Certainly we must recognize that as a matter of common sense and business acumen experienced corporate executives and their advisers may legitimately attempt to surround the proposed maneuver with factors which maximize at least one of the legitimate business purposes beyond the hope or expectation of the tax purpose. But equally as certain the key to this thorny problem of subjective intent does not lie in methodically characterizing all of the taxpayer's asserted non-tax motives as spurious. Whether legitimate business purposes did in fact induce the transaction, and if so to what extent, whether they were mere window dressing or afterthoughts, or whether the tax-saving purpose outranked any one of the credited business motives are all questions of fact upon which the taxpayer has the burden. American Pipe & Steel Corp. v. Commissioner of Internal Revenue, 9 Cir., 1957, 243 F.2d 125, cert. denied 355 U.S. 906, 78 S. Ct. 333, 2 L. Ed. 2d 261. Unless clearly erroneous, the finding of the Tax Court must stand. Commissioner of Internal Revenue v. Duberstein, 1960, 363 U.S. 278, 80 S. Ct. 1190, 4 L. Ed. 2d 1218; 26 U.S.C.A. § 7482."
The foregoing constitutes Findings of Fact and Conclusions of Law herein. Any Finding of Fact hereinabove made which also constitutes a Conclusion of Law is adopted as a Conclusion of Law. Any Conclusions of Law herein made which also constitutes a Finding of Fact is hereby adopted as a Finding of Fact.
APPENDIX
Internal Revenue Code of 1954 (26 U.S. C.):
SEC. 269. ACQUISITIONS MADE TO EVADE OR AVOID INCOME TAX.
(a) In General. If
(1) any person or persons acquire, or acquired on or after October 8, 1940, directly or indirectly, control of a corporation, or
(2) any corporation acquires, or acquired on or after October 8, 1940, directly or indirectly, property of another corporation, not controlled, directly or indirectly, immediately before such acquisition, by such acquiring corporation or its stockholders, the basis of which property, in the hands of the acquiring corporation, is determined by reference to the basis in the hands of the transferor corporation,
and the principal purpose for which such acquisition was made is evasion or avoidance of Federal income tax by securing the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, then . . . such deduction, credit, or other allowance shall not be allowed. For purposes of paragraphs (1) and (2), control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock of the corporation.
(b) Power of Secretary or his Delegate to Allow Deduction, etc., in Part. In any case to which subsection (a) applies, the Secretary or his delegate is authorized
(1) any person or persons acquire, it, or allowance any part of any amount disallowed by such subsection, if he determines that such allowance will not result in the evasion or avoidance of Federal income tax for which the acquisition was made; or
(2) to distribute, apportion, or allocate gross income, and distribute, apportion, or allocate the deductions, credits, or allowances the benefit of which was sought to be secured, between or among the corporations, or properties, or parts thereof, involved, and to allow such deductions, credits, or allowances so *429 distributed, apportioned, or allocated, but to give effect to such allowance only to such extent as he determines will not result in the evasion or avoidance of Federal income tax for which the acquisition was made; or
(3) to exercise his powers in part under paragraph (1) and in part under paragraph (2).
* * * * * *
NOTES
[*] Consolidated with No. CA. 63-H-75, Coastal Transportation Co. v. United States of America; No. CA. 63-H-76, The Christine Towing Co. v. United States of America; No. CA. 63-H-77, Riverside Transportation Co. v. United States of America; No. CA. 63-H-78, Murray Bay Transportation Co. v. United States of America; No. CA. 63-H-79, Dixon Bay Transportation Co. v. United States of America; No. CA. 63-H-80, Green Bay Transportation Co. v. United States of America; No. CA. 63-H-81, Erie Barge Co. v. United States of America; No. CA. 63-H-82, Ev Barge Co. v. United States of America; No. CA. 63-H-83, Gulf Storage Company, Inc. v. United States of America; No. CA. 63-H-84, Lavaca Barge Co. v. United States of America; No. CA. 63-H-85, Naptha Barge Co. v. United States of America; No. CA. 63-H-86, Navidad Barge Co. v. United States of America; No. CA. 63-H-87, Wolverine Barge Co. v. United States of America; No. CA. 63-H-88, Huron Barge Co. v. United States of America; No. CA. 63-H-89, Michigan Barge Co. v. United States of America; No. CA. 63-H-90, Superior Barge Co. v. United States of America; No. CA. 63-H-91, Ontario Barge Co. v. United States of America; No. CA. 63-H-92, St. Clair Barge Co. v. United States of America; No. CA. 63-H-93, Jack Barge Co. v. United States of America.
[1] The corporations involved in this issue are:
Name of Civil
Plaintiff Action No.
Bay Sound Transportation Co. 63-H-73
Coastal Transportation Co. 63-H-75
Christine Towing Co. 63-H-76
Riverside Transportation Co. 63-H-77
Murray Bay Transportation Co. 63-H-78
Dixon Bay Transportation Co. 63-H-79
Green Bay Transportation Co. 63-H-80
Erie Barge Co. 63-H-81
Ev Barge Co. 63-H-82
Gulf Storage Co., Inc. 63-H-83
Lavaca Barge Co. 63-H-84
Naptha Barge Co. 63-H-85
Navidad Barge Co. 63-H-86
Wolverine Barge Co. 63-H-87
Huron Barge Co. 63-H-88
Michigan Barge Co. 63-H-89
Superior Barge Co. 63-H-90
Ontario Barge Co. 63-H-91
St. Clair Barge Co. 63-H-92
Jack Barge Co. 63-H-93
|
135 Cal. Rptr. 2d 30 (2003)
30 Cal. 4th 894
69 P.3d 951
ROBERT L., Petitioner,
v.
The SUPERIOR COURT of Orange County, Respondent;
The People, Real Party in Interest.
No. S100359.
Supreme Court of California.
June 5, 2003.
As Modified on Denial of Rehearing August 20, 2003.[*]
*32 Carl C. Holmes, Public Defender, Deborah Kwast, Chief Deputy Public Defender, and Kevin J. Phillips, Assistant Public Defender, for Petitioner.
No appearance for Respondent.
Tony Rackauckas, District Attorney, and Brian N. Gurwitz, Deputy District Attorney, for Real Party in Interest.
*31 MORENO, J.
At the March 7, 2000 Primary Election, the California electorate passed Proposition 21, the Gang Violence and Juvenile Crime Prevention Act of 1998. Section 4 of Proposition 21 added Penal Code, section 186.22, subdivision (d) (section 186.22(d)),[1] which provides that "[a]ny person who is convicted of a public offense punishable as a felony or a misdemeanor," committed for the benefit of a criminal street gang, shall be punished by imprisonment in the county jail, or by imprisonment in the state prison for one, two, or three years. In this case, we decide two issues: (1) whether section 186.22(d) is a sentence enhancement, an alternate penalty provision, or a substantive offense; and (2) whether section 186.22(d) applies to all misdemeanors and all felonies or only to "wobblers"; namely, those public offenses that are punishable, in the alternative, as a misdemeanor or a felony.[2] The Court of Appeal concluded that section 186.22(d) was an alternate penalty provision that applied to all misdemeanors and all felonies. We agree and affirm the judgment of the Court of Appeal.
I. Factual and Procedural Background
The Orange County District Attorney's Office filed an amended petition against petitioner under Welfare and Institutions Code, section 602 alleging, in count one, a violation of section 186.22(d) as a substantive offense; in count two, a violation of section 186.22, subdivision (a), active participation in a criminal street gang; and in count three, a violation of section 242, misdemeanor battery. Petitioner demurred on the grounds that section 186.22(d) did not create a substantive offense and applied only to wobblers. The trial court overruled the demurrer and petitioner sought a writ of prohibition/mandate in the Court of Appeal. The Court of Appeal held that section 186.22(d) created a penalty provision that applied to any gang-related misdemeanor or felony. It ordered the trial court to sustain the demurrer as to count 1 of the amended petition, with leave to amend.
II. Discussion
Section 186.22(d) provides in full: "Any person who is convicted of a public offense punishable as a felony or a misdemeanor, which is committed for the benefit of, at the direction of or in association with, any criminal street gang with the specific intent to promote, further, or assist in any criminal conduct by gang members, shall be punished by imprisonment in the county jail not to exceed one year, or by imprisonment in the state prison for one, two, or three years, provided that any person sentenced to imprisonment in the county jail shall be imprisoned for a period not to exceed one year, but not less than 180 days, and shall not be eligible for *33 release upon completion of sentence, parole, or any other basis, until he or she has served 180 days. If the court grants probation or suspends the execution of sentence imposed upon the defendant, it shall require as a condition thereof that the defendant serve 180 days in a county jail."
A. Characterizing Section 186.22(d)
As a threshold matter, we must determine whether section 186.22(d) is a sentence enhancement, an alternate penalty provision, or a substantive offense. This distinction is of practical import because, as pointed out by the Court of Appeal, "By interpreting the statute as a penalty provision [as opposed to a substantive offense], prosecutors would be free to charge ... section 186.22(d) along with the predicate offense needed to satisfy that section without running afoul of the necessarily included offense rule."
By definition, a sentence enhancement is "an additional term of imprisonment added to the base term." (Cal. Rules of Court, rule 4.405(c); People v. Jefferson (1999) 21 Cal. 4th 86, 101, 86 Cal. Rptr. 2d 893, 980 P.2d 441 (Jefferson ).) Section 186.22(d) is not a sentence enhancement because it does not add an additional term of imprisonment to the base term; instead, it provides for an alternate sentence when it is proven that the underlying offense has been committed for the benefit of, or in association with, a criminal street gang. Neither is it a substantive offense because it does not define or set forth elements of a new crime. (See, e.g., People v. Bright (1996) 12 Cal. 4th 652, 661, 49 Cal. Rptr. 2d 732, 909 P.2d 1354 (Bright).)
Both petitioner and real party in interest acknowledge that section 186.22(d) is an alternate penalty provision. We agree. In Bright, supra, 12 Cal.4th at page 669, 49 Cal. Rptr. 2d 732, 909 P.2d 1354, we determined that the reference in section 664, subdivision (a)[3] to premeditated attempted murder "sets forth a penalty provision prescribing an increased sentence ... to be imposed upon defendant's conviction of attempted murder when the additional specified circumstances are found to be true by the trier of fact." (Fn.omitted.) We distinguished a penalty provision from an enhancement in this manner: "[A] penalty provision prescribes an added penalty to be imposed when the offense is committed under specified circumstances. A penalty provision is separate from the underlying offense and does not set forth elements of the offense or a greater degree of the offense charged. [Citations.]" (Bright, at p. 661, 49 Cal. Rptr. 2d 732, 909 P.2d 1354.) "[S]trictly speaking this portion of section 664 does not constitute an `enhancement' within the meaning of rule 405(c) of the California Rules of Court, which defines 'enhancement' as `an additional term of imprisonment added to the base term,' because this statutory provision establishes an increased base term for the crime of attempted murder upon a finding of specified circumstances." (Id. at p. 656, fn. 2, 49 Cal. Rptr. 2d 732, 909 P.2d 1354.)
In Jefferson, we interpreted former section 186.22, subdivision (b)(4) (now section 186.22, subdivision (b)(5))[4] as an alternate *34 penalty provision. Former subdivision (b)(4) provided for an alternate increased sentence in the form of a higher minimum eligible parole date, for certain felonies punishable by life that were committed for the benefit of a criminal street gang.[5] We stated: "Unlike an enhancement, which provides for an additional term of imprisonment, the 15-year minimum term in [former] section 186.22(b)(4) [now subdivision (b)(5) ] sets forth an alternate penalty for the underlying felony itself, when the jury has determined that the defendant has satisfied the conditions specified in the statute." (Jefferson, supra, 21 Cal.4th at p. 101, 86 Cal. Rptr. 2d 893, 980 P.2d 441.)[6]
Like the statutes in Bright and Jefferson, section 186.22(d) prescribes an alternate penalty when the underlying offense is committed under specified circumstances; here, for the benefit of, at the direction of, or in association with, a criminal street gang. We therefore hold that section 186.22(d) is an alternate penalty provision.
B. Section 186.22(d) Applies to Misdemeanors and Felonies
Petitioner argues that, because section 186.22(d) applies when a person is "convicted of a public offense punishable as a misdemeanor or felony," it is limited to wobblers, because wobblers are the only public offenses punishable as either a misdemeanor or felony. We disagree.
As noted, the electorate passed section 186.22(d) as part of Proposition 21. "In interpreting a voter initiative ..., we apply the same principles that govern statutory construction. (See Horwich v. Superior Court (1999) 21 Cal. 4th 272, 276 [87 Cal. Rptr. 2d 222, 980 P.2d 927] (Horwich).) Thus, [1] `we turn first to the language of the statute, giving the words their ordinary meaning.' (People v. Birkett (1999) *35 21 Cal. 4th 226, 231 [87 Cal. Rptr. 2d 205, 980 P.2d 912] (Birkett).) [2] The statutory language must also be construed in the context of the statute as a whole and the overall statutory scheme [in light of the electorate's intent]. (Horwich, supra, 21 Cal.4th at p. 276, [280, 87 Cal. Rptr. 2d 222, 980 P.2d 927].) [3] When the language is ambiguous, `we refer to other indicia of the voters' intent, particularly the analyses and arguments contained in the official ballot pamphlet.' (Birkett, supra, 21 Cal.4th at p. 243 [87 Cal. Rptr. 2d 205, 980 P.2d 912].)" (People v. Rizo (2000) 22 Cal. 4th 681, 685, 94 Cal. Rptr. 2d 375, 996 P.2d 27 (Rizo).)
In other words, our "task is simply to interpret and apply the initiative's language so as to effectuate the electorate's intent." (Hi-Voltage Wire Works, Inc. v. City of San Jose (2000) 24 Cal. 4th 537, 576, 101 Cal. Rptr. 2d 653, 12 P.3d 1068 (Hi-Voltage ) (cone. & dis. opn. of George, C.J.).)
1. Ordinary Meaning
Our first task is to give the section 186.22(d) phrase "a public offense punishable as a felony or a misdemeanor" its ordinary meaning as understood by the electorate. Section 15 defines "[a] crime or public offense [as] an act committed or omitted in violation of a law forbidding or commanding it...." Section 16 provides that crimes and public offenses include felonies, misdemeanors and infractions. By its plain language, therefore, section 186.22(d) applies to any crime or public offense that is a felony or a misdemeanor. Any crime or public offense that is an infraction is excluded.
But petitioner contends that section 186.22(d) "perfectly describes wobblers," because "[w]obblers are the only public offenses punishable as a misdemeanor or felony," and the voters, who are presumed to know this fact, therefore intended section 186.22(d) to be limited to wobblers. We disagree. Section 17, which classifies public offenses, provides, in subdivision (a), that "[a] felony is a crime which is punishable with death or by imprisonment in the state prison." Subdivision (b), the so-called wobbler section, states that "[w]hen a crime is punishable, in the discretion of the court, by imprisonment in the state prison or by fine or imprisonment in the county jail, it is a misdemeanor for all purposes under [five specified] circumstances." (§ 17, subd. (b).)[7]
Thus, section 186.22(d) does not, as petitioner alleges, "perfectly describe wobblers." Most glaringly, it lacks the "in the discretion of the court" language of section 17, subdivision (b). Nor does section 186.22(b) utilize the section 17, subdivision (b) statutory language "by imprisonment in the state prison or by fine or imprisonment in the county jail." Finally, section 186.22(d) does not state the circumstances under which such a crime will be considered *36 a misdemeanor. It is hard to imagine that the electorate intended to limit the scope of section 186.22(d) to offenses described in section 17, subdivision (b) when section 186.22(d) does not refer to section 17, subdivision (b), or even mirror the statutory language of section 17, subdivision (b).
This conclusion is buttressed when one considers that the term "wobbler" does not have a meaning defined by statute or commonly understood by the electorate. Specifically, the term "wobbler," as used here, does not appear in the Penal Code or in the Merriam-Webster Dictionary.[8] Instead, "wobbler" is a legal term of art of recent vintage, and its use is limited primarily to attorneys, judges, and law enforcement personnel who are familiar with criminal law. (See, e.g., People v. Municipal Court (Kong) (1981) 122 Cal. App. 3d 176, 179, 175 Cal. Rptr. 861, fn. 3 ["Wobblers" are "those offenses punishable either as felonies or misdemeanors, in the discretion of the court. In the jargon of the criminal law, [such] offenses are known as `wobblers.'" (Italics added.) ].) We are confident that the average voter, unschooled in the patois of criminal law, would have understood the plain language of section 186.22(d) to encompass all misdemeanors and all felonies.[9]
2. Statute Read as a Whole
In People v. Morris (1988) 46 Cal. 3d 1, 16, 249 Cal. Rptr. 119, 756 P.2d 843, we stated: "Statutory language should not be interpreted in isolation, but must be construed in the context of the entire statute of which it is a part, in order to achieve harmony among the parts." Applying that principle here, we look at section 186.22 as a whole. Proposition 21 repealed former section 186.22, subdivision (d), and reenacted the former subdivision's language as current subdivision (g). (See Ballot Pamp., Primary Elec. (Mar. 2000) text of Prop. 21, at pp. 119-120.) Section 186.22, subdivision (g), provides: "Notwithstanding any other law, the court may strike the additional punishment for the enhancements provided in this section or refuse to impose the minimum jail sentence for misdemeanors in an unusual case where the interests of justice would best be served if the court specifies on the record and enters into the minutes the circumstances indicating that the interests of justice would best be served by that disposition." (Italics added.)
It is clear that the phrase "minimum jail sentence for misdemeanors," as used in section 186.22, subdivision (g), refers to the section 186.22(d) penalty provision, because the term "misdemeanor" appears nowhere else in section 186.22. Subdivision (g)'s use of the unadorned term "misdemeanors," therefore, strongly indicates *37 that the enhancement to which it refers applies to all misdemeanors and is not limited to "wobblers." Certainly, had the electorate intended that section 186.22(d) be limited to "wobblers," subdivision (g) would have stated, for example, that the "court may ... refuse to impose the minimum jail sentence for [public offenses deemed to be] misdemeanors [under Penal Code section 17, subdivision (b) ] in an unusual case where the interests of justice would best be served...." It does not.[10] Thus, when section 186.22, subdivisions (d) and (g) are harmonized, and Proposition 21 is read as a whole, one is led to the necessary conclusion that section 186.22(d) applies to all misdemeanors and all felonies.
3. Ambiguity
Even assuming the phrase "public offense punishable as a felony or misdemeanor" is susceptible of two interpretations and was therefore ambiguous to the voters, Rizo teaches that where a statute is ambiguous, "`we refer to other indicia of the voters' intent, particularly the analyses and arguments contained in the ... ballot pamphlet.'" (Rizo, supra, 22 Cal.4th at p. 685, 94 Cal. Rptr. 2d 375, 996 P.2d 27, quoting Birkett, supra, 21 Cal.4th at p. 243, 87 Cal. Rptr. 2d 205, 980 P.2d 912.)
But the Court of Appeal, in its discussion of section 186.22(d), citing Hi-Voltage, supra, 24 Cal. 4th 537, 101 Cal. Rptr. 2d 653, 12 P.3d 1068, for support, analyzed previous failed legislative efforts to amend section 186.22(d), and concluded that the intent of the Proposition 21 drafters, and thus the voters, was for section 186.22(d) to apply to all misdemeanors. While its conclusion may have been correct,[11] the Court of Appeal goes too far.
This court has made it clear that the "motive or purpose of the drafters of a statute is not relevant to its construction, absent reason to conclude that the body which adopted the statute was aware of that purpose and believed the language of the proposal would accomplish it. [Citations.] The opinion of drafters or legislators who sponsor an initiative is not relevant since such opinion does not represent the intent of the electorate and we cannot say with assurance that the voters were aware of the drafters' intent. [Citations.]" (Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Comm. (1990) 51 Cal. 3d 744, 764-765, fn. 10, 274 Cal. Rptr. 787, 799 P.2d 1220.)
In Hi-Voltage, while we did state that "we can discern and thereby effectuate the voters' intention only by interpreting [the initiative's] language in its historical context" (Hi-Voltage, supra, 24 Cal.4th at p. 542, 101 Cal. Rptr. 2d 653, 12 P.3d 1068), we sought only to place our debate about Proposition 209 [12] in its "relevant analytical *38 context" (Hi-Voltage, at p. 544, 101 Cal. Rptr. 2d 653, 12 P.3d 1068). We therefore looked back on 150 years of "the appropriate role of government concerning questions of race." (Ibid.) But we were careful to point out that "we may `test our construction against those extrinsic aids that bear on the enactors' intent' [citation], in particular the ballot materials accompanying Proposition 209 that place the initiative in historical context. [Citations.]" (Id. at p. 560, 101 Cal. Rptr. 2d 653, 12 P.3d 1068.)
Thus, our court has never strayed from our pronouncement in Horwich, supra, 21 Cal. 4th 272, 87 Cal. Rptr. 2d 222, 980 P.2d 927, that "legislative antecedents" "not directly presented to the voters ... are not relevant to our inquiry." (Id. at p. 277, fn. 4, 87 Cal. Rptr. 2d 222, 980 P.2d 927.) Accordingly, in Horwich, we "[c]onsider[ed] the electorate's intended goal as reflected in the language of the [statute] and in the ballot arguments...." (Id. at p. 277, 87 Cal. Rptr. 2d 222, 980 P.2d 927.) Similarly, in Delaney v. Superior Court (1990) 50 Cal. 3d 785, 801, 268 Cal. Rptr. 753, 789 P.2d 934, we stated, "[Legislative] history would not provide us with any guidance as to the voters' subsequent intent because none of the indicia of the Legislature's possible intent (committee analyses and digest and letters from the statute's author) were before the voters." Thus, to the extent the Court of Appeal, in ascertaining the voters' intent, relied on evidence of the drafters' intent that was not presented to the voters, we decline to follow it.[13] Instead, we look to the materials that were before the voters.
a. Findings and declarations
Proposition 21 was enacted to combat gang crime. In the "FINDINGS AND DECLARATIONS" section of the proposition, "[t]he people [found] and declare[d]" that "Criminal street gangs have become more violent, bolder, and better organized in recent years. Some gangs, like the Los Angeles-based 18th Street Gang and the Mexican Mafia are properly analyzed as organized crime groups, rather than mere street gangs. A 1996 series in the Los Angeles Times chronicled the serious negative impact the 18th Street Gang has on neighborhoods where it is active." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) text of Prop. 21, § 2, subd. (b), p. 119.)
"Vigorous enforcement and the adoption of more meaningful criminal sanctions, including the voter-approved `Three Strikes' law, Proposition 184, has resulted in substantial and consistent four year decline in overall crime. Violent juvenile crime has proven most resistant to this positive trend." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) text of Prop. 21, § 2, subd. (c), p. 119.)
"Gang-related crimes pose a unique threat to the public because of gang members' organization and solidarity. Gangrelated felonies should result in severe penalties. Life without the possibility of parole or death should be available to murderers who kill as part of any gang-related activity." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) text of Prop. 21, § 2, subd. (h), p. 119.)
*39 "Dramatic changes are needed in the way we treat juvenile criminals [and] criminal street gangs ... if we are to avoid the predicted, unprecedented surge in juvenile and gang violence. Californians deserve to live without fear of violent crime and to enjoy safe neighborhoods, parks, and schools. This act addresses each of these issues with the goal of creating a safer California, for ourselves and our children in the Twenty-First Century." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) text of Prop. 21, § 2, subd. (k), p. 119.)
b. Ballot materials
Proposition 21 sought to tackle, in "dramatic" fashion, the onerous problem of gang violence and gang crime. Viewed in this context, imposing felony punishment for gang-related misdemeanors is consistent with the spirit and intent of the Act. Indeed, Proposition 21 proponents urged that "Proposition 21 ends the `slap on the wrist' of current law by imposing real consequences for GANG MEMBERS, RAPISTS AND MURDERERS who cannot be reached through prevention or education." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) argument in favor of Prop. 21, p. 48.)
The legislative analysis of Proposition 21 contained a summary chart of the gang provisions, and stated that the act "[increases penalties for gang-related crimes and requires gang members to register with local law enforcement agencies." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) analysis of Prop. 21 by Legis. Analyst, summary chart, p. 47.) As with ballot pamphlet arguments, a reviewing court may look to a ballot's legislative analysis to determine voter intent. (See, e.g., Legislature v. Eu (1991) 54 Cal. 3d 492, 504, 286 Cal. Rptr. 283, 816 P.2d 1309 (Eu).)
Finally, as a reviewing court is directed to look at the arguments contained in the official ballot pamphlet to ascertain voter intent, it is well settled that such an analysis necessarily includes the arguments advanced by both the proponents and opponents of the initiative. (Eu, supra, 54 [email protected]. 504-505, 286 Cal. Rptr. 283, 816 P.2d 1309.) Here, the opponent's rebuttal to the argument in favor of Proposition 21 specifically made the voters aware that Proposition 21 would enhance the punishment of gang-related misdemeanors: "Proposition 21 is NOT LIMITED TO VIOLENT CRIME. It turns low-level vandalism into a felony. It requires gang offenders with misdemeanors (like stealing candy) to serve six months in jail. SHERIFF Mike Hennessey (S.F.) says, `I support tough laws against gangs and crime, but Proposition 21 is the WRONG APPROACH.'" (Ballot Pamp., Primary Elec. (Mar. 7, 2000) rebuttal to argument in favor of Prop. 21, p. 48, italics added.)[14]
Fairly read, opponents warned that the passage of Proposition 21, section 186.22(d) would turn vandalism under $400 (a misdemeanor) into a felony, and would make gang-related misdemeanor petty theft subject to a minimum six-month sentence.[15] But the voters passed the initiative despite these warnings. Thus, the ballot materials *40 clearly show that the voters intended to dramatically increase the punishment for all gang-related crime,[16] and specifically contemplated that all misdemeanors would be included within the ambit of section 186.22(d).[17]
Indeed, the electorate's intent to punish all gang crime more severely would be undermined if section 186.22(d) applied only to wobblers, and not to all misdemeanors, because section 186.22(d) provides for lower punishment than many, if not all, wobbler crimes that are charged as felonies.[18]
For example, where the wobbler is assault with a deadly weapon other than a firearm (§ 245, subd. (a)(1)), and the crime is charged as a felony, section 245, subdivision (a)(1) provides a sentence of two, three, or four years in state prison. In addition, if such assault was committed for the benefit of a gang, the prosecutor could also charge the section 186.22, subdivision (b)(1) enhancement in order to add a minimum of two, three, or four years to that sentence, and as much as five or 10 years in prison.[19] Yet, were this same gang-related assault charged under section *41 186.22(d), which operates to the exclusion of section 186.22, subdivision (b)(1),[20] the defendant's maximum sentence would be three years. Thus, if section 186.22(d) were limited to wobblers, the statute's only effect would be to reduce the punishment for gang-related crime. But the electorate clearly did not intend this result. Instead, the electorate intended that section 186.22(d) increase the punishment for gang-related misdemeanors.[21]
4. Absurd Results
Petitioner contends that application of section 186.22(d) to all misdemeanors and all felonies, instead of wobblers only, would lead to absurd results because it would allow prosecutors to charge a gang-related murder, mayhem, or rape under the "all felonies" rubric of section 186.22(d). Such a result, petitioner contends, would be contrary to the intent of the voters, because they wanted gang crime to be punished more severely, not more leniently.
This argument is without merit. In People v. Garcia (1999) 21 Cal. 4th 1, 14, 87 Cal. Rptr. 2d 114, 980 P.2d 829, in interpreting a section of the "Three Strikes" initiative, we stated that "For purposes of interpreting these statutes ... it matters not whether the drafters, voters or legislators consciously considered all the effects and interrelationships of the provisions they wrote and enacted. We must take the language ... as it was passed into law, and must, ... without doing violence to the language and spirit of the law, interpret it so as to harmonize and give effect to all its provisions." (Fn. omitted.)
While it is possible that a prosecutor might file a murder, mayhem or rape charge exclusively under section 186.22(d), this is an unintended consequence that would rarely, if ever, occur. (See, e.g., In re Executive Life Ins. Co. (1995) 32 Cal. App. 4th 344, 373, 38 Cal. Rptr. 2d 453 [while the failure to consider a statute's consequences may be unwise, a "court may not [freely] substitute its personally perceived wisdom" "because the field of unintended consequences approaches the infinite"].) Nothing in Proposition 21 requires that the prosecution make such a choice and, to the contrary, section 37 of Proposition 21 provides that "[i]t is the intent of the people of the State of California in enacting this measure that if any provision in this act conflicts with another section of *42 law which provides for a greater penalty or longer period of imprisonment that the latter provision shall apply ...." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) text of Prop. 21, § 37, p. 131, italics added.) As stated by the Court of Appeal, "[w]e presume prosecutors will exercise their charging discretion in a manner that is consistent with the will of the electorate and the goal of achieving substantial justice."
III. Conclusion
In Hodges v. Superior Court (1999) 21 Cal. 4th 109, 114, 86 Cal. Rptr. 2d 884, 980 P.2d 433, we stated that "[i]n the case of a voters' initiative statute ... we may not properly interpret the measure in a way that the electorate did not contemplate: the voters should get what they enacted, not more and not less." Section 186.22(d) enables prosecutors to more severely punish gang-related misdemeanors. This is the very result the voters intended when passing Proposition 21, not more and not less.
The judgment of the Court of Appeal is affirmed.
WE CONCUR: GEORGE, C.J., BAXTER, WERDEGAR, CHIN, and BROWN, JJ.
Dissenting Opinion by KENNARD, J.
Subdivision (d) of Penal Code section 186.22[1] provides that any person "convicted of a public offense punishable as a felony or a misdemeanor," which was committed to benefit a criminal street gang, may be sentenced to prison, and must serve at least six months in county jail. Does this provision apply to all felonies and all misdemeanors, or only to "wobblers," a class of offenses that may be prosecuted as either felonies or misdemeanors? According to the majority, it applies to all felonies and misdemeanors. I disagree.
I
Section 186.22, enacted in 1989 and operative in 1993, is part of the California Street Terrorism Enforcement and Prevention Act of 1988. Some of its complex provisions have in recent years been addressed by this court. (See People v. Sengpadychith (2001) 26 Cal. 4th 316, 109 Cal. Rptr. 2d 851, 27 P.3d 739; People v. Robles (2000) 23 Cal. 4th 1106, 99 Cal. Rptr. 2d 120, 5 P.3d 176; People v. Castenada (2000) 23 Cal. 4th 743, 97 Cal. Rptr. 2d 906, 3 P.3d 278; People v. Zermeno (1999) 21 Cal. 4th 927, 89 Cal. Rptr. 2d 863, 986 P.2d 196; People v. Loeun (1997) 17 Cal. 4th 1, 69 Cal. Rptr. 2d 776, 947 P.2d 1313; People v. Gardeley (1996) 14 Cal. 4th 605, 59 Cal. Rptr. 2d 356, 927 P.2d 713.) In general, the act imposes increased penalties when crimes are committed to benefit a criminal street gang.
In 2000, California voters passed Proposition 21, an initiative that made many changes to laws pertaining to minors accused of crimes. Among other things, Proposition 21 amended section 186.22 by adding subdivision (d) (section 186.22(d)), which is at issue here.
Section 186.22(d) provides: "Any person who is convicted of a public offense punishable as a felony or a misdemeanor, which is committed for the benefit of, at the direction of or in association with, any criminal street gang with the specific intent to promote, further, or assist in any criminal conduct by gang members, shall be punished by imprisonment in the county jail not to exceed one year, or by imprisonment in the state prison for one, *43 two, or three years, provided that any person sentenced to imprisonment in the county jail shall be imprisoned for a period not to exceed one year, but not less than 180 days, and shall not be eligible for release upon completion of sentence, parole, or any other basis, until he or she has served 180 days. If the court grants probation or suspends the execution of sentence imposed upon the defendant, it shall require as a condition thereof that the defendant serve 180 days in a county jail." (Italics added.)
At issue is the meaning of the phrase "convicted of a public offense punishable as a felony or a misdemeanor." (§ 186.22(d).) The majority holds that it refers to all misdemeanors and felonies, rejecting petitioner's contention that it refers only to wobblers. As I shall explain, the majority's reasoning is unpersuasive.
II
"In interpreting a voter initiative ..., we apply the same principles that govern statutory construction. [Citation.] Thus, 'we turn first to the language of the statute, giving the words their ordinary meaning.' [Citation.] The statutory language must also be construed in the context of the statute as a whole and the overall statutory scheme. [Citation.] When the language is ambiguous, `we refer to other indicia of the voters' intent, particularly the analyses and arguments contained in the official ballot pamphlet.'" (People v. Rizo (2000) 22 Cal. 4th 681, 685, 94 Cal. Rptr. 2d 375, 996 P.2d 27.)
Here, section 186.22(d)'s phrase "convicted of a public offense punishable as a felony or a misdemeanor" is ambiguous: It can be read either as applying only to wobblers or as referring to all misdemeanors and all felonies. But when section 186.22(d) is read together with subdivision (b)(1) of section 186.22 (section 186.22(b)(1)), it becomes apparent that section 186.22(d) can only apply to wobblers.
Under the majority's interpretation of section 186.22(d), a defendant who is convicted of a felony and is found to have committed the crime to benefit a criminal street gang will be sentenced to a prison term of one year, two years, or three years. But (except for a couple of rarely used exceptions) the prison term for even the most minor felonies is 16 months, two years, or three years, a sentence greater than (for the lower term) or equal to (for the middle and upper terms), the sentence specified in section 186.22(d). Most serious felonies, of course, carry even greater sentences. Moreover, Proposition 21 also amended section 186.22(b)(1) to provide, in words identical to those of section 186.22(d), that any person who commits a felony to benefit a criminal street gang must be punished by an added penalty of two, three, or four years in prison, a penalty greater than the sentence described in section 186.22(d).[2] Thus, if the majority is right that in the phrase "convicted of a public offense punishable as a felony or a misdemeanor," the words "a felony" refer to all felonies, then those two words are meaningless: No prosecutor will allege a violation of section 186.22(d) in any felony case, because it provides for felony *44 sentences lower than those prescribed elsewhere in the Penal Code, including those required in another part of the same law.
The words "a felony" are not the only ones that are made meaningless by construing section 186.22(d), as the majority does, as applying to all felonies and misdemeanors. That provision pertains to persons "convicted of a public offense punishable as a felony or a misdemeanor." (Italics added.) Under the construction given by the majoritythat the phrase refers to all felonies and misdemeanorsthe drafters of Proposition 21 could have simply omitted the italicized words without affecting the meaning given by the majority.
The majority's interpretation violates a basic tenet of statutory construction that whenever possible, significance must be given to every word in ascertaining legislative intent, avoiding any construction that renders some words surplusage. (Agnew v. State Bd. of Equalization (1999) 21 Cal. 4th 310, 330, 87 Cal. Rptr. 2d 423, 981 P.2d 52; see also Cooley v. Superior Court (2002) 29 Cal. 4th 228, 249, 127 Cal. Rptr. 2d 177, 57 P.3d 654; Navellier v. Sletten (2002) 29 Cal. 4th 82, 95, 124 Cal. Rptr. 2d 530, 52 P.3d 703.) By contrast, to construe section 186.22(d) as applying only to wobblers, as I would, gives meaning to all the statutory language. That provision's phrase "a public offense punishable as a felony or a misdemeanor" is a simplified version of language used elsewhere in the Penal Code to describe a wobbler. (See § 17, subd. (b) ["a crime ... punishable, in the discretion of the court, by imprisonment in the state prison or by fine or imprisonment in the county jail...."].)
According to the majority, "[b]y its plain language ... section 186.22(d) applies to any crime or public offense that is a felony or a misdemeanor." (Maj. opn., ante, 135 Cal.Rptr.2d at p. 35, 69 [email protected]. 955-956.) The statutory language, read in a commonsense manner, refers to wobblers because, as explained above, that is the only construction that gives meaning to all the statutory language. The majority offers no explanation for its claim that, looking only at the words themselves, section 186.22(d) refers to all felonies and misdemeanors.
The majority maintains that if section 186.22(d) was intended to apply only to wobblers, it would have contained specific language expressly saying so, such as a reference to section 17 (which describes a wobbler), or words that mirrored section 17's description of a wobbler. (Maj. opn., ante, at pp. 35-36, 69 [email protected]. 955-957.) One can just as easily argue that if section 186.22(d) was intended to apply to all felonies and misdemeanors, it would have contained specific language saying so. When, as here, a statute is ambiguous, one can always assert that the drafters could have avoided the ambiguity by adding unambiguous language.
The majority claims its holding "is buttressed when one considers that the term `wobbler' does not have a meaning defined by statute or commonly understood by the electorate." (Maj. opn., ante, at pp. 35-36, 69 [email protected]. 955-957.) That assertion is puzzling. The word "wobbler" does not appear in section 186.22(d) and its meaning is thus not in issue. True, "wobbler" is not statutorily defined and is not used in common parlance, but so what? Section 186.22(b) contains no reference to wobblers. But it does contain the phrase "a public offense punishable as a felony or a misdemeanor," which is, as noted earlier, language accurately describing a wobbler.
The majority cites the arguments and analyses in the ballot pamphlet presented to the voters to support its conclusion that section 186.22(d) applies to all felonies and misdemeanors, not just wobblers. (Maj. *45 opn., ante, at pp. 37-41, 69 [email protected]. 957-961.) First, the majority notes that the Legislative Analysis of Proposition 21 said that the proposition "`[i]ncreases penalties for gang-related crimes and requires gang members to register with local law enforcement agencies.'" (Maj. opn., ante, at p. 39, 69 [email protected]. 958-959.) There is no dispute that one of the purposes of Proposition 21 was to impose stiffer penalties on gang-related crimes. But that point is irrelevant to the issue whether section 186.22(d) applies to all felonies and misdemeanors or only to wobblers.
Next, the majority points out that the opponents of Proposition 21 said that it "`turns low-level vandalism into a felony'" and "`requires gang offenders with misdemeanors (like stealing candy) to serve six months in jail.'" (Maj. opn., ante, at p. 39, 69 [email protected]. 958-959, italics omitted.) According to the majority, the vandalism argument is "fairly read" (id. at pp. 39-0, 69 [email protected]. 958-960) as warning that Proposition 21 would turn relatively minor crimes, such as gang-related vandalism causing damage of less than $400, into felonies, and the candy example warned the voters that such a minor crime would trigger the harsh penalty of a six-month sentence for gang-related petty theft. Thus, the majority reasons, the voters were on notice that section 186.22(d) would apply to all misdemeanors and felonies, and that they must therefore have intended this result in passing Proposition 21.
Once again, the majority seizes on arguments that have nothing to do with the issue before us. The opponents' statement that Proposition 21 "turns low-level vandalism into a felony" refers not to section 186.22(d), but to Proposition 21's proposed change in the vandalism law. Before Proposition 21, vandalism (§ 594) was a misdemeanor unless the value of the damage exceeded five thousand dollars. (Stats.1999, ch. 83, § 144.) Proposition 21 amended section 594 to permit felony prosecution for vandalism when the damage exceeds four hundred dollars. It is this change in the vandalism law that the opponents were addressing when they told the voters that Proposition 21 "turns low-level vandalism into a felony." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) rebuttal to argument in favor of Prop. 21, p. 48.)
With respect to the opponents' candy argument, the majority is wrong when it reads the opponents' argument as implicitly saying that section 186.22(d) applies to all misdemeanors. Even if applicable only to wobblers, the provision would nonetheless apply to a theft of candy if the offender had a prior conviction for shoplifting (§ 666), if the offender was convicted of second degree burglary (§§ 459, 461), or in the unlikely event that the value of the candy exceeded $400 (§§ 487, subd. (a), 489, subd. (b)).
The majority conveniently overlooks the argument by the proponents of Proposition 21 that the proposition "doesn't lock up kids for minor offenses." (Ballot Pamp., Primary Elec. (Mar. 7, 2000) rebuttal to argument against Prop. 21, p. 49.) Contrary to that claim, the majority construes section 186.22(d) as mandating a minimum sentence of six months in jail and a maximum of three years in prison for all gang-related misdemeanors, no matter how insignificant. For example, a defendant convicted of driving with an expired license (Veh.Code, § 12500) will, under the majority's interpretation, have to serve at least six months in jail and could receive up to three years in prison if passengers in the car are members of a criminal street gang and the jury finds that the defendant drove the car for their benefit. The voters, when they enacted Proposition 21, were assured by the proponents that the *46 initiative would not impose such draconian penalties.
Construed as applying only to wobblers, section 186.22(d) has a plausible purpose: To limit the power of trial courts to impose light sentences on defendants who commit gang-related wobblers. When a defendant is convicted of a wobbler charged as a felony with a gang enhancement under subdivision (b) of section 186.22, a trial court wishing to show leniency may reduce the wobbler to a misdemeanor and impose a short jail sentence. (See People v. Superior Court (Alvarez) (1997) 14 Cal. 4th 968, 60 Cal. Rptr. 2d 93, 928 P.2d 1171 [when defendant convicted of a wobbler charged as a felony, trial court may avoid the three strikes penalty provision by reducing the crime to a misdemeanor].) Section 186.22(d) limits the trial court's power to exercise leniency in the fashion described above: If the court elects to treat the crime as a misdemeanor, section 186.22(d) requires it to sentence the defendant to a minimum of six months in county jail. In my view, it was to achieve this purpose that the voters amended section 186.22 to add subdivision (d).
CONCLUSION
The majority asserts that the only purpose of section 186.22(d) is to "enable[ ] prosecutors to more severely punish gang-related misdemeanors." (Maj. opn., ante, 135 Cal.Rptr.2d at p. 36, 69 [email protected]. 956-957, italics added.) This cannot be true. If the voters' sole purpose was to punish gang-related misdemeanants more severely, why did they enact a law that, by its terms, applies to those convicted of crimes punishable "as a felony or a misdemeanor?" (Italics added.) The majority does not, and cannot, answer this question. The only construction of section 186.22(d) that gives meaning to all the statutory language is to read it as applying only to wobblers, as I propose to do. I would therefore reverse the judgment of the Court of Appeal, which held that petitioner could be prosecuted under section 186.22(d) based on his commission of a misdemeanor.
NOTES
[*] Kennard, J., dissented.
[1] All statutory references are to the Penal Code unless otherwise noted.
[2] The etymology of the term "wobbler" in California law is discussed post.
[3] Section 664, subdivision (a) provides: "If the crime attempted is punishable by imprisonment in the state prison, the person guilty of the attempt shall be punished . .. for one-half the term of imprisonment prescribed upon a conviction of the offense attempted. However, if the crime attempted is willful, deliberate, and premeditated murder, as defined by Section 189, the person guilty of that attempt shall be punished in the state prison for life with the possibility of parole."
[4] Former section 186.22, subdivision (b)(4) was renumbered as subdivision (b)(5) by the passage of Proposition 21 in March 2000. (Pen.Code § 186.22, subd. (b)(5), as amended by Prop. 21, § 4.) It provides: "Except as provided in paragraph (4), any person who violates this subdivision in the commission of a felony punishable by imprisonment in the state prison for life, shall not be paroled until a minimum of 15 calendar years have been served." (Ibid., italicized language added by Prop. 21.)
[5] For example, premeditated attempted murder is punishable by an indeterminate term of life in prison with the possibility of parole. (§ 664, subd. (a).) Section 3046, subdivision (a)(1) provides that "No prisoner imprisoned under a life sentence may be paroled until he or she has served ... [¶] ... [a] term of at least seven calendar years." Thus, under section 186.22, former subdivision (b)(4) (now subdivision (b)(5)), where it is proven that a premeditated attempted murder was committed for the benefit of a gang, the minimum eligible parole date is at least 15 calendar years, which effectively more than doubles the prisoner's actual confinement time.
[6] Current section 186.22, subdivision (b)(4), which provides a term of life in prison for "[a]ny person who is convicted of a felony enumerated in this paragraph committed for the benefit of, at the direction of, or in association with any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members" also is an alternate penalty provision because it, too, "sets forth an alternate penalty for the underlying felony itself, when the jury has determined that the defendant has satisfied the conditions specified in the statute." (Jefferson, supra, 21 Cal.4th at p. 101, 86 Cal. Rptr. 2d 893, 980 P.2d 441.) In People v. Sengpadychith (2001) 26 Cal. 4th 316, 327, 109 Cal. Rptr. 2d 851, 27 P.3d 739, we referred to current section 186.22, subdivision (b)(4) as a "criminal street gang enhancement [that] increases the punishment for the offense." But the issue in that case was not whether this provision was a sentence enhancement rather than an alternate penalty provision, and "[l]anguage used in any opinion is of course to be understood in the light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered." (Ginns v. Savage (1964) 61 Cal. 2d 520, 524, fn. 2, 39 Cal. Rptr. 377, 393 P.2d 689.)
[7] The five specified circumstances in which a wobbler will be treated like a misdemeanor are: (1) when the court imposes a judgment of punishment other than imprisonment in the state prison (§ 17, subd. (b)(1)); (2) when the court, upon committing the defendant to the Youth Authority, designates the offense to be a misdemeanor (§ 17, subd. (b)(2)); (3) when at the time the court grants probation, it does not impose a sentence, or, upon application of the defendant, the court declares the offense a misdemeanor (§ 17, subd. (b)(3)); (4) when the prosecutor designates the offense a misdemeanor (§ 17, subd. (b)(4)); and (5) when the court, at or before the preliminary hearing, determines that the offense is a misdemeanor (§ 17, subd. (b)(5)). A wobbler is deemed a felony unless charged as a misdemeanor by the People or reduced to a misdemeanor by the sentencing court under section 17, subdivision (b). (People v. Statum (2002) 28 Cal. 4th 682, 685, 122 Cal. Rptr. 2d 572, 50 P.3d 355.)
[8] See, e.g., Merriam-Webster's Collegiate Dictionary (10th ed.1995).
[9] It appears that the term "wobbler" is not used outside of our state. The term "wobbler" first appeared in California law in People v. Herron (1976) 62 Cal. App. 3d 643, 647, footnote 3, 133 Cal. Rptr. 287, where the court stated, "a `wobbler' [is] a crime in which the sentence determines whether it be a misdemeanor or felony." It was employed once in 1977 (People v. Sandoval (1977) 70 Cal. App. 3d 73, 90, 138 Cal. Rptr. 609), and once in 1978 (People v. Hawkins (1978) 85 Cal. App. 3d 960, 967, 149 Cal. Rptr. 855). In People v. Kunkel (1985) 176 Cal. App. 3d 46, 51, footnote 3, 221 Cal. Rptr. 359, the court supplied this explanation for the term "wobbler": "An offense which is punishable either by imprisonment in the state prison or by incarceration in the county jail is said to `wobble' between the two punishments and hence is frequently called a `wobbler' offense." We first utilized the term "wobbler" in 1984, in People v. Holt (1984) 37 Cal. 3d 436, 452, 208 Cal. Rptr. 547, 690 P.2d 1207. And the United States Supreme Court first acknowledged the term "wobbler" in Ewing v. California (2003) 538 U.S. 11 [123 S. Ct. 1179, 1183]: "Under California law, certain offenses may be classified as either felonies or misdemeanors. These crimes are known as `wobblers.'"
[10] Proposition 21 also added section 186.30, subdivision (b)(3), a registration requirement for gang members convicted of [a]ny crime that the court finds is gang related at the time of sentencing or disposition." (Italics added.) This subdivision, like section 186.22, subdivision (g), is not qualified in any manner.
[11] The Court of Appeal pointed out that the Senate record showed that proposed section 186.22(d) was designed to "apply to gang members who commit misdemeanors as well as felonies." (Sen. Subcom. on Juvenile Justice, Rep. on Sen. Bill No. 1455 (1997-1998 Reg. Sess.) for Apr. 20, 1998 hearing, p. 15.) And an analysis conducted by the Assembly Committee on Public Safety stated section 186.22(d) was intended to make any gang-related misdemeanor or felony punishable by up to three years in prison. (Assem. Com. on Public Safety, Analysis of Assem. Bill No. 1735 (1997-1998 Reg. Sess.) p. 2.) Indeed, the committee specifically stated the proposed change "would allow a person who commits a misdemeanor for the benefit of a criminal street gang to be sent to state prison." (Ibid.)
[12] Proposition 209 (enacted as Cal. Const., art. I, § 31) provides: "The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting."
[13] Real party in interest requests that we take judicial notice of the prior, failed efforts in the Legislature to pass section 186.22(d). Petitioner formally opposes this request. In Horwich, supra, 21 Cal.4th at page 277, footnote 4, 87 Cal. Rptr. 2d 222, 980 P.2d 927, we took judicial notice of legislative antecedents to Proposition 213 despite the fact we found them irrelevant to the electorate's intent. Following the same logic, the request for judicial notice is hereby granted.
[14] Proposition 21 amended section 594 (vandalism), and made it a wobbler where "the amount of defacement, damage or destruction of property is four hundred dollars or more." (§ 594, subd. (b)(1).) Under new section 594, subdivision (b)(2)(A), as amended by Proposition 21, vandalism with damage under $400 is a misdemeanor, punishable by fine or up to one year in county jail. Prior to Proposition 21, vandalism was punishable as a wobbler if the amount of damage was $5,000 or more. (Former § 594, subd. (b)(2).) The vandalism amendments of Proposition 21 became effective, pursuant to section 594, subdivision (g), on January 1, 2002.
[15] The dissent argues that the ballot language "Proposition 21 `turns low-level vandalism into a felony' refers not to section 186.22(d), but to Proposition 21's proposed change in the vandalism law." (Dis. opn., post, 135 Cal.Rptr.2d at p. 45, 69 [email protected]. 963-964.) We disagree. While the dissent interprets "low-level vandalism" to refer only to vandalism that causes $400 or more in damages under the vandalism law, we believe that the phrase "low-level vandalism" refers to the fact that prosecutors can utilize section 186.22(d) to combat gang graffiti without regard to the cost of its cleanup, which is often less than $400.
[16] The dissent claims that we "conveniently overlook[] the argument by the proponents of Proposition 21 that the proposition `doesn't lock up kids for minor offenses.'" (Dis. opn., post, at pp. 45-46, 69 [email protected]. 963-965.) We disagree. There is nothing "minor" about many misdemeanor crimes committed for the benefit of a gang, such as: (1) gang graffiti, which is often a prelude to gang violence; (2) possession of a concealed firearm; (3) brandishing a firearm; or (4) battery on a nongang [email protected]. It was the intent of the voters that section. 186.22(d) enable prosecutors to punish such gang-related crimes as felonies.
[17] Real party in interest suggests that, under Proposition 21, gang-related misdemeanors now constitute serious felonies by virtue of the fact that Proposition 21 also added section 1192.7, subdivision (c)(28), which makes a serious felony "any felony offense, which would also constitute a violation of Section 186.22." Whether a misdemeanor offense punishable as a felony under section 186.22(d), constitutes a serious felony is not before us, and we express no opinion on the matter.
[18] In People v. Arroyas (2002) 96 Cal. App. 4th 1439, 1448-1449, 118 Cal. Rptr. 2d 380, the Court of Appeal held that a "misdemeanor, converted to a felony by [section 186.22,] subdivision (d) [is not also] subject to the felony enhancement provided in [section 186.22,] subdivision (b)(1)." It necessarily follows that where the crime is a wobbler, the prosecutor must elect whether to prosecute the offense under section 186.22(d) (and thus not have the option of charging the section 186.22, subdivision (b)(1) enhancement), or charge the crime as a felony and allege the section 186.22, subdivision (b)(1) enhancement.
[19] Section 186.22, subdivision (b)(1) provides in relevant part that "any person who is convicted of a felony committed for the benefit of . . . any criminal street gang, with the specific intent to commit . . . any criminal conduct by gang members, shall, upon conviction of that felony, in addition and consecutive to the punishment prescribed for the felony or attempted felony of which he or she has been convicted, be punished as follows: [¶] (A) Except as provided in subparagraphs (B) and (C), the person shall be punished by an additional term of two, three, or four years at the court's discretion. [¶] (B) If the felony is a serious felony, as defined in subdivision (c) of Section 1192.7, the person shall be punished by an additional term of five years. [¶] (C) If the felony is a violent felony, as defined in subdivision (c) of Section 667.5, the person shall be punished by an additional term of 10 years."
Section 1192.7, subdivision (c)(23) makes "any felony in which the defendant personally used a dangerous or deadly weapon" a serious felony. Section 667.5, subdivision (c)(8) makes "[a]ny felony in which the defendant inflicts great bodily injury on any person other than an accomplice" a violent felony. Thus, depending on the type of section 245, subdivision (a)(1) assault, the section 186, subdivision (b)(1) enhancement on this wobbler may add two, three, four, five or 10 years in prison to the defendant's sentence on the underlying felony.
[20] See discussion in footnote 18, ante.
[21] The dissent claims that its interpretation, which applies section 186.22(d) to wobblers only, has a "plausible" purpose in one situation: it "limit[s] the power of trial courts to impose light sentences on defendants who commit gang-related wobblers." (Dis. opn., post, 135 [email protected]. 45-46, 69 [email protected]. 963-965.) Specifically, when a trial court wishing to show leniency declares a gang-related wobbler to be a misdemeanor, it is "require[d]" to impose a six-month sentence under 186.22(d), whereas under section 186.22, subdivision (b)(1) the court could have imposed a short jail sentence. (Dis. opn., post, at p. 46, 69 [email protected]. 964-965.) Contrary to the dissent's view, the trial court's power is not so limited in this situation. Under section 186.22, subdivision (g), the court still may "refuse to impose the minimum jail sentence for misdemeanors in an unusual case where the interests of justice would best be served." It strains credulity to believe that the voters enacted section 186.22(d) for this one "plausible" purpose.
[1] All statutory citations are to the Penal Code.
[2] As amended by Proposition 21, section 186.22(b)(1) provides in pertinent part: "[A]ny person who is convicted of a felony committed for the benefit of, at the direction of, or in association with any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members, shall, upon conviction of that felony, in addition and consecutive to the punishment prescribed for the felony or attempted felony for which he or she has been convicted, be punished by . . . [¶] (A) ... an additional term of two, three, or four years at the court's discretion. ..."
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603 F. Supp. 2d 506 (2009)
UNITED STATES of America,
v.
Victor WRIGHT, Defendant.
No. 08-CR-433 (ENV)(VP).
United States District Court, E.D. New York.
March 19, 2009.
*507 James E. Neuman, New York, NY, for Victor Wright.
David S. Leibowitz, Assistant United States Attorney, United States Attorney's Office, Southern District of New York, New York, NY, for United States of America.
MEMORANDUM AND ORDER
VITALIANO, District Judge.
On June 27, 2008, Victor Wright was indicted for assault on a federal officer, possession of a weapon while in prison and obstruction of justice. These charges stem from Wright's alleged attack on an Assistant United States Attorney at the time of his scheduled sentencing hearing before Judge Frederic Block of this Court. On January 16, 2009, Wright moved to transfer venue of his prosecution to the Southern District of New York, asserting essentially three grounds for the transfer: a) that the pre-trial publicity surrounding the case compromises his right to a fair and impartial trial, b) that personnel, particularly those of the United States Marshals Service (the "marshals"), employed in this district may be biased against him and thus might seek to hinder his defense, and c) that the circumstances surrounding the prosecution of his case here may give the appearance of impropriety. The United States takes no firm position on the motion.[1]
Wright brings his motion under both bases outlined in Federal Rule of Criminal Procedure 21. Rule 21(a) makes transfer mandatory if the Court determines that "so great a prejudice against the defendant exists in the transferring district that the defendant cannot obtain a fair and impartial trial there." Fed. R.Crim.P. 21(a). Where the defendant argues that pre-trial publicity is the source of this prejudice, the proper test is whether there is a "reasonable likelihood that prejudicial news prior to trial will prevent a fair trial." United States v. Maldonado-Rivera, 922 F.2d 934, 966-67 (2d Cir.1990) (quoting Sheppard v. Maxwell, 384 U.S. 333, 363, 86 S. Ct. 1507, 16 L. Ed. 2d 600 (1966)). Rule 21(b) allows the Court to transfer a prosecution "for the convenience of the parties and witnesses and in the interests of justice." Fed.R.Crim.P. 21(b). In ruling on a 21(b) motion, the Court is to consider a number of factors, including the location of the defendant, location of witnesses and "any other special circumstances that might bear on the desirability of transfer." See Maldonado-Rivera, 922 [email protected]. It is up to the trial court to properly weigh and balance these factors. See id. Significantly, under either provision *508 of Rule 21, the trial court exercises broad discretion. Id.
The first ground advanced by Wright offers not even the faintest basis for relief. The Court rejects as implausible Wright's argument concerning pre-trial publicity. It is simply illogical to conclude that any media accounts, even if they appeared in widely-circulated publications like the New York Times and New York Post, could somehow prejudice potential jurors against Wright in Brooklyn, but not a walkable few miles away across the Brooklyn Bridge in a Manhattan courtroom. Moreover, even if there is a speck of validity to any alleged disparity of the jury pools in the two districts, with the Brooklyn pool more adverse, a trial court has many tools at its disposal by which it can limit any prejudice allegedly caused by extensive media coverage. See Sheppard, 384 U.S. at 362-63, 86 S. Ct. 1507 (identifying curative steps a district court may take to address potentially prejudicial pre-trial publicity). Clearly, however, neither past nor prospective media coverage of this case in a media market equally shared by both districts supports transfer of venue from one to the other on that ground.
Second, the Court categorically rejects any suggestion that any court personnel in the Eastern District, specifically including sworn deputy marshals, have in any way prejudiced or have attempted, or would act in the future, to prejudice Wright's defense, intentionally or otherwise. Indeed, Wright has presented only bald speculation, with absolutely no evidentiary support, of any such bias or inappropriate behavior. As was acknowledged unanimously at the argument on this motion, no one has encountered anything but the highest level of professionalism and ethical conduct from the marshals and other Eastern District personnel. Simply put, the Court rejects as totally unfounded even the mere thought that the men and women responsible for the administration of justice in our courthouse would handle Wright's case differently than they would any of the other hundreds of cases which pass through the Court's doorsthat is, with courtesy, efficiency, fairness and a commitment to protect the rights of all.
Nevertheless, due process requires more than just the impartial carriage of justiceit requires that true "justice must [also] satisfy the appearance of justice." In re Murchison, 349 U.S. 133, 136, 75 S. Ct. 623, 99 L. Ed. 942 (1955). It is for that reason alone that defendant's third argument is more than just troubling.
The Court must be mindful of the public's perception of the judicial process and is charged with ensuring that the public perceives its process to be impartial. The facts alleged here are highly unusual. A member of the Eastern District family, her' name posted like any other on our courthouse directory, is the alleged victim. The assault is charged to have taken place herein fact, in a cookie cutter copy of the very courtroom where this trial would be held. The potential witnesses, with their Eastern District rootsthe sentencing judge, the courtroom deputy clerk, the court reporter, the marshalsare all familiar by name and nod to the personnel who would staff any trial of this case in this district. Whether there is any palpable presence of uneasiness accompanying such an assignment misses the point. The point is whether the criminal trial of a defendant, staffed by such personnel and literally in the victim's "home court", will appear objectively to be on an equal footing, fair and just. On this score, there is a dearth of guidance in caselawcaselaw that dwells virtually exclusively on whether claims of substantive prejudice and unfairness warrant the transfer of venue.
The Court is aware, though, of a nearby nonfederal model that offers clear guidance. *509 The busiest trial court in the world, the Civil Court of the City of New York, has by administrative order taken the guesswork and hesitation out of the equation. The Civil Court mandates that any case involving one of its employees as a party must be automatically transferred to a county other than the one in which the employee works or resides. See ADVISORY NOTICE ON THE FILING OF ACTIONS BY OR AGAINST EMPLOYEES OF THE CIVIL COURT (December 7, 2005). Civil Court's rule has been followed by other courts, recognizing, for example, that a plaintiff's "frequent interaction with court personnel, including Justices, requires transfer of [plaintiff's] case to another county." Palma v. City of New York, 19 Misc.3d 1143(A), 2008 WL 2338234, at *2 (N.Y.Sup.Ct. June 9, 2008).
Although the rule and cases following it are not precisely on point, since the victim of a crime is not a "party" in the criminal prosecution, the principles underlying such rules or decisions, that is barring even an appearance of increased advantage owing to the party's membership in the court's "family," make sense. It is certainly conceivable that conducting Wright's trial in the same courthouse where the alleged crime occurred and surrounded by court personnel who may have known and worked with the alleged victim and/or the witnesses likely to be called to testify could cause an objective reasonable observer to second guess the impartiality and fairness of the proceedings. Indeed, any concern about appearances may be further exacerbated by the fact that the alleged victim here is entitled under the Crime Victims' Rights Act not only to appear at Wright's trial, but also to be reasonably heard at critical stages, even to the point of making recommendations which may depart from positions advanced by the prosecution. See 18 U.S.C. §§ 3771(a)(3)-(4). All in all, in harmony with the Civil Court rule, where a member of the court family is a party or a victim, that fact and those related to it can certainly qualify as "special circumstanc[es] that might bear on the desirability of transfer." Upon consideration of these circumstances, the Court concludes that transferring this case to the Southern District as requested by defendant is "in the interests of justice." See Maldonado-Rivera, 922 [email protected]. Therefore, and with no objection from the government, Wright's motion to transfer venue should be granted and any appearance of unfairness avoided.
The Clerk of the Court is directed to transfer this case to the Southern District of New York.
SO ORDERED.
NOTES
[1] The Office of the United States Attorney for the Eastern District of New York has recused itself. The government is represented by the United States Attorney for the Southern District of New York.
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435 S.E.2d 428 (1993)
Donald Edward WATSON
v.
COMMONWEALTH of Virginia.
Record No. 0353-92-1.
Court of Appeals of Virginia.
September 21, 1993.
Byron W. Waters, Richmond, for appellant.
Janet F. Rosser, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.
Present: BAKER, WILLIS and BRAY, JJ.
BRAY, Judge.
Donald Edward Watson (defendant) was convicted in the trial court of carrying a *429 concealed weapon in violation of Code § 18.2-308. He contends on appeal that the evidence does not support the conviction because the offending pistol was not a weapon carried "about his person." We disagree and affirm the conviction.
The facts are not in dispute. On July 20, 1991, Officer Lucas of the Suffolk Police Department stopped a vehicle for an "equipment violation." Defendant was the driver, and a routine license check disclosed that his operator's license was "suspended." In such instances, local police policy required that the vehicle be towed to a secure area and, in a related procedure, Officer DeBusk inventoried the contents of the car. DeBusk discovered a "fully loaded" pistol "under the driver's floor mat," "completely out of sight," and "seized the weapon." Defendant was subsequently "taken to headquarters and charged" with a violation of Code § 18.2-308.
On cross-examination, DeBusk testified that the gun "was placed underneath the floor mat on the lower left hand corner, close to the door" of the "driver's compartment" and near the edge of the mat. He recalled that "[y]ou could reach your left hand down and pull the weapon out" while "sitting in the driver's seat" without "too abrupt a movement." DeBusk described the location as "easily accessible."
It is well established that "[t]he judgment of the court sitting without a jury will not be set aside unless it is plainly wrong or without evidence to support it. However, a trial court's conclusion based on evidence that is `not in material conflict' does not have this binding effect on appeal." Williams v. Commonwealth, 14 Va.App. 666, 669, 418 S.E.2d 346, 348 (1992) (quoting Hankerson v. Moody, 229 Va. 270, 274-75, 329 S.E.2d 791, 794 (1985)). A "trier of fact ... `may not arbitrarily disregard uncontroverted evidence of unimpeached witnesses which is not inherently incredible and not inconsistent with facts in the record,'" and a finding under such circumstances presents a question of law, reviewable by this Court on appeal. Id. at 669-70; 418 [email protected].
Code § 18.2-308(A) provides, in pertinent part, that "[i]f any person carries about his person, hidden from common observation, (1) any pistol, revolver, or other weapon ... he shall be guilty of a Class 1 misdemeanor." "The purpose of the statute was to interdict the practice of carrying a deadly weapon about the person, concealed, and yet so accessible as to afford prompt and immediate use." Sutherland v. Commonwealth, 109 Va. 834, 835, 65 S.E. 15, 15 (1909); Schaaf v. Commonwealth, 220 Va. 429, 430, 258 S.E.2d 574, 574-75 (1979).
The Supreme Court has twice addressed the intendment of the statutory language "about his person." Code § 18.2-308. In Sutherland, the Court reasoned that "`[a]bout the person' must mean that it is so connected with the person as to be readily accessible for use or surprise if desired" and found that a pistol in a "scabbard," carried in a "pair of saddle-bags, with the lids down," did not violate the statute. 109 Va. at 835-36, 65 S.E. at 15. Later, in Schaaf, the Court revisited the issue and, citing with approval the Sutherland definition of "about the person," affirmed the conviction of a woman for carrying a gun in her "zippered" handbag. 220 Va. at 430, 258 [email protected]. Though noting that Sutherland could be distinguished on its facts, the Schaaf Court expressly overruled the earlier decision "to the extent that there may be a conflict." Id. at 432, 258 [email protected].
Defendant argues that both Sutherland and Schaaf instruct that an analysis of accessibility turns upon "the motion required to bring the weapon to bear." "If significant body motion ... is required, then ... the weapon is not readily accessible," because the movement would displace any element of surprise. Defendant acknowledges on brief that the weapon in issue was "[s]urely ... `accessible'" but not "readily" so due to the "body movement required ... to reach the pistol." This view, however, ignores the "plain meaning" of Code § 18.2-308 and attendant case law and urges an impermissibly "narrow and strained" construction of the *430 statute. Crews v. Commonwealth, 3 Va. App. 531, 535-36, 352 S.E.2d 1, 3 (1987).
Accessibility of a concealed weapon for "prompt and immediate use" is clearly the evil proscribed by the statute. Sutherland, 109 Va. at 835, 65 S.E. at 15; Schaaf, 220 Va. at 430, 258 [email protected]. Judicial use of the term "readily" simply recognizes that the availability contemplated by the statute means "in a ready manner" or "without much difficulty." Webster's Ninth New Collegiate Dictionary 980 (1989). Doubtless, the location of a weapon is a significant circumstance for the court to consider in weighing accessibility. However, a weapon is not, as defendant urges, inaccessible "as a matter of law" if available only upon noticeable "body motion."
Here, the loaded pistol was a weapon "readily accessible" to defendant with only the slightest movement and, thus, "carrie[d] about his person" in violation of Code § 18.2-308. It was, as the trial judge concluded, "more accessible ... than even if [defendant] had had it in his pocket."
Accordingly, the trial court correctly construed and applied the statute to the evidence, and we affirm its judgment.
Affirmed.
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The plaintiff was engaged in the service of the defendant E. D. Austin for the year 1850, living in his family, during which time an intimacy sprang up between him and Caroline Gillespie, a widow lady, the daughter of Colonel Austin, aged about 22 years, which resulted in an engagement to marry. This she made known to her father, but it was violently opposed by him. At first she concurred, or affected to concur, with the wishes of her father, and informed him that she had discarded the plaintiff, and that he would leave the country. On 1 March, 1851, however, she informed her father that she had determined to marry the plaintiff without his consent, and that the marriage was to take place in three days thereafter. He then called her attention to an agreement which had been made between them long before any marriage was in contemplation, which was, that if she ever married again, she would convey to her infant son, the defendant Lueco M. Gillespie, all her interest in the tract of land which her late husband had willed as a support for her and their child during her life; also a certain negro named Mary and certain articles of furniture, consisting of a bed and furniture, a bedstead, bureau and washstand, which said agreement was founded on the following consideration: It turned out that the property left by her former husband for that purpose had proved insufficient to pay (259) the debts of the estate, and one of the slaves bequeathed specifically to his wife and child would have to be sold to make up the deficiency. A negro man bequeathed to her infant son had no wife, and it was agreed between Mrs. Gillespie and her father that he should be taken, instead of falling on one of the two in which she had a life estate who had wives in the neighborhood; and as an equivalent therefor, conveyances should be made to secure the property above mentioned, to wit, her interest in the land, the girl Mary, and the furniture, to her said *Page 210
son Lueco, and the slave of Lueco had accordingly been sold and the money applied in the payment of the debts. On this agreement and the facts connected with it being rehearsed to her, she made the conveyances accordingly. The defendant Austin says she did so willingly, and that when the one conveying the personal property was being prepared she insisted on putting in another slave named Vardry in which she had a life estate, which was done, and that she put in Vardry because she said Lueco's father ought to have given him to his son, and also insisted on putting in the articles of furniture above named, stating that she had bought them at the sale of her husband's estate for Lueco, and that she always intended to give them to him. He also says that she proposed to put in another slave, Linda, in whom she had a life estate, but he dissuaded her from doing so. The deed conveying her interest in the tract of land was made to E. D. Austin as the trustee and next friend of the said Lueco, and was dated 1 March, 1851; the other was made directly to her son Lueco, bearing the same date. On the next day after these deeds were executed, the father, Colonel Austin, started with his daughter to the State of Virginia, with a view, as he admits, to prevent the contemplated marriage from being solemnized. They proceeded to the house of a friend in the county of Davie, where they were detained by her indisposition, and during this delay the plaintiff came to that place and had an interview with the daughter. Colonel Austin then informed him of the existence of the deeds in question, notwithstanding (260) which they persisted in the purpose of marrying, which event took place on 11 March, 1851, at the house of the defendant Austin, to which they returned after the interview above spoken of. The notice of the deeds was given to the plaintiff on 4 March.
Asbury McDaniel, a witness to the deed, states in his deposition that Mrs. Gillespie was constrained to sign the instruments in question; that she was in tears when she did it, and said she would rather go to her grave than do so; that her father used no force or threats, but told her to sign. There was testimony going to show that McDaniel's character was bad, and that he was not worthy of credit on oath. There was other evidence as to the question of duress.
The girl Mary and the articles of furniture remained in the possession of the plaintiff and his wife from their marriage till her death, which took place in the fall of 1853. In January, 1854, Colonel Austin took possession of the negro girl Mary as the property of his grandson, Lueco M. Gillespie, and suit was brought in the name of John F. Foard, as next friend of the said Lueco, in the Superior Court of Rowan, for the value of the bed, bedstead, and other personal property, and a judgment obtained against plaintiff for the same. The bill was filed against Colonel Austin, the trustee, the defendant L. M. Gillespie, and J. F. *Page 211
Foard, his next friend in the suit at law, praying for an injunction to prevent the execution at law from being enforced, which was granted and was ordered to stand over and await the hearing in the cause. The further prayer is for the surrender of the two deeds as being a fraud upon the plaintiff's marital rights, and for the delivery of the girl Mary, and for an account of half the rents and profits of the tract of land given for the support of the said, Caroline, plaintiff's wife, and her son during her life.
The plaintiff and Mrs. Gillespie had entered into an agreement to marry, and the day for its solemnization was fixed. Three days before the time fixed for the wedding her father induces her to convey all of her property, except the negro woman, in whom she had but a life estate, to the defendant Lueco M. Gillespie, her infant son, who was before sufficiently provided for by his father's will. After procuring this conveyance, the father still determined to prevent the marriage if he could. He starts off with her to Virginia. In Davie County, at the house of a relative, she becomes too much indisposed to proceed on the journey. The plaintiff goes there and has an interview, and learns from her the fact that she had been induced to execute the conveyance of her property to her son. Both the plaintiff and Mrs. Gillespie still insist that the marriage should take place. Whereupon she goes back home with her father, and the marriage is solemnized shortly thereafter.
1 Roper Husband and Wife, 164, upon an examination of the cases, comes to this conclusion: "It is presumed, therefore, that without the consent of the intended husband, the law will not permit any disposition of the wife's property to be made before the marriage then in contemplation, and that under no circumstances after a treaty of marriage has commenced will any such voluntary disposition of her property be binding on her subsequent husband. In the absence of other evidence of fraud, the time when the disposition or settlement was made must decide its validity, and attention to this circumstance will, as it is presumed, reconcile the principal cases. "This passage in Roper has been cited by this Court, with approbation, in several cases, but it was never before necessary to decide the precise point which is now presented — i.e., does notice of the conveyance made by the wife, imparted to the husband at any time before the marriage is solemnized, defeat his right to have the conveyance set aside? Or is it necessary, in order to bind him, that, after receiving notice, he should concur and give his consent thereto, which is usually done by his signature on the conveyance? *Page 212
(262) Spencer v. Spencer, 56 N.C. 404, after reciting the passage from Roper and making a reference to the other cases in which it is cited with approbation, is put on the ground that the notice is vague and indefinite. Taylor v. Rickman, 45 N.C. 278, where the husband actually signed the conveyance, is put on the ground of surprise because the paper was presented to him after the parties had met together for the purpose of being married.
The question depends on the time when the disposition or settlement is made, and the principle is this: if a woman, before she has a marriage incontemplation, gives away her property, the man who afterwards marries her has no ground of complaint on which he can stand before this Court, although he married expecting to get the property and without notice of the disposition previously made by her.
After the courtship has begun — that is, after the man has signified his intention to address the woman, and before the matter is concluded by her acceptance of the proposition — if she give away her property, and he has notice thereof and still proceeds in his courting, the disposition is binding upon him, although he did not concur and give his consent, because, at the time of his notice, he was not committed by a contract to marry, and his equity can only be put on the ground that he wasdeceived, which is repelled by the naked fact of notice, as in an action of deceit in the sale of a horse where it is proved that the vendee has notice of the defect before the trade was closed.
After the courtship or negotiation about and concerning the marriageis concluded, and the parties bind themselves by a contract to marry, neither can give away his or her property without the consent of the other, and the matter does not then rest upon a mere question of deceit
which may be repelled by proof of notice, but involves a question of fraud on a right vested by force of a contract, for a breach of which an action will lie at law, although a court of equity will not enforce a specific performance for a reason growing out of its peculiar nature (263) — i. e., if the parties are unwilling, they cannot be forced to live together as man and wife should do; so a specific performance is impracticable, and the Court declines the jurisdiction on the same ground that it will not attempt to make parties proceed under a contract to carry on business as copartners in merchandise because, without mutual good-will and readiness on both sides, the object cannot be accomplished; still there is a valid contract embracing in its consequences the property of each of the parties, for, as is said in Roper, supra, 163,"the wife's fortune, in addition to his own, may be a weighty consideration and inducement for entering into the contract," and, of course, after the contract to marry in concluded she cannot convey her property without his concurrence; and if she does, the person taking it *Page 213
with notice will be converted into a trustee in order to prevent a fraud on the contract.
In our case, the father of Mrs. Gillespie, at whose instance the conveyance was made, and who was acting as the self-constituted prochienami of her infant son, had notice, and, indeed, procured her to make it for the express purpose of defeating the rights of the plaintiff vested by force of the contract to marry.
The ground mainly relied on by Mr. Boyden for the defendant, to wit, that the conveyance was for a valuable consideration, is not tenable for several reasons. We have seen that it was made with full notice of a preexisting contract and with the purpose of defeating it. In respect to the several articles of furniture brought by Mrs. Gillespie, her saying "that she intended to give them to her son" amounts to nothing and has no legal effect. In respect to the land and slaves, the alleged arrangement not being in writing was not valid or obligatory in law or equity, and, at most, the amount of it was that her specific legacy should abate ratably with that of her son, and she was to make good by fair contribution any abatement of his legacy caused by the sale of a slave given to him instead of one given to her — taking into consideration the fact the legacy to him was contingent upon the event of his (264) arriving at the age of 21, with a limitation over to her if he died under that age, and the legacy to her was for life, with a limitation over to the son if he arrived at full age. So that this understanding can in no sense be treated as a valuable consideration to support the absolute conveyance which she was induced to make to her son on the eve of her expected marriage, and it must be treated as mere security for any balance which, upon a final settlement of the estate, may appear to be due by reason of a necessity for an abatement of the specific legacies, taking into consideration the value of the legacy to her and the legacy to her son under the will of the testator.
There is still another view on which the ground taken by Mr. Boyden is not tenable. We are satisfied by the evidence that Mrs. Gillespie did not execute the conveyance voluntarily and of her own accord. She did so under moral, if not physical, duress, and consequently the conveyance is inoperative and of no effect. The testimony of the subscribing witness establishes the actual constraint; and if it be said he is a man of notoriously bad character, the reply is that "he was selected by the father," so he cannot object on account of bad character, for if so, there is no proof of the execution of the deed, and there is room for the imputation that such a witness was selected because the father did not choose to have a credible witness who could speak of the constraint and duress imposed on his daughter. If to this be added the fact that the conveyance was executed at the instance of a father by a daughter whose *Page 214
business he had charge of, who was living in his family and wholly dependent on him, and who having agreed to marry a man to whom her father had objections, was willing, in almost any way, to propitiate his favor, and the further fact that after all these concessions made by her and the deeds were signed according to his dictation, she is, on the next day — but two days before the day fixed on for her marriage — constrained by her father to start on a journey to Virginia, which purpose she defeated at the house of a relation by indisposition, either actual or (265) feigned, whereby her intended husband is enable to overtake them, clearly makes out a case of duress.
The plaintiff is entitled to a decree setting aside the conveyances as in fraud of his contract to marry, except so far as to give them effect as a security for any abatement which, in a settlement of the estate, it may appear her legacy was liable to in order to meet her ratable part of the debts of the testator, which, although not relied on in the bill as a distinct ground for relief, is relevant in reply to the allegation that the conveyance was for valuable consideration.
PER CURIAM. Decree accordingly.
Cited: Ferebee v. Pritchard, 112 N.C. 86; Brinkley v. Brinkley,128 N.C. 507, 509, 515; Brinkley v. Spruill, 130 N.C. 47. |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 Form 10-Q (Mark One) x QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2012 OR o TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 333-139298 Bridgeline Digital, Inc. (Exact name of registrant as specified in its charter) Delaware 52-2263942 State or other jurisdiction of incorporation or organization IRS Employer Identification No. 80 Blanchard Road Burlington, Massachusetts (Address of Principal Executive Offices) (Zip Code) 724-832-6310 (Registrant’s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90days.Yes x Noo Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files x Yes o No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act. Largeacceleratedfilero Acceleratedfilero Non-acceleratedfilero (Do not check if a smaller reporting company) Smallerreportingcompanyx Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).YesoNo x The number of shares of Common Stock par value $0.001 per share, outstanding as of May 11, 2012 was 12,614,627. 1 Bridgeline Digital, Inc. Quarterly Report on Form 10-Q For the Quarterly Period ended March 31, 2012 Index Page Part I Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2012 and September 30, 2011 4 Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended March 31, 2012 and 2011 5 Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended March 31, 2012 and 2011 6 Notes to Interim Condensed Consolidated Financial Statements (unaudited) 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3. Qualitative and Quantitative Disclosures About Market Risk 31 Item 4. Controls and Procedures 31 PartII Other Information Item1. Item 2. Legal Proceedings Unregistered Sales of Equity Securities and Use of Proceeds 32 32 Item 5.
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UNITED STATES DISTRET EOSRS ESE FPR SUTRERN DESEMET OF IME EGHKLS Page 1 of 6
ROBERTO SANCHEZ
Petitioner
V. Case No: 08-CR-789 (RUS)
UNITED STATES OF AMERICA
Respondent
MOTION TO MODIFY A TERM OF IMPRISONMENT UNDER 18 U.S.C. 3582(c)(1)(A)(i)IMPOSE A REDUCED SENTENCE
UNDER
SECTION 404 OF THE FIRST STEP ACT.
And now on this day, April 8, 2019 Petitioner Roberto Sanchez, moves this Honorable Court, pursuant to 18 U.S.C 3582({c)
(AAI), the First Step Act now provided that an inmate can bring a request to “modify a term of imprisonment” directly to
"a sentencing court, rather than requiring a motion made by the Bureau of Prisons, based on a claim that “extraordinary and
compelling reasons warrant such a reduction” see United States v. Marks Case no. 03-CR-6023 (WDNY Mar. 14, 2019) &
Holloway decision of a few years ago where EDNY Judge Gleason convinced the U.S. Attorney to consent to an otherwise
unauthorized court order cutting an inmates sentence due to “extraordinary and compelling reasons that warrant such a
reduction".
Section 404 of the First Step Act gives this Court jurisdiction and discretion to "impose" a reduced sentence of any length
consistent with section 841(b)(1)(A), without limitations on what the Court may consider, see section 404(b). Further,
section 404{b) gives the Court jurisdiction to “impose a reduced sentence. Congress's choice of the verb "impose" instead of
“modify” or "reduce", is significant. Federal sentencing statutes use the verb “imposed” to mean "sentence" in light of all
relevant factors, See e.g 18 U.S.C. section 3553{a) "the court shall impose a sentence sufficient, but not greater than
_ necessary, to comply with the purpose set forth in paragragh (2) of the section"; section 3553{a)(2) directing the courts to
consider "the need for the sentence imposed" in light of the purpose of sentencing.
it is evident Congress enacted section 404 to rectify the wrongs of oversentencing. At this point, more than ten years
into his prison sentence, and beyond the sentencing statute's mandatory minimum, it manifests in Mr. Sanchez's behavior
that the 3653(a) factors considered in his imposed sentence, no longer apply. The nature and circumstances of the offense
and the history and characteristics of the defendant have all changed after more than ten years. The social stigma attached
to non-violent drug crinfe25E ha RiRG OPHR2 12d Bech 8 CLITA EMA Font tHe dbo lady 6PexheageeqaMmighment. The
intended effects of excessive sentencing has not been perceived, and a new epidemic of mass incarceration now exists.
There has been a bipartisan push to promote treatment for addicts and sentencing reform for non-violent drug offenders.
The need for the sentence that was imposed upon Mr. Sanchez over ten years ago is now more than necessary under the
contemporary shift in bipartisan ideology. The movant's current time served, which is greater than his mandatory minimum,
has reflected the seriousness of the offense, promoted respect for the law, and provided more than fair and just punishment
for the offense.
EXTRAORDINARY AND COMPELLING REASONS WARRANTING A REDUCTION:
1 was sentenced to a term of 240 months which commenced on August 10, 2008. Presently, | have completed over half of my
period of incarceration and believe in my heart, that the government's handling of my life changed it for the better. Through
the last ten years of my life, [have had much time for reflection and introspection. The gravity of my offense, which
" “seemed to escape me years ago, has been brought into clear focus. | have seen the impact that drugs have had upon my
fellow travelers in this challenging world of prison, and the havoc drugs wreaked on their lives and the lives of their victims
and families, not to mention the widespread societal damage drugs caused. While | was a first time offender in a non-
violent way, my punishment was deserved because of the critical role | formerly played in this horribly toxic process, While
prison is a hard teacher, it nevertheless has made me fully recognize the wrongful path | once traveled, and has also given
me absolute resolve to use my experience as a positive tool to better myself, my family, my environment, and, to the extent
| can, society.
My extraordinary accomplishments while incarcerated are numerous: | have completed over 100 prison programs from
RDAP, Victim impact groups, to obtaining my GED. (see Attachment A “Achievement Awards). | also eamed my certification
to operate Heavy Equipment Trucks, Dump trucks, Back Hoe, Front Loader, BOP Buses and Vans. (See Attachment B "Heavy
_ operators License"). | have received many furloughs granted to me because of my flawless disciplinary record. Ail of these
are compelling evidence of a new path. Not only have | been rewarded with a transfer to a camp without locks, fences, or
walls, talso have a job that allows me to drive outside the camp boundaries. This demonstrates the trust given to me by the
Bureau of Prison. (Attachment C "Inmate Progress Report"). My Family is another compelling reason. My family has indeed
acutely felt the separation from their father. Notwithstanding this reality, | have coached from afar, instilling in my children
the most producive values and am proud to report that my older children have surpassed the many barriers of losing their
dad and have nonetheless attained great successes as productive and exemplary members of society. My son Carlos Sanchez,
is an Administrator of Police Precinct in the Bronx. Robert Sanchez dr. is a middle school math teacher at IS 37. Jenny
Sanchez is a Lieutenant in the 44th Precinct in the Bronx, and my son Chris Sanchez is a Police Officer in Trenton New
Case 1:08-cr-00789-RJS Document 402 Filed 11/26/19 Page 3 of 6
Jersey. My biggest concern now is my youngest daughter Hope Francesca Sanchez (See attachment D}, who is 15 years old
and has not had my steady hand to mold her, as she was only 5 when | was sent away. | have missed all of the many life
events with my wonderful family and the tragic loss of my mother at only 63 years old. | write to you to share not only my
apology for the life | have wasted, but to share the positive changes that have been realized. | would respectfully ask for |
your kind consideration the possibility of you providing intervention to lighten my load. If | could rejoin my family now, | am
convinced that | could continue producing ‘the correct life choices for my young daughter, Hope Francesca, and continue
stewarding my other children so that the wrong that | did can continue to be changed into the positive of having my family's
productivity partially atone for my sins. Please allow me to rejoin society as one who has seen the light of redemption. Your
consideration to this request is appreciated beyond words.
CONCLUSION
Petitioner Sanchez respectfully requests this honorable Court to impose a new sentence under 18 U.S.C 3582 & Section
404(b) of the First Step Act. It would not be completely unorthodox, considering the many commutations given under
President Obama or the commutations being considered by President Trump, to impose: (1) a significantly reduced
sentence: (2) a period of home confinement from the current time served; (3) or an early release to a halfway house from
the current time served.
Thank you very much for your time and consideration. Z, p 4 /
i. — . 7 i hh Z . {
Date: SCT 7 f i 7 40 / ° Lie ii her AIA
Roberto Sanchez
Dear Warden; Case 1:08-cr-00789-RJS Document 402 Filed 11/26/19 Page 4 of 6
i ask that you support my request for a reduction in sentence(RIS) as a result of compelling and extraordinary circumstances
under 18 u.s.c 3582 (c)(i}(A}(} Also known as the first step Act signed into Law on December,21,2018. | believe that i
qualify for such consideration as a result of events that have transpired since the date of my sentencing that judge Sullivan
could not have reasonably foreseen when he imposed a must harsh 240 month sentence on Aug,10 2008. | atm acutely aware
of the consequence of my criminal activity on to people that were negatively impacted from the devasting poison of drugs.
To this day ij regret with all my heart the damage | caused to society and accept full responsibility for my horrible
conduct. | had decided early on to change the direction of my life while i was in prison J]. To that end my experience as
positive and productive as | could manage. | have completed over 100 programs during my over 10 years in various
institutions. Please consider the attached" which reveals these achievements. In addition while incarcerated
| earned certifications to operate Heavy Equipment Trucks, Dump Trucks, Back Hoa, Front Loader, BOP Buses and vans.
Please see "Exhibit B" which verify these certifications. Further | have been granted numerous furloughs because of my
positive disciplinary record and the trust given me at various facilities.
As important for this request is my family's need for my re-unification. While | have attempted, to Sheppard my flock from
afar, it is inadequate to guide and counsel chiidren without one's physical presence. | am proud of their successes. My son
Carles Sanchez is an administrator with the New York City Police Dept. My other son Robert Sanchez, Is a middle school Math
teacher at |.S 37. My daughter Jenny is a Lieutenant in the 44 Prescient in the Bronx and my son Christopher Sanchez is a
Police
Officer in Trenton N.J. These proud accomplishments of my family still are unfinished since my youngest daughter Hope
Francesca Sanchez who is 16 needs me more than ever te guide and counsel her through important times in her life. Having
my farnily select the right paths of life will be my must important contribution and atonement for the tragic mis-direction of
my life.
‘Your Honor has the power to look at my life since sentencing and hopefully acknowledge the compelling changes since that
fateful day in 2008, Recent cases may persuade you to use your great power to allow me to take the final step to select a
new path of goad over evil, honor over disrespect and lawfulness over the wicked days of my past. A district Judge Gleason
took bold steps in granting a RIS in recent case of U.S v. Manks 03-cr-6023 (WDNY 3/14/19 which followed Judge Gleason of
the Eastern District of New York in the Holloway matter, These two counts newed the law as a compassionate tool of
Case 1:08-cr-00789-RJS Document 402 Filed 11/26/19 Page 5 of 6
TRULINCS 90282054 - SANCHEZ, ROBERTO - Unit: OTV-C-A
eee eee eee Ee ee
society. Please consider me for this result and | will live the rest of my life making you proud of you choice.
Thank You.
U.S. DEPARTMENT OF wosaFeel: 08-cr-00789-RJS DOCURERO GEST Fae Abi RIP EFA
Federal Bureau of Prisons
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DATE WARDEN OR REGIONAL DIRECTOR.
If dissatisfied with this response, you may appeal to the Regional Director, Your appeal must be received in the Regional Office within 20 calendar days of the date of this respons
THIRD COPY: RETURN TO INMATE CASE NUMBER:
CASE NUMBER:
Part C- RECERT
Return to: : . ~
LAST NAME, FIRST, MIDDLE INITIAL REG, NO, UNIT INSTITUTION --cefe:d54c:ddd9:71d7:5b29:a3f9:4a6:77b
SUBJECT: _
DATE &® RECIPIENT’S SIGNATURE (STAFF MEMBER)
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|
Citation Nr: 1615679
Decision Date: 04/18/16 Archive Date: 04/26/16
DOCKET NO. 11-20 462 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Lincoln, Nebraska
THE ISSUES
1. Entitlement to a higher initial rating for an acquired psychiatric disorder, to include depression, generalized anxiety disorder, and delusional disorder, rated 70 percent disabling prior to May 19, 2014 and 30 percent disabling since that date.
2. Entitlement to a total disability rating based on individual unemployability (TDIU) due to service-connected disabilities.
REPRESENTATION
Appellant represented by: Calvin Hansen, Attorney at Law
ATTORNEY FOR THE BOARD
B. Elwood, Counsel
INTRODUCTION
The Veteran served on active duty from May 1980 to July 1981.
These matters initially came before the Board of Veterans' Appeals (Board) from September 2011 and October 2014 rating decisions of the Department of Veterans Affairs (VA), Regional Office (RO), in Lincoln, Nebraska. In the September 2011 decision, the RO denied entitlement to a TDIU. In the October 2014 decision, the RO granted service connection for an acquired psychiatric disorder, to include depression, generalized anxiety disorder, and delusional disorder and assigned an initial 70 percent disability rating from February 25, 2011 through May 18, 2014 and an initial 30 percent disability rating since May 19, 2014.
The Board remanded the issue of entitlement to a TDIU in April and August 2014 for further development.
In October 2015, the Board denied entitlement to an earlier effective date for the grant of service connection for the service-connected psychiatric disability and remanded the matters on appeal for further development.
The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the Veteran if further action is required.
REMAND
In its October 2015 remand, the Board instructed the AOJ to schedule the Veteran for a VA examination to assess the severity of her service-connected psychiatric disability. A VA psychiatric examination was scheduled for a date in December 2015, but the Veteran failed to report for the examination. She subsequently submitted a VA Form 9 to the AOJ in February 2016 on which she reported that she had previously contacted the AOJ and had explained that she was unable to attend the scheduled examination due to bad weather and health problems. Also, she requested that a VA examination be scheduled at a location closer to her home. In light of the Veteran's contentions, the Board finds that good cause has been shown for her failure to report to the previous VA examination. Hence, a remand is necessary to again attempt to afford the Veteran a VA examination to assess the severity of her service-connected psychiatric disability.
In addition, the claim for a TDIU is inextricably intertwined with the appeal for a higher initial rating for the service-connected psychiatric disability. The Veteran is only eligible for a TDIU on a schedular basis for a portion of the appeal period, but that may change depending on the results of the VA examination, and the Board will therefore defer any decision on TDIU at this time.
Moreover, the Veterans Claims Assistance Act of 2000 (VCAA) requires VA to make reasonable efforts to help a claimant obtain evidence necessary to substantiate her claim. 38 U.S.C.A. § 5103A (West 2014); 38 C.F.R. § 3.159(c), (d) (2015). The VCAA's duty to assist includes a duty to help a claimant obtain records relevant to her claim, whether or not the records are in Federal custody. 38 C.F.R. § 3.159(c)(4).
The Veteran's Social Security Administration (SSA) disability records indicate that she has received treatment at the VA Medical Center in Omaha, Nebraska (VAMC Omaha) from 2002 through at least May 2014 (see Form SSA-3368). The only treatment records from VAMC Omaha in the file are dated in May 2011 and were submitted by the Veteran. There are also records from the Southern Arizona VA Health Care system dated from September 1989 to March 1999. Thus, it appears that there are additional VA treatment records that have not yet been obtained. VA has a duty to obtain any additional relevant records. 38 U.S.C.A. § 5103A(b),(c); Bell v. Derwinski, 2 Vet. App. 611, 612-13 (1992).
Also, the Veteran's SSA disability records reflect that she was denied entitlement to SSA disability benefits in May 2015 and the records that have been obtained pertain to her initial claim for such benefits. She reported on a September 2015 VA Form 9, however, that the denial of SSA benefits was "currently on appeal and pending an Administrative Law Judge hearing." The United States Court of Appeals for Veterans Claims has held that where there has been a determination with regard to SSA benefits, the records concerning that decision must be obtained, if relevant. Tetro v. Gober, 14 Vet. App. 100, 108 -09 (2000); Murincsak v. Derwinski, 2 Vet. App. 363, 372 (1992); cf. Golz v. Shinseki, 590 F.3d 1317, 1321 (2010) (there is no duty to get SSA records when there is no evidence that they are relevant). Any additional records pertaining to the Veteran's appeal of the May 2015 denial of SSA disability benefits are directly relevant to the higher initial rating and TDIU issues on appeal. Hence, the AOJ should attempt to obtain any such records upon remand.
Lastly, a May 2014 VA psychiatric examination report indicates that the Veteran reportedly received relevant psychiatric treatment from Dr. Knackstedt at Heartland Family. When VA becomes aware of private treatment records it will specifically notify the Veteran of the records and ask for a release to obtain the records. If the Veteran does not provide the release, VA should ask the Veteran to obtain the records. 38 C.F.R. § 3.159(e)(2). These steps have not been taken with regard to any relevant treatment records from Dr. Knackstedt. Thus, a remand is also necessary to attempt to obtain any additional relevant private treatment records.
Accordingly, the case is REMANDED for the following action:
1. Ask the Veteran to identify the location and name of any VA or private medical facility where she has received treatment for a psychiatric disability, to include the dates of any such treatment.
Ask the Veteran to complete authorizations for VA to obtain all records of her treatment for a psychiatric disability from Dr. Knackstedt/Heartland Family (see page 8 of the May 2014 VA psychiatric examination report) and from any other sufficiently identified private treatment provider from whom records have not already been obtained. The AOJ shall attempt to obtain any relevant private treatment records for which a sufficient release is received. All efforts to obtain these records must be documented in the file.
If unable to obtain any identified records, take action in accordance with 38 C.F.R. § 3.159(e).
2. Obtain and associate with the file all outstanding VA records of the Veteran's treatment, to specifically include:
(a) all records from the Southern Arizona VA Health Care system dated from February 2010 through the present;
(b) all records from the VA Nebraska-Western Iowa Health Care system dated from February 2010 through the present; and
(c) all such relevant records from any other sufficiently identified VA facility.
All efforts to obtain these records must be documented in the file. Such efforts shall continue until the records are obtained or it is reasonably certain that they do not exist or that further efforts to obtain them would be futile. If unable to obtain any identified records, take action in accordance with 38 C.F.R. § 3.159(e).
3. Contact the SSA and obtain any additional records pertaining to the Veteran's appeal of the May 2015 denial of SSA disability benefits, including any medical records obtained in support of the appeal.
All efforts to obtain these records must be documented in the file. Such efforts shall continue until the records are obtained or it is reasonably certain that they do not exist or that further efforts to obtain them would be futile. If unable to obtain any identified records, take action in accordance with 38 C.F.R. § 3.159(e).
4. After all efforts have been exhausted to obtain and associate with the file any additional treatment records and SSA records, schedule the Veteran for a VA psychiatric examination to assess the current severity of her service-connected psychiatric disability. All indicated tests and studies shall be conducted.
All relevant electronic records contained in the VBMS and Virtual VA systems, including a copy of this remand along with any records obtained pursuant to this remand, must be sent to the examiner for review.
The examiner shall report the nature and severity of all signs and symptoms of the Veteran's psychiatric disability and fully describe the impact of the disability on her occupational and social functioning.
The examiner is advised that the Veteran is competent to report her symptoms and history, and such statements by the Veteran must be specifically acknowledged and considered in formulating any opinions concerning the severity of her psychiatric disability. If the examiner rejects the Veteran's reports regarding symptoms, the examiner must provide a reason for doing so.
The examiner must provide reasons for any opinion given.
5. If any benefit sought on appeal remains denied, the issue a supplemental statement of the case. After the Veteran is given an opportunity to respond, return the case to the Board.
The Veteran has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West 2014).
_________________________________________________
Jonathan Hager
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2014), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2015).
|
600 P.2d 448 (1979)
42 Or.App. 151
John C. WEBBER and Mildred Webber, Husband and Wife, Respondents,
v.
COUNTY OF CLACKAMAS, Clackamas County Commissioners, Stan Skoko, Robert Schumacher, and Ralph Groener, Clackamas County Planning Commission, and Dan Baer, Chairman, Clackamas County Planning Commission, and John McIntyre, Director, Environmental Services, Appellants.
No. 77-11-319; CA 11947.
Court of Appeals of Oregon.
Argued and Submitted April 23, 1979.
Decided September 17, 1979.
*449 Michael E. Judd, Oregon City, argued the cause for appellants. With him on the briefs was Keith Kinsman, Clackamas County Counsel, Oregon City.
Earl H. Mickelsen, Portland, argued the cause and filed the brief for respondents.
Before SCHWAB, C.J., and TANZER and RICHARDSON, JJ.
TANZER, Judge.
Plaintiffs initiated this declaratory judgment proceeding to obtain a declaration that they have established a nonconforming use giving them a vested right to develop their land at a density prohibited by the present Clackamas County Comprehensive Plan. The trial court found that plaintiffs had established the nonconforming use, and defendants appeal. We review de novo[1] and reverse.
Plaintiffs own approximately 127 acres of land in Clackamas County. Prior to the adoption of the Comprehensive Plan in 1974, plaintiffs drilled a well on their property, installed a pump, constructed a large reservoir tank and laid a water main along a public road which bisects their property. Plaintiffs spent approximately $110,000 to develop the water system, which was designed to serve approximately 250 houses. This development plan was consistent with the zoning ordinances, which allowed residential development at half-acre density subject to certain conditions not at issue here. When the county adopted the comprehensive plan in 1974, the permitted density of development decreased to one dwelling unit per five acres. The question is whether the construction of the water system prior to the adoption of the comprehensive plan is sufficient to give plaintiffs a vested right to continue development of their land at the half-acre density.
A landowner may acquire a vested right to continue a nonconforming use not *450 only for uses actually in existence but also for uses which are in various stages of development at the time a more restrictive land use regulation is adopted. Whether a landowner has proceeded far enough with the proposed development to acquire a vested right turns on the facts of each case. Clackamas Co. v. Holmes, 265 Or. 193, 197, 508 P.2d 190 (1973). Generally, nonconforming uses are not favored because, by definition, they detract from the effectiveness of comprehensive land use regulation. Clackamas Co. v. Port. City Temple, 13 Or. App. 459, 462, 511 P.2d 412 (1973). Accordingly, one who claims a nonconforming use bears the burden of proving the facts upon which the right to such a use is based. See 1 Anderson, The Law of Zoning, § 6.09 (1976).
In Clackamas Co. v. Holmes, 265 Or. at 198-99, 508 P.2d at 193 the Supreme Court set out the factors to be considered in determining whether a landowner has acquired a vested right to proceed with development of the project. The first factor is the ratio of expenses already incurred to the total cost of the project. The Court also listed several additional elements of the test:
"* * * Other factors which should be taken into consideration are the good faith of the landowner, whether or not he had notice of any proposed zoning or amendatory zoning before starting his improvements, the type of expenditures, i.e., whether the expenditures have any relation to the completed project or could apply to various other uses of the land, the kind of project, the location and ultimate cost. Also, the acts of the landowner should rise beyond mere contemplated use or preparation, such as leveling of land, boring test holes, or preliminary negotiations with contractors or architects." (Citations omitted.)
See also Eklund v. Clackamas County, 36 Or. App. 73, 81, 583 P.2d 567 (1978).
The Ratio Test
Here, plaintiffs invested approximately $110,000 between 1967 and 1973 to serve residential development of the 127 acres at half-acre density. Because plaintiffs intended to sell parcels of their property for development by others rather than construct the houses themselves, the record contains no estimate of the projected overall cost of the project. Consequently, we cannot determine the precise ratio of the cost of the water system to the total development cost.[2] The difficulty of the so-called "ratio test" of Holmes is that it does not tell us which ratio is sufficiently great to justify a nonconforming use and which is not. Applying the ratio test here, we are able to say only that construction of 250 houses is obviously a multi-million dollar proposition, and that the ratio of prior expenditures to the total cost of the project is far less favorable to a vested right than the 1:14 ratio in Holmes, where the court found a vested right based on the prior expenditures plus other factors which weighed in favor of the nonconforming use. The ratio test does not favor plaintiffs.
Good Faith
Plaintiffs' development expenditures were made in good faith. Defendants do not contend that plaintiffs had notice of the more restrictive density controls in the comprehensive plan before they constructed the water system. Good faith development supports a nonconforming use.
Other Uses
Plaintiffs also bear the burden of proving that the density restrictions in the *451 comprehensive plan would deprive them of any opportunity to derive reasonable economic value from their investment. They must show not only that they will lose the anticipated return on their investment, but also that the water system is incompatible with alternative uses. Plaintiffs did not sustain their burden of proof on this question. Plaintiff John Webber testified that after the system was completed, he sold water to neighboring landowners, but he thereafter limited those sales because he wanted to conserve the remainder of the supply for development of his own property. He also testified that water is difficult to obtain and is at a premium in the area. Thus, plaintiffs have shown the existence of an alternative use for their water system consistent with the comprehensive plan: they can use some of the water to supply residential development of their property at the permitted five-acre density and sell at least some of the excess supply to their neighbors.
As defendants state in their brief:
"It may be that the plaintiffs would realize the largest profit from their well and their property if allowed to develop the land under the old, more intensive zoning, but that is not the issue here. The issue is whether the development of the water system has committed the plaintiffs to only one use of the land, or whether there are other reasonable alternatives. The issue is whether the water system `could apply to various other uses of the land.' Eklund v. Clackamas County, supra. Clearly it could."
Although the alternative use (commercial sale of excess water) may not yield as large a profit as plaintiffs anticipated from the more intensive development, plaintiffs have not demonstrated that the lesser economic return of the alternative use is unreasonably low. The construction of the water system has not been proven to constitute an irreversible commitment to development of the half-acre density inasmuch as there is no proof of the absence of an economically reasonable alternative use of the improvement. Thus it has not been established that denial of a nonconforming use will be a taking of plaintiffs' investment.[3]
In sum, plaintiffs have not established a vested right to continue development of a nonconforming use, because their expenditures for construction of the water system do not constitute a major portion of the total cost of the project and because they did not establish an absence of economically reasonable alternative uses for the water system.
Finally, plaintiffs offer an alternative ground for affirming the judgment below. They contend that the text of the comprehensive plan actually designates their property as suburban, which allows development at half-acre density, rather than rural, which allows only five-acre density. The trial court did not reach this issue. The basis for plaintiffs' contention is the definitions of "suburban" and "rural" in the plan. Rural areas are defined in the plan text as "those areas having neither sanitary sewers nor public water." Suburban areas are "those outlying areas east and southeast of the Urban area that are generally served by public water." Since it is stipulated that plaintiffs' water system has been officially designated as a public utility, plaintiffs urge that their property cannot be rural under the definition quoted above. However, their land is not located east or southeast of the Urban area, so it does not fall within the definition of suburban land either. The ambiguity in applying the textual definitions of the two terms is resolved by the comprehensive plan map, which clearly designates plaintiffs' land as rural and hence subject to the five-acre *452 density restriction.[4] We have no basis for resolving the textual ambiguity in the manner plaintiffs suggest.
Reversed.
NOTES
[1] Because the declaration which plaintiffs sought is analogous to an injunction against the county's enforcement of the density controls in the comprehensive plan, this declaratory judgment proceeding is equitable in nature and we review de novo. See Lindsey v. Dairyland Insurance Co., 278 Or. 681, 688, 565 P.2d 744 (1977).
[2] Plaintiffs contend that because they intended to sell their land without making any additional improvements, their project was virtually completed. They argue that the ratio test should be applied to their total expenditures, rather than to the total cost of the intended residential development. This approach is untenable because an economically sound ratio of water system cost to homesites is higher than its ratio to developed lots, but either ratio is a part of the same economic algebra based on the projected price of the houses at the time of sale to consumers. There is no evidence here upon which we can make the appropriate economic findings.
[3] In Eklund v. Clackamas County, 36 Or. App. at 81-82, 583 P.2d 567, we found that a nonconforming use had been established on the basis of construction of a water system plus other factors which are not present here. Plaintiffs correctly acknowledge in their brief that the proponent of the vested right in Eklund had proceeded further with development than plaintiffs did in this case. There, the water system in question was an integral part of a larger water system designed to serve a residential development of which a major portion had already been completed, and the system was not compatible with other uses.
[4] If any ambiguity remained, resolution of that ambiguity would be initially a matter for the county's interpretation. Cf. Bienz v. City of Dayton, 29 Or. App. 761, 776-77, 566 P.2d 904 (1977).
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0286n.06
Nos. 15-2037/15-2197
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
May 31, 2016
UNITED STATES OF AMERICA, )
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
MONROE AVANT, JR.; ) MICHIGAN
TODD SELMA, )
)
Defendants-Appellants. )
)
BEFORE: MOORE, SUTTON, and DONALD, Circuit Judges.
PER CURIAM. Monroe Avant, Jr., and Todd Selma appeal the district court’s denial of
their joint motion to suppress. We affirm.
On March 18, 2014, law enforcement officers executed a search warrant at 3909 Spruce
Street, Inkster, Michigan. Shortly before law enforcement’s arrival, a white Buick Regal pulled
into the driveway, and Selma, the passenger, exited the vehicle and entered the residence. When
law enforcement arrived, Avant, the driver, exited the vehicle and put his hands up; he was
handcuffed and questioned away from the vehicle. Selma fled the house and was apprehended a
block away. A search of the Buick uncovered an AR-15 rifle, marijuana, and heroin.
A federal grand jury subsequently charged Avant and Selma with possession of a firearm
by a felon, in violation of 18 U.S.C. § 922(g)(1). Avant moved to suppress the firearm and drugs
seized during the warrantless search of the Buick; Selma filed a notice of joinder and
concurrence in the motion. After an evidentiary hearing, the district court denied the defendants’
Nos. 15-2037/15-2197
United States v. Avant
motion to suppress based on two exceptions to the warrant requirement: (1) the detection of a
drug odor coming from the vehicle and (2) the plain-view doctrine. Both defendants entered into
plea agreements preserving the right to appeal the denial of their motion to suppress. Avant
pleaded guilty to possession of a firearm by a felon, in violation of 18 U.S.C. § 922(g)(1), and
received a 46-month sentence. Selma pleaded guilty to possession of a stolen firearm, in
violation of 18 U.S.C. § 922(j), and received a 71-month sentence. This timely appeal followed.
“When reviewing the denial of a motion to suppress, we review the district court’s factual
findings for clear error and its legal conclusions de novo.” United States v. Hinojosa, 606 F.3d
875, 880 (6th Cir. 2010). In doing so, we consider the evidence in the light most favorable to the
government. United States v. Johnson, 707 F.3d 655, 658 (6th Cir. 2013).
“If there is probable cause to believe a vehicle contains evidence of criminal activity,” an
officer may search “any area of the vehicle in which the evidence might be found.” Arizona v.
Gant, 556 U.S. 332, 347 (2009). We have “held that an officer’s detection of the smell of
marijuana in an automobile can by itself establish probable cause for a search.” United States v.
Elkins, 300 F.3d 638, 659 (6th Cir. 2002) (citing United States v. Garza, 10 F.3d 1241, 1246 (6th
Cir. 1993)). Here, Sergeant Paul White testified that he is familiar with the odor of marijuana
and that, as he approached the driver’s door of the Buick, he could smell burnt marijuana.
Captain Daniel Voltattorni also testified that he is familiar with the odor of marijuana and that, as
he placed Avant in handcuffs and moved him away from the vehicle, he detected an odor of
burnt marijuana emanating from both Avant and the vehicle.
The defendants contend that the district court should have credited the testimony of
Coreathen Avant, Avant’s wife and the Buick’s owner. While Mrs. Avant denied smelling burnt
marijuana in her vehicle, she admitted that she did not know what happened in the car on March
-2-
Nos. 15-2037/15-2197
United States v. Avant
18, 2014, between when her husband dropped her off at work at 4:30 a.m. and when the search
warrant was executed later that morning. The district court acknowledged the defendants’
argument that there was no physical evidence of burnt marijuana in the vehicle but found that the
testimony of Sergeant White and Captain Voltattorni, who both testified to smelling burnt
marijuana, was credible. We give “great deference” to the district court’s credibility
determinations. United States v. Navarro-Camacho, 186 F.3d 701, 707 (6th Cir. 1999). The
defendants also argue that law enforcement should have used canine units to inspect the Buick to
detect the presence of marijuana. But the defendants have not cited any authority that requires
the use of a canine unit to detect the presence of narcotics when an officer has already smelled
narcotics. The district court did not clearly err in finding that the officers testified credibly that
they smelled marijuana. Nor did the district court err in concluding that the smell of marijuana
provided probable cause to search the Buick without a warrant.
The plain-view doctrine provided an independent basis to support the warrantless search
of the Buick. Under the plain-view doctrine, “if police are lawfully in a position from which
they view an object, if its incriminating character is immediately apparent, and if the officers
have a lawful right of access to the object, they may seize it without a warrant.” Minnesota v.
Dickerson, 508 U.S. 366, 375 (1993). “[A] motorist has ‘no legitimate expectation of privacy
shielding that portion of the interior of an automobile which may be viewed from outside the
vehicle by either inquisitive passersby or diligent police officers.’” United States v. Galaviz,
645 F.3d 347, 355 (6th Cir. 2011) (quoting United States v. Campbell, 549 F.3d 364, 373 (6th
Cir. 2008)). Here, the officers were lawfully present at 3909 Spruce Street to execute a search
warrant. Sergeant White testified that he looked into the driver’s side window of the Buick and
saw what appeared to be the butt of an AR-15 rifle between the center console and the
-3-
Nos. 15-2037/15-2197
United States v. Avant
passenger’s seat. Captain Voltattorni testified that, when he reached inside the vehicle to turn
the ignition off, he noticed a rifle on the passenger’s side. Other officers testified that they saw
the rifle in plain view. The incriminating nature of the rifle was immediately apparent, see, e.g.,
Mich. Comp. Laws § 750.227d(1)(a), and provided probable cause to believe that the vehicle
contained evidence of a crime, authorizing the officers to search the vehicle and giving them a
lawful right of access to its interior. See Galaviz, 645 [email protected].
The defendants attempt to attack the credibility of the officers’ testimony about the rifle.
But the officers’ testimony was not “so internally inconsistent or implausible on its face that a
reasonable factfinder would not credit it.” Anderson v. City of Bessemer City, 470 U.S. 564, 575
(1985).
Selma’s reliance on Gant is misplaced because that case involved the search of a vehicle
incident to an arrest. See 556 U.S. at 335. The Buick was not searched incident to an arrest but
was searched based on the officers’ detection of the smell of marijuana and observation of the
rifle in plain view.
For the foregoing reasons, we AFFIRM the district court’s denial of the defendants’
motion to suppress.
-4-
|
F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
NOV 22 1999
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
In re: RICHARD STEVEN PARRIN
and CONSTANCE ANNE PARRIN,
Debtors.
No. 99-3023
(BAP No. KS-97-055)
RICHARD STEVEN PARRIN and (Bankr. No. 97-20238)
CONSTANCE ANNE PARRIN, (D. Kan.)
Appellants,
v.
BRENDA PORTER HELMS,
JANICE E. STANTON, and MARK
SCHOTTLER,
Appellees.
ORDER AND JUDGMENT *
Before ANDERSON , BARRETT , and BRISCOE, Circuit Judges.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Debtors Richard Steven Parrin and Constance Anne Parrin appeal the
bankruptcy court’s order denying their motion to enforce the 11 U.S.C. § 362
automatic stay in their bankruptcy proceeding. The Parrins filed personal Chapter
7 bankruptcy in the Kansas District Court. The Parrins are also the sole officers
and shareholders of Bodin Corporation, which is the debtor in an involuntary
Chapter 7 bankruptcy proceeding in the Northern District of Illinois. Defendants,
the trustee in the Bodin proceeding and trustee’s counsel, filed a motion to
compel the Parrins’ attendance at a Rule 2004 examination relating to the Bodin
estate. See Bankr. R. 2004. The Parrins sought to stay defendants’ motion,
invoking § 362’s automatic stay provisions. The bankruptcy court denied their
motion, concluding that the Rule 2004 examination in the Bodin proceeding was
not an action “against the debtor” in the Parrin’s personal bankruptcy proceeding.
See § 362(a). The Tenth Circuit Bankruptcy Appellate Panel (the BAP) affirmed
the bankruptcy court’s order denying stay relief.
We exercise jurisdiction under 28 U.S.C. § 158(d). The order denying the
Parrins’ motion to enforce the stay is a final order. See Eddleman v. United
-2-
States Dep’t of Labor , 923 F.2d 782, 784 (10th Cir. 1991), overruled in part on
other grounds , Temex Energy, Inc. v. Underwood, Wilson, Berry, Stein &
Johnson , 968 F.2d 1003 (10th Cir. 1992). As there are no disputed facts, we
review the BAP’s legal determinations de novo. See Phillips v. White (In re
White) , 25 F.3d 931, 933 (10th Cir. 1994). Upon review of the parties’
submissions, we affirm for substantially the reasons stated in the thorough
opinion issued by the BAP.
The judgment of the Tenth Circuit Bankruptcy Appellate Panel is
AFFIRMED.
Entered for the Court
Stephen H. Anderson
Circuit Judge
-3-
|
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 31, 2008 Charter Communications Holdings, LLC Charter Communications Holdings Capital Corporation CCH II, LLC CCH IICapital Corp. CCO Holdings, LLC CCO Holdings Capital Corp. (Exact name of registrants as specified in their charters) Delaware (State or Other Jurisdiction of Incorporation or Organization) 333-77529-88-4155179 333-77499-01 43-1843177 333-111529-88-4155293 333-111423-01 13-4257703 333-112529-88-4155239 333-112593-01 20-0259004 (Commission File Number) (I.R.S. Employer Identification Number) 12405 Powerscourt Drive St. Louis, Missouri 63131 (Address of principal executive offices including zip code) 801.732.5372 (Registrants' telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On March 16, 2009, Charter Communications, Inc., the indirect parent company of Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation, CCH II, LLC, CCH II Capital Corp., CCO Holdings, LLC and CCO Holdings Capital Corp.,issued a press release announcing its results for the fourth quarter ended December 31, 2008. The following information, including the entirety of the press release appearing in Exhibit 99.1 hereto, is not filed but is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition." ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. Exhibit Number Description 99.1 Press Release dated March 16, 2009 (Incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on March 16, 2009 (File No. 000-27927)). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation, CCH II, LLC, CCH II Capital Corp., CCO Holdings, LLC, and CCO Holdings Capital Corp. have duly caused this current report to be signed on its behalf by the undersigned, thereunto duly authorized. Charter Communications Holdings, LLC Registrant By: CHARTER COMMUNICATIONS, INC., Sole Manager Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer Charter Communications Holdings Capital Corporation Registrant Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer CCH II, LLC Registrant By: CHARTER COMMUNICATIONS, INC., Sole Manager Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer CCH II Capital Corp. Registrant Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer CCO Holdings, LLC Registrant By: CHARTER COMMUNICATIONS, INC., Sole Manager Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer CCO Holdings Capital Corp. Registrant Dated:March 16, By:/s/ Kevin D. Howard Name: Kevin D. Howard Title: Vice President, Controller andChief Accounting Officer Exhibit Index Exhibit Number Description 99.1 Press Release dated March 16, 2009 (Incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on March 16, 2009 (File No. 000-27927)).
|
EXHIBIT 10.9
Lease Contract
Party A: Xu Shujun
Party B: Tonghua Tongdetang Pharmaceutical Company
Party A and Party B agree to conclude the contract according to the Contract Law
of the People’s Republic of China and relevant regulations.
Article 1: Status of house
1.
Address: No. 566 Heping Road, Jianshe Street
2.
Building area: 2448.57 square meters
Article 2: Term
1.
From Nov. 1 of 2006 to Oct. 31 of 2011, covering 5 years.
2.
Party B has the priority to lease the house after the contract expires, and it
shall notify Party A in advance of 6 months, and Party A shall reply within one
month after receiving the notice.
Article 3: deposit
1.
Rent: 30000 Yuan/month for the first year; 35000 Yuan/month for the second;
40000 Yuan/month for the third year; 45000 Yuan/month for the fourth year; 50000
Yuan/month for the fifth year;
2.
The rent shall be paid once a quarter.
Article 5: decoration
1.
Party B has right to decorate the house with the permission of Party A;
2.
Party B shall not disobey the relevant laws when implementing the decoration.
3.
The main decoration structure shall not be damaged after the lease term.
Article 6: House use and maintenance
1.
Party A has the responsibilities to manage and protect the house.
2.
Party B has obligations to maintain and repair the non-natural damage of the
house.
Article 7: obligation f Party A
1.
Waterproof handling of building cover;
2.
The two parties shall assume the land use fees after signing the agreement, and
other fees shall be assumed by Party B;
3.
Assist Party B to coordinate the house heating fees;
--------------------------------------------------------------------------------
4.
Allow Party b to lease part of the house, which shall be approved by Party A;
and Party B shall not use it to operate the same industry and products with
Party A;
Article 8: Obligations of Party B
1.
Party B shall repair and maintain the damaged facilities owing to its
responsibility, and it shall assume the relevant obligations caused by
non-prompt maintenance.
2.
Pay the rent as well as other relevant fees in time;
3.
Party B shall not take up the power distribution room that is used by Party A.
Article 9: change of contract main part
1.
The change of house ownership in the lease term cannot affect this contract.
Party B shall tell the situation of the transferred house, but it needs not to
get the approval of Party A. After transfer, the house owner becomes Party A of
the contract.
2.
The changed organizational institute shall continue to perform this contract
within the term.
Article 10: termination
1.
Party A has right to terminate the contract and requires Party B to compensate
for the economic loss if one of the following situation happened:
(1)
Party B uses the house to take illegal activities;
(2)
Party B doesn’t pay the rent according to the agreed term.
2.
Party B has right to terminate the contract and requires Party A to compensate
for the economic loss if one of the following situation happened:
(1)
Party A delivers the house after one month of the regulated term in the
contract;
(2)
Party A operates in the house of Party B without the advance notice, which
affects the normal activities of Party B.
Article 11: obligations for breach of contract
Party A will violate the contract if one of the following situations occurred:
(1)
It doesn’t comply with the contract to provide the house;
(2)
It violates other items of the contract.
Party B will violate the contract within 15 days after receiving the written
notice of Party A if one of the following situations occurred:
(1)
It doesn’t pay the rent in time;
--------------------------------------------------------------------------------
(2)
It doesn’t deliver the house in time after the contract expires;
(3)
It damages the house and facilities or changes the structure, which cause the
loss of Party A.
(4)
It violates other items of the contract.
Article 12: force majeure
Both parties shall not assume the obligations if there is the force majeure, and
the relevant party shall notify the other party within 15 days after the force
majeure and provide the certificate. Within the reasonable time, the party shall
continue to perform the contract.
Article 13: applicable laws and disputes handling
Both parties will solve the disputes arising from execution of the contract
through friendly consultation, or mediation by the related department. In case
the agreement cannot be reached, any party may resort to arbitration commission
for arbitration over the matter.
Article 14: provisions
1.
Any party shall not change or revise the contract without confirmation of the
two parties;
2.
The two parties shall use the written form to change or supplement the contract,
and make it as the attachment of the contract with the signature and seal of two
parties, with the same legal effect of the contract;
3.
This contract has two copies, with both parties holding one respectively, and it
will take effect after signing and sealing.
Party A: Xu Shujun Party B: Tonghua Tongdetang Pharmaceutical
Company
Oct. 25, 2008
--------------------------------------------------------------------------------
|
NOTE: This opinion is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
HARRIS CORPORATION,
Plaintiff-Appellee,
v.
FEDERAL EXPRESS CORPORATION,
Defendant-Appellant.
__________________________
2012-1094
__________________________
Appeal from the United States District Court for the
Middle District of Florida in No. 07-CV-1819, Judge John
Antoon, II.
___________________________
Decided: January 17, 2013
___________________________
BRIAN R. GILCHRIST, Allen Dyer, Doppelt, Milbrath &
Gilchrist, P.A., of Orlando, Florida, argued for plaintiff-
appellee. With him on the brief was RYAN T. SANTURRI.
KARA F. STOLL, Finnegan, Henderson, Farabow, Gar-
rett & Dunner, LLP, of Washington, DC, argued for
defendant-appellant. With her on the brief were JASON
W. MELVIN; and JEFFREY A. BERKOWITZ, of Reston, Virgin-
HARRIS CORP v. FED EX CORP 2
ia. Of counsel on the brief was E. CHRIS CHERRY, FedEx
Corporation, of Memphis, Tennessee.
__________________________
Before LOURIE, CLEVENGER, and WALLACH, Circuit Judg-
es.
Dissenting opinion filed by Circuit Judge WALLACH.
CLEVENGER, Circuit Judge.
This is an appeal from a decision by the United States
District Court for the Middle District of Florida in a
patent infringement suit in which Plaintiff-Appellee
Harris Corporation (“Harris”) asserted seven patents (“the
Asserted Patents”) against Defendant-Appellant Federal
Express Corporation (“FedEx”). After the court conducted
claim construction, a jury found all asserted claims were
not invalid and willfully infringed. FedEx then moved for
judgment as a matter of law (“JMOL”), arguing that
Harris failed to meet its burden of proving infringement
and willful infringement, and that FedEx had established
by clear and convincing evidence that the patents were
obvious and unenforceable due to inequitable conduct.
The district court granted the JMOL motion in part,
finding that FedEx did not willfully infringe four of the
seven Asserted Patents as a matter of law, but denied the
motion in all other respects.
FedEx appeals the district court’s claim construction
ruling as to one term, the district court’s denial of JMOL
of non-infringement as to certain accused systems, the
court’s denial of JMOL as to obviousness, and the court’s
denial of JMOL as to willfulness with respect to the
remaining Asserted Patents. For the reasons outlined
below, we reverse the district court’s claim construction,
vacate and remand the court’s denial of JMOL as to non-
3 HARRIS CORP v. FED EX CORP
infringement and willfulness, and affirm its denial of
JMOL as to validity.
I
Plaintiff Harris, an international communications and
information technology company, is the assignee of a
family of patents stemming from a single parent, U.S.
Patent No. 6,047,165 (filed Nov. 14, 1995, issued April 4,
2000) (“the ’165 patent”), which is entitled “[w]ireless,
frequency-agile spread spectrum ground link-based air-
craft data communication system.” The ’165 patent, along
with six of its continuations, form the Asserted Patents in
this case. 1 All seven of the Asserted Patents are directed
to a particular technique for accumulating and storing
data reflecting aircraft performance while the plane is
airborne, and then upon arrival, transmitting that data
via spread spectrum signals to the ground for subsequent
analysis.
A brief overview of this field of technology is useful in
understanding the Asserted Patents. Since the earliest
days of commercial air travel, planes have incorporated a
flight data recorder which monitors, collects and stores
flight performance data. This device is commonly known
as the plane’s “black box.” These “black boxes” are spe-
cially designed to withstand an aircraft mishap so that
the data may be recovered and reviewed after the fact.
’165 patent, col. 1 ll. 20–34. In 1995, the Federal Aviation
1 The other six Asserted Patents are: U.S. Patent
Nos. 6,154,637 (issued Nov. 28, 2000) (“the ’637 patent”);
6,308,045 (issued Oct. 23, 2001) (“the ’045 patent”);
6,990,319 (issued Jan. 24, 2006) (“the ’319 patent”);
7,426,387 (issued Sept. 16, 2008) (“the ’387 patent”);
7,428,412 (issued Sept. 23, 2008) (“the ’412 patent”); and
7,444,146 (issued Oct. 28, 2008) (“the ’416 patent”).
HARRIS CORP v. FED EX CORP 4
Administration (“FAA”) encouraged all airlines to review
the “black box” data on a regular basis, rather than
simply after a mishap, to help prevent accidents. In
response, artisans developed techniques that allowed
airlines to retrieve flight performance data without re-
moving the “black box” from the plane. Id. at col. 1 ll. 35–
43. One such prior art solution involved equipping each
aircraft with a redundant flight-data recorder having a
removable storage medium (i.e., a cartridge or floppy
disk) that an attendant could physically carry off the
plane upon arrival. Id. at col. 1 ll. 44–52. This system
was nicknamed “sneakernet.” Later prior art systems
equipped the redundant flight-data recorder with a data
output transmitter, so that flight data could be transmit-
ted directly to a ground-based computer system via either
a fiber-optic cable or a wireless infrared link. Id. at col. 1
l. 60–col. 2 l. 6.
These prior art systems suffered from several draw-
backs. For example, “sneakernet” was time and manpow-
er intensive, and subject to error when disks or cartridges
were erroneously associated with the wrong planes. Id. at
col. 1 ll. 53–60. The fiber-optic cable and infrared sys-
tems, on the other hand, required the aircraft to be
parked at or near the gate because the fiber-optic cable
was physically tethered to the ground computer system
and infrared transmission required a direct line of sight
between the plane and the ground computer. Id. at col. 1
l. 61–col. 2 l. 6.
To address these concerns, the inventors of the As-
serted Patents proposed a modification to the prior art.
Like the prior art, the Asserted Patents employ a device
(which the patent calls a “ground data link unit”) that
stores a redundant copy of the flight data information
while the plane is airborne and which is equipped with a
5 HARRIS CORP v. FED EX CORP
wireless transceiver for transmission upon arrival. In the
Asserted Patents, the “ground data link unit” communi-
cates wirelessly with the ground receiver via radio fre-
quency signals—specifically, spread spectrum signals—
rather than infrared signals. ’165 [email protected]. 2 ll. 22–
33. Spread spectrum signals have certain benefits over
infrared wireless, such as the ability to communicate with
the ground receiver without a direct line of sight.
Claim 1 of the ’319 patent is representative of the As-
serted Patents’ invention:
1. A method of providing data from an aircraft
comprising:
continuously monitoring the flight performance of
the aircraft during an entire flight of the aircraft
from at least take-off to landing;
generating aircraft data representative of the con-
tinuously monitored aircraft flight performance
during an entire flight of the aircraft from at least
take-off to landing;
accumulating and continuously storing the gener-
ated aircraft data within a ground data link unit
positioned within the aircraft during the entire
flight of the aircraft from at least take-off to land-
ing to create an archival store of such aircraft da-
ta;
after the aircraft completes its flight and lands at
an airport, transmitting the accumulated, stored
generated aircraft data from the ground data link
unit over a wideband spread spectrum communi-
cations signal to a ground based spread spectrum
receiver; and
HARRIS CORP v. FED EX CORP 6
demodulating the received spread spectrum com-
munications signal to obtain the accumulated,
aircraft data representative of the flight perfor-
mance of the aircraft during an entire flight of the
aircraft from take-off to landing.
See ’319 [email protected]. 16 l. 52–col. 17 l. 7. Other claims in
the Asserted Patents describe slight variations of the type
of spread spectrum transmission used to transmit the
data or the type of system used for transmission. For
instance, certain claims require storing data during two
flights rather than one, whereas others claim uploading
data to the aircraft via spread spectrum, rather than
downloading it to the ground. These are just two of the
many variations found among the patents’ claims.
II
Defendant FedEx is a global courier service that uses
a substantial fleet of aircraft for its deliveries. In 1998,
FedEx began equipping its MD-11 aircraft with a system
called “TITAN,” which was capable of wirelessly trans-
mitting recorded flight data to the ground upon arrival
using spread spectrum signals. FedEx later learned that
Harris had acquired certain patents related to this tech-
nology field, and so it contacted Harris in 2002 to confirm
that the TITAN system “is not and never will be in viola-
tion of” Harris’s patents. Harris responded that certain of
its patents were licensed to Spirent, the vendor responsi-
ble for FedEx’s TITAN system. As such, FedEx had
reason to believe that the TITAN systems in its MD-11
aircraft were licensed products, and the TITAN system
has not been accused in this case.
In 2003, FedEx decided to incorporate similar func-
tionality into its fleet of older, smaller B727 aircraft. But
7 HARRIS CORP v. FED EX CORP
instead of purchasing licensed TITAN systems for its
B727 fleet, FedEx partnered with a different aircraft
parts manufacturer named Avionica to build a brand new
system according to FedEx’s specifications (“the Fed-
Ex/Avionica System”). There is no indication that FedEx
made any effort to determine whether this new Fed-
Ex/Avionica System infringed Harris’s patents, or ever
inquired about obtaining a license from Harris before
installing FedEx/Avionica Systems on its B727 aircraft.
Nevertheless, within a few years every FedEx B727 was
equipped with a FedEx/Avionica System.
In 2007, Harris filed suit alleging that the Fed-
Ex/Avionica System infringed Harris’s ground data link
patents. Roughly nine months after the suit was filed,
Avionica provided FedEx with a new software “upgrade”
for the FedEx/Avionica System. Prior to the installation
of this new software option, the FedEx/Avionica System
downloaded all of the flight performance data recorded
during flight to the ground computer upon arrival. After
this new software option was installed, the system’s
operator could choose to exclude five minutes of the
recorded flight data after the plane landed but before the
data was transmitted. This new software option appar-
ently served no functional purpose, and was incorporated
solely to “design around” Harris’s patents. Six months
later, FedEx removed the “design-around” systems entire-
ly from the B727 fleet, and today no version of the Fed-
Ex/Avionica System is in use.
III
After extensive discovery, claim construction, and
summary judgment motions, the case was tried to a jury
in July 2010. The jury returned a special verdict finding
all of the asserted claims to be not invalid, enforceable
HARRIS CORP v. FED EX CORP 8
and willfully infringed, and finding that Harris had
proven the existence of secondary indicia of nonobvious-
ness.
FedEx moved for JMOL that Harris failed to meet its
burden of proving both infringement and willful in-
fringement, and that FedEx had established by clear and
convincing evidence that the patents are obvious and
unenforceable as a result of inequitable conduct. The
court agreed that the jury’s finding that FedEx willfully
infringed the ’319, ’387, ’412 and ’146 patents was not
supported by substantial evidence, but denied FedEx’s
motion in all other respects. Harris was awarded a
permanent injunction, compensatory damages, and attor-
ney’s fees, but was denied enhanced damages.
FedEx has timely appealed the district court’s claim
construction ruling, and its denial of FedEx’s JMOL
motion as to non-infringement, invalidity, and willful
infringement of the ’165, ’637, and ’045 patents. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a).
IV
Claim construction is reviewed de novo. Cybor Corp.
v. FAS Techs., Inc., 138 F.3d 1448, 1454–55
(Fed.Cir.1998) (en banc). To ascertain the scope and
meaning of the asserted claims, we look to the words of
the claims themselves, the specification, the prosecution
history, and any relevant extrinsic evidence. Phillips v.
AWH Corp., 415 F.3d 1303, 1315–17 (Fed.Cir.2005) (en
banc).
JMOL is appropriate when “a reasonable jury would
not have a legally sufficient evidentiary basis to find for
the party on that issue.” Fed.R.Civ.P. 50(a)(1). This court
9 HARRIS CORP v. FED EX CORP
reviews the denial of a motion for JMOL under the law of
the regional circuit. Orion IP, LLC v. Hyundai Motor Am.,
605 F.3d 967, 973 (Fed. Cir. 2010). Under the law of the
Eleventh Circuit, we must “consider all the evidence, and
the inferences drawn therefrom, in the light most favora-
ble to the nonmoving party ... [and] in this light, [deter-
mine whether] there was any legally sufficient basis for a
reasonable jury to find in favor of the nonmoving party.”
Advanced Bodycare Solutions, LLC v. Thione Int'l, Inc.,
615 F.3d 1352, 1360 (11th Cir. 2010) (internal citations
and quotations marks omitted)
We review the jury's conclusions on obviousness, a
question of law, without deference, and the underlying
findings of fact, whether explicit or implicit within the
verdict, for substantial evidence. Johns Hopkins Univ. v.
Datascope Corp., 543 F.3d 1342, 1345 (Fed. Cir. 2008)
(quotations omitted).
V
We turn first to the issue of claim construction, 2 and
the single limitation at issue on appeal: “transmitting the
accumulated, stored generated aircraft data.” 3 Before the
2 We reject Harris’s theory that, because FedEx no
longer uses the infringing system and the parties have
settled for a compensatory-damages sum that will not be
impacted by this appeal, claim construction is a moot
issue. FedEx is presently enjoined from further use of its
“design-around,” and reversing the district court’s claim
construction might provide FedEx with relief from this
injunction. Accordingly, this issue is not moot.
3 Each of the asserted claims includes (or depends
from a claim that includes) some variation of this limita-
tion, although the limitation is phrased slightly different-
ly across the seven Asserted Patents. For the purposes of
claim construction on appeal, the parties treat the phras-
HARRIS CORP v. FED EX CORP 10
district court, Harris argued that this term needed no
construction and submitted a proposed plain meaning of:
“transmitting aircraft data that has been accumulated,
stored, and generated.” FedEx argued that a construction
was necessary and proposed the following: “transmitting
all the aircraft data that has been accumulated or stored
or generated.” Notably, the FedEx/Avionica “design-
around” system transmits less than “all” of its accumulat-
ed data—five minutes less, to be exact—and so this
system arguably would not literally infringe under Fed-
Ex’s construction. The district court disregarded the
parties’ proposed constructions and construed the term
sua sponte to require “only the transmission of data
sufficient to provide a comprehensive, long-term picture of
the flight performance” to the ground upon arrival.
Harris Co. v. Fed. Exp. Co., 698 F. Supp. 2d 1345, 1358
(M.D. Fla. 2010) (claim construction opinion).
On appeal, FedEx again urges the construction it pro-
posed below, whereas Harris defends the district court’s
sua sponte construction. The dispute boils down to how
much of the data accumulated while the plane is in the
air must be transmitted to the ground once the plane
reaches its destination. FedEx concedes that while the
plane is airborne, the ground data link unit may collect
and store something less than “all” available data. But
FedEx insists that once the plane has landed, any and all
data accumulated and stored in the ground data link unit
must be transmitted to the ground. Harris, on the other
hand, urges a more flexible interpretation that would
permit transmission of a subset of all data stored in the
ing found in claim 1 of the ’319 patent as representative of
this limitation across all asserted claims, and we follow
suit.
11 HARRIS CORP v. FED EX CORP
ground data link unit, provided that data is representa-
tive of the plane’s performance over the entire flight.
Of the two constructions, FedEx’s interpretation re-
mains truest to the claim language. The claim introduces
the relevant data set by describing how it is first “gener-
ated” during an entire flight and then “accumulated” and
“stored” in the ground data link unit between take-off and
landing:
generating aircraft data representative of the con-
tinuously monitored aircraft flight performance
during an entire flight of the aircraft from at least
take-off to landing;
accumulating and continuously storing the gener-
ated aircraft data within a ground data link unit
positioned within the aircraft during the entire
flight of the aircraft from at least take-off to land-
ing to create an archival store of such aircraft da-
ta;
’319 [email protected]. 16 ll. 57–64 (emphasis added). The
claim’s next step, where we encounter the disputed limi-
tation, describes transmitting “the” data using identical
language as the previous claim steps:
after the aircraft completes its flight and lands at
an airport, transmitting the accumulated, stored
generated aircraft data from the ground data link
unit over a wideband spread spectrum communi-
cations signal to a ground based spread spectrum
receiver;
’319 [email protected]. 16 l. 65–col. 17 l. 2 (emphasis added).
When identical language is found in multiple steps within
HARRIS CORP v. FED EX CORP 12
the same claim, it is reasonable to assume that all refer-
ences relate to the same subject matter. See Process
Control Corp. v. HydReclaim Corp., 190 F.3d 1350, 1356
(Fed. Cir. 1999) (holding that “a discharge rate” in an
earlier limitation refers to the same discharge rate as “the
discharge rate” in a later limitation); Microprocessor
Enhancement Corp. v. Texas Instruments, Inc., 520 F.2d
1367, 1375 (Fed. Cir. 2008) (acknowledging that it is a
reasonable “initial assumption” to construe a single claim
term “consistently with its appearance in other places in
the same claim”) (quotations omitted). Given this claim’s
prior description of generating, accumulating and storing
a particular set of data in the ground data link unit, it is
entirely reasonable to interpret “transmitting the accu-
mulated, stored generated aircraft data from the ground
data link unit” as referring to that same data set. This is
especially true where, as here, the later instance refers to
“the” data and therefore begs for some antecedent basis.
Harris nonetheless argues that nothing in this lan-
guage requires that “all” of the data in the ground data
link unit must be transmitted once the plane lands, and
accuses FedEx of importing the word “all” into the claim
in the absence of support for such an inclusion. We reject
this argument for two reasons. First, although the claim
does not expressly require that “all” of the accumulated
data must be transmitted, it similarly lacks any indica-
tion that some subset of the accumulated data should be
transmitted, and if so what that subset should be. In the
absence of such guidance, FedEx’s interpretation seems
entirely reasonable. Second, Harris’s construction would
require us to interpret “the . . . data” to mean “a subset of
the data sufficient to provide a comprehensive, long-term
picture of the flight performance.” So we have been
presented with competing constructions that each import
additional language into the claim. For the reasons
13 HARRIS CORP v. FED EX CORP
outlined above, we believe FedEx’s most naturally aligns
with the claim language.
Harris argues that the subsequent and final element
of Claim 1 contradicts FedEx’s construction because the
data set is described at this “demodulation” step as “rep-
resentative of the flight performance:”
demodulating the received spread spectrum com-
munications signal to obtain the accumulated,
aircraft data representative of the flight perfor-
mance during the entire flight from take-off to
landing.
’319 [email protected]. 17 ll. 3–7 (emphasis added). However,
the phrase “representative of the flight performance” as
used in this clause modifies the “accumulated, [sic] air-
craft data,” not the transmitted data. This supports
FedEx’s position that the data’s scope becomes fixed upon
termination of the in-flight accumulation phase, and may
not be further summarized after the plane lands but prior
to transmission.
The specification is unhelpful in evaluating this issue.
While it is true that nothing in the specification indicates
that “all” data accumulated during the flight must be
transmitted to the ground once the plane lands, it is also
true that the term “comprehensive, long-term picture of
the flight performance” is found nowhere in the specifica-
tion. The written description is therefore at best a neu-
tral factor in this analysis.
We last turn to the prosecution history, from which
the district court apparently derived the language used in
its sua sponte construction. In particular, the district
court adopted statements Harris made during reexamina-
HARRIS CORP v. FED EX CORP 14
tion of the ’045 patent when distinguishing its invention
from U.S. Patent No. 5,445,347 (issued Aug. 29, 1995)
(“Ng”). Ng (discussed infra in further detail) teaches a
system for monitoring vehicle operating conditions
whereby signals are transmitted from the vehicle to the
ground via spread spectrum signals at intermittent times
during a voyage as the vehicle passes certain ground
receivers. Harris argued that its invention did not
transmit Ng’s “snapshots” of data but rather “a compre-
hensive long-term picture” of the flight performance,
stating:
[In Ng,] [t]he only data available for transmission
is a momentary snap-shot of the continuously
monitored operating conditions.
Performing inspections in near real time in an au-
tomated wireless preventive maintenance moni-
toring system has nothing in common with
acquiring a comprehensive long-term picture de-
rived from the totality of the flight performance
data in order to identify and remedy adverse
trends.
J.A. 3424. But these statements address only the data
“available for transmission,” comparing Ng’s “momentary
snapshot” to Harris’s “comprehensive long-term picture
derived from the totality of the flight performance data.”
It is entirely ambiguous whether the data “available for
transmission” refers to the extent and type of data that is
“accumulated” during the voyage, or to the amount of
data that is “transmitted’ upon arrival. Even the district
court noted that this language was “amendable to multi-
ple reasonable interpretations.” Harris, 698 F. Supp. [email protected]. As a general rule, prosecution history cannot
overcome the natural reading of the claim when the
15 HARRIS CORP v. FED EX CORP
alleged disavowal is ambiguous. See Elbex Video, Ltd. v.
Sensormatic Electronics Corp., 508 F.3d 1366, 1371 (Fed.
Cir. 2007). Given the ambiguity of the prosecution histo-
ry, there is no basis for incorporating this language into
this term’s construction.
Thus, all intrinsic evidence either supports FedEx’s
construction or is neutral, and because the parties have
not provided any extrinsic evidence that sheds light on
this limitation, we must return to the most reasonable
interpretation of this limitation as it appears in the claim.
Phillips, 415 F.3d at 1316 (“The construction that stays
true to the claim language and most naturally aligns with
the patent’s description of the invention will be [] the
correct construction.”). As such, we reverse the court’s
construction of the claim term “transmitting the accumu-
lated, stored generated aircraft data” in favor of FedEx’s
proposed construction: “transmitting all the aircraft data
that has been accumulated or stored or generated.”
VI
Next, we turn to the district court’s denial of FedEx’s
JMOL motion on the issue of non-infringement. When a
patent infringement verdict is based on an incorrect claim
construction, we reverse the trial court's denial of a
motion for judgment as a matter of law if no reasonable
jury could have found infringement under the proper
claim construction. Finisar Corp. v. DirecTV Group, Inc.,
523 F.3d 1323, 1333 (Fed. Cir. 2008).
The jury found that both the FedEx/Avionica System
and the “design around” infringed the Asserted Patents.
FedEx only appeals the judgment with respect the “de-
sign-around” system, arguing that “[i]t is undisputed that
FedEx’s design-around does not transmit a five-minute
HARRIS CORP v. FED EX CORP 16
segment of the data that was accumulated and stored
and, accordingly, it does not transmit the same data set
that was accumulated and stored.” FedEx thus contends
that a reversal of the district court’s claim construction
leaves this court with no option but to also reverse the
district court’s denial of FedEx’s JMOL motion for non-
infringement.
But the record reflects that FedEx’s “design-around”
simply provided its users with the option to delete five
minutes’ worth of accumulated data prior to transmission.
Trial Tr. 116:2–20, July 21, 2010, ECF No. 272. So
although it might have been possible to use the “design-
around” system in a non-infringing manner, it was also
apparently possible to use the system exactly like the
original FedEx/Avionica System, i.e., in an infringing
manner. As such, use of FedEx’s “design-around” system
might nevertheless infringe an asserted method claim,
such as claim 1 of the ’319 patent, if used with the “five
minute” option turned off. Similarly, the “design around”
might also infringe certain asserted system claims due to
its capability to behave like the original FedEx/Avionica
System.
We therefore vacate the district court’s denial of
JMOL on the issue of non-infringement as to the Fed-
Ex/Avionica “design-around” system, and remand for
further consideration consistent with our claim construc-
tion ruling.
VII
Before addressing FedEx’s validity challenges, we
pause to reject FedEx’s contention that a new trial on
validity is necessary as a result of our reversal of the
district court’s claim construction. A claim construction
17 HARRIS CORP v. FED EX CORP
reversal does not, in and of itself, justify a new validity
trial; rather, there must be some showing that the erro-
neous construction somehow prejudiced the validity case
below. Eaton Corp. v. Rockwell Int'l Corp., 323 F.3d 1332,
1344 (Fed. Cir. 2003). Harris’s briefing challenged FedEx
to explain how its invalidity case was prejudiced by the
district court’s claim construction, and FedEx failed to do
so. Indeed, the district court’s construction was broader
than the proper construction, insofar as it encompassed
systems that transmitted “all” accumulated data to the
ground (i.e., the FedEx/Avionica System) as well as sys-
tems that transmitted less than “all” such data (i.e., the
FedEx/Avionica “design-around”). So if anything, the
correct claim construction would only make proving
invalidity more difficult for FedEx in a new trial.
We therefore turn to the merits of FedEx’s validity
appeal.
A
FedEx presented a number of prior art obviousness
contentions at trial, but only two are before us on appeal.
The first involves the Ng reference. As discussed above,
Ng teaches a system for monitoring vehicle operating
conditions whereby signals are transmitted from the
vehicle to the ground via spread spectrum signals at
intermittent times during the voyage as the vehicle
passes certain ground receivers. While primarily targeted
at trains, Ng acknowledges the invention could be used in
airplanes. [email protected]. 3 ll. 22–28. In Ng’s preferred em-
bodiment, a diagnostic unit monitors the train’s operating
conditions, stores a signal representing the train’s current
status, and then periodically transmits a spread-spectrum
signal conveying the train’s status to ground-based re-
ceivers located at fixed stations as the train passes them
HARRIS CORP v. FED EX CORP 18
along its route. See id. at col. 3 ll. 17–31; col. 4 ll. 53–57;
col. 4 l. 62–col. 5 l. 5. As noted above, Ng was before the
PTO at one point during either prosecution or re-
examination of all seven of the Asserted Patents, and was
specifically addressed and overcome during re-
examination of the ’045 patent.
FedEx’s second obviousness contention involves a
1978 publication describing the data recording systems on
an L-1011 aircraft (“L-1011”) combined with a September,
1994, presentation given by Douglas Aircraft engineer
Pete Hibson (“FCM-69”). The L-1011 reference essential-
ly teaches the “sneakernet” system, i.e., a system for
collecting data during aircraft flights that samples and
records data onto a “Quick Access Recorder” (“QAR”)
which utilized removable cassettes. QAR cassettes could
be removed from an aircraft and processed to detect any
potential issues on a ground-based “playback station.”
There is no dispute that L-1011 is prior art to the Assert-
ed Patents, and it was considered during prosecution or
reexamination of five of the seven Asserted Patents.
The FCM-69 reference is a slideshow from a public
presentation given by Douglas Aircraft engineer Pete
Hibson three months before the Asserted Patents’ earliest
priority date. Mr. Hibson, working with spread-spectrum
expert Dr. Darius Modarress, recognized that many of the
problems caused by infrared or fiber optic cables could be
resolved by replacing these with spread-spectrum trans-
missions. The first page of the FCM-69 reference de-
scribes the purpose of the presentation: to set forth a
“novel concept of using Spread Spectrum technology to
interface a PMAT system to an airplane in place of a
direct connection to the aircraft.” The document begins
with an overview of the downsides of presently available
fiber-optic and infrared systems. The document then
19 HARRIS CORP v. FED EX CORP
describes how these problems could be largely solved by
implementing spread spectrum. For instance, it describes
how spread spectrum offered “lower cost and increased
functionality” and eliminated the need to tether the plane
using the fiber-optic cable. Spread spectrum, the presen-
tation continued, required no license from the FCC, the
signals were largely immune to interference and had high
transmission rates, and spread spectrum could be imple-
mented using commercially-available products rather
than costly specialized devices. But FCM-69 also notes
that data rates for spread spectrum were, on average, 100
times slower than infrared.
B
FedEx contends that both of its contentions present a
clear and convincing case for obviousness. As for Ng,
FedEx contends that the this system could be easily
adapted to behave like the Harris invention by merely
adding extra memory to Ng’s data recorder, thus provid-
ing the system with sufficient capacity to store an entire
trip’s worth of data. As for the second contention, FedEx
argues that L-1011 generally teaches transferring data
collected during a flight to the ground for analysis,
whereas FCM-69 teaches the purportedly novel aspect of
Harris’s invention, which is transmitting the accumulated
flight data using spread spectrum signals.
Harris argues, in response, that FedEx provided the
jury with insufficient evidence to support its obviousness
contentions, and that the jury heard convincing evidence
that undermines FedEx’s contentions. We agree with
Harris. FedEx’s expert opined on the Ng reference only in
the context of three claims (dependent claims 5, 15, and
25 of the ’319 patent). And although witnesses testified
regarding the L-1011 and FCM-69 references separately,
HARRIS CORP v. FED EX CORP 20
FedEx apparently only proposed this combination to the
jury during its closing argument when the two references
were recited among a laundry list of prior art.
The weakness of FedEx’s trial evidence troubles Fed-
Ex’s appellate reliance upon these combinations to invali-
date all sixty-two claims of the Asserted Patents. FedEx
did not at trial, and does not on appeal, set forth a claim-
by-claim analysis of all the asserted claims describing
which elements can be found in which reference. The
asserted claims include many variations on claim 1 of the
’319 patent, such as requiring that the spread spectrum
signal use the “S band” (which is required by claims 3 and
9 of the ’165 patent, and claim 39 of the ’637 patent), or
that the system use a spread spectrum signal transmit-
ting a “probe beacon” to select a sub-band frequency
channel (which is required by all asserted claims in the
’637 patent) or that the system automatically download
the data from the aircraft to the ground upon landing
(required by, inter alia, all asserted claims from the ’387
patent). FedEx argues that these are “subtle variations”
that “do not affect patentability in view of the prior art.”
But this does not relieve FedEx of its burden to prove by
clear and convincing evidence that these additional limi-
tations actually were known in the prior art, which it has
failed to do.
FedEx also failed to explain why an artisan would be
motivated to make its suggested prior art modifications.
Although evidence of motivation to combine is not re-
quired to prove invalidity, it may nevertheless be "im-
portant to identify a reason that would have prompted a
person of ordinary skill in the relevant field to combine
the elements in the way the claimed new invention does."
KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418-22 (2007).
This is particularly true in the case of Ng, where FedEx
21 HARRIS CORP v. FED EX CORP
suggests without further explanation that it would have
been obvious to re-engineer a system that periodically
transmits mid-voyage status updates so that it instead
accumulates an entire trip’s worth of data and transmits
all of the accumulated data at once upon arrival. Absent
any explanation to the contrary, one suspects FedEx
reached this conclusion using impermissible hindsight.
The limited testimony FedEx offered at trial concern-
ing its obviousness contentions suffered from other defi-
ciencies. During cross-examination, Dr. Helfrick was
unable to speak to certain aspects of the Ng reference
such as whether the Ng system recorded data over the
entire life of the train’s voyage or how much information
the Ng system transmitted to a station when the train
passed by. Meanwhile, Mr. Hibson—FedEx’s primary
witness concerning the FCM-69 reference—was discredit-
ed during cross-examination. For instance, the jury
learned about an e-mail Mr. Hibson sent when volunteer-
ing to assist in FedEx’s defense which expressed anger at
Harris’s licensing success because Hibson had “taught
[Harris] everything, including wireless.” J.A. 2704–05;
Trial Tr. 136:21–142:13, July 26, 2010, ECF No. 275.
Moreover, when asked during cross-examination why he
agreed to testify on FedEx’s behalf, Mr. Hibson responded
that he was a Boeing employee and FedEx was “one of
[Boeing’s] best customers, [so] we want to keep them
happy." Trial Tr. 141:6–17, July 26, 2010, ECF No. 275.
The jury also heard testimony that the FCM-69 pro-
posal actually taught away from spread spectrum. We
have held that “[a] reference may be said to teach away
when a person of ordinary skill, upon reading the refer-
ence, would be discouraged from following the path set
out in the reference, or would be led in a direction diver-
gent from the path that was taken by the applicant.” In
HARRIS CORP v. FED EX CORP 22
re Gurley, 27 F.3d 551, 553 (Fed. Cir. 1994). Although
FCM-69 largely encourages the use of spread spectrum,
the presentation also included certain facts that might
have discouraged an artisan from using spread spectrum.
For instance, the presentation acknowledged that spread
spectrum had slower data transfer rate than infrared, and
too many planes using spread spectrum at once could
result in higher error rates or dropped connections.
On top of all this, the jury learned that all three ref-
erences were before the PTO and considered during
prosecution of the '387 patent, the '412 patent, and the
'146 patent, and Ng was also considered during prosecu-
tion of the '165 patent, the '319 patent. All three refer-
ences were also before the PTO during the reexamination
of the '165 and '045 patents, and as noted above, Harris
directly addressed and overcame a challenge based upon
Ng during the latter patent’s reexamination. Although
none of these facts impact FedEx’s burden of proof, they
are reasonable considerations when determining whether
an invalidity defense has been proven by clear and con-
vincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, 131 S.
Ct. 2238, 2251, 180 L. Ed. 2d 131 (2011).
Finally, the jury found that Harris had proven the ex-
istence of a number of secondary considerations of nonob-
viousness, which can buttress a court’s finding of
nonobviousness. See Eli Lilly & Co. v. Zenith Goldline
Pharmaceuticals, Inc., 471 F.3d 1369, 1380 (Fed. Cir.
2006) (“Lilly proved extensive secondary considerations to
rebut obviousness . . . these objective criteria buttressed
the trial court's conclusion of nonobviousness.”). Harris’s
successful licensing program is evidence of commercial
success and acceptance by others, and the FedEx/Avionica
System is evidence that others copied its invention.
Moreover, Mr. Hibson testified that his 1994 presentation
23 HARRIS CORP v. FED EX CORP
was rejected because his colleagues at the time were
focused upon using fiber-optic and infrared transmissions.
Harris submitted this as evidence of skepticism by other
experts, and also that others had tried unsuccessfully to
solve the problem. FedEx has not appealed any of these
findings.
FedEx bears the burden to demonstrate invalidity by
clear and convincing evidence. Yet the evidence regard-
ing the scope and content of these references and the
differences between the references and the asserted
claims fail to satisfy this standard of proof, and FedEx
does not contest the existence of Harris’s secondary con-
siderations of nonobviousness. Accordingly, we affirm the
district court’s denial of JMOL as to invalidity.
VIII
Finally, we address FedEx’s appeal of the district
court’s denial of JMOL on the issue of willfulness as to
certain of the Asserted Patents. In its JMOL motion,
FedEx argued that it had raised substantial questions
regarding infringement and validity throughout the
litigation, and that this precluded a finding that it met
the first prong of the analysis set forth in In re Seagate
Tech., LLC, 497 F.3d 1360, 1366 (Fed. Cir. 2007), which
requires that the infringer acted despite an objectively
high likelihood that its actions constituted infringement
of a valid patent. FedEx also argued that Harris failed to
introduce clear and convincing evidence regarding wheth-
er FedEx knew or should have known about the objective-
ly high risk, which is the second Seagate prong. The
district court granted FedEx’s motion as to four of the
Asserted Patents, but denied the motion as to the other
three.
HARRIS CORP v. FED EX CORP 24
Citing Metabolite Labs., Inc., v. Lab. Corp. of Am.
Holdings, 370 F.3d 1354, 1359 (Fed. Cir. 2004), the dis-
trict court applied a deferential standard of review to the
jury’s willfulness findings, stating that “[w]hether in-
fringement was willful is a question of fact reviewed for
substantial evidence.” But this court has since held in
Bard Peripheral Vascular, inc. v. W.L. Gore & Associates,
Inc., that “simply stating that willfulness is a question of
fact oversimplifies this issue.” 682 F.3d 1003, 1006 (Fed.
Cir. 2012). As such, the district court should have re-
viewed the Seagate “objective prong” evidence de novo
because “[t]he ultimate legal question of whether a rea-
sonable person would have considered there to be a high
likelihood of infringement of a valid patent should always
be decided as a matter of law by the judge.” Id. at 1008.
In view of this, and also in light of our above claim
construction and noninfrignement rulings, we vacate the
JMOL order as to the willfulness issue and remand for
further consideration in accordance with this opinion.
CONCLUSION
For the foregoing reasons, we reverse the district
court’s order on claim construction, we vacate and remand
the district’s court’s denial of JMOL as to non-
infringement and willfulness, and we affirm on all other
counts.
AFFIRMED IN PART, REVERSED IN PART, AND
VACATED AND REMANDED IN PART
COSTS
No costs.
NOTE: This opinion is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
HARRIS CORPORATION,
Plaintiff-Appellee,
v.
FEDERAL EXPRESS CORPORATION ,
Defendant-Appellant.
__________________________
2012-1094
__________________________
Appeal from the United States District Court for the
Middle District of Florida in No. 07-CV-1819, Judge John
Antoon, II.
__________________________
WALLACH, Circuit Judge, dissenting in part.
I do not agree that the “transmitting data” terms re-
quire transmission of all of the accumulated data. Ra-
ther, because I conclude that the terms require
transmission of only such data sufficient to provide a
representative picture of the aircraft flight performance, I
dissent in part.
The majority relies upon the rule: “The construction
that stays true to the claim language and most naturally
aligns with the patent’s description of the invention will
be . . . the correct construction.” Phillips v. AWH Corp.,
HARRIS CORP v. FED EX CORP 2
415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc) (quoting
Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d
1243, 1250 (Fed. Cir. 1998)). However, the new construc-
tion the majority adopts, requiring “transmitting all of
the aircraft data that has been accumulated or stored or
generated,” Maj. Op. at 15 (emphasis in original), is not
supported by the claim language, specification, or prose-
cution history. Moreover, it improperly narrows the claim
language, limiting an otherwise broadly drafted claim.
See Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898,
906 (Fed. Cir. 2004) (quoting Teleflex, Inc. v. Ficosa N.
Am. Corp., 299 F.3d 1313, 1327 (Fed. Cir. 2002)) (“[T]he
claims of a patent will not be read restrictively unless the
patentee has demonstrated a clear intention to limit the
claim scope using ‘words or expressions of manifest exclu-
sion or restriction.”’).
The majority determines that it is reasonable that
“the” data set transmitted must be “all” the data that was
accumulated and stored on the basis that “identical
language is found in multiple steps within the same
claim” which “begs for some antecedent basis.” Maj. Op. at
12. Claim 1 of the ’319 patent states, in part:
A method of providing data from an aircraft com-
prising:
...
[a] generating aircraft data representative of the
continuously monitored aircraft flight performance
during an entire flight of the aircraft from at least
take-off to landing;
[b] accumulating and continuously storing the
generated aircraft data . . . to create an archival
store of such aircraft data;
3 HARRIS CORP v. FED EX CORP
[c] after the aircraft completes its flight and lands
at an airport, transmitting the accumulated,
stored generated aircraft data . . . ; and
[d] demodulating the received spread spectrum
communications signal to obtain the accumulated,
aircraft data representative of the flight perfor-
mance of the aircraft during an entire flight of the
aircraft from take-off to landing.
’319 patent col. 16 l. 52–col. 17 l. 7 (emphases and para-
graphing added). The majority refers to “the” data set,
but “the” data set is not consistently defined throughout.
Instead, “data” is modified as “generated aircraft data” in
limitation [b]; as “accumulated, stored generated aircraft
data” in limitation [c]; and finally, as “accumulated,
aircraft data representative of the flight performance” in
limitation [d]. 1
1 The majority opinion cites to Process Control to
support its reasoning. Maj. Op. at 12 (Process Control
Corp. v. HydReclaim Corp., 190 F.3d 1350 (Fed. Cir.
1999). However, in that case the language provided
meaning to an otherwise indefinite term, whereas here
FedEx did not challenge Harris’s expert opinion that one
skilled in the art would understand how much data would
be required to provide a comprehensive long-term picture
of flight performance. See J.A.1599-1602. Here the only
identical language used throughout the claim is “aircraft
data,” thus the antecedent basis the majority references
should be to limitation [a] where “aircraft data” is first
modified. Accordingly, the antecedent basis for each of
the remaining limitations is to “aircraft data” which
would provide “aircraft data representative of . . . flight
performance.” Furthermore, this court has since provided
additional guidance on Process Control, explaining that
the construction of “discharge rate” was supported by, not
reliant upon, the antecedent basis; a “patentee’s mere use
of a term with an antecedent does not require that both
terms have the same meaning.” Microprocessor Enhance-
HARRIS CORP v. FED EX CORP 4
The only consistent term in each limitation is “aircraft
data” which is defined in limitation [a] to mean “data
representative of . . . aircraft flight performance.” The
way “aircraft data” is described in the various limitations
of the claims implies discretion to generate, store, trans-
mit, and demodulate only such data necessary to be
“representative” of flight performance. Thus, the claim
does not require that “all” of the accumulated, stored data
be transmitted, as long as the transmitted data is repre-
sentative of the aircraft flight performance. In fact, the
term “all” is nowhere to be found in the claim language.
See Maj. Op. at 12–13. Accordingly, defining limitation [c]
to require transmitting “all” of the flight performance
data accumulated is counterintuitive within the context of
the claims. See Hockerson-Halberstadt, Inc. v. Converse
Inc., 183 F.3d 1369, 1374 (Fed. Cir. 1999) (“Proper claim
construction . . . demands interpretation of the entire
claim in context, not a single element in isolation.”).
Additionally, the majority concedes that nothing in
the specification indicates how much data should be
accumulated, stored, or transmitted. The prosecution
history—which suggests that Harris intended his inven-
tion to create a comprehensive picture representative of
an entire flight—likewise does not require a more restric-
tive reading. 2 See Maj. Op. at 14–15. Thus, there is no
ment Corp. v. Texas Instruments Inc., 520 F.3d 1367, 1375
(Fed. Cir. 2008).
2 Before the PTO, Harris distinguished its inven-
tion from prior art by addressing the difference between
sending real-time data at various intervals (as was done
in Ng by a train transmitting data as it traveled past
fixed locations), J.A.3272-74, as opposed to accumulating
data to gain a comprehensive picture representative of an
entire flight. Harris’s representations during reexamina-
tion reveal nothing that limits the scope of transmitting
data to all of the accumulated and stored data. The
5 HARRIS CORP v. FED EX CORP
reason to limit the data accumulated, stored, or transmit-
ted to anything but that which would be representative of
flight performance. See Liebel-Flarsheim, 358 [email protected].
Because the majority’s construction unnecessarily re-
stricts the claim terms without support from the claim
language, specification, or prosecution history, I respect-
fully dissent.
majority holds that the prosecution history cannot over-
come the natural reading of the claim, but because its
reading of the claim unnecessarily adopts a limitation, it
cannot be the most reasonable interpretation.
|
83 Ill. App. 3d 1083 (1980)
404 N.E.2d 895
THE HOME INSURANCE COMPANY, INC., Plaintiff-Appellee,
v.
LORELEI RESTAURANT COMPANY, INC., et al., Defendants-Appellees. (UNDERWRITERS AT LLOYD'S OF LONDON et al., Intervening Petitioners-Appellants.) VELVET TRUNK, INC., a/k/a Sabrina Boutique, Inc., Plaintiff-Appellee,
v.
LORELEI RESTAURANT COMPANY, INC., et al., Defendants-Appellees. (UNDERWRITERS AT LLOYD'S OF LONDON et al., Intervening Petitioners-Appellants.)
Nos. 79-1379, 79-1792 cons.
Illinois Appellate Court First District (1st Division).
Opinion filed April 28, 1980.
*1084 Julius Abler, of Libertyville, for appellants.
Epton, Mullin, Segal & Druth, Ltd., of Chicago (Saul A. Epton, Abraham W. Brussell, and David C. Lechner, of counsel), for appellee The Home Insurance Company, Inc.
Morrison & Kamins, P.C., of Chicago, for appellee Velvet Trunk, Inc.
Hynes, Olson, Karnezis & O'Rourke, of Chicago (Themis N. Karnezis, of counsel), for other appellees.
Orders affirmed.
Mr. PRESIDING JUSTICE GOLDBERG delivered the opinion of the court:
In case 79-1379, The Home Insurance Company, Inc. (Home), as subrogee for Central National Bank of Chicago (Central), brought suit *1085 against Lorelei Restaurant Company, Inc. (Lorelei), Nicholas Karnezis, Evans Karnezis, and Napoleon Karnezis (Karnezis brothers), for property damage resulting from a fire on premises owned by Central and leased to the Karnezis brothers. In case 79-1792, Velvet Trunk, Inc. (Velvet Trunk), lessee of adjoining premises, brought suit against Lorelei and the Karnezis brothers for property damage arising out of the same fire.
Lorelei's insurers, Underwriters at Lloyd's of London (Lloyd's), and First State Insurance Company (First State) (collectively intervenors), filed petitions for leave to intervene in both cases. The issues are identical in each instance. The petitions for intervention were denied. Intervenors appealed from both orders. We have consolidated the appeals.
In this court intervenors contend their interests are not adequately represented by Lorelei, their insured, since the intervenors may be bound by an order or judgment entered against Lorelei. They also urge it would not be reasonable to compel them to rely upon Lorelei or Home for proper representation of their interests.
Home's suit against Lorelei and the Karnezis brothers sought recovery for payment Home made to Central, its subrogee and the owner of the premises. The complaint alleged that Lorelei and the Karnezis brothers were in possession, maintenance, and control of the premises at the time of the fire and they had a duty to control, possess, and maintain the premises in such a manner so as not to cause damage to the property. The complaint alleged negligence, res ipsa loquitur, willful and wanton acts, and intentional acts as alternate theories.
By their answer Lorelei and Evans Karnezis admitted they were in possession of the premises and had a duty to maintain them so as not to cause damage or destruction. Nicholas and Napoleon Karnezis denied their possession and the existence of such a duty.
The petition for leave to intervene incorporated by reference a separate motion for summary judgment on behalf of Lorelei. The motion averred the premises were leased to the Karnezis brothers individually, and the lease prohibited transfer of control from the Karnezis brothers. Since Lorelei, the insured, was not a party to the lease, it could not be in possession, and thus Lorelei would not be liable to Home. These contentions contradict the answer of Lorelei and Evans Karnezis.
The petition for leave to intervene alleged that Lloyd's and First State had refused to defend Lorelei in the present action. It further stated that in a case pending before the United States District Court, Lorelei had sued the intervenors on the policy to recover for the damage arising from the same fire. In that action the intervenors contended they were not liable because the Karnezis brothers had set the fire and acts of arson were not covered by the policy. In addition, intervenors alleged they could not reasonably rely upon Lorelei for adequate representation of their interests.
*1086 The facts and contentions of case 79-1792 involving Velvet Trunk are similar and need not be elaborated. Velvet Trunk was in the same building as Lorelei. It shared its roof and front and rear walls with Lorelei. The complaint of Velvet Trunk against defendants alleged the fire resulted alternatively from the negligent acts, willful, wanton, and reckless acts, or intentional acts of the defendants. The complaint also alleged the Karnezis brothers, all or one or more, owned, operated, and maintained Lorelei. This was denied in the answer. The intervenors incorporated in their petition a separate motion for summary judgment. The allegations thereof are essentially similar to those in the companion case.
The right of intervention in Illinois courts is governed by section 26.1 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 26.1.) This statute provides for intervention as a matter of right where specifically permitted by statute and also (par. 26.1(1)(b)) "when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant will or may be bound by an order or judgment in the action * * *."
1 Leave to intervene may be allowed by the trial court as a matter of discretion where a statute confers a conditional right or (par. 26.1(2)(b)) "when an applicant's claim or defense and the main action have a question of law or fact in common."
In University Square, Ltd. v. City of Chicago (1979), 73 Ill. App. 3d 872, 877-78, 392 N.E.2d 136, we find these principles expressed:
(1) Section 26.1 is to be liberally construed.
(2) Where intervention is discretionary, the ruling by the trial court "will not be disturbed absent a clear abuse of discretion."
(3) The salutary purpose of intervention "is to expedite litigation by disposing of the entire controversy among the persons involved in one action to prevent a multiplicity of actions."
2, 3 We are also obliged to consider principles of insurance law which are applicable here. Generally, the duty of an insurer to defend an action against the insured is determined from the allegations of the complaint. If facts are alleged "within or potentially within policy coverage, the insurer is obliged to defend even if the allegations are groundless, false, or fraudulent." (Thornton v. Paul (1978), 74 Ill. 2d 132, 144, 384 N.E.2d 335; see also Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 193-94, 355 N.E.2d 24.) If an insurer wrongfully refuses to defend an insured, the insurer is liable to the insured for breach of contract (Thornton, 74 Ill. 2d 132, 144), or it may be estopped from raising policy defenses or the issue of noncoverage in a subsequent action by the insured or by a judgment creditor in garnishment (Thornton, 74 Ill. 2d 132, 145; Aetna Casualty & Surety Co. v. Dichtl (1979), 78 Ill. App. 3d 970, 973, *1087 398 N.E.2d 582; Palmer v. Sunberg (1966), 71 Ill. App. 2d 22, 33, 217 N.E.2d 463, appeal denied (1966), 34 Ill. 2d 631).
4 However, when there is a conflict of interest between the insurer and the insured, the insurer should not be obligated or permitted to participate in the defense of the case. (Thornton, 74 Ill. 2d 132, 152; Associated Indemnity Co. v. Insurance Co. of North America (1979), 68 Ill. App. 3d 807, 821, 386 N.E.2d 529, appeal denied (1979), 75 Ill. 2d 589.) Their obligation to provide a defense should be satisfied by reimbursing the insured for costs of the defense. (Thornton, 74 Ill. 2d 132, 152.) Otherwise, to require the insurer to defend "would put the insurer and the insured in the untenable position of attempting to cooperate in the conduct of the litigation where their interests were, in fact, adverse." Thornton, 74 Ill. 2d 132, 154.
It is manifest that the interests of the intervenors in the cases before us are antagonistic to the interests of Lorelei. If allowed to participate in the defense, the petitioners would only prejudice the defendants.
5 The intervenors have already denied liability to Lorelei on their policy. They have refused to defend Lorelei and have raised the defense of arson in legal proceedings instituted against them by Lorelei. It appears from the petitions for leave to intervene that the policy of the intervenors includes insurance against liability. Therefore, it is in the interest of Lorelei to fasten a liability upon the intervenors by proving the fire was caused by negligence. It is in the interest of the intervenors to escape this liability and to terminate any possible policy liability by showing that the fire was intentionally set by Lorelei or its agents. In our opinion, this type of situation is governed by Thornton and by Maryland Casualty Co. We conclude that permitting the intervention in the cases before us would result in manifest prejudice to the remaining parties.
6, 7 Since there is such a serious conflict between the interests of the insurer and the insured, the failure of the insurer to participate in the defense of the action filed against the insured would not estop it from raising the defense of noncoverage in a subsequent proceeding (Aetna Casualty & Surety Co. v. Dichtl (1979), 78 Ill. App. 3d 970, 974, citing Thornton, 74 Ill. 2d 132, 152); such as a garnishment (Reis v. Aetna Casualty and Surety Co. (1978), 69 Ill. App. 3d 777, 791, 387 N.E.2d 700). Because the intervenors would not be bound by any order or judgment in the pending action, they may not intervene as a matter of right.
Furthermore, an intervenor must take a case as he finds it and cannot change a proceeding by introducing new matters not relevant to the controversy or which unduly complicate it. (Hurley v. Finley (1955), 6 Ill. App. 2d 23, 26, 126 N.E.2d 513; Chicago, Milwaukee, St. Paul & Pacific R.R. Co. v. Harris Trust & Savings Bank (1978), 63 Ill. App. 3d 1012, 1022, 380 N.E.2d 835.) Petitioners here raise several questions unrelated to *1088 Home's suit for damages. They would have the court determine a question as to coverage afforded under the policies of insurance issued. This has no place in the controversy before us.
Other new issues which the interventions would bring into the case are interpretation of the lease to the destroyed premises and the effect of the policy issued by intervenors as regards coverage of the loss. These factors would be distinctly to the detriment of the present litigants. They would complicate and delay trial of the issues in the instant cases. (See Chicago, Milwaukee, St. Paul & Pacific R.R. Co. (1978), 63 Ill. App. 3d 1012, 1022, and cases there cited.) It follows that intervenors are not entitled to intervene as a matter of discretion.
The learned and able trial judge properly denied petitioners' motions for leave to intervene. The orders appealed from are affirmed.
Orders affirmed.
McGLOON and CAMPBELL, JJ., concur.
|
IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. WR-40,255-10
EX PARTE CHRISTOPHER WAYNE HARRISON, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. 678421 IN THE 208TH DISTRICT COURT
FROM HARRIS COUNTY
Per curiam.
O R D E R
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of capital murder
and sentenced to life imprisonment.
In his present application, Applicant claims trial counsel rendered ineffective assistance. This
application, however, presents a more serious question. This Court's records reflect that Applicant
has filed six prior applications challenging this conviction. It is obvious from the record that
Applicant continues to raise issues that have been presented and rejected in previous applications
or that should have been presented in previous applications. The writ of habeas corpus is not to be
lightly or easily abused. Sanders v. U.S., 373 U.S. 1 (1963); Ex parte Carr, 511 S.W.2d 523 (Tex.
Crim. App. 1974). Because of his repetitive claims, we hold that Applicant's claims are barred from
review under Article 11.07, § 4, and are waived and abandoned by his abuse of the writ. This
application is dismissed.
Therefore, we instruct the Honorable Louise Pearson, Clerk of the Court of Criminal
Appeals, not to accept or file the instant application for a writ of habeas corpus, or any future
application pertaining to this conviction unless Applicant is able to show in such an application that
any claims presented have not been raised previously and that they could not have been presented
in a previous application for a writ of habeas corpus. Ex parte Bilton, 602 S.W.2d 534 (Tex. Crim.
App. 1980).
A copy of this order shall be sent to the Texas Department of Criminal Justice-Correctional
Institutions Division and Pardons and Paroles Division.
Filed: April 25, 2012
Do Not Publish
|
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
CENTRAL DISTRICT OF CALIFORNIA
10
11
RICARDO A.,1 Case No. CV 18-08142-RAO
12
Plaintiff,
13
v. JUDGMENT OF REMAND
14
ANDREW M. SAUL, Commissioner
15 of Social Security,
16 Defendant.
17
18 In accordance with the Memorandum Opinion and Order filed concurrently
19 herewith,
20 IT IS ORDERED AND ADJUDGED that the decision of the Commissioner
21 of Social Security is reversed, and the matter is remanded to the Commissioner for
22 further proceedings consistent with the Memorandum Opinion and Order.
23
24 DATED: August 22, 2019
ROZELLA A. OLIVER
25 UNITED STATES MAGISTRATE JUDGE
26
1
27 Partially redacted in compliance with Federal Rule of Civil Procedure 5.2(c)(2)(B)
and the recommendation of the Committee on Court Administration and Case
28 Management of the Judicial Conference of the United States.
|
Action by the McCormick Harvesting Machine Company against W. H. Koch and T. J. Koch. Judgment for defendants and plaintiff brings error. Reversed.
Opinion of the court by
The McCormick Harvesting Machine company, a corporation, brought its action in the probate court of Garfield county against W. H. Koch and T. J. Koch to recover judgment on two promissory notes for the sum of $47 each, with interest, executed by the defendants for a harvesting machine. Each of the notes contained the following provision:
"The express condition of the sale and purchase of the harvesting machine for which this note is given is such that the title, ownership, or possession does not pass from the said McCormick Harvesting Machine company until this note and interest is paid in full, and the said McCormick Harvesting Machine company have full power to declare this note due, and take possession of the said harvesting machine, whenever they deem themselves *Page 376
insecure, even before the maturity of this note, and sell the same at public or private sale, without notice. The proceeds (after the expenses and interest are paid) to be applied on this note, and any balance then unpaid shall, in consideration of the use and rent of said property, be a valid and subsisting claim against the vendee."
The defendants answered that the plaintiff had, without their knowledge or consent, taken possession of the machine for which the notes were given, and deprived them of the possession and use of same, and prayed judgment for cancellation of the notes and for costs of suit. To this answer the plaintiff interposed a demurrer for want of sufficient facts. The demurrer was overruled, and exceptions saved. The plaintiff then filed a reply, in which it was admitted that plaintiff took possession of the machine; but it was averred that such possession was taken long after the notes became due, and then under and by virtue of the terms and agreements contained in the notes, and said machine sold, and the proceeds, after paying expense of sale, applied and credited on said notes, and that there was a balance due, for which judgment was prayed.
The defendants then moved for judgment in their favor on the pleadings. The court sustained the motion and rendered judgment in favor of the defendants for costs and for cancellation of the notes. From this judgment the plaintiff prosecutes this appeal.
The defendants in error have not favored us with any brief, and we are not advised upon what theory the trial court decided the case and gave judgment for defendants. The sale of the machine, the terms and conditions of the notes, and the manner of disposal of the machine on default, were all matters concerning which *Page 377
the parties had a right to contract, and these terms and conditions were embraced in, and made part of, the notes. On default of payment the machine company had a right to the possession of the harvester, and a right to sell the same and apply the proceeds of sale to the payment of the notes; and the payors expressly agreed that, in consideration of the use of the machine, they should be liable for any balance. We know of no reason why such a contract is not valid and binding on the parties to it, or why it cannot be enforced as between the parties to the contract. The answer did not state a defense which would avoid the terms and provisions contained in the notes. There was no allegation of fraud, nor was it averred that the defendants had never had the possession or use of the machine. It may have been a hard contract, but the defendants voluntarily entered into it, and, under the showing made, the courts are not authorized to release them from their agreement. The reply was sufficient for the answer. It was error to render judgment for the defendants on the pleadings.
The judgment is reversed, and cause remanded, with directions to overrule the motion for judgment on the pleadings, and sustain the demurrer to the amended answer, and for further proceedings. Judgment for plaintiff in the case for costs.
All of the Justices concurring. *Page 378 |
IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2020 Term
FILED
November 17, 2020
released at 3:00 p.m.
No. 19-0459 EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
AC&S INC.,
Defendant Below, Petitioner,
v.
JEFFREY R. GEORGE,
Plaintiff Below, Respondent.
Appeal from the Circuit Court of Putnam County
The Honorable Phillip M. Stowers, Judge
Civil Action No. 17-C-196
AFFIRMED
Submitted: October 7, 2020
Filed: November 17, 2020
Brian J. Moore, Esq. W. Jesse Forbes, Esq.
Arie M. Spitz, Esq. Forbes Law Offices PLLC
Dinsmore & Shohl LLP Charleston, West Virginia
Charleston, West Virginia and
Counsel for Petitioner Todd S. Bailess, Esq.
Rodney A. Smith, Esq.
Bailess Smith PLLC
Charleston, West Virginia
Counsel for Respondent
JUSTICE WALKER delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “An order denying a motion to compel arbitration is an interlocutory
ruling which is subject to immediate appeal under the collateral order doctrine.” Syllabus
Point 1, Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556 (2013).
2. “When an appeal from an order denying a motion to dismiss and to
compel arbitration is properly before this Court, our review is de novo.” Syllabus Point 1,
W.Va. CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W. Va. 465, 796 S.E.2d 574
(2017).
3. “When a trial court is required to rule upon a motion to compel
arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006), the authority
of the trial court is limited to determining the threshold issues of (1) whether a valid
arbitration agreement exists between the parties; and (2) whether the claims averred by the
plaintiff fall within the substantive scope of that arbitration agreement.” Syllabus Point 2,
State ex rel. TD Ameritrade, Inc. v. Kaufman, 225 W. Va. 250, 692 S.E.2d 293 (2010).
4. A collective bargaining agreement may require an employee to
resolve his or her statutory or common law employment discrimination claims through
grievance and arbitration, so long as it does so in clear and unmistakable terms.
i
WALKER, Justice:
After his employment with AC&S Inc. (AC&S) was terminated in April
2016, Jeffrey R. George filed this case claiming unlawful employment discrimination and
retaliation. AC&S moved to dismiss and to compel arbitration of Mr. George’s claims
under the terms of the collective bargaining agreement (CBA) in place at the workplace.
In May 2019, the circuit court denied the motion and AC&S appealed on the grounds that
the arbitration clause of the CBA was a waiver of Mr. George’s individual right to pursue
his statutory and common law claims outside of arbitration. Although the CBA here
required arbitration of all disputes arising under the CBA, it did not include a “clear and
unmistakable” waiver of Mr. George’s individual right to pursue his statutory and common
law employment discrimination claims in state court. So, the circuit court correctly denied
AC&S’s motion to dismiss and to compel arbitration.
I. FACTUAL AND PROCEDURAL BACKGROUND
Mr. George was employed by AC&S as a chemical operator in Nitro, West
Virginia. He was a member of the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-
CIO (union), which is the sole agent of all bargaining unit employees at AC&S’s Nitro
facility. In September 2014, the union and AC&S entered into a CBA that established the
terms and conditions of employment for covered employees.
1
The CBA contains two arbitration provisions. Article X, Section 2, of the
CBA provides:
It is expressly understood and agreed by all parties to this
Agreement, the Employer, the Union, and Bargaining Unit
employees that the sole remedy for disputes regarding
disciplinary actions taken by the Employer against employees
covered by this Agreement shall be in accordance with
ARTICLE XI, GRIEVANCE AND ARBITRATION
PROCEDURES, of this Agreement.
And Article XI, Section 1, of the CBA provides general language requiring that
all complaints, disputes, controversies, or grievances arising
between the Employer and . . . [covered employees], which
involve[] only questions of interpretation or application of any
provisions of this Agreement shall be adjusted and resolved . .
. in the manner provided by this ARTICLE, ARTICLE XI,
GRIEVANCE AND ARBITRATION PROCEDURES.
On April 26, 2016, AC&S terminated Mr. George’s employment for alleged
violation of safety rules and insubordination. Mr. George believes his termination was in
retaliation for filing a workers’ compensation claim and because he was perceived as
having an impairment or being disabled.
2
The union filed a grievance on Mr. George’s behalf the day he was
terminated. 1 AC&S denied Mr. George’s grievance and neither he nor the union on his
behalf pursued arbitration under the CBA.
In October 2017, Mr. George filed this lawsuit in circuit court alleging that
he was wrongfully terminated in violation of the West Virginia Workers Compensation
Act, 2 the West Virginia Human Rights Act, 3 and substantial public policies of the State of
West Virginia. 4 AC&S responded by moving to dismiss and compel arbitration, arguing
that the arbitration clause in the CBA governing Mr. George’s employment mandated
arbitration of his claims. After Mr. George filed a response, the circuit court held a hearing
on the motion.
1
A one-page “Grievance Report” form used to initiate grievances directs employees
(or their representative) to describe the nature of the grievance and specifically what
provisions of the CBA they allege were violated. Mr. George’s grievance was described
as follows: “On or about 4/26/2016 the Company terminated the above named grievant
without cause.” As for “Agreement Violation” on the form, Mr. George alleged that AC&S
violated “[Article] II. Employer’s [sic] rights and all other areas of the contract that may
pertain as well as any applicable state or federal laws that may apply.” As for the form’s
designation of “Settlement requested in Grievance,” Mr. George requested: “For the
grievant to be returned to work and made whole.”
2
W. Va. Code §§ 23-5A-1 to -4 (1990).
3
W. Va. Code §§ 5-11-1 to -20 (2016).
4
See Harless v. First Nat’l Bank in Fairmont, 162 W. Va. 116, 246 S.E.2d 270
(1978).
3
On May 7, 2019, the circuit court denied AC&S’s motion. It found that Mr.
George’s individual employment discrimination claims fell outside the scope of the CBA.
Relying on the United States Supreme Court opinions of Wright v. Universal Maritime
Corp., 5 and 14 Penn Plaza LLC v. Pyett, 6 the circuit court stated that “[i]n order to compel
an employment discrimination claim pursuant to an arbitration agreement contained in a
CBA, the requirement to arbitrate such claims must be particularly clear such that the
waiver of a judicial forum is clear and unmistakable.” The circuit court applied the test set
forth by the Fourth Circuit Court of Appeals in Carson v. Giant Food, Inc., 7 which stated
that the “clear and unmistakable” waiver standard can be satisfied in the following two
ways:
The first is the most straightforward. It simply involves
drafting an explicit arbitration clause. Under this approach, the
CBA must contain a clear and unmistakable provision under
which the employees agree to submit to arbitration all federal
causes of action arising out of their employment. Such a clear
arbitration clause will suffice to bind the parties to arbitrate
claims arising under a host of federal statutes, including Title
VII, 42 U.S.C. § 1981, the ADEA, and the ADA.
The second approach is applicable when the arbitration
clause is not so clear. General arbitration clauses, such as those
referring to “all disputes” or “all disputes concerning the
interpretation of the agreement,” taken alone do not meet the
clear and unmistakable requirement of [Wright]. When the
parties use such broad but nonspecific language in the
arbitration clause, they must include an “explicit incorporation
5
525 U.S. 70 (1998).
6
556 U.S. 247 (2009).
7
175 F.3d 325 (4th Cir. 1999).
4
of statutory antidiscrimination requirements” elsewhere in the
contract. . . . If another provision, like a nondiscrimination
clause, makes it unmistakably clear that the discrimination
statutes at issue are part of the agreement, employees will be
bound to arbitrate their federal claims. 8
The circuit court found that the CBA met neither of these approaches. The
CBA contains no language that 1) incorporates the statutory or common law claims Mr.
George is asserting, or 2) requires union members to submit to arbitration “all causes of
action” arising from their employment, coupled with a nondiscrimination clause. So, the
CBA required arbitration of any contractual disputes regarding disciplinary actions but not
arbitration of Mr. George’s employment discrimination claims. Finally, the circuit court
rejected AC&S’s argument that Mr. George’s “course of conduct” in filing a union
grievance regarding his termination demonstrated that he understood his claims must be
pursued through arbitration.
II. STANDARD OF REVIEW
AC&S appeals the circuit court’s denial of its motion to dismiss and compel
arbitration. In Credit Acceptance Corporation v. Front, 9 we held that “[a]n order denying
a motion to compel arbitration is an interlocutory ruling which is subject to immediate
appeal under the collateral order doctrine.” And, “[w]hen an appeal from an order denying
a motion to dismiss and to compel arbitration is properly before this Court, our review is
8
Carson, 175 [email protected].
9
231 W. Va. 518, 745 S.E.2d 556 (2013), syl. pt. 1.
5
de novo.” 10 Our review is also plenary to the extent our analysis requires us to examine
the CBA. 11
III. ANALYSIS
AC&S contends that the circuit court should have granted its motion to
dismiss and to compel arbitration of Mr. George’s employment-related claims. Our
consideration is necessarily limited in scope. We begin by observing that
[w]hen a trial court is required to rule upon a motion to
compel arbitration pursuant to the Federal Arbitration Act
[FAA], 9 U.S.C. §§ 1-307 (2006), the authority of the trial
court is limited to determining the threshold issues of (1)
whether a valid arbitration agreement exists between the
parties; and (2) whether the claims averred by the plaintiff fall
within the substantive scope of that arbitration agreement.[ 12]
The question here is not whether the CBA includes an arbitration agreement
that pertains to Mr. George’s employment; it undisputedly does. Instead, the primary issue
is whether his statutory and common law employment discrimination claims fall within the
substantive scope of the CBA.
10
Syl. Pt. 1, W.Va. CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W. Va.
465, 796 S.E.2d 574 (2017).
11
Zimmerer v. Romano, 223 W. Va. 769, 777, 679 S.E.2d 601, 609 (2009) (“[W]e
apply a de novo standard of review to [a] circuit court’s interpretation of [a] contract.”).
12
Syl. Pt. 2, State ex rel. TD Ameritrade, Inc. v. Kaufman, 225 W. Va. 250, 692
S.E.2d 293 (2010).
6
In this appeal, AC&S argues that 1) the circuit court should not have applied
the “clear and unmistakable” waiver standard when determining the validity of the
arbitration clause; 2) alternatively, the arbitration clause meets that standard; and 3) the
circuit court erred when it failed to take Mr. George’s course of conduct into account. Mr.
George counters that the circuit court did not err in applying the “clear and unmistakable”
waiver standard because Wright remains binding precedent, and the CBA does not meet
that standard. Mr. George also states that the broadest conclusion that can be drawn from
his decision to file a grievance initially is that he intended to arbitrate contractual violations
of the CBA.
A. “Clear and Unmistakable” Waiver Standard
Normally, the inclusion of an arbitration clause in a CBA creates a
“presumption of arbitrability” as to disputes that arise between the parties to that
agreement. 13 There is an exception to that rule where a dispute ultimately concerns not the
application or interpretation of the CBA, but the meaning of a statute; Wright requires a
court to determine whether, without use of the presumption, an “ordinary textual analysis
of a CBA show[s] that matters which go beyond the interpretation and application of
contract terms are subject to arbitration[.]” 14 In Wright, the Supreme Court emphasized
13
See AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 650
(1986).
14
525 U.S. at 79.
7
that a waiver of employee rights to a judicial forum must be “clear and unmistakable.” 15
In addition, “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the
substantive rights afforded by the statute; it only submits to their resolution in an arbitral,
rather than a judicial, forum.” 16
There are advantages and disadvantages to the employer and the union in
negotiating an arbitration clause in a CBA that reaches employees’ individual statutory
rights. With those considerations in mind, both parties—who are highly sophisticated at
negotiating the terms of a CBA—must balance those interests. 17 If the parties reach
agreement on this issue, there should be no ambiguities surrounding the waiver provision
incorporated into the CBA. As mandated by the Supreme Court in Wright and 14 Penn
Plaza, an agreement to waive employees’ rights to a judicial forum for individual statutory
claims must be “clear and unmistakable” in the language of the CBA.
15
525 U.S. at 80.
16
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-28
(1985).
17
See Floyd D. Weatherspoon, Incorporating Mandatory Arbitration Employment
Clauses into Collective Bargaining Agreements: Challenges and Benefits to the Employer
and the Union, 38 Del. J. Corp. L. 1025, 1029 (2014).
8
AC&S first argues that the circuit court should not have applied the “clear
and unmistakable” waiver standard pronounced in Wright 18 when determining the
“validity” of the arbitration clause. AC&S maintains this heightened standard runs afoul
of the more recent case of Epic Systems Corp. v. Lewis, 19 where the Supreme Court stated
that arbitration agreements cannot be invalidated by “defenses that apply only to arbitration
or that derive their meaning from the fact that an agreement to arbitrate [email protected].” 20
AC&S reasons that Wright’s standard is premised on the clause’s relation to arbitration and
is exactly the sort of defense that is prohibited under Epic Systems.
AC&S’s reliance on Epic Systems is misplaced; that case did not involve
collectively bargained waivers of employees’ rights to a judicial forum for employment
discrimination claims. Epic Systems addressed whether employer-employee agreements
that contain class and collective action waivers that provide employment disputes are to be
resolved by individualized arbitration were invalid under the National Labor Relations Act
18
525 U.S. 70.
19
138 S. Ct. 1612 (2018).
20
Id. at 1622 (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339
(2011).
9
(NLRA). 21 The Supreme Court held that such agreements do not violate the NLRA and
that the agreements must be enforced as written pursuant to the FAA. 22
In this case, the “clear and unmistakable” waiver standard was not used to
determine the validity of the arbitration clause; the circuit court found the arbitration clause
was valid and enforceable with regard to Mr. George’s contractual rights under the CBA.
Rather, the circuit court used this standard to determine the scope of the CBA’s arbitration
clause. 23 So, Epic Systems is not relevant to our analysis because the “clear and
unmistakable” waiver standard “does not reflect disfavor of union-negotiated arbitration
agreements.” 24 Rather, this standard ensures that courts do not inadvertently interpret a
CBA as waiving employees’ individual rights to bring employment discrimination claims
in court when examining general arbitration clauses that the parties intended to reach only
to contractual disputes under the CBA. 25
21
138 S. Ct. at 1619-21, 1632.
22
Id.
23
Abdullayeva v. Attending Homecare Servs. LLC, 928 F.3d 218, 222-23 (2d Cir.
2019) (“[T]he ‘clear and unmistakable’ standard is applicable only to the question whether
a union has waived its members’ right to bring statutory claims in court, not to the initial
question whether an arbitration agreement [email protected].”).
24
Abdullayeva, 928 [email protected].
25
See e.g., Wright, 525 U.S. at 80 (stating that clause mandating arbitration of
“matters under dispute” did not waive right to bring claims of employment discrimination
(continued . . .)
10
AC&S further argues that Wright’s “heightened standard” with respect to
arbitration clauses in CBAs was based on the reasoning in Alexander v. Gardner-Denver
Co., 26 and that Supreme Court jurisprudence with respect to arbitration has evolved to the
point that Gardner-Denver is ripe for overruling. 27
To explain why this argument is
flawed, we discuss Gardner-Denver in the context of the two cases that guide our analysis,
Wright and 14 Penn Plaza.
In Gardner-Denver, the plaintiff brought an action under Title VII of the
Civil Rights Act of 1964, 28 and the Supreme Court was tasked with deciding “under what
circumstances, if any, an employee’s statutory right to a trial de novo under Title VII may
be foreclosed by prior submission of his claim to final arbitration under the
in court, because such an ambiguous clause “could be understood to mean matters in
dispute under the contract”).
26
415 U.S. 36 (1974).
27
AC&S points to the following dicta in a footnote from 14 Penn Plaza for this
proposition:
Because today’s decision does not contradict the holding of
Gardner-Denver, we need not resolve the stare decisis
concerns raised by the dissenting opinions. . . . But given the
development of this Court’s arbitration jurisprudence in the
intervening years, . . . Gardner-Denver would appear to be a
strong candidate for overruling if the dissents’ broad view of
its holding . . . were correct.
14 Penn Plaza, 556 U.S. at 264 n.8 (emphasis added). For the reasons discussed below,
this footnote is not relevant to the issues before this Court.
28
42 U.S.C. §§ 2000e to 2000e-17.
11
nondiscrimination clause of a collective-bargaining agreement.” 29 The CBA at issue stated
that “[n]o employee will be discharged, suspended or given a written warning notice except
for just cause,” and it “contained a broad arbitration clause covering differences aris[ing]
between the Company and the Union as to the meaning and application of the provisions
of [the CBA] and any trouble arising in the plant.” 30 The Supreme Court observed that the
lower courts “evidently thought that [the result] was dictated by notions of election of
remedies and waiver and by the federal policy favoring arbitration of labor disputes[.].” 31
But the Court disagreed and stated that the doctrine of election of remedies had no
application in the context of the case because submitting a grievance to arbitration
vindicated a contractual right whereas filing a lawsuit asserted an “independent statutory
right[.]” 32
Finding that in enacting Title VII, Congress granted individual employees a
nonwaivable, public law right that was separate and distinct from rights created through
collective bargaining, Gardner-Denver held that an employee “does not forfeit his right to
a judicial forum for claimed discriminatory discharge in violation of Title VII” if he or she
29
Gardner-Denver, 415 U.S. at 38.
30
Id. at 39-40 (internal quotation marks omitted).
31
Id. at 45-46.
32
Id. at 49-50.
12
first pursues a grievance to final arbitration under the nondiscrimination clause of a CBA.33
In addition to Gardner-Denver’s core holding, the Court expressed doubts about the
competence of arbitrators to evaluate and decide statutory claims, and about the validity of
union-negotiated waivers of employees’ federal forum rights for statutory claims. 34
Over twenty years later, the Supreme Court was confronted with a similar
issue in Wright, when it addressed whether a general arbitration clause in a CBA required
an employee to use the arbitration procedure for an alleged violation of the Americans with
Disabilities Act of 1990 35 (ADA). 36 The Supreme Court held that any waiver of a judicial
forum for an employee’s statutory rights in a CBA would have to be “clear and
unmistakable.” 37 With respect to the particular CBA at issue in Wright, the Court observed
that it contained only a general arbitration provision, providing for “arbitration of matters
33
Id. at 49.
34
Id. at 51-52.
35
42 U.S.C. §§ 12101 et seq.
36
Wright, 525 U.S. at 72.
37
Id. at 80. (“[T]he right to a federal judicial forum is of sufficient importance to be
protected against less-than-explicit union waiver in a CBA.”).
13
under dispute,” and, thus, contained no sufficiently “clear and unmistakable” waiver of
statutory rights under the ADA. 38
In Wright, the Supreme Court stated that it did not reach the question of
whether a “clear and unmistakable” waiver “would be enforceable.” 39 But it squarely
addressed that issue in 14 Penn Plaza 40 and sanctioned the use of a CBA’s mandatory
arbitration provisions covering employee’s individual statutory claims. In 14 Penn Plaza,
the plaintiffs submitted their employment discrimination claims to arbitration pursuant to
the CBA between the parties, and filed a claim for employment discrimination in federal
court under the Age Discrimination in Employment Act of 1967. 41 The Court held that the
explicit language in the CBA was sufficient to meet the test set out in Wright; the CBA
“clearly and unmistakably” required the parties to arbitrate the statutory age discrimination
claims. 42
38
Id.
39
Id. at 82.
40
556 U.S. 247.
41
29 U.S.C. §§ 621 to 634.
42
The CBA between the parties explicitly provided:
NO DISCRIMINATION. There shall be no discrimination
against any present or future employee by reason of race, creed,
color, age, disability, national origin, sex, union membership,
(continued . . .)
14
In 14 Penn Plaza, the Supreme Court went on to state that Gardner-Denver
did not control the outcome when the CBA’s arbitration provision expressly covered both
statutory and contractual discrimination claims. It noted since the employees in Gardner-
Denver had not agreed to arbitrate their statutory claims, and the arbitrators were not
authorized to resolve such claims, the arbitration in those cases did not preclude subsequent
statutory actions in court. 43
The dissenting justices in 14 Penn Plaza read Gardner-Denver broadly to
hold that “an individual’s statutory right of freedom from discrimination and access to court
for enforcement were beyond a union’s power to waive.” 44 But the majority in 14 Penn
Plaza disagreed and found that the ultimate holding in Gardner-Denver did not involve the
issue of enforceability of an agreement to arbitrate statutory claims, but rather the different
or any characteristic protected by law, including, but not
limited to, claims made pursuant to Title VII of the Civil Rights
Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the New York State
Human Rights Law, the New York City Human Rights Code,
. . . or any other similar laws, rules, or regulations. All such
claims shall be subject to the grievance and arbitration
procedures (Articles V and VI) as the sole and exclusive
remedy for violations. Arbitrators shall apply appropriate law
in rendering decisions based upon claims of discrimination.
14 Penn Plaza, 556 U.S. at 252 (emphasis added).
43
14 Penn Plaza, 556 U.S. at 264.
14 Penn Plaza, 556 U.S. at 280 (Souter, J., dissenting, joined by J. Stevens, J.
44
Ginsburg, and J. Breyer).
15
issue of “whether arbitration of contract-based claims precluded subsequent judicial
resolution of statutory claims.” 45 The Court disavowed Gardner-Denver’s anti-arbitration
dicta language as misguided and stated, “[t]hat skepticism . . . rested on a misconceived
view of arbitration that this Court has since abandoned.” 46
With this background, we quickly discern that any disagreement about the
breadth of Gardner-Denver’s holding does not involve the issue before this Court. Mr.
George never argued that his union lacked authority to negotiate a waiver of a judicial
forum for his individual statutory rights. And the Supreme Court consistently applied the
“clear and unmistakable” in Gardner-Denver, Wright, and 14 Penn Plaza. So we decline
AC&S’s invitation to rule otherwise.
This Court has not addressed whether the “clear and unmistakable” waiver
standard applies to the arbitrability of state law employment discrimination claims when
the arbitration clause is in a CBA. 47 We are mindful that in “deciding disputes over the
45
14 Penn Plaza, 556 U.S. at 264.
46
14 Penn Plaza, 556 U.S. at 265.
47
We have held that an arbitration clause in an employment contract entered directly
between an employer and employee (not in a CBA) is enforceable when it specifically
addressed the statutory [email protected]. For instance, in Hampden Coal, LLC v. Varney,
240 W. Va. 284, 810 S.E.2d 286 (2018), this Court reversed the lower court’s decision and
remanded for entry of an order dismissing the civil action and compelling arbitration of the
employee’s deliberate intent and unlawful discrimination claims against his employer and
supervisor. We found that those claims fell within the scope of the specific language of
(continued . . .)
16
interpretation of [CBAs], state contract law must yield to the developing federal common
law, lest common terms in bargaining agreements be given different and potentially
inconsistent interpretations in different jurisdictions.” 48 And “[t]he Federal Arbitration Act
requires courts to enforce covered arbitration agreements according to their terms.” 49
Applying these principles to the matter before us, we hereby hold that a
collective bargaining agreement may require an employee to resolve his or her statutory or
common law employment discrimination claims through grievance and arbitration, so long
as it does so in clear and unmistakable terms.
The Supreme Court has not yet defined the contours of this standard. Some
federal circuit courts have adopted a bright-line approach for identifying “clear and
the arbitration agreement. That agreement explicitly stated the parties’ mutual assent to
arbitrate:
all disputes or claims of any kind includ[ing] but [ ] not limited
to claims of unlawful discrimination, retaliation or harassment
based upon race, national origin, ancestry, disability, religion,
sex, age, workers’ compensation claims or history, veteran’s
status, or any other unlawful reason, and all other claims
relating to employment or termination from employment. This
shall also include claims for wages or other compensation due,
claims for breach of any contract, tort claims or claims based
on public policy.
Id. at 288-89, 810 [email protected].
48
Livadas v. Bradshaw, 512 U.S. 107, 122 (1994).
49
Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1412 (2019).
17
unmistakable” waivers when a CBA “explicitly mentions employee rights under [the
relevant statute] or any other federal anti-discrimination statute[.]” 50 In our view, this
standard is satisfied when the CBA reflects that the parties agreed to waive an employee’s
right to a judicial forum for statutory/common law discrimination claims using clear and
unmistakable language. 51
B. The CBA Does Not Contain a Clear and Unmistakable Waiver of a Judicial
Forum for Employment Discrimination Claims
AC&S argues next that even if this Court adopts the “clear and
unmistakable” waiver standard, the CBA at issue here is sufficiently explicit to waive a
50
Quint v. A.E. Staley Mfg. Co., 172 F.3d 1, 9 (1st Cir. 1999). The Sixth and Seventh
Circuits endorse this approach. See, e.g., Bratten v. SSI Servs., Inc., 185 F.3d 625, 631 (6th
Cir. 1999) (explaining that “a statute must specifically be mentioned in a [CBA] for it to
even approach” the clear and unmistakable-waiver standard); Vega v. New Forest Home
Cemetery, LLC, 856 F.3d 1130, 1135 (7th Cir. 2017) (holding that a CBA did not clearly
and unmistakably waive a judicial forum for rights under the Fair Labor Standards Act
(FLSA) when the arbitration provision did not reference the FLSA). The Second, Fifth,
and Eighth Circuits also embrace this approach. See, e.g., Lawrence v. Sol G. Atlas Realty
Co., 841 F.3d 81, 84 (2d Cir. 2016); Ibarra v. UPS, 695 F.3d 354, 360 (5th Cir. 2012); cf.
Abdullayeva, 928 F.3d at 223-24 (finding a clear and unmistakable waiver when the CBA
required arbitration of claims under specifically listed statutes); Thompson v. Air Transp.
Int’l Ltd. Liab. Co., 664 F.3d 723, 726 (8th Cir. 2011) (accepting, without comment, the
plaintiff’s concession that the arbitration provision covering employment discrimination
“alleged to be violations of state or federal law” was a clear and unmistakable waiver).
51
See Syl. Pt. 1, State ex rel. U-Haul Co. of W. Va. v. Zakaib, 232 W. Va. 432, 752
S.E.2d 586 (2013) (“‘Under the Federal Arbitration Act, 9 U.S.C. § 2, parties are only
bound to arbitrate those issues that by clear and unmistakable writing they have agreed to
arbitrate. An agreement to arbitrate will not be extended by construction or implication.’
Syllabus point 10, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250
(2011), overruled on other grounds by Marmet Health Care Center, Inc. v. Brown, [565]
U.S. [530], 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam).”).
18
judicial forum for employment discrimination claims. AC&S contends the CBA is unique
in that it contains two arbitration provisions: a specific, self-contained arbitration clause
that only pertains to disputes regarding discipline, and a general arbitration clause
pertaining to interpretation of the CBA. AC&S states that the first arbitration clause applies
to Mr. George’s wrongful termination allegations—because termination was a disciplinary
action—and this clause, Article X, Section 2, is a “clear and unmistakable” waiver. We
disagree.
Article X, Section 2 of the CBA provides that “the sole remedy for disputes
regarding disciplinary actions taken by the Employer against employees covered by this
Agreement shall be in accordance with ARTICLE XI, GRIEVANCE AND
ARBITRATION PROCEDURES[.]” Clearly, Article X is not self-contained; it directs
us to Article XI, the CBA’s section outlining the grievance and arbitration procedures. And
Article XI, Section 1, of the CBA provides general language requiring that
all complaints, disputes, controversies, or grievances arising
between the Employer and . . . [covered employees], which
involve[] only questions of interpretation or application of any
provisions of this Agreement, shall be adjusted and resolved . .
. in the manner provided by this ARTICLE, ARTICLE XI,
GRIEVANCE AND ARBITRATION PROCEDURES. 52
Article XI, Section 2, also states “that time is of the essence in resolving
disputes, controversies, or grievances which may arise between the Employer, Bargaining
52
(Emphasis added).
19
Unit employees, and the Union as it relates to interpretation or application of the
provisions of this Agreement.” 53 Article XI, Section 3, describes the three-step grievance
procedure, and Section 4 describes the procedure to proceed to arbitration.
Under the plain language of the CBA, Article X, Section 2, requires that
“disputes regarding disciplinary actions” shall be in accordance with Article XI, Section 1.
And that provision plainly states that “complaints, disputes, controversies, or grievances”
which involve “only questions of interpretation or application of any provisions of this
Agreement” shall be resolved by way of the grievance and arbitration procedures. So, the
CBA only requires arbitration of any contractual disputes under the terms of the CBA
regarding disciplinary actions. Indeed, that is the most natural reading of the plain
language of the CBA, given that nowhere does it reference any state or federal statutes
dealing with employment discrimination.
AC&S asks us to assume that because the CBA requires Mr. George to use
the grievance and arbitration procedure to resolve disputes over disciplinary matters (like
termination), it necessarily requires statutory/common law claims on the same subject to
be submitted to the grievance process. Jonites v. Exelon Corporation 54 shows why that
assumption is mistaken. In Jonites, the Seventh Circuit Court of Appeals held that
53
(Emphasis added).
54
522 F.3d 721 (7th Cir. 2008).
20
language in a CBA to the effect that “any dispute or difference aris[ing] between the
Company and the Union or its members as to the interpretation or application of any of the
provision of this Agreement or with respect to job working conditions” must be resolved
through the contractual grievance procedure was not an “explicit” waiver of an employee’s
right to sue under the Fair Labor Standards Act. 55 The court noted that this generalized
language was little different from that at issue in Wright, where the Supreme Court had
likewise concluded that there was no “clear and unmistakable” language in the CBA
requiring claims under the ADA to be arbitrated. 56
Articles X and XI of the CBA are no more specific than the provisions
examined in Jonites and Wright. 57 They mention no statute, they do not discuss individual
statutory or common law discrimination claims, and there is no mention of waiver of a
judicial forum. The CBA does not include a “clear and unmistakable” waiver of Mr.
George’s right to a judicial forum to bring his employment discrimination claims. To the
contrary, the CBA explicitly excludes those claims when it provides that “complaints,
disputes, controversies, or grievances . . . which involve[] only questions of interpretation
55
Id. at 725.
56
Id.; see Wright, 525 U.S. at 80-82.
57
In Wright, the CBA’s “arbitration clause [was] very general, providing for
arbitration of ‘[m]atters under dispute,’ . . . which could be understood to mean matters in
dispute under the contract.” 525 U.S. at 80.
21
or application of any provisions of this [CBA], shall be adjusted and resolved” by
arbitration.
By contrast, the CBA’s contractual language at issue in 14 Penn Plaza
explicitly incorporated a variety of statutory anti-discrimination provisions into the
agreement and provided that “[a]ll such claims shall be subject to the grievance and
arbitration procedure . . . as the sole and exclusive remedy for violations.” 58 That language,
the Supreme Court concluded, amounted to an explicitly-stated agreement to arbitrate
statutory claims. 59 Unlike the explicit language examined by the Supreme Court in 14
Penn Plaza, 60 the CBA here does not state that employees must submit statutory or
common law discrimination causes of action to arbitration. For these reasons, the circuit
court properly denied AC&S’s motion to dismiss and to compel arbitration.
C. Course of Conduct
Finally, AC&S argues that the circuit court erred when it failed to consider
Mr. George’s course of conduct when filing a grievance as evidence that he clearly and
unmistakably understood that challenges to his termination raised in this lawsuit were
subject to the CBA’s grievance process and arbitration. Mr. George disagrees and states
58
556 U.S. at 252.
59
Id. at 258-59.
60
See note 42, supra.
22
that the broadest conclusion that can be drawn from his decision to file a grievance initially
is that he intended to arbitrate contractual violations of the CBA. Mr. George has the better
argument here because “[n]either historical practice nor the parties’ unexpressed intent can
fulfill” Wright’s “clear and unmistakable” waiver standard. 61
More to the point, the fact that Mr. George filed a grievance seeking
reinstatement is not, as AC&S asserts, any indication that he understood that he was bound
to arbitrate his employment discrimination claims. Rather, when Mr. George filed his
grievance, he relied on his substantive rights under the CBA. Mr. George has
statutory/common law rights as well as contractual rights, and the circuit court appreciated
the distinction between those categories of rights when it found that his decision to resort
to the grievance procedure when seeking reinstatement did not impact his rights to seek
redress of his employment discrimination claims in court. An employee is not required to
choose between the rights provided by a CBA and the rights provided by statutes such as
the West Virginia Human Rights Act; absent a clear and unmistakable waiver, the
employee is entitled to both. So, AC&S is entitled to no relief in this regard.
61
Wawock v. CSI Elec. Contractors, Inc., 649 F. App’x 556, 559 (9th Cir. 2016)
(citing Wright, 525 U.S. at 80).
23
IV. CONCLUSION
For the reasons set out above, we affirm the order of the Circuit Court of
Putnam County denying AC&S’s motion to dismiss and to compel arbitration.
Affirmed.
24
|
Case: 11-40511 Document: 00511843667 Page: 1 Date Filed: 05/03/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 3, 2012
No. 11-40511
Summary Calendar Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
POMPILIO MENDEZ-DIAZ,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 2:10-CR-1134-02
Before SMITH, BARKSDALE, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Pompilio Mendez-Diaz appeals the sentence of 56-months’ imprisonment
imposed following his guilty-plea conviction for conspiracy to transport illegal
aliens within the United States, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(ii),
1324(a)(1)(A)(v)(I), and 1324(a)(1)(B)(i). Mendez contends his guilty plea was not
knowingly and voluntarily entered because he was not aware that his offense
level for the advisory Sentencing Guidelines would be increased based on: his
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 11-40511 Document: 00511843667 Page: 2 Date Filed: 05/03/2012
No. 11-40511
creating a risk of serious injury (to border patrol agents who apprehended
Mendez and his group of illegal aliens); and his causing a serious injury (for
raping a member of the alien group). He also contends his sentence was
unreasonable because of these upward adjustments. The Government counters
that Mendez’ appeal is barred because, in his plea agreement, he waived the
right to appeal his sentence.
The plain language of Mendez’ plea agreement confirms that he waived
the right to pursue this appeal, and our review of the rearraignment
proceedings confirms that the waiver was knowing and voluntary. See, e.g.,
United States v. Bond, 414 F.3d 542, 544 (5th Cir. 2005) (two-step inquiry for
waiver of appeal).
AFFIRMED.
2
|
201 B.R. 225 (1996)
In re SACRAMENTO REAL ESTATE CORPORATION, Sacramento Crushing Corporation, Sacramento Corporation, Debtors.
SACRAMENTO REAL ESTATE CORPORATION, Sacramento Crushing Corporation, and Sacramento Corporation, Plaintiffs,
v.
FIRST CHICAGO BANK, RAVENSWOOD, Defendant.
Bankruptcy Nos. 96 A 00394, 96 B 3992, 96 B 4120 and 96 B 4121.
United States Bankruptcy Court, N.D. Illinois, Eastern Division.
October 8, 1996.
*226 *227 Harold L. Moskowitz, Chicago, IL, for Plaintiffs/Debtors.
William L. Kabaker, Donald F. Engel, Schwartz & Freeman, Chicago, IL, for Defendant First National Bank of Chicago/Ravenswood.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JACK B. SCHMETTERER, Bankruptcy Judge.
Background
This Adversary proceeding[1] relates to bankruptcy proceedings filed by Sacramento Corporation ("Sacramento") and its subsidiaries, Sacramento Crushing and Sacramento Real Estate Corporation ("Debtors" or the "Sacramento entities") under Chapter 11 of the Bankruptcy Code (the "Code"), 11 U.S.C. § 101 et seq. The three bankruptcy proceedings have been substantively consolidated.
Sacramento Corporation holds all issued corporate stock of both Sacramento Crushing and Sacramento Real Estate. At the time of trial, Sacramento Crushing was in the business of recycling of construction waste. Sacramento Real Estate is in the business of owning and leasing the real estate upon which Sacramento Crushing operates. The defendant, First National Bank of Chicago as successor to First Chicago Bank/Ravenswood ("FNB" or the "Bank") is Sacramento's primary lender, secured by the real property and improvements where the operations take place.
Debtors have filed this Adversary Complaint seeking declaration that a refund received from Cook County following tax litigation relating to real estate owned by Sacramento Real Estate (the "Refund") belongs to Debtors, not the Bank. Trial was held, and the Court now makes and enters Findings of Fact and Conclusions of Law, pursuant to which judgment will separately enter for the Plaintiff-Debtors.
FINDINGS OF FACT
1. Sacramento Crushing Corporation ("Crushing"), an affiliate of Sacramento Real Estate Corporation ("Real Estate"), was at the time of trial in the business of operating a facility to recycle construction waste. Real Estate is in the business of owning and leasing of the real estate upon which Crushing operates. Real Estate is the sole beneficiary of National Boulevard Bank of Chicago Trust No. 8368, dated October 23, 1986 (the "Trust"). The Trust owns a certain parcel of real estate commonly known as 445 North Sacramento Avenue, Chicago, Illinois, which real estate consists of approximately 11 acres (the "Property").
2. On February 16, 1996, Real Estate filed its voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code.
3. On February 20, 1996, Crushing filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code.
4. Debtors remain in control of their assets as debtors-in-possession pursuant to §§ 1107 and 1108 of the Bankruptcy Code. No trustee has been appointed.
5. First National Bank of Chicago ("FNB"), an Illinois banking corporation, is the successor corporation to the First Chicago Bank of Ravenswood f/k/a Bank of Ravenswood, an Illinois banking association.
6. On or about October 24, 1986, the Debtors and their parent company, Sacramento Corporation ("Sacramento"), purchased *228 all assets of Schreiber Material & Cartage Co., an Illinois corporation then in bankruptcy (the "Purchase"), from FNB pursuant to an Asset Purchase Agreement of that same date.
7. In order to fund the purchase, the Debtors, Sacramento, and John Gotta ("Gotta"), Sacramento's majority shareholder and President, executed and delivered the following promissory notes (the "Notes") to FNB:
a. A promissory note dated October 24, 1986, in the original principal amount of $1,418,000;
b. A promissory note dated October 24, 1986, in the original principal amount of $801,000;
c. A promissory note dated October 24, 1986, in the original principal amount of $721,000 (the "Advance Note"); and
d. A promissory note dated October 24, 1986, in the original principal amount of $250,000 (the "L of C Note").
8. To secure the obligations of Debtors to FNB (which as of October 24, 1986, totaled $3,190,000), Debtors executed and delivered a Security Agreement (the "Security Agreement"), dated October 24, 1986, in favor of FNB. In addition, Real Estate executed and delivered a mortgage on its major asset, which was the real estate commonly known as 445 North Sacramento Boulevard, Chicago, Illinois (the "Mortgage").
9. Pursuant to the terms of the Security Agreement, Sacramento granted FNB a continuing lien and security interest in the following personal property:
(a) All of Debtors' then-owned or thereafter acquired accounts receivable, contract rights, chattel paper, documents and instruments evidencing any obligations to Debtors for payment of goods sold or leased or services rendered, fixtures, furniture, and machinery and equipment and all proceeds and products thereof; and
(b) all present and future inventory of whatsoever kind or nature, including, without limitation, all raw materials, work in process and finished goods and any documents relating thereto, and all right, title, and interest of Debtors therein and thereto.
10. Debtors did not pay real estate taxes due and owing on the Property to the Cook County Collector for certain years. This resulted in the Cook County Collector's Office listing those real estate taxes for sale at its scheduled tax sale.
11. On March 20, 1992, the Cook County Collector sold the Property's 1987, 1989, and 1990 real estate taxes to Cambridge Investment Group ("Cambridge") and State Title, Inc. ("STI"), at the penalty rate of 18% every six months, the highest penalty rate permitted by law. (The tax parcels sold to STI were subsequently redeemed without contest and are not involved in the present dispute.)
On or about December 28, 1992, Crushing entered into an agreement with Cambridge pursuant to which Cambridge agreed to extend the time in which redemption of the tax liens sold to it could be made to December 1, 1993 (the "Redemption Agreement"). Neither the Debtors, JDG, Inc., nor John Gotta redeemed the real estate taxes pursuant to the Redemption Agreement with Cambridge.
12. Sacramento hired Robert Dempsey to represent it in redeeming the taxes and for all other related matters, including Cambridge's petition for tax deed. All of Dempsey's bills were sent to and paid by Sacramento.
13. Sacramento sought new monies from FNB to fund the redemption of taxes. At that point, FNB could have advanced such monies under its original mortgage. The Mortgage (wherein Boulevard National Bank, as Trustee, is identified as the "First Party"), provided in Paragraph 4 that the First Party "shall pay before any penalty attaches" all real estate taxes applicable to the Property. Paragraph 14 of the Mortgage also provided that the Mortgagee may, but was not required to, pay any tax lien affecting the Property. Paragraph 14 of the Mortgage further provided that any monies paid by the Mortgagee for the purposes authorized by Paragraph 14 and all expenses paid or incurred in connection therewith, including attorneys' fees and other monies advanced by the Mortgagee to protect the *229 Property and the Mortgagee's lien would constitute so much additional indebtedness secured by the Mortgagee.
14. However, FNB elected not to proceed by new advancement under the old Mortgage. On or about November 13, 1993, FNB granted Sacramento a new line of credit which was evidenced by the execution and delivery of a promissory note to FNB in the original principal amount of $625,000, the proceeds of which were to be used by Sacramento to redeem the unpaid real estate taxes. This line of credit was a new note and not an advance under any other or prior FNB/Sacramento loan document.
15. On or about November 30, 1993, the new loan amount was then credited to Sacramento's checking account, and cashier's checks totaling $662,539.66 on Sacramento's behalf were issued out of that account in favor of David Orr, the Cook County Clerk. On those checks, the listed remitter was Sacramento.
16. The total amount due to redeem all the real estate taxes that had been sold was found to be in excess of the new line of credit established in November of 1993, and additional authorization was needed to approve additional advance to Sacramento.
17. In order to pay the amounts needed to redeem from tax sales to STI and Cambridge, Sacramento was granted a larger line of credit by FNB, which was evidenced by the execution and delivery of a Demand Promissory Note dated February 11, 1994, in the original principal amount of $750,000, which loan amount was increased to the amount of $840,000 on or about March 15, 1994, pursuant to the terms of a new promissory note (the "New Note").
18. Terms of the New Note that covered the final total of the new loans provided that interest accrued and was to be payable monthly at 1% over prime, and the Note was fully due in 90 days. Some interest was actually paid to FNB by Sacramento under the Redemption Note.
19. The New Note was renewed on June 15, 1994, and every 90 days thereafter until December 15, 1995.
20. All loan proceeds of the new loan were deposited into Sacramento's checking account. Cashier's checks were then issued out of that account payable to the Cook County Clerk, and the Debtors' checking account was then debited by the check amounts. These are the funds that were used to redeem from tax sales to STI (Finding No. 11) and Cambridge (Finding No. 17).
21. From the foregoing new loans, on or about February 2, 1994, some of the tax parcels sold to Cambridge were redeemed under protest by payment of $406,851.98 to the Cook County Collector, and on March 18, 1994, the remaining tax parcels were also redeemed under protest by payment of $411,757.04 to the Cook County Collector.
22. In order to protect its interest in the Property, FNB executed the first of two Redemptions Under Protest certificates and deposited the certificate, together with a check in the amount of $406,851.98 from Debtor's newly borrowed funds, with the Cook County Collector. On March 18, 1994, FNB executed the second Redemption Under Protest certificate and deposited the certificate, together with another check from Debtor's newly borrowed funds in the amount of $411,762.04, with the Cook County Collector. All of the real estate tax liens against the Property, for the years 1987 through 1990 which had been previously sold to Cambridge, were thereby redeemed.
23. The two Redemption Under Protest certificates were executed by G. Joseph Keller, a vice-president of FNB. Both Redemption Under Protest certificates named FNB as the redeeming party, and the receipt for funds deposited with the Cook County Clerk specified that the funds were received from FNB. However, Sacramento's lawyer Dempsey saw to preparation and delivery of those papers and payments.
24. Cambridge then filed a Petition for Tax Deed as Case No. 93 CoTD 3536, bearing the caption In The Matter Of The Application of the County Treasurer and Ex-Officio County Collector of Cook County, Illinois, for an Order of Judgment and Sale Against Lands and Lots; Petitioner Cambridge Investment Group (the "Lawsuit").
*230 25. Dempsey consulted with Sacramento and filed in Cambridge's two proceedings an appearance on behalf of FNB, the land trust holding legal title, and also Sacramento. In signing the protest papers, FNB was pursuing its interests to protect its collateral, and was thereby acting in accord with Debtors' parallel interests as well as its own.
26. The state court conducted a hearing on the Lawsuit and initially granted the petition of Cambridge for issuance of a tax deed. However, upon Motion to Reconsider, on January 19, 1996, the judge presiding entered a Memorandum Decision pursuant to which he reversed himself, finding that the sale of the delinquent taxes to Cambridge was completed contrary to the provisions of Section 21-205 of the Illinois Property Tax Code and thereupon sustained FNB's redemption under protest.
27. On February 13, 1996, a second Order was entered in the Lawsuit, finding that the sale of the real estate taxes to Cambridge was a sale in error pursuant to Section 22-45 of the Illinois Property Tax Code.
28. The February 13, 1996, Order further provided in pertinent part that Cambridge was to receive back only what it paid to buy the taxes, not interest thereon:
As authorized by Section 21-380 of the Property Tax Code, the County Clerk shall forthwith pay to the party redeeming all funds presently on deposit on account of the redemption under protest for the sales of the 1990 taxes of the property described as Volume 544, P.I.N.'s XX-XX-XXX-XXX and XX-XX-XXX-XXX [the Permanent Index Numbers for the Property], including any interest earned on such deposits.
29. Accordingly, $315,793.34 (the "Overpayment") was returned to FNB as the "party redeeming," pursuant to check issued by the Cook County Clerk on February 23, 1996. However, the order made no finding as to what party owned the Refund.
30. The Refund check was actually received from the County Clerk either just before or just after the bankruptcy filings. FNB's name appeared on the Refund check issued by the Cook County Clerk as payee. By agreement of the parties in Debtors' related bankruptcy proceedings, the Refund was deposited into an interest bearing account pending further order of this Court. Since then, the only disbursement allowed from the Refund has been for fees the parties agreed were due to the attorney Dempsey.
31. Determining ownership of the Refund will affect the amount (or lack) of monies available to pay claims against the bankruptcy estate.
32. Additional facts stated in the Conclusions of Law will stand as further Findings of Fact.
CONCLUSIONS OF LAW
This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334. This proceeding is a core proceeding under 28 U.S.C. § 157(b)(2)(K). Venue is proper in this District pursuant to 28 U.S.C. § 1409(a).
Funds used to redeem the real estate taxes belonged to Sacramento. Although FNB loaned Sacramento those monies, the loaned funds were deposited into Sacramento's account without restriction. Sacramento then caused cashier's checks to be issued to redeem the real estate taxes.
Under 35 ILCS § 200/21-345, all redemptions from real estate tax sales are presumed to be by the property owner and inure to that party's benefit.
Under 11 U.S.C. § 541(a)(1), "property of the estate" in bankruptcy includes "all legal or equitable interests of the debtor in property." Such definition includes not only property that Debtor owned at the time of filing, but also property in which it had an interest, even if that interest is contingent. Matter of Carousel Intern. Corp., 89 F.3d 359, 362 (7th Cir.1996). Actual possession of the property by debtor is unnecessary. Matter of Pedersen, 155 B.R. 750, 757 (Bankr. S.D.Iowa 1993). Moreover, the debtor's right to sue for any reason is a property interest that almost always becomes property of the estate. In re FBN Food Services, Inc., 175 B.R. 671, 684 (Bankr.N.D.Ill.1994) (debtor's claims that were converted to settlement proceeds were property of the estate), *231 aff'd, 185 B.R. 265 (N.D.Ill.1995) aff'd in part and remanded in part, 82 F.3d 1387 (7th Cir.1996).
As discussed below, Debtors were entitled to the Refund on the bankruptcy petition date, and therefore held an interest in that property that was and remains property of the bankruptcy estate.
Section 9-106 of the Uniform Commercial Code provides in pertinent part that "`General Intangibles' means any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments and money." Section 9-106 of the Uniform Commercial Code also extends the provisions of U.C.C. Article 9, including its perfection requirements, to general intangibles. In re Castle Ventures, Ltd., 167 B.R. 758, 764 (Bankr.E.D.N.Y.1994).
The right to receive a tax refund is a general intangible. Lazere Financial Corp. v. Palmetto Pump & Irrigation Inc. (Matter of Palmetto Pump & Irrigation, Inc.), 81 B.R. 109, 111 (Bankr.M.D.Fla.1987); Sterling National Bank & Trust Co. of New York v. Bornstein (In re Metric Metals Int'l, Inc.), 20 B.R. 633, 636 (S.D.N.Y.1981); In re Don Connolly Constr. Co., Inc., 110 B.R. 976, 978 (Bankr.M.D.Fla.1990); Castle Ventures, 167 B.R. 758 (real estate tax refund is a general intangible).
Because tax refunds are general intangibles, FNB would only be entitled to the Refund if general intangibles or choses in action were included in the Security Agreement that had been properly perfected by the time Debtors filed their respective bankruptcy petitions. Castle Ventures, 167 B.R. 758; In re Neuenschwander, 73 B.R. 327, 328 (Bankr.S.D.Fla.1987).
The Security Agreement executed by the Debtor, and as described in the U.C.C. Form-1 filed by FNB, did not include the granting of a security interest in general intangibles. Thus, FNB has never been granted (and even had it been granted, it has never perfected) a security interest in the Refund. The Refund is therefore an asset of the bankruptcy estate free and clear of any lien or encumbrance under the Security Agreement.
Further, even if the new loan of funds had been pursuant to the original mortgage described hereinabove, under the terms of that mortgage the collateral consisted only of the real estate and possibly collateral described in the Security Agreement. Since neither the mortgage nor the Security Agreement covered general intangibles or choses in action, FNB was not secured by the Refund or right to recover it.
FNB argues that Debtors did not have legal title to the refund at the time of the refund and this bankruptcy proceeding cannot help Debtors acquire legal title to the money. FNB argues that the Refund is not property of the estate under Title 11, U.S.C. § 541[2] and that it otherwise has a statutory and contractual right to it.
Debtors had the burden of proving that the Refund is property of the estate. Gorenz v. State of Illinois Department of Agric., 653 F.2d 1179, 1184 (7th Cir.1981). The estate's rights are limited to whatever rights Debtors had at the commencement of the case and such rights are not expanded because of bankruptcy proceedings. Matter of Sanders, 969 F.2d 591, 593 (7th Cir.1992); Moody v. Amoco Oil Co., 734 F.2d 1200, 1213 (7th Cir.), cert. denied, 469 U.S. 982, 105 S. Ct. 386, 83 L. Ed. 2d 321 (1984). Section 541 expressly allows Debtor the right to "all legal or equitable interests of the debtor in property at the commencement of the case." As long as Debtor can show that it has a legal or equitable title in the refund at the commencement of the case, the refund is property of the estate.
*232 Whether a debtor has an interest in property is of course defined by state law, both to determine whether property is an asset of the debtor, In re K & L Ltd., 741 F.2d 1023, 1030 n. 7 (7th Cir.1984); In re Foos, 183 B.R. 149, 157 (Bankr.N.D.Ill.1995); and to determine the nature of such rights, Butner v. United States, 440 U.S. 48, 54-55, 99 S. Ct. 914, 918, 59 L. Ed. 2d 136 (1979); Matter of Jones, 768 F.2d 923, 927 (7th Cir. 1985).
As stated, the right to receive a tax refund is a "General Intangible." The money returned here is much in the nature of a tax overpayment. The state court decided that the sale to Cambridge was a sale in error pursuant to § 22-45 of the Illinois Property Tax Code. As a result, the court ordered a refund of $315,793.34 from the full amounts paid by Debtors to redeem. This is very much like a tax refund for a tax overpayment. The right to receive a tax refund and the right to proceeds from litigating such a claim is a chose in action, therefore a "general intangible" right.
Because refunds are intangible, FNB would have had a security interest in the Refund only if its right to "general intangibles" or "choses in action" were included in the Security Agreement created for the purpose of giving FNB additional security for the money it lent for the purpose of tax redemption. See Neuenschwander, 73 B.R. at 327. Neither the original loan documentation nor documentation of the new loans that enabled tax redemption covered choses in action and proceeds thereof or even general intangibles. The litigation which resulted in the Refund enforced a chose in action and claim thereto which was held by Debtors prior to their bankruptcy filings. Moreover, the evidence showed no agreement between the parties which expressly allocated any possible refund to either party. Further, the Refund is not cash collateral as that term is defined under 11 U.S.C. § 363(a).
As a result, the Refund belongs to Debtor's estate.
FNB claims that it has a statutory right to the Refund irrespective of whether or not it contracted regarding disposition of the Refund or whether it had a security interest in such a refund granted by loan documentation. FNB claims to have been the "redeeming party" under Illinois law as defined by 35 ILCS 200/21-380. The relevant part of that statute states:
Redemption under protest. Any person redeeming under this Section at a time subsequent to the filing of a petition under 22-30 or 21-445, who desires to preserve his or her right to defend against the petition for tax deed, shall accompany the deposit redemption with a writing substantially in the following form: . . . Redemption under protest constitutes the appearance of the person protesting in the proceedings under Section 22-30 through 22-55 and that person shall present a defense to the petition of tax deed at the time which the court directs . . . Upon a finding sustaining the protest in the whole or in part, the court may declare the sale to be a sale in error under Section 21-310 or Section 22-45, and shall direct the county clerk to return all or part of the redemption money or deposit to the party redeeming.
35 ILCS 200/21-380 (emphasis added.)
FNB contends that it is a "redeeming party" because its name appears in on all the Redemption Certificates and on the Refund check issued by the Cook County Clerk. Thus FNB believes itself to be entitled to the funds because the state court ordered a refund under 35 ILCS 200/21-380 to the "redeeming party" and it claims to be that party.
The language of this Illinois statute cannot be interpreted to comprise a legislative decision that the "redeeming party" always has a property interest in a refund superior to all others. No case authority was found interpreting the statute in such manner. A better interpretation would interpret the phrase "to the party redeeming" to be an administrative provision directing disposition of a refund to that person whose name appears on the redemption certificate. Provision for the County Clerk to pay refunds to the "party redeeming" merely establishes the vehicle for the Clerk to be absolved of responsibility for those funds by paying them to a specified *233 party. The wording of the Illinois statute permits its application to situations where a refund made to the "party redeeming" is only held by that party in trust or as nominee for another who has a superior right to the money. The statute thus allows for the possibility that the "party redeeming" holds the refund in a resulting trust.
A resulting trust arises by operation of the law if one person furnishes consideration for property and title is taken in another. Treschak v. Yorkville Nat'l Bank, 237 Ill.App.3d 855, 857, 178 Ill. Dec. 558, 560, 604 N.E.2d 1081, 1083 (Ill.App.Ct.1992). The theory of a resulting trust is founded upon a natural equity that one who pays for the property should enjoy it, unless it was intended by the vesting of title to confer a beneficial interest upon the grantee. Id. (citing Gary-Wheaton Bank v. Meyer, 130 Ill. App. 3d 87, 85 Ill. Dec. 180, 473 N.E.2d 548 (Ill.App.Ct.1984)). An implied or resulting trust imposed by operation of law arises when the transaction circumstances are such that it is inequitable for the title owner to enjoy a beneficial interest in the property, and such a trust arises from the presumed intent of the parties. In re White Farm Equipment Co., 63 B.R. 800, 807 (Bankr. N.D.Ill.1986), aff'd, Brinkmann v. White Farm Equipment Co. (In re White Farm Equipment Co.), 1987 WL 4838 (N.D.Ill. May 4, 1987). Resulting trusts arise most commonly in "straw man" real estate transaction where title is taken by one person after consideration for the purchase is provided by another.
In Illinois, the person claiming that a resulting trust exists must establish the existence thereof by clear and convincing evidence. Once claimant shows that it provided the payment from which the property in issue was deemed, a rebuttable presumption of resulting trust arises and the burden shifts to the other party to prove entitlement. American Nat'l Bank and Trust Co. of Rockford, Ill. v. United States, 832 F.2d 1032, 1035-1036 (7th Cir.1987); Zack Co. v. Sims, 108 Ill.App.3d 16, 27, 63 Ill. Dec. 732, 740, 438 N.E.2d 663, 671 (Ill.App.Ct.1982). Here, Debtors have shown that they borrowed money without restriction for use in redeeming taxes. FNB did not prove otherwise.
Because the Refund returned Debtors' money that was used to redeem the taxes, and because there was no agreement between the parties giving FNB a security interest therein, FNB is therefore deemed to hold the Refund as trustee of a resulting trust for the benefit of the Debtors. Since Debtors' funds were used to redeem the taxes, any benefit accruing from that redemption through a refund belongs to Debtors.
FNB argues that Debtors never had a property right in the $850,000 used to redeem the taxes, claiming that the Bank's money was used to redeem the taxes, and therefore no resulting trust could arise. However, the facts established at trial indicate that, although FNB signed the redemption certificate and was the "party redeeming" under 35 ILCS 200/21-380, it was Debtors' borrowed money that was used for the redemption.
Quite clearly, the funds used to redeem the taxes had been loaned to Debtor. Those funds were not advanced under the old Mortgage. Rather, Debtor gave new consideration for these new funds in the form of new promissory notes. New security agreements were issued to cover the new indebtedness, albeit not drafted with adequate scope to cover the refunded fund involved here. The new loans were deposited in Sacramento's bank account before the checks were issued. Furthermore, the checks used to redeem real estate taxes listed Sacramento Crushing as "Remitter," and Debtors paid interest on the newly borrowed funds. In short, FNB clearly loaned the money to Debtors through new loans and sufficiently documented the transactions to create a new debtor-creditor relationship.
The fact that the parties understood the funds were loaned for the purpose of redeeming real estate taxes does not change ownership of the loaned funds or create a lien on the partial refund thereof. The intended use of funds did not change the debtor-creditor relationship, and did not create a lien on choses in action or general intangibles.
*234 There was some evidence at trial that FNB had reason to anticipate a possible partial refund of the redemption payments. First, FNB suggested to Debtors' president that he hire Dempsey, an attorney experienced in property tax matters, to represent Debtors in the state tax litigation. There was also a November 19, 1993, interoffice memorandum from Mr. Keller, Vice-President of FNB (over two months prior to the redemption), noting that "there appeared to be some irregularities in the dates and numbering sequence of the certificates purchased by Cambridge." The memo also noted that "[t]hese irregularities have been confirmed by a real estate tax attorney hired by Sacramento who plans to file a motion for a restraining order to prevent Cambridge from filing for deed. . . ." Therefore, an FNB officer knew that part of the new money to be loaned out for Debtors to use in real estate tax redemptions might be returned because of sale irregularities. However, FNB did not draft the new loan documentation to provide that any such refund would be returned to FNB, nor did it extend its lien rights to choses in action or intangibles owned by Debtors so as to cover such a possible refund. Those agreements cannot be rewritten here to correct the Bank's omission at the time to protect its interests.
CONCLUSION
Accordingly, judgment will separately enter declaring the Refund to be property of the bankruptcy estate of these Debtors and ordering turnover of it to a debtor-in-possession account subject to further order of Court.
NOTES
[1] The Cook County Collector, originally made a party defendant, was dismissed on Plaintiffs' motion on May 9, 1996.
[2] Relevant parts of § 541(a) state:
(a) The commencement of a case under section 310, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:
(1) Except as provided in subsection (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case. . . .
(6) Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as earnings from services performed by an individual debtor after the commencement of the case.
(7) Any interest in property that the estate acquires after the commencement of the case.
|
Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
2-20-2008
USA v. Lowery
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-4276
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008
Recommended Citation
"USA v. Lowery" (2008). 2008 Decisions. Paper 1575.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/1575
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 06-4276
____________
UNITED STATES OF AMERICA
v.
WILLIAM LOWERY,
Appellant.
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(No. 04-cr-00814)
District Judge: Hon. Petrese B. Tucker
Submitted Under Third Circuit LAR 34.1(a)
January 15, 2008
Before: BARRY, CHAGARES, and ROTH, Circuit Judges.
____________
Filed: February 20, 2008
OPINION OF THE COURT
CHAGARES, Circuit Judge.
Defendant William Lowery appeals his conviction and sentence for possession of a
firearm by a felon in violation of 18 U.S.C. § 922(g)(1), claiming that (1) there was
insufficient evidence to support the jury’s finding that he knowingly possessed a firearm;
(2) the District Court confused and misled the jury by giving a charge on joint possession;
and (3) the District Court erred in including a prior felony conviction in calculating his
base offense level and criminal history category. We disagree and will affirm the
judgment of the District Court.
I.
As we write only for the parties, we do not set out the facts in great detail.
Lowery agreed as a condition of his state parole that he would not possess any
firearms, he would obtain permission before changing residences, and he would allow
the Pennsylvania Board of Probation and Parole to search his person, property, and
residence without a warrant, and seize any object that violated a condition of his
parole.
When he was first released on parole, Lowery lived with his family, but shortly
thereafter, he moved in with his girlfriend, Fiona Hopkins. He did not tell his parole
officer, Harry Gaab, about the move but Gaab became suspicious after visiting the
house of Lowery’s family and finding none of Lowery’s possessions there. Gaab
confronted Lowery, and Lowery conceded that he had moved. Gaab then went to
Hopkins’ address, spoke with her, and she confirmed that Lowery was, in fact, living
there.
On May 28, 2004, Lowery reported to Gaab, and signed in, listing Hopkins’
address as his address. Following a request from his supervisor, Gaab took Lowery’s
wallet and keys and conducted a search of the residence, while Lowery was
2
temporarily detained at the parole office. The door to one of the bedrooms was bolted
to the floor with a padlock marked U-Haul, where Lowery had worked one year
earlier. Gaab opened the lock with one of Lowery’s keys, and he and another agent,
Rick Oliveros, proceeded to search the room, which appeared to be where Lowery and
Hopkins slept. Under the right side of the mattress, at the head of the bed, the parole
officers found an automatic pistol tucked inside a small concealment holster with a
fully loaded magazine containing six live rounds of ammunition. The gun was less
than a foot from the edge of the mattress. The bed was positioned against two walls,
so that only the right side, where the gun was found, and the foot of the bed were
unobstructed.
The bedroom also contained a night stand, a closet, and two dressers. The
night stand was directly to the right of the bed, within arms’ reach of the pistol. The
agents found photo identification of Lowery on top of the night stand and a manila
envelope with mail and documents addressed to Lowery inside the night stand. Under
the right side of the bed, below where the officers found the gun, there were six pairs
of men’s size 13 shoes. Within a few feet of the shoes, also on the right side of the
room, stood a dresser with men’s toiletries and clothing. A television and March 2004
police citation addressed to Lowery were on top of the dresser. A closet on the right
side of the room contained both men’s and women’s clothing. The clothing closest to
the foot of the bed was female apparel; there was men’s clothing in the other half of
the closet – closest to the right side of the bed and night stand. The dresser to the left
3
of the entrance to the bedroom contained female hygiene products.
At trial, the parties stipulated, inter alia, that Lowery had previously been
convicted of a crime punishable by a term of imprisonment exceeding one year, and
the gun recovered under the bed had been sold to his sister, Bernadette Lowery. A
jury convicted William Lowery on August 17, 2005. This appeal followed.
II.
Lowery claims that his conviction must be reversed because the evidence
adduced at trial was insufficient to prove that he knowingly possessed a firearm in
violation of 18 U.S.C. § 922(g)(1). We disagree.
It is well established that appellants face a heavy burden in challenging a jury
conviction based on sufficiency of evidence. “We apply a particularly deferential
standard of review when deciding whether a jury verdict rests on legally sufficient
evidence. It is not for us to weigh the evidence or to determine the credibility of the
witnesses. Rather, we must view the evidence in the light most favorable to the
government, and will sustain the verdict if any rational trier of fact could have found
the essential elements of the crime beyond a reasonable doubt.” United States v.
Dent, 149 F.3d 180, 187 (3d Cir. 1998) (citations and quotation marks omitted);
United States v. Cartwright, 359 F.3d 281, 285-86 (3d Cir. 2004).
We have explained that constructive possession requires that a person
4
“knowingly has both the power and the intention at a given time to exercise dominion
or control over a thing.” United States v. Garth, 188 F.3d 99, 112 (3d Cir. 1999).
Mere proximity or mere presence on the property where contraband is located does
not establish dominion or control. United States v. Jenkins, 90 F.3d 814, 818 (3d Cir.
1996).
Lowery argues that he shared the bedroom with Fiona Hopkins, and the
evidence “at best established mere presence and proximity.” Appellant Br. at 29-30.
Yet, the fact that others also have access to a firearm does not preclude a finding of
constructive possession. Garth,188 [email protected]. Detective Daniel Wade testified at
trial that Fiona Hopkins was surprised when she learned that a firearm had been found
under her bed. Based on that testimony, the fact that Lowery’s sister procured the
gun, the U-Haul padlock on the bedroom door, and the evidence suggesting that
Lowery slept on the side of the bed where the gun was hidden, a reasonable jury could
have inferred that Lowery had constructive possession of the firearm. Lowery’s
argument is, therefore, without merit.
III.
Lowery also argues that the District Court confused and misled the jury by
giving a joint possession charge, which was not supported by the facts because
Lowery’s girlfriend was not charged with criminal possession or as a conspirator.
5
Again, we disagree.
We review the District Court’s choice of language in a jury instruction for
abuse of discretion. A jury instruction does not constitute reversible error if the
instruction “fairly and adequately” presents the issues in the case without confusing or
misleading the jury. United States v. Ellis, 156 F.3d 493, 498 n.7 (3d Cir. 1998);
United States v. Zehrbach, 47 F.3d 1252, 1264 (3d Cir. 1995). We have plenary
review over a challenge to jury instructions based on statutory construction and over
the interpretation and application of legal precepts. United States v. Schneider, 14
F.3d 876, 878 (3d Cir. 1994).
Before jury selection, the Government requested an instruction regarding joint
possession, to which Lowery objected. The District Court overruled the objection and
instructed the jury that:
To possess means to have something within a person’s control. This
does not necessarily mean that the defendant must hold it physically, that is,
have actual possession of it. Possession includes sole and joint possession.
Possession also includes both actual and constructive possession. A person
who has direct physical control of something on or around his person is
then in actual possession of it. A person who is not in actual possession but
who has both the power and the intention to exercise control over
something is in constructive possession of it. So whenever I use the term
“possession” in these instructions, I mean actual as well as constructive
possession.
App. 210-11. Contrary to Lowery’s contention, “the mere statement to the jury of the
words ‘joint possession’ without any explanation” was neither confusing nor misleading.
6
Appellant Br. at 32. Given that Lowery shared the bed and bedroom with his girlfriend,
the District Court did not err in including the concept of joint possession in its charge.
Moreover, viewed in its entirety, the charge correctly focused on actual and constructive
possession and described the relevant legal standard. United States v. Johnstone, 107
F.3d 200, 204 (3d Cir. 1997). We conclude that the District Court employed the correct
legal standard in its charge and did not abuse its discretion with the particular language it
used to describe the standard.
IV.
Finally, Lowery challenges the reasonableness of his sentence, claiming that the
District Court impermissibly double counted one of his two prior felony convictions.
Lowery argues that a conviction that caused him to be a felon who could not legally
possess a weapon must necessarily be considered an element of the offense of illegally
possessing a weapon, and therefore, under the Sentencing Guidelines, the District Court
should not have considered his prior felony conviction in calculating his criminal history.
Lowery’s arguments are, however, without merit.
We exercise plenary review over the District Court’s interpretation of the advisory
Sentencing Guidelines and review the District Court’s factual findings for clear error.
United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en banc).
U.S.S.G. § 4A1.2 defines a prior sentence for purposes of computing criminal
7
history and provides that “[t]he term ‘prior sentence’ means any sentence previously
imposed upon adjudication of guilt . . . for conduct not part of the instant offense.”
U.S.S.G. § 4A1.2. The application note explains that “[c]onduct that is part of the instant
offense means conduct that is relevant conduct to the instant offense under the provisions
of § 1B1.3 (Relevant Conduct).” U.S.S.G. § 4A1.2, cmt. n.1; see also United States v.
Irvin, 369 F.3d 284, 289-92 (3d Cir. 2004). Yet, contrary to Lowery’s contentions, none
of his prior convictions constituted conduct that was part of the instant offense. Both
convictions were for prior incidents unrelated to possession of the weapon in question
here. We conclude that the District Court correctly calculated Lowery’s sentence.
V.
For the foregoing reasons, we will affirm the District Court’s judgment in all
respects.
8
|
Name: Commission Decision No 3641/92/ECSC of 24 November 1992 amending the questionnaires set out in the Annex to Commission Decision No 1566/86/ECSC on iron and steel statistics
Type: Decision_ENTSCHEID
Subject Matter: iron, steel and other metal industries; production; economic analysis
Date Published: 1992-12-22
Avis juridique important|31992S3641Commission Decision No 3641/92/ECSC of 24 November 1992 amending the questionnaires set out in the Annex to Commission Decision No 1566/86/ECSC on iron and steel statistics Official Journal L 376 , 22/12/1992 P. 0001 - 0032 Finnish special edition: Chapter 13 Volume 23 P. 0234 Swedish special edition: Chapter 13 Volume 23 P. 0234 COMMISSION DECISION No 3641/92/ECSC of 24 November 1992 amending the questionnaires set out in the Annex to Commission Decision No 1566/86/ECSC on iron and steel statisticsTHE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 47 thereof, Whereas changing conditions in the iron and steel industry require that the statistical collection system be adapted continually and survey methods improved; Whereas, since the adoption of Commission Decision No 1566/86/ECSC(1) , as last amended by Decision No 3731/91/ECSC(2) , it has become necessary to change some of the questionnaires on the consumption of raw materials and energy and on employment in the iron and steel industry; Whereas the census system should be simplified by discontinuing one questionnaire and by changing the census frequency, yearly instead of quarterly, of others; Whereas Council Regulation (EEC) No 3924/91 of 19 December 1991 on the establishment of a Community survey of industrial production(3) requires the establishment of a census of the value of iron and steel production; Whereas the changes provided for must ensure that the requirements for statistics on the iron and steel sector are satisfied in an improved manner, especially in the future Single Market, HAS DECIDED AS FOLLOWS: Article 1 Decision No 1566/86/ECSC is hereby amended as follows: 1. The following Article 2a is inserted: 'Article 2a As part of the Community survey of industrial production created by Council Regulation (EEC) No 3924/91 (*), ECSC iron and steel works in the Community must answer questionnaire 2-76 and state the value of their deliveries of iron and steel products. (*) OJ No L 374, 31. 12. 1991, p. 1.' 2. The questionnaires 2-50, 2-51, 2-53, 2-54, 2-55, 2-58, S-1, S-2 and S-8 set out in the Annex are replaced by the statistical questionnaires set out in the Annex hereto. Questionnaires S-1, S-2 and S-8 shall take the numbers 2-31, 2-32 and 2-34. 3. Questionnaire S-9 in the Annex is deleted. Article 2 This Decision shall enter into force on the day of its publication in the Official Journal of the European Communities. It shall apply from 1 January 1993. This Decision shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 24 November 1992. For the Commission Henning CHRISTOPHERSEN Vice-President (1) OJ No L 141, 28. 5. 1986, p. 1. (2) OJ No L 359, 30. 12. 1991, p. 1. (3) OJ No L 374, 31. 12. 1991, p. 1. ANNEX NOTE The questionnaires reproduced in the Annex are supplied by the SOEC in the original size. |
State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: September 11, 2014 517578
________________________________
In the Matter of JOSEPH DEXTER,
Petitioner,
v MEMORANDUM AND JUDGMENT
BRIAN FISCHER, as Commissioner
of Corrections and Community
Supervision,
Respondent.
________________________________
Calendar Date: August 4, 2014
Before: Peters, P.J., McCarthy, Garry, Lynch and Clark, JJ.
__________
Joseph Dexter, Elmira, petitioner pro se.
Eric T. Schneiderman, Attorney General, Albany (Marcus J.
Mastracco of counsel), for respondent.
__________
Proceeding pursuant to CPLR article 78 (transferred to this
Court by order of the Supreme Court, entered in Albany County) to
review a determination of respondent which found petitioner
guilty of violating a certain prison disciplinary rule.
Petitioner commenced this CPLR article 78 proceeding to
challenge a prison disciplinary determination. The Attorney
General has advised this Court that said determination has been
administratively reversed, all references thereto expunged from
petitioner's institutional record and the mandatory surcharge
refunded to petitioner's account. Accordingly, petitioner has
received all the relief to which he is entitled and the petition
must be dismissed as moot (see Matter of Hughes v Venettozzi, 117
AD3d 1248, 1248-1249 [2014]; Matter of Rafi v Prack, 116 AD3d
1324, 1325 [2014]).
-2- 517578
Peters, P.J., McCarthy, Garry, Lynch and Clark, JJ.,
concur.
ADJUDGED that the petition is dismissed, as moot, without
costs.
ENTER:
Robert D. Mayberger
Clerk of the Court
|
115 S3391 IS: Guarantee Access to Arts and Music Education Act of 2018
U.S. Senate
2018-08-28
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
II115th CONGRESS2d SessionS. 3391IN THE SENATE OF THE UNITED STATESAugust 28, 2018Mr. Tester (for himself and Mrs. Shaheen) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and PensionsA BILLTo amend the Elementary and Secondary Education Act of 1965 to expand access to school-wide arts
and music programs, and for other purposes.
1.Short titleThis Act may be cited as the Guarantee Access to Arts and Music Education Act of 2018 or the GAAME Act of 2018. 2.School-wide access to arts educationSection 1114(b)(7)(A)(iii) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314(b)(7)(A)(iii)) is amended—
(1)in each of subclauses (IV) and (V), by striking ; and and inserting a semicolon; and (2)by adding at the end the following:
(VI)sequential, standards-based arts education taught by certified arts educators (as defined by the State) and community arts providers to meet challenging State academic standards; and.
3.School-wide access to music educationSection 1114(b)(7)(A)(iii) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314(b)(7)(A)(iii)), as amended by section (2), is further amended by inserting after subclause (VI) the following:
(VII)sequential, standards-based music education that is aligned to challenging State academic standards and is taught by certified music educators (as defined by the State); and.
4.Targeted assistance schools for arts educationSection 1115(b)(2)(A) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6315(b)(2)(A)) is amended by striking well-rounded education; and inserting the following:
well rounded education, such as—(i)programmatic assistance for students to participate in arts programs that address their academic needs (including support for certified arts educators (as defined by the State), arts educator professional development, supplies, and other expenses associated with instruction in the arts); and.
5.Targeted assistance schools for music educationSection 1115(b)(2)(A) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6315(b)(2)(A)), as amended by section 4, is further amended by adding at the end the following:
(ii)programmatic assistance for students to participate in music programs that address their academic needs (including support for certified music educators, music educator professional development, instruments, sheet music, and other expenses associated with music instruction);. |
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs, November 24, 2004
STATE OF TENNESSEE, DEPARTMENT OF CHILDREN’S SERVICES v.
ABB, IN THE MATTER OF: LJB, Jr., d/o/b 12/05/1997 and EJB, d/o/b
02/26/1999, Children Under 18 Years of Age
Direct Appeal from the Juvenile Court for Hamilton County
Nos. 188,611 and 188,612 Hon. Suzanne Bailey, Judge
No. E2004-01306-COA-R3-PT - FILED JANUARY 13, 2005
In this action to terminate the parental rights of the mother, ABB, to LJB, Jr., and
EJB, the Juvenile Court ordered ABB’s rights terminated, and the mother has appealed. We affirm.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Juvenile Court Affirmed.
HERSCHEL PICKENS FRANKS , P.J., delivered the opinion of the court, in which CHARLES D. SUSANO,
JR., J., and D. MICHAEL SWINEY, J., joined.
Robert D. Bradshaw, Guardian ad Litem, Chattanooga, Tennessee
Michele L. Coffman, Chattanooga, Tennessee, for Appellant.
Paul G. Summers, Attorney General and Reporter, and
Juan G. Villasenor, Assistant Attorney General, Nashville, Tennessee, for Appellee.
OPINION
The mother has a long history of alcohol and drug abuse dating from her teenage
years. Initially, due to the mother’s addiction, she agreed with her sister to give custody of the two
children to the sister to care for them and with the concurrence of the Department of Children’s
Services, the sister was awarded legal custody of the children. On June 23, the parties agreed and
developed a permanency plan with identical requirements for both children. Under the plan, ABB
was required to take parenting classes at a DCS approved facility and provide proof of completion,
attend children’s counseling as requested by the treatment team, and participate in a DCS approved
money management program. Additionally, she was required to get individual counseling to address
domestic violence issues, pay child support in accordance with the child support laws, complete a
Council for Alcohol and Drug Abuse Services (CADAS) program, and follow its recommendations
which include AA and NA meetings.
On December 22, 2003, the DCS filed a Petition to terminate the parental rights of
ABB, and her husband, LJB.1 The trial on this Petition was held on April 19, 2004 and May 3, 2004.
Following trial, the Juvenile Court entered Judgment terminating ABB’s parental rights to her
children. The Trial Court in its ruling said:
. . . The mother is either unwilling or unable to provide a stable, safe and suitable
home for the subject children,. . . . At the time of the petition, the mother again began
treatment for her drug addiction. . . . The mother failed to substantially comply with
her permanency plan responsibilities, or to otherwise remedy the conditions which
cause the children to remain in foster care.
The Court also found the mother had abandoned her children by wilfully failing to
support the children or make reasonable payments toward their support, and the Court, in ruling that
defendant had failed to comply in a substantial manner with the permanency plan said:
. . . Specifically, Defendant failed to follow all recommendations made as a result of
her A&D assessment; failed to complete her treatment through CADAS, follow
recommendations of aftercare program including regular attendance at AA or NA
meetings; . . .
Further, the Court determined that there was clear and convincing evidence that it was in the
children’s best interest that the mother’s parental rights be terminated.
The mother has appealed and argues there is no clear and convincing evidence that
warrants the termination of her parental rights under statutory abandonment or for failure to
substantially comply with the permanency plan. Finally, she argues there is no clear and convincing
evidence to support the finding that termination would be in the best interest of the children.
The findings of the Trial Judge are accorded the presumption of correctness unless
the evidence preponderates against them. See Tenn. R. App. P. 13(d). Bogan v. Bogan, 60 S.W.3d
721-727 (Tenn. 2001). This Court’s review of questions of law is conducted under a de novo
standard of review, with no deference to the conclusions of law made by the lower court. Southern
Constructors, Inc., v. Loudon County Bd. Of Education, 58 S.W.3d 706-710 (Tenn. 2001).
1
The parental rights of the father were terminated, and he is not a party to this appeal.
-2-
A parent’s rights may be terminated based upon several statutory grounds set forth
in Tenn. Code Ann. § 36-1-113, and the Juvenile Court is required to find clear and convincing
evidence that a statutory ground for termination has been satisfied in order to terminate the parent’s
rights. Id. Clear and convincing evidence supporting any single ground will support a termination
order. See, In re: Valentine, 79 S.W.3d 539-546 (Tenn. 2002).
The mother argues the record shows that she has remedied the circumstances that
caused her children to be removed from her custody. She testified that she had provided two clean
drug screens and had enrolled in a program to help her learn to better handle her finances, and was
regularly visiting with her children. She admitted to having a relapse on November 2, 2003, but has
obtained support for her drug addiction through Alcoholics Anonymous, which she testified she
attends regularly. She further testified that by the time of the hearing she had completed her anger
management and financial management counselings, parental assessment parenting classes, and had
procured an apartment adequate for her and the children and was currently employed.
DCS conceded that after the Petition to Terminate Parental Rights was filed, the
mother had complied with some of the requirements of the permanency plan, but argued that ABB’s
efforts came “too little, too late” to constitute substantial compliance.
We find from our review of the evidence that there is clear and convincing evidence
to support the Trial Court’s finding that the mother failed to substantially comply with the
permanency plan. The key factor establishing substantial non-compliance is her failure to complete
the CADAS program. She was admitted to the CADAS program on December 8, 2003, and was
seeking to get into the Family Way Program, which is one of CADAS’s halfway houses, whose
mission is helping women who have substance abuse problems to regain custody of their children.
The assistant manager of the facility testified that the mother “started off very positively and was
very interested in going into the Family Way Program”. But soon, the witness testified, she noticed
the mother’s motivation began to wain and the mother said on several occasions that she wasn’t sure
that she wanted to enter the program, and she inevitably dropped out of the program. The witness
testified that had the mother’s motivation continued, she would have been able to move into one of
their apartments with her children within a short period of time, and the program had no
requirements that would have prevented her from coming into the program. In our view, this was
an essential requirement of the permanency plan, and had the mother continued successfully, she
could have demonstrated that she could properly care for her handicapped children and thereby
regained custody.
The record contains the report of a psychologist who performed a parenting
assessment on February 11 and March 24, 2004. The psychologist reported that the mother was
poly-substance dependent and he diagnosed the mother as suffering from recurrent major depression,
and made recommendations for treatment. He cautioned that she would have to be continuously
monitored, and be under the care of a treating professional “over a period of time before
consideration of her regaining custody of her children”. He concluded that the mother’s becoming
“financially and environmentally stable will be very important”.
-3-
We conclude that the mother’s refusal to remain in the CADAS program whereby she
could have regained custody of her children in a controlled environment, clearly supports the Trial
Court’s conclusion that there was clear and convincing evidence of substantial non-compliance with
the permanency plan, which standing alone, is an adequate basis to terminate the mother’s parental
rights.
The Trial Court, in concluding that it was in the best interest of the children to
terminate the mother’s parental rights, observed:
But we’ve got children who have such special needs that they have to have
somebody who’s there one hundred percent, somebody who doesn’t have the
struggles that you have, who’s likely to face this, seeing them again, relapse again.
They’ve got to have somebody there all the time with them.
With your history of being manic depressive; with the medications you’ve
had, your history of being in Moccasin Bend, your history of this drug addiction, all
the struggles that you have right now, I cannot find it’s in the best interest of these
children for your rights not to be terminated.
The factors to be taken into account by the Trial Court are set forth in Tenn. Code Ann. § 36-1-
113(c)(2). When these factors are applied to the evidence in the record, it is clear that it is in the best
interest of the children to terminate the mother’s parental rights. The mother conceded in her
testimony that the children reside in a “good place” with her three sisters.
The Judgment of the Juvenile Court is affirmed and the cause remanded to the
Juvenile Court. The costs on appeal are assessed to ABB.
______________________________
HERSCHEL PICKENS FRANKS , P.J.
-4-
|
218 S.W.3d 81 (2007)
Jane DOE 1, Individually and as Next Friend of Jane Doe 2, A Minor Child, Petitioner,
v.
PILGRIM REST BAPTIST CHURCH, Respondent.
No. 06-0686.
Supreme Court of Texas.
March 9, 2007.
John C. Sherwood, Ann H. Washburn, Law Offices of John C. Sherwood, Dallas, Tony Diaz, Austin, and Mark Anthony Mosley, Plano, for Petitioner.
Samuel Stan Tillman, Sharpe Tillman & Melton, Fort Worth, for Respondent.
*82 Charles W. McGarry, Law Offices of Charles McGarry, Denise Lasalle Campbell, Dallas, for Other.
PER CURIAM.
Petitioner Jane Doe 1, individually and as the next friend of minor child Jane Doe 2, sued Pilgrim Rest Baptist Church and two other defendants. The trial court granted summary judgment for the Church, and petitioner timely filed a motion for new trial. To make the judgment final and appealable, the trial court later ordered
that all claims against [the Church] are severed from this cause into cause number to be assigned [and restyled] on the docket of this Court upon compliance with the District Clerk's procedure.
The italicized portions were handwritten. The parties agree that the procedure required payment of a filing fee. Doe paid the fee 123 days after the order was signed and filed her notice of appeal a week later. The court of appeals dismissed the appeal for want of jurisdiction because the notice of appeal was filed more than ninety days after the severance order was signed. 193 S.W.3d 727, 729 (Tex.App.-Dallas 2006); see TEX.R.APP. P. 26.1(a) ("[T]he notice of appeal must be filed within 90 days after the judgment is signed if any party timely files: (1) a motion for new trial. . . . ").
"As a rule, the severance of an interlocutory judgment into a separate cause makes it final." Diversified Fin. Sys., Inc. v. Hill, Heard, O'Neal, Gilstrap & Goetz, P.C., 63 S.W.3d 795, 795 (Tex. 2001) (per curiam) (citing Farmer v. Ben E. Keith Co., 907 S.W.2d 495, 496 (Tex. 1995) (per curiam)). A court can, however, "condition[ the effectiveness of the severance on a future certain event, such as . . . payment of fees associated with the severance by the party requesting it." McRoberts v. Ryals, 863 S.W.2d 450, 453 n. 3 (Tex.1993); see also Diversified, 63 [email protected]. This practice, though permitted, should be avoided because of the potential for confusion, as this case illustrates. The court of appeals construed the handwritten condition to apply only to the renumbering and restyling of the severed case, not to the severance itself, 193 S.W.3d at 729, but we see no reason why the trial court would merely condition further clerical action, and not the severance itself, on compliance with applicable procedures. The parties' agreement at the court of appeals that the condition applied to the severance itself does not, of course, bind the court of appeals but does reflect the parties' understanding of what the trial court was doing.
Because the appeal was timely perfected, we grant Doe's petition for review and without hearing oral argument, TEX. R. APP. P. 59.1, reverse the judgment of the court of appeals and remand the case to that court for further proceedings.
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION RE: MOTION TO DISMISS (#101)
The defendants, Weatherstone Corporation, Henry R. Kravis and Caroline Kravis have moved to dismiss an action brought by the plaintiffs, Cypriano Muniz and Mercedes Muniz. The defendants, Henry R. Kravis and Caroline Roehm (Kravis) were served in accordance with Connecticut General Statutes § 52-59 and the defendant Weatherstone Corporation was served in accordance with Connecticut General Statutes § 33-411.
On June 28, 1994, the plaintiffs filed suit against the defendants by service of the writ, summons and complaint upon the Secretary of State and each defendant by certified mail, return receipt requested. The writ, summons and complaint were filed with this court on July 14, 1994. CT Page 10501
Deputy Sheriff Mark A. Pesiri, prepared the return of service which stated that "then and there" (June 24, 1994), Sheriff Pesiri made service in compliance with C.G.S. §§ 52-59b(c) and 33-411.
Pursuant to C.G.S. § 52-59b(c), a non-resident individual may be served by a sheriff leaving with the Secretary of State's office ". . . a true and attested copy thereof, and by sending to the defendant . . . by registered or certified mail, . . . a like true and attested copy." C.G.S. § 52-59b(c).
In the return of service dated June 28, 1994 (attached hereto), Deputy Sheriff Pesiri states that on said date, he left ". . . true and attested copy of the original Writ, Summons and Complaint, for each defendant, in the office of the Secretary of State of the State of Connecticut," and sent ". . . true and attested copy of the original Writ, Summons and Complaint with any doings thereon endorsed, by Certified Mail, Return Receipt, addressed to HENRY R. KRAVIS . . . and . . . CAROLINE KRAVIS . . . ." (Emphasis added).
The defendant's argument that service is voidable is unfounded. The defendants' argument that the return did not indicate a true and attested copy of the process was sent to the defendants by certified/registered mail is unfounded as the return clearly stated such requirement was met. All the requirements under § 52-59b(c) were met by the initial return which sets forth that the individual defendants were served by "Certified Mail, Return Receipt": in accordance with § 52-59b(c).
The defendants also assert that the return "is silent as to whether true and attested copies of the Writ, Summons and Complaint were sent by the Sheriff to the individual defendants via Certified or Registered Mail." (Defendants' [email protected]. 3-4). However, the return clearly stated that the defendants were sent "a true and attested copy(ies) of the original Writ, Summons and Complaint . . . by Certified Mail, Return Receipt. . ."
Therefore as the plaintiffs have served the CT Page 10502 defendants in accordance with C.G.S. § 52-59b(c), the defendant's motion to dismiss must be denied.
Service of process may be made upon a foreign corporation by serving the Secretary of State. General Statute § 33-411 provides in part as follows:
. . . If it appears from the records of the secretary of the state that such corporation has failed to maintain such agent for service of process, or if it appears by affidavit attached to the process, notice or demand of the officer or other person directed to serve any process, notice or demand upon such corporation's agent appearing on the records of the secretary of the state that such agent cannot, with reasonable diligence, be found at the address shown on such records, service of such process, notice or demand on such corporation may be made by such officer or other proper person by: (A) Leaving a true and attested copy thereof, together with the required fee, at the office of the secretary of the state or depositing the same in the United States mails, by registered or certified mail, postage prepaid, addressed to such office, and (B) depositiong [depositing] in the United States mails, by registered or certified mail, postage prepaid, a true and attested copy thereof, together with a statement by such officer that service is being made pursuant to this section, addressed to such corporation at the address of its executive offices at last shown on the records of the secretary of the state or at such other address as has been designated as provided in subsection (b) of section 33-300. . . .
The defendant contends that the return is "silent as to whether a Certified or Registered Mailing occurred, and if it did occur, when, and to whom." The return specifically states:
". . . on the same day (June 28, 1994), service was made upon WEATHERSTONE CORPORATION CT Page 10503 pursuant to C.G.S. § 33-411 by leaving a true and attested copy of the original Writ, Summons and Complaint . . . in the office of the Secretary of State of the State of Connecticut . . . by sending a true, and attested copy of the original Writ, Summons and Complaint . . . by Certified Mail, Return Receipt, addressed to WEATHERSTONE CORPORATION c/o Kohlberg, Kravis and Roberts at 9 West 57th Street, New York, N.Y. 10019."
See attached Return.
Because the return specifies that there was a certified mailing on June 28, 1994 to WEATHERSTONE CORPORATION, and because a copy of the original writ, summons, and complaint was provided to the Secretary of State and to the corporate defendant, service was proper under C.G.S. § 33-411 and the defendant's motion to dismiss must be denied.
All defendants were properly served as indicated in the return of service, pursuant to C.G.S. § 52-59b and § 33-411. The defendants' motion to dismiss is denied for the reasons set forth herein.
PICKETT, J.
EXHIBIT MARK A. PESIRI DEPUTY SHERIFF FAIRFIELD COUNTY P.O. BOX 373 STAMFORD, CONNECTICUT 06904-0373 TEL. 580-980-4257 FAX 580-980-4257
STATE OF CONNECTICUT )) SS: STAMFORD JUNE 28, 1994 COUNTY OF FAIRFIELD )
Then and there, by virtue hereof, I made service of the within and foregoing original Writ, Summons Complaint upon HENRY R. KRAVIS and CAROLINE KRAVIS pursuant to C.G.S. 52-596(c) by leaving a true and attested copy of the original Writ, Summons Complaint, for each defendant, in the office of the Secretary of State of the State of Connecticut with the fee of $25.00, for each defendant, and by sending a true and attested copy of the original Writ, Summons Complaint, CT Page 10504 with doings thereon endorsed, by certified mail, return receipt addressed to HENRY R. KRAVIS c/o Kohlberg, Kravis Roberts at 9 West 57th Street, New York, Ny 10019 and addressed to CAROLINE KRAVIS c/o Kohlberg, Kravis Roberts at 9 west 57th Street, New York, Ny 10019.
And later, on the same day, service was made upon WETHERSTONE CORPORATION pursuant to C.G.S. 33-411 by leaving a true and attested copy of the original Writ, Summons Complaint (along with a diligent search affidavit) in the office of the Secretary off State of the State of Connecticut the fee of $25.00 and by sending a true and attested copy of the original Writ, Summons Complaint, with my doings thereon endorsed, by certified mail, return receipt, addressed to WETHERSTONE CORPORATION c/o Kohlberg, Kravis Roberts at 9 West 57th Street, New York, Ny 10019.
The within and foregoing is the original Writ, Summons
Complaint with my doings hereon endorsed.
SHERIFF'S FEES ATTEST
Service .............. $ 70.00 Travel ............... 55.44 Copies ............... 100.00 ------------------ Secretary of State ... 75.00 MARK A. PESIRI Postage .............. 7.56 Deputy Sheriff Endorsements ......... 5.00 Fairfield County -------- TOTAL ......... $ 314.00 |
Citation Nr: 0524014
Decision Date: 08/31/05 Archive Date: 09/09/05
DOCKET NO. 98-04 960 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Waco, Texas
THE ISSUE
Entitlement to service connection for retained shrapnel
fragments in the head as a distinct ratable entity.
REPRESENTATION
Veteran represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
M. Taylor, Counsel
INTRODUCTION
The veteran had active service from April 1941 to April 1945.
This case comes before the Board of Veterans' Appeals (the
Board) on appeal from rating decisions of the Waco, Texas, VA
Regional Office (RO).
FINDING OF FACT
A shell fragment wound has resulted in retained foreign
bodies, orbital depression, tenderness and deformity of the
anterior margin of the frontal sinus.
CONCLUSION OF LAW
Residuals of a shell fragment wound of the right suborbital
area with retained foreign bodies, orbital depression and
deformity of the anterior margin of the frontal sinus was
incurred in wartime service. 38 U.S.C.A. §§ 1110, 1154 (West
2002).
REASONS AND BASES FOR FINDING AND CONCLUSION
Initially, the Board notes that any defect in regard to VCAA
is harmless error as the claim is herein granted.
The veteran honorably served his nation during a time of war
and was wounded in action. His decorations include the
Purple Heart. The issue before the Board is entitlement to a
separate evaluation for shrapnel wound as a distinct entity.
The veteran is service-connected for a scar of the right eye
region, a residual of a shell fragment wound. More recently,
service connection was established for headaches as secondary
to the shell fragment wound.
The veteran asserts that a separate evaluation for the shell
fragment wound should be assigned. We agree. Service
connection may be granted for disability due to disease or
injury incurred in or aggravated by service. However, the
evaluation of the same disability under various diagnoses is
to be avoided. The issue before the Board is whether
granting a separate evaluation for the shell fragment wound
would result in pyramiding. The Court addressed an analogous
situation in 1994. The Court determined that the condition
embodied in Diagnostic Code 7800 was entirely cosmetic. Such
rating does not contain any component of pain or muscle
damage. The critical element is that none of the
symptomatology for any one of these conditions is duplicative
or overlapping with the symptomatology of the other two.
Esteban v. Brown, 6 Vet. App. 259 (1994).
In this case, there is clear evidence that the wound resulted
in more than just a scar. There are retained fragments in
the deeper structures. Furthermore, there is an associated
deformity of the anterior margin of the frontal sinus. Also
described is a depression in the orbital rim. In view of the
fact that the Court has determined that Diagnostic Code 7800
is limited to cosmetic changes, there is no duplication of
disability and service connection is warranted. Adding to
the determination of the Board is the finding of tenderness,
a factor not contemplated in Diagnostic Code 7800.
In sum, the grant of service connection for the cosmetic
defect (scar) does not prevent the recognition of service
connection for residuals of a shell fragment wound of the
right suborbital area with retained foreign bodies, orbital
depression and deformity of the anterior margin of the
frontal sinus
ORDER
Service connection (as a distinct ratable entity) for
residuals of a shell fragment wound of the right suborbital
area with retained foreign bodies, orbital depression and
deformity of the anterior margin of the frontal sinus is
granted.
____________________________________________
H. N. SCHWARTZ
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Exhibit 10.5
AMENDMENT NO. 2 TO
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
This Amendment No. 2 to Intercreditor and Collateral Agency Agreement (this
“Amendment”), dated as of this 2nd day of September, 2020, is by and among CIBC
Bank USA, formerly known as The PrivateBank and Trust Company (“CIBC”), The
Prudential Insurance Company of America (“Prudential”), Pruco Life Insurance
Company (“Pruco”), Prudential Retirement Guaranteed Cost Business Trust
(“Prudential Guaranteed”), PAR U Hartford Life Insurance Comfort Trust (“PAR”),
CIBC, in its capacity as Bank Agent, and CIBC, in its capacity as Collateral
Agent.
WITNESSETH:
WHEREAS, the parties to this Amendment are party to the Intercreditor and
Collateral Agency Agreement dated as of May 14, 2015 (the “Intercreditor
Agreement”), as the same shall be amended by this Amendment and amended or
otherwise modified from time to time;
WHEREAS, as of the date hereof, BMO Harris Bank N.A. (“BMO”) has been repaid all
outstanding Senior Indebtedness owed to it in full and is no longer a party to
the Credit Agreement as a Bank Lender;
WHEREAS, the Borrowers and CIBC are entering into the Amendment No. 7 to Credit
Agreement, dated as of the date hereof (“Bank Amendment”);
WHEREAS, the Borrowers, Prudential, Pruco, Prudential Guaranteed and PAR are
entering into the Amendment No. 3 to Note Purchase Agreement, dated as of the
date hereof (the “Note Amendment”);
WHEREAS, as a condition to the execution and delivery of each of the Bank
Amendment and the Note Amendment, the parties thereto require the execution and
delivery of this Amendment by the parties hereto.
NOW, THEREFORE, for the above reasons, in consideration of the mutual covenants
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.Definitions. Capitalized terms used but not defined in this Amendment
have the meanings assigned thereto in the Intercreditor Agreement, as amended by
this Amendment.
SECTION 2.Amendments. Effective as of the Effective Date (as defined below):
2.1Section 1 of the Intercreditor Agreement is hereby amended by amending and
restating or inserting in appropriate alphabetical order, as applicable, the
following defined terms:
--------------------------------------------------------------------------------
“Additional Notes” shall mean any additional senior secured notes issued by
Borrowers in favor of Noteholders under the Note Agreement from time to time
after the date of the Second Amendment that constitute or evidence “Additional
Prudential Debt” as defined in the Credit Agreement as in effect as of the date
of the Second Amendment.
“Second Amendment” means that certain Amendment No. 2 to Intercreditor and
Collateral Agency Agreement dated as of September 2, 2020 by and among the
Collateral Agent, the Bank Lender and the Noteholders.
“Senior Secured Notes” shall mean, collectively, the Borrowers’ 5.50% Senior
Secured Notes due May 14, 2025, the Borrowers’ 5.10% Senior Secured Notes due
August 17, 2027 and all Additional Notes.
2.2Section 8 of the Intercreditor Agreement is hereby amended by amending and
restating paragraph (a) thereof in its entirety to read as follows:
(a)The Bank Agent and each Bank Lender agrees that, without the consent in
writing by Noteholders holding a majority of the outstanding principal amount of
the Senior Secured Notes, it will not (i) make any Revolving Loan or issue any
Letter of Credit if such loans or issuances would cause the aggregate
outstanding principal amount of Revolving Loans and undrawn face amount of
Letters of Credit to exceed the sum of (x) $28,000,000 less (y) the amount of
all permanent reductions of the "Commitment" (as defined in the Credit
Agreement) after the date of the Second Amendment, (ii) except for (x) Persons
becoming Borrowers after the date hereof and (y) the Guaranty Agreements, retain
or obtain the primary or secondary obligations of any other obligor or obligors
with respect to all or any part of the Senior Indebtedness, or (iii) from and
after the institution of any bankruptcy or insolvency proceeding involving any
Loan Party, as respects the Collateral enter into any agreement with such Loan
Party with respect to post-petition usage of cash collateral, post-petition
financing arrangements or adequate protection. Each Noteholder agrees that,
without the consent in writing by the Bank Lenders holding a majority of the
outstanding principal amount of the Loan and Reimbursement Obligations and
Outstanding Letters of Credit Exposure, it will not (i) make note purchases,
advances, loans or extensions of credit pursuant to the Note Agreement if such
purchases, advances, loans or extensions of credit would cause the outstanding
aggregate principal amount of Senior Indebtedness under the Note Agreement to
exceed the sum of (x) $23,000,000 in the aggregate under Senior Secured Notes
issued and outstanding as of the date of the Second Amendment plus (y)
$28,000,000 in the aggregate under Additional Notes less (z) the amount of all
principal payments made on the Senior Secured Notes after the date of the Second
Amendment, (ii) except for (x) Persons becoming Borrowers after the date hereof
and (y) the Guaranty Agreements, retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to all or any part of
the Senior Indebtedness, or from and after the institution of any bankruptcy or
insolvency proceeding involving any Loan Party, as respects the Collateral enter
into any agreement with such Loan Party with respect to post-petition usage of
cash collateral, post-petition financing arrangements or adequate protection.
--------------------------------------------------------------------------------
SECTION 3.Effectiveness. This Amendment shall become effective as of the date
(the “Effective Date”) upon which this Amendment has been executed and delivered
by each party hereto concurrently with the effectiveness of the Bank Amendment
and the Note Amendment.
SECTION 4.Confirmations. Each party hereto acknowledges and agrees that (i)
each reference to the “Credit Agreement” in any Collateral Documents shall
include the Credit Agreement as amended by the Bank Amendment and (ii) each
reference to the “Note Agreement” in any Collateral Documents shall include the
Note Agreement as amended by the Note Amendment.
SECTION 5.Effect of Amendment. Upon the effectiveness of this Amendment, each
reference to the Intercreditor Agreement in each Collateral Document and in any
other document, instrument or agreement shall mean and be a reference to the
Intercreditor Agreement as modified by this Amendment. Except as specifically
set forth in Section 2, the Intercreditor Agreement shall remain in full force
and effect and is hereby ratified and confirmed in all respects. Except as
expressly amended hereby, the Intercreditor Agreement and each of the Collateral
Documents are hereby ratified and confirmed in all respects and shall continue
in full force and effect. Except as specifically stated in this Amendment, the
execution, delivery and effectiveness of this Amendment shall not (a) amend the
Intercreditor Agreement, (b) operate as a waiver of any right, power or remedy
of the Collateral Agent, any Bank Lender, the Bank Agent or any Noteholder, or
(c) constitute a waiver of, or consent to any departure from, any provision of
the Intercreditor Agreement at any time. The execution, delivery and
effectiveness of this Amendment shall not be construed as a course of dealing or
other implication that the Collateral Agent, any Bank Lender, the Bank Agent or
any Noteholder has agreed to or is prepared to grant any consents or agree to
any amendment to the Intercreditor Agreement in the future, whether or not under
similar circumstances.
SECTION 6.Entire Agreement. The Intercreditor Agreement, as amended by this
Amendment, constitutes the entire agreement and understanding between the
parties to each with respect to the subject matter thereof and hereof and
supersedes any and all oral communication and prior writings in respect thereof
or hereof.
SECTION 7.Counterparts. This Amendment may be executed in several counterparts
and by each party on a separate counterpart, each of which, when so executed and
delivered, shall be an original, but all of which together shall constitute but
one and the same instrument.
SECTION 8.Governing Law. THIS AMENDMENT SHALL BE GOVERNED AS TO VALIDITY,
INTERPRETATION, ENFORCEMENT AND EFFECT BY THE LAWS OF THE STATE OF MINNESOTA
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS AMENDMENT
TO BE GOVERNED BY THE LAWS OF ANY OTHER JURISDICTION).
SECTION 9.Bank Lender Party.The parties acknowledge and agree that BMO has, as
of the date of this Amendment, been repaid all outstanding Senior Indebtedness
owed to it, has terminated its “Commitments” under the Credit Agreement and is
no longer a Bank Lender under
--------------------------------------------------------------------------------
or otherwise a party to the Credit Agreement, the Intercreditor Agreement or any
of the Collateral Documents.
[Signature page follows.]
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first written above.
CIBC BANK USA, in its individual capacity, as
Bank Agent, as the sole Bank Lender and as
Collateral Agent
By: /s/ Leanne Manning____________
Name: Leanne Manning
Title: Managing Director
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Anna Sabiston____________
Second Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Anna Sabiston____________
Assistant Vice President
Background image [c315-20200902ex105f5be3b002.jpg]
--------------------------------------------------------------------------------
PRUDENTIAL RETIREMENT
GUARANTEED COST BUSINESS
TRUST
By:Prudential Retirement Insurance and
Annuity Company, as Grantor
By:PGIM, Inc., as Investment Manager
By:/s/ Anna Sabiston____________
Vice President
PAR U HARTFORD LIFE INSURANCE
PAR U HARTFORD LIFE INSURANCE COMFORT TRUST
By:Prudential Arizona Reinsurance
Universal Company, as Grantor
By:PGIM, Inc., as Investment Manager
By: /s/ Anna Sabiston____________
Name: Anna Sabiston
Title: Vice President
Background image [c315-20200902ex105f5be3b002.jpg]
--------------------------------------------------------------------------------
Acknowledged, consented and agreed:
WINMARK CORPORATION
By: /s/ Anthony D. Ishaug____________
Name:Anthony D. Ishaug
Title:Executive Vice President and Chief
Financial Officer
WIRTH BUSINESS CREDIT, INC.
By: /s/ Anthony D. Ishaug____________
Name:Anthony D. Ishaug
Title:Chief Financial Officer and Treasurer
WINMARK CAPITAL CORPORATION
By: /s/ Anthony D. Ishaug____________
Name:Anthony D. Ishaug
Title:Chief Financial Officer and Treasurer
GROW BIZ GAMES, INC.
By: /s/ Anthony D. Ishaug____________
Name:Anthony D. Ishaug
Title:Chief Financial Officer, Treasurer and Secretary
Background image [c315-20200902ex105f5be3b002.jpg]
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Exhibit 10.42 2006 Incentive Compensation Plan Plan Document Effective as of June 1, 2010 TABLE OF CONTENTS Page ARTICLEI.ESTABLISHMENT; PURPOSES; AND DURATION 1 1.1.Establishment of the Plan. 1 1.2.Purposes of the Plan. 1 1.3.Duration of the Plan. 1 ARTICLEII.DEFINITIONS 2 2.1.“Affiliate” 2 2.2.“Award” 2 2.3.“Award Agreement” 2 2.4.“Beneficial Ownership” 3 2.5.“Board” or “Board of Directors” 3 2.6.“Cause” 3 2.7.“Change of Control” 3 2.8.“Code” 5 2.9.“Committee” 5 2.10.“Company Incumbent Board” 5 2.11.“Company Proxy Contest” 5 2.12.“Company Surviving Corporation” 5 2.13.“Covered Employee” 5 2.14.“Director” 6 2.15.“Disability” 6 2.16.“Dividend Equivalents” 6 2.17.“Effective Date” 6 2.18.“Employee” 6 2.19.“Exchange Act” 6 2.20.“Fair Market Value” 6 2.21.“Fiscal Year” 7 2.22.“Freestanding SAR” 7 2.23.“Grant Price” 7 2.24.“Incentive Stock Option” 7 2.25.“Insider” 7 2.26.“Non-Control Acquisition” 7 2.27.“Non-Control Transaction” 7 2.28.“Non-Employee Director” 7 2.29.“Nonqualified Stock Option” 8 2.30.“Notice” 8 2.31.“Option” 8 2.32.“Option Price” 8 2.33.“Other Stock-Based Award” 8 2.34.“Participant” 8 2.35.“Performance-Based Compensation” 8 2.36.“Performance Measure” 8 2.37.“Performance Period” 8 2.38.“Performance Share” 8 (i) Page 2.39.“Performance Unit” 8 2.40.“Period of Restriction” 8 2.41.“Person” 9 2.42.“Qualified Change of Control” 9 2.43.“Related Entity” 9 2.44.“Restricted Stock” 9 2.45.“Restricted Stock Unit” 9 2.46.“Retirement” 9 2.47.“Rule 16b-3” 9 2.48.“Securities Act” 9 2.49.“Share” 9 2.50.“Stock Appreciation Right” 9 2.51.“Subject Person” 9 2.52.“Subsidiary” 9 2.53.“Substitute Awards” 10 2.54.“Tandem SAR” 10 2.55.“Termination” 10 2.56.“Voting Securities” 10 ARTICLEIII.ADMINISTRATION 10 3.1.General. 10 3.2.Committee. 11 3.3.Authority of the Committee. 11 3.4.Award Agreements. 13 3.5.Discretionary Authority; Decisions Binding. 13 3.6.Attorneys; Consultants. 14 3.7.Delegation of Administration. 14 ARTICLEIV.SHARES SUBJECT TO THE PLAN AND ANNUAL AWARD LIMITS 14 4.1.Number of Shares Available for Grants. 14 4.2.Annual Award Limits. 15 4.3.Adjustments in Authorized Shares. 15 4.4.No Limitation on Corporate Actions. 16 ARTICLEV.ELIGIBILITY AND PARTICIPATION 17 5.1.Eligibility. 17 5.2.Actual Participation. 17 ARTICLEVI.STOCK OPTIONS 17 6.1.Grant of Options. 17 6.2.Award Agreement. 17 6.3.Option Price. 17 6.4.Duration of Options. 18 6.5.Exercise of Options. 18 6.6.Payment. 18 (ii) Page 6.7.Rights as a Shareholder. 19 6.8.Termination of Employment or Service. 19 6.9.Limitations on Incentive Stock Options. 20 ARTICLEVII.STOCK APPRECIATION RIGHTS 21 7.1.Grant of SARs. 21 7.2.Grant Price. 21 7.3.Exercise of Tandem SARs. 21 7.4.Exercise of Freestanding SARs. 22 7.5.Award Agreement. 22 7.6.Term of SARs. 22 7.7.Payment of SAR Amount. 22 7.8.Rights as a Shareholder. 22 7.9.Termination of Employment. 22 ARTICLEVIII.RESTRICTED STOCK AND RESTRICTED STOCK UNITS 23 8.1.Awards of Restricted Stock and Restricted Stock Units. 23 8.2.Award Agreement. 23 8.3.Nontransferability of Restricted Stock. 23 8.4.Period of Restriction and Other Restrictions. 23 8.5.Delivery of Shares, Payment of Restricted Stock Units. 23 8.6.Forms of Restricted Stock Awards. 24 8.7.Voting Rights. 24 8.8.Dividends and Other Distributions. 24 8.9.Termination of Employment or Service. 25 8.10.Compliance With Section 409A. 25 ARTICLEIX.PERFORMANCE UNITS AND PERFORMANCE SHARES 25 9.1.Grant of Performance Units and Performance Shares. 25 9.2.Value of Performance Units and Performance Shares. 26 9.3.Earning of Performance Units and Performance Shares. 26 9.4.Form and Timing of Payment of Performance Units and Performance Shares. 26 9.5.Rights as a Shareholder. 26 9.6.Termination of Employment. 26 9.7.Compliance With Section 409A. 27 ARTICLEX.OTHER STOCK-BASED AWARDS 27 10.1.Other Stock-Based Awards. 27 10.2.Value of Other Stock-Based Awards. 27 10.3.Payment of Other Stock-Based Awards. 27 10.4.Termination of Employment or Directorship. 27 10.5.Compliance With Section 409A. 28 ARTICLEXI.PERFORMANCE MEASURES 28 11.1.Performance Measures. 28 (iii) Page 11.2.Evaluation of Performance. 29 11.3.Adjustment of Performance-Based Compensation. 29 11.4.Committee Discretion. 29 ARTICLEXII.DIVIDEND EQUIVALENTS 30 12.1.Dividend Equivalents. 30 ARTICLEXIII.TRANSFERABILITY OF AWARDS; BENEFICIARY DESIGNATION 30 13.1.Transferability of Incentive Stock Options. 30 13.2.All Other Awards. 31 13.3.Beneficiary Designation. 31 ARTICLEXIV.RIGHTS OF PARTICIPANTS 31 14.1.Rights or Claims. 31 14.2.Adoption of the Plan. 32 14.3.Vesting. 32 14.4.No Effects on Benefits. 32 14.5.One or More Types of Awards. 33 ARTICLEXV.CHANGE OF CONTROL 33 15.1.Treatment of Outstanding Awards. 33 15.2.No Implied Rights; Other Limitations. 35 15.3.Termination, Amendment, and Modifications of Change of Control Provisions. 35 15.4.Compliance with Section 409A. 35 ARTICLEXVI.AMENDMENT, MODIFICATION, AND TERMINATION 36 16.1.Amendment, Modification, and Termination. 36 16.2.Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. 37 ARTICLEXVII.TAX WITHHOLDING AND OTHER TAX MATTERS 37 17.1.Tax Withholding. 37 17.2.Withholding or Tendering Shares. 38 17.3.Restrictions. 38 17.4.Special ISO Obligations. 38 17.5.Section 83(b) Election. 38 17.6.No Guarantee of Favorable Tax Treatment. 39 ARTICLEXVIII.LIMITS OF LIABILITY; INDEMNIFICATION 39 18.1.Limits of Liability. 39 18.2.Indemnification. 39 ARTICLEXIX.SUCCESSORS 40 19.1.General. 40 (iv) Page ARTICLEXX.MISCELLANEOUS 40 20.1.Drafting Context. 40 20.2.Forfeiture Events. 40 20.3.Severability. 41 20.4.Transfer, Leave of Absence. 41 20.5.Exercise and Payment of Awards. 42 20.6.Deferrals. 42 20.7.Loans. 42 20.8.No Effect on Other Plans. 42 20.9.Section 16 of Exchange Act and Code Section 162(m). 42 20.10.Requirements of Law; Limitations on Awards. 43 20.11.Participants Deemed to Accept Plan. 44 20.12.Governing Law. 44 20.13.Plan Unfunded. 44 20.14.Administration Costs. 45 20.15.Uncertificated Shares. 45 20.16.No Fractional Shares. 45 20.17.Deferred Compensation. 45 20.18.Employees Based Outside of the United States. 45 (v) CORELOGIC, INC. 2 CoreLogic, Inc., a Delaware corporation (the “Company”), has adopted CoreLogic, Inc. 2006 Incentive Compensation Plan (the “Plan”) for the benefit of non-employee directors of the Company and officers and eligible employees of the Company and any Subsidiaries and Affiliates (as each term defined below), as follows: ARTICLEI. ESTABLISHMENT; PURPOSES; AND DURATION 1.1.Establishment of the Plan.The Company hereby establishes this incentive compensation plan to be known as “CoreLogic, Inc. 2006 Incentive Compensation Plan”, as set forth in this document.The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and Other Stock-Based Awards.The Plan was adopted by the Board of Directors (as defined below) on February 23, 2006.The Plan became effective upon approval by the shareholders of the Company, which approval must occur within the period beginning on such adoption date and ending on February 22, 2007 (the “Effective Date”).The Plan was amended and restated effective June 1, 2010 to reflect the change in the name of the Company to CoreLogic, Inc.The Plan shall remain in effect as provided in Section 1.3. 1.2.Purposes of the Plan.The purposes of the Plan are to provide additional incentives to non-employee directors of the Company and to those officers and employees of the Company, Subsidiaries and Affiliates whose substantial contributions are essential to the continued growth and success of the business of the Company and the Subsidiaries and Affiliates, in order to strengthen their commitment to the Company and the Subsidiaries and Affiliates, and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and to further align the interests of such non-employee directors, officers and employees with the interests of the shareholders of the Company.To accomplish such purposes, the Plan provides that the Company may grant Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and Other Stock-Based Awards. 1.3. Duration of the Plan.The Plan shall commence on the Effective Date, as described in Section 1.1, and shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article XVII, until all Shares subject to it shall have been delivered, and any restrictions on such Shares have lapsed, pursuant to the Plan’s provisions.However, in no event may an Award be granted under the Plan on or after ten years from the Effective Date. -1- ARTICLEII. DEFINITIONS Whenever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized: 2.1.“Affiliate”means any entity other than the Company and any Subsidiary that is affiliated with the Company through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of the Plan by the Committee; provided, however, that, notwithstanding any other provisions of the Plan to the contrary, for purposes of NQSOs and SARs, if an individual who otherwise qualifies as an Employee or Non-Employee Director provides services to such an entity and not to the Company or a Subsidiary, such entity may only be designated an Affiliate if the Company qualifies as a “service recipient,” within the meaning of Code Section 409A, with respect to such individual; provided further that such definition of “service recipient” shall be determined by (a) applying Code Section 1563(a)(1), (2) and (3), for purposes of determining a controlled group of corporations under Code Section 414(b), using the language “at least 50 percent” instead of “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)-2, for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), using the language “at least 50 percent” instead of “at least 80 percent” each place it appears in Treasury Regulations Section 1.414(c)-2, and (b) where the use of Shares with respect to the grant of an Option or SAR to such an individual is based upon legitimate business criteria, by applying Code Section 1563(a)(1), (2) and (3), for purposes of determining a controlled group of corporations under Code Section 414(b), using the language “at least 20 percent” instead of “at least 80 percent” at each place it appears in Code Section 1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)-2, for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), using the language “at least 20 percent” instead of “at least 80 percent” at each place it appears in Treasury Regulations Section 1.414(c)-2. 2.2.“Award”means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, and Other Stock-Based Awards. 2.3.“Award Agreement”means either: (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, or (b) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof.The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. -2- 2.4.“Beneficial Ownership”(including correlative terms) shall have the meaning given such term in Rule 13d-3 promulgated under the Exchange Act. 2.5.“Board” or “Board of Directors”means the Board of Directors of the Company. 2.6.“Cause”shall have the definition given such term in a Participant’s Award Agreement, or in the absence of any such definition, as determined in good faith by the Committee. 2.7.“Change of Control”means the occurrence of any of the following: (a)an acquisition in one transaction or a series of related transactions (other than directly from the Company or pursuant to Awards granted under the Plan or compensatory options or other similar awards granted by the Company) by any Person of any Voting Securities of the Company, immediately after which such Person has Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred pursuant to this Section 2.7(a), Voting Securities of the Company which are acquired in a Non-Control Acquisition shall not constitute an acquisition that would cause a Change of Control; or (b)any Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such Person) Beneficial Ownership of Voting Securities of the Company possessing thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred pursuant to this Section 2.7(b), Voting Securities of the Company which are acquired in a Non-Control Acquisition shall not constitute an acquisition that would cause a Change of Control; or (c)the individuals who, immediately prior to the Effective Date, are members of the Board (the “Company Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the election, or nomination for election of any new director was approved by a vote of at least a majority of the Company Incumbent Board, such new director shall, for purposes of the Plan, be considered as a member of the Company Incumbent Board; provided further, however, that no individual shall be considered a member of the Company Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Company Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Company Proxy Contest; or -3- (d)the consummation of any merger, consolidation, recapitalization or reorganization involving the Company unless: (i) the shareholders of the Company, immediately before such merger, consolidation, recapitalization or reorganization, own, directly or indirectly, immediately following such merger, consolidation, recapitalization or reorganization, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the corporation resulting from such merger or consolidation or reorganization (the “Company Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities of the Company immediately before such merger, consolidation, recapitalization or reorganization; and (ii) the individuals who were members of the Company Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, recapitalization or reorganization constitute at least a majority of the members of the board of directors of the Company Surviving Corporation, or a corporation Beneficially Owning, directly or indirectly, a majority of the voting securities of the Company Surviving Corporation, and (iii)no Person, other than (A) the Company, (B) any Related Entity, (C) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation, recapitalization or reorganization, was maintained by the Company, the Company Surviving Corporation, or any Related Entity or (D) any Person who, together with its Affiliates, immediately prior to such merger, consolidation, recapitalization or reorganization had Beneficial Ownership of fifty percent (50%) or more of the then outstanding Voting Securities of the Company, owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company Surviving Corporation’s then outstanding Voting Securities (a transaction described in clauses (d)(i) through (d)(iii) above is referred to herein as a “Non-Control Transaction”); or (e) any approval of any plan or proposal for the liquidation or dissolution of the Company; or (f) any sale, lease, exchange, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets or business of the Company to any Person (other than (A) a transfer or distribution to a Related Entity, or (B) a transfer or distribution to the Company’s shareholders of the stock of a Related Entity or any other assets). -4- Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities of the Company as a result of the acquisition of Voting Securities of the Company by the Company which, by reducing the number of Voting Securities of the Company then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company and (1) before such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company in a related transaction or (2) after such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company which in either case increases the percentage of the then outstanding Voting Securities of the Company Beneficially Owned by the Subject Person, then a Change of Control shall be deemed to occur. Solely for purposes of this Section 2.7, (1) “Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person, and (2) “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.Any Relative (for this purpose, “Relative” means a spouse, child, parent, parent of spouse, sibling or grandchild) of an individual shall be deemed to be an Affiliate of such individual for this purpose.None of the Company or any Person controlled by the Company shall be deemed to be an Affiliate of any holder of Shares. 2.8. “Code”means the Internal Revenue Code of 1986, as it may be amended from time to time, including rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto. 2.9. “Committee”means the Compensation Committee of the Board of Directors or a subcommittee thereof, or such other committee designated by the Board to administer the Plan. 2.10.“Company Incumbent Board”shall have the meaning provided in Section 2.7(c). 2.11.“Company Proxy Contest”shall have the meaning provided in Section 2.7(c). 2.12. “Company Surviving Corporation”has the meaning provided in Section 2.7(d)(i). 2.13. “Covered Employee”means any Employee who is or may become a “covered employee,” as defined in Code Section 162(m), and who is designated, either as an individual Employee or a member of a class of Employees, by the Committee within the shorter of (i) ninety (90) days after the beginning of the Performance Period, or (ii) the first twenty-five percent (25%) of the Performance Period, as a “Covered Employee” under the Plan for such applicable Performance Period. -5- 2.14.“Director”means any individual who is a member of the Board of Directors of the Company. 2.15.“Disability”means the inability to engage in any substantial gainful occupation to which the relevant individual is suited by education, training or experience, by reason of any medically determinable physical or mental impairment, which condition can be expected to result in death or continues for a continuous period of not less than twelve (12) months; provided, however, that, for purposes of ISOs, “Disability” shall mean “permanent and total disability” as set forth in Section 22(e)(3) of the Code. 2.16.“Dividend Equivalents”means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to an Award but that have not been issued or delivered, as described in Article XII. 2.17.“Effective Date”shall have the meaning ascribed to such term in Section 1.1. 2.18.“Employee”means any person designated as an employee of the Company, a Subsidiary and/or an Affiliate on the payroll records thereof.An Employee shall not include any individual during any period he or she is classified or treated by the Company, a Subsidiary or an Affiliate as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company, a Subsidiary and/or an Affiliate without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company, a Subsidiary and/or an Affiliate during such period.As further provided in Section 20.4, for purposes of the Plan, upon approval by the Committee, the term Employee may also include Employees whose employment with the Company, a Subsidiary or an Affiliate has been terminated subsequent to being granted an Award under the Plan.For the avoidance of doubt, a Director who would otherwise be an “Employee” within the meaning of this Section 2.19 shall be considered an Employee for purposes of the Plan. 2.19.“Exchange Act”means the Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto. 2.20.“Fair Market Value”means the fair market value of the Shares as determined by the Committee by the reasonable application of such reasonable valuation method, consistently applied, as the Committee deems appropriate; provided, however, that, with respect to ISOs, for purposes of Section 6.3 and 6.9(c), such fair market value shall be determined subject to Section 422(c)(7) of the Code; provided further, however, that (a) if the Shares are readily tradable on an established securities market, Fair Market Value on any date shall be the last sale price reported for the Shares on such market on such date or, if no sale is reported on such date, on the last date preceding such date on which a sale was reported, or (b) if the Shares are admitted for listing on the New York Stock Exchange or other comparable market, Fair Market Value on any date shall be the last sale price reported for the Shares on such market on such date or, if no sale is reported on such date, on the last day preceding such date on which a sale was reported.In each case, the Committee shall determine Fair Market Value in a manner that satisfies the applicable requirements of Code Section 409A. -6- 2.21.“Fiscal Year”means the calendar year, or such other consecutive twelve-month period as the Committee may select. 2.22. “Freestanding SAR”means an SAR that is granted independently of any Options, as described in Article VII. 2.23.“Grant Price”means the price established at the time of grant of an SAR pursuant to Article VII, used to determine whether there is any payment due upon exercise of the SAR. 2.24.“Incentive Stock Option”or “ISO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VI and which is designated as an Incentive Stock Option and which is intended to meet the requirements of Section 422 of the Code. 2.25.“Insider”means an individual who is, on the relevant date, an officer, director or ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act. 2.26.“Non-Control Acquisition”means an acquisition (whether by merger, stock purchase, asset purchase or otherwise) by (a) an employee benefit plan (or a trust forming a part thereof) maintained by (i) the Company or (ii) any corporation or other Person of which fifty percent (50%) or more of its total value or total voting power of its Voting Securities or equity interests is owned, directly or indirectly, by the Company (a “Related Entity”); (b) the Company or any Related Entity; (c) any Person in connection with a Non-Control Transaction; or (d) any Person that owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the outstanding Voting Securities of the Company on the Effective Date. 2.27.“Non-Control Transaction”shall have the meaning provided in Section 2.7(d). 2.28.“Non-Employee Director”means a Director who is not an Employee. -7- 2.29.“Nonqualified Stock Option”or “NQSO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VI and which is not intended to meet the requirements of Section 422 of the Code or otherwise does not meet such requirements. 2.30. “Notice”means notice provided by a Participant to the Company in a manner prescribed by the Committee. 2.31. “Option”or “Stock Option”means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article VI. 2.32.“Option Price”means the price at which a Share may be purchased by a Participant pursuant to an Option. 2.33.“Other Stock-Based Award”means an equity-based or equity-related Award described in Section 10.1, granted in accordance with the terms and conditions set forth in Article X. 2.34.“Participant”means any eligible individual as set forth in Article V who holds one or more outstanding Awards. 2.35.“Performance-Based Compensation”means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain performance-based compensation paid to Covered Employees.Notwithstanding the foregoing, nothing in the Plan shall be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section 162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A. 2.36.“Performance Measure”means performance criteria or measures as described in Section 11.1 on which the performance goals described in Article XI are based and which are approved by the Company’s shareholders pursuant to the Plan in order to qualify certain Awards as Performance-Based Compensation in accordance with Article XI. 2.37.“Performance Period”means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to, or the amount or entitlement to, an Award. 2.38.“Performance Share”means an Award of a performance share granted to a Participant, as described in Article IX. 2.39.“Performance Unit”means an Award of a performance unit granted to a Participant, as described in Article IX. 2.40.“Period of Restriction”means the period during which Shares of Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture, and, in the case of Restricted Stock, the transfer of Shares of Restricted Stock is limited in some way, as provided in Article VIII. -8- 2.41.“Person”means “person” as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act, including any individual, corporation, limited liability company, partnership, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity or any group of persons. 2.42.“Qualified Change of Control”means a Change of Control that qualifies as a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code. 2.43.“Related Entity”has the meaning provided in Section 2.26. 2.44.“Restricted Stock”means an Award granted to a Participant pursuant to Article VIII. 2.45. “Restricted Stock Unit”means an Award, whose value is equal to a Share, granted to a Participant pursuant to Article VIII. 2.46. “Retirement”means Termination of a Participant due to either (a) retirement in accordance with any employee pension benefit plan maintained by the Company that is intended to satisfy the requirements of Section 401(a) of the Code entitling such Participant to a full pension under such plan or (b) retirement with the consent of the Committee. 2.47.“Rule 16b-3”means Rule 16b-3 under the Exchange Act, or any successor rule, as the same may be amended from time to time. 2.48.“Securities Act”means the Securities Act of 1933, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto. 2.49.“Share”means a share of common stock, par value $1.00 per share, of the Company (including any new, additional or different stock or securities resulting from any change in corporate capitalization as listed in Section 4.3). 2.50.“Stock Appreciation Right”or “SAR” means an Award, granted alone (a “Freestanding SAR”) or in connection with a related Option (a “Tandem SAR”), designated as an SAR, pursuant to the terms of Article VII. 2.51. “Subject Person”has the meaning provided in Section 2.7. 2.52. “Subsidiary”means any present or future corporation which is or would be a “subsidiary corporation” of the Company as the term is defined in Section 424(f) of the Code. -9- 2.53.“Substitute Awards”means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, options or other awards previously granted, or the right or obligation to grant future options or other awards, by a company acquired by the Company, a Subsidiary and/or an Affiliate or with which the Company, a Subsidiary and/or an Affiliate combines, or otherwise in connection with any merger, consolidation, acquisition of property or stock, or reorganization involving the Company, a Subsidiary or an Affiliate, including a transaction described in Code Section 424(a). 2.54.“Tandem SAR”means a SAR that is granted in connection with a related Option pursuant to Article VII. 2.55.“Termination”means the time when a Participant ceases the performance of services for the Company, any Affiliate or Subsidiary, as applicable, for any reason, with or without Cause, including a Termination by resignation, discharge, death, Disability or Retirement, but excluding (a) a Termination where there is a simultaneous reemployment or continuing employment of a Participant by the Company, Affiliate or any Subsidiary, (b) at the discretion of the Committee, a Termination that results in a temporary severance, and (c) at the discretion of the Committee, a Termination of an Employee that is immediately followed by the Participant’s service as a Non-Employee Director.Notwithstanding any other provisions of the Plan or any Award Agreement to the contrary, a Termination shall not be deemed to have occurred for purposes of any provision the Plan or any Award Agreement providing for payment or distribution with respect to an Award constituting deferred compensation subject to Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A. 2.56.“Voting Securities”shall mean, with respect to any Person that is a corporation, all outstanding voting securities of such Person entitled to vote generally in the election of the board of directors of such Person. ARTICLEIII. ADMINISTRATION 3.1.General.The Committee shall have exclusive authority to operate, manage and administer the Plan in accordance with its terms and conditions.Notwithstanding the foregoing, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including establishing procedures to be followed by the Committee, but excluding matters which under any applicable law, regulation or rule, including any exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) or Section 162(m) of the Code, are required to be determined in the sole discretion of the Committee.If and to the extent that the Committee does not exist or cannot function, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee, subject to the limitations set forth in the immediately preceding sentence.Notwithstanding any other provision of the Plan to the contrary, any action or determination specifically affecting or relating to an Award granted to a Non-Employee Directorshall be taken or approved, by the Board or the Committee. -10- 3.2.Committee.The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors.The Committee shall consist of not less than three (3) non-employee members of the Board, each of whom satisfies such criteria of independence as the Board may establish and such additional regulatory or listing requirements as the Board may determine to be applicable or appropriate.Appointment of Committee members shall be effective upon their acceptance of such appointment.Committee members may be removed by the Board at any time either with or without cause, and such members may resign at any time by delivering notice thereof to the Board.Any vacancy on the Committee, whether due to action of the Board or any other reason, shall be filled by the Board.The Committee shall keep minutes of its meetings.A majority of the Committee shall constitute a quorum and a majority of a quorum may authorize any action.Any decision reduced to writing and signed by a majority of the members of the Committee shall be fully effective as if it has been made at a meeting duly held. 3.3.Authority of the Committee.The Committee shall have full discretionary authority to grant, pursuant to the terms of the Plan, Awards to those individuals who are eligible to receive Awards under the Plan.Except as limited by law or by the Articles of Incorporation or Bylaws of the Company, and subject to the provisions herein, the Committee shall have full power, in accordance with the other terms and provisions of the Plan, to: (a)select Employees and Non-Employee Directors who may receive Awards under the Plan and become Participants; (b)determine eligibility for participation in the Plan and decide all questions concerning eligibility for, and the amount of, Awards under the Plan; (c)determine the sizes and types of Awards; (d)determine the terms and conditions of Awards, including the Option Prices of Options and the Grant Prices of SARs; (e)grant Awards as an alternative to, or as the form of payment for grants or rights earned or payable under, other bonus or compensation plans, arrangements or policies of the Company or a Subsidiary or Affiliate; (f)grant Substitute Awards on such terms and conditions as the Committee may prescribe, subject to compliance with the ISO rules under Code Section 422 and the nonqualified deferred compensation rules under Code Section 409A, where applicable; (g)make all determinations under the Plan concerning Termination of any Participant’s employment or service with the Company or a Subsidiary or Affiliate, including whether such Termination occurs by reason of Cause, Disability or Retirement or in connection with a Change of Control and whether a leave constitutes a Termination; -11- (h) construe and interpret the Plan and any agreement or instrument entered into under the Plan, including any Award Agreement; (i) establish and administer any terms, conditions, restrictions, limitations, forfeiture, vesting or exercise schedule, and other provisions of or relating to any Award; (j) establish and administer any performance goals in connection with any Awards, including related Performance Measures or performance criteria and applicable Performance Periods, determine the extent to which any performance goals and/or other terms and conditions of an Award are attained or are not attained, and certify whether, and to what extent, any such performance goals and other material terms applicable to Awards intended to qualify as Performance-Based Compensation were in fact satisfied; (k) construe any ambiguous provisions, correct any defects, supply any omissions and reconcile any inconsistencies in the Plan and/or any Award Agreement or any other instrument relating to any Awards; (l) establish, adopt, amend, waive and/or rescind rules, regulations, procedures, guidelines, forms and/or instruments for the Plan’s operation or administration; (m)make all valuation determinations relating to Awards and the payment or settlement thereof; (n)grant waivers of terms, conditions, restrictions and limitations under the Plan or applicable to any Award, or accelerate the vesting or exercisability of any Award; (o)subject to the provisions of Article XVI, amend or adjust the terms and conditions of any outstanding Award and/or adjust the number and/or class of shares of stock subject to any outstanding Award; (p)at any time and from time to time after the granting of an Award, specify such additional terms, conditions and restrictions with respect to such Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules, including terms, restrictions and conditions for compliance with applicable securities laws or listing rules, methods of withholding or providing for the payment of required taxes and restrictions regarding a Participant’s ability to exercise Options through a cashless (broker-assisted) exercise; -12- (q)offer to buy out an Award previously granted, based on such terms and conditions as the Committee shall establish with and communicate to the Participant at the time such offer is made; (r) determine whether, and to what extent and under what circumstances Awards may be settled in cash, Shares or other property or canceled or suspended; and (s) exercise all such other authorities, take all such other actions and make all such other determinations as it deems necessary or advisable for the proper operation and/or administration of the Plan. 3.4.Award Agreements.The Committee shall, subject to applicable laws and rules, determine the date an Award is granted.Each Award shall be evidenced by an Award Agreement; however, two or more Awards granted to a single Participant may be combined in a single Award Agreement.An Award Agreement shall not be a precondition to the granting of an Award; provided, however, that (a) the Committee may, but need not, require as a condition to any Award Agreement’s effectiveness, that such Award Agreement be executed on behalf of the Company and/or by the Participant to whom the Award evidenced thereby shall have been granted (including by electronic signature or other electronic indication of acceptance), and such executed Award Agreement be delivered to the Company, and (b) no person shall have any rights under any Award unless and until the Participant to whom such Award shall have been granted has complied with the applicable terms and conditions of the Award.The Committee shall prescribe the form of all Award Agreements, and, subject to the terms and conditions of the Plan, shall determine the content of all Award Agreements.Any Award Agreement may be supplemented or amended in writing from time to time as approved by the Committee; provided that the terms and conditions of any such Award Agreement as supplemented or amended are not inconsistent with the provisions of the Plan.In the event of any dispute or discrepancy concerning the terms of an Award, the records of the Committee or its designee shall be determinative. 3.5.Discretionary Authority; Decisions Binding.The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan.All determinations, decisions, actions and interpretations by the Committee with respect to the Plan and any Award Agreement, and all related orders and resolutions of the Committee shall be final, conclusive and binding on all Participants, the Company and its shareholders, any Subsidiary or Affiliate and all persons having or claiming to have any right or interest in or under the Plan and/or any Award Agreement.The Committee shall consider such factors as it deems relevant to making or taking such decisions, determinations, actions and interpretations, including the recommendations or advice of any Director or officer or employee of the Company, any director, officer or employee of a Subsidiary or Affiliate and such attorneys, consultants and accountants as the Committee may select.A Participant or other holder of an Award may contest a decision or action by the Committee with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful, and any review of such decision or action shall be limited to determining whether the Committee’s decision or action was arbitrary or capricious or was unlawful. -13- 3.6.Attorneys; Consultants.The Committee may consult with counsel who may be counsel to the Company.The Committee may, with the approval of the Board, employ such other attorneys and/or consultants, accountants, appraisers, brokers, agents and other persons, any of whom may be an Employee, as the Committee deems necessary or appropriate.The Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons.The Committee shall not incur any liability for any action taken in good faith in reliance upon the advice of such counsel or other persons. 3.7.Delegation of Administration.Except to the extent prohibited by applicable law, including any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) or Section 162(m) of the Code, or the applicable rules of a stock exchange, the Committee may, in its discretion, allocate all or any portion of its responsibilities and powers under this Article III to any one or more of its members and/or delegate all or any part of its responsibilities and powers under this Article III to any person or persons selected by it; provided, however, that the Committee may not delegate its authority to correct defects, omissions or inconsistencies in the Plan.Any such authority delegated or allocated by the Committee under this Section 3.7 shall be exercised in accordance with the terms and conditions of the Plan and any rules, regulations or administrative guidelines that may from time to time be established by the Committee, and any such allocation or delegation may be revoked by the Committee at any time. ARTICLEIV. SHARES SUBJECT TO THE PLAN AND ANNUAL AWARD LIMITS 4.1.Number of Shares Available for Grants.The shares of stock subject to Awards granted under the Plan shall be Shares.Such Shares subject to the Plan may be either authorized and unissued shares (which will not be subject to preemptive rights) or previously issued shares acquired by the Company or any Subsidiary.Subject to adjustment as provided in Section 4.3, the total number of Shares that may be delivered pursuant to Awards under the Plan shall be four million seven hundred thousand (4,700,000) Shares.If (a) any Shares are subject to an Option, SAR, or other Award which for any reason expires or is terminated or canceled without having been fully exercised, or are subject to any Restricted Stock Award (including any Shares subject to a Participant’s Restricted Stock Award that are repurchased by the Company at the Participant’s cost), Restricted Stock Unit Award or other Award granted under the Plan which are forfeited, or (b) any Award based on Shares is settled for cash, expires or otherwise terminates without the issuance of such Shares, the Shares subject to any such Award shall, to the extent of any such expiration, termination, cancellation, forfeiture or cash settlement, be available for delivery in connection with future Awards under the Plan; provided, however, that all Shares covered by a SAR, to the extent that it is exercised, and whether or not Shares are actually issued to the Participant upon exercise of the SAR, shall reduce the total number of Shares available for delivery under the Plan. Any Shares delivered under the Plan upon exercise or satisfaction of Substitute Awards shall not reduce the Shares available for delivery under the Plan; provided, however, that the total number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan shall be the number of Shares set forth in the first sentence of this Section 4.1, as adjusted pursuant to this Section 4.1, but without application of the foregoing provisions of this sentence. -14- 4.2.Annual Award Limits.The following limits shall apply to grants of all Awards under the Plan: (a)Options:The maximum aggregate number of Shares that may be subject to Options granted in any one Fiscal Year to any one Participant shall be five hundred thousand (500,000) Shares. (b)SARs:The maximum aggregate number of Shares that may be subject to Stock Appreciation Rights granted in any one Fiscal Year to any one Participant shall be five hundred thousand (500,000) Shares.Any Shares covered by Options which include Tandem SARs granted to one Participant in any Fiscal Year shall reduce this limit on the number of Shares subject to SARs that can be granted to such Participant in such Fiscal Year. (c)Restricted Stock or Restricted Stock Units:The maximum aggregate number of Shares that may be subject to Awards of Restricted Stock or Restricted Stock Units granted in any one Fiscal Year to any one Participant shall be two hundred fifty thousand (250,000) Shares. (d)Performance Shares or Performance Units:The maximum aggregate grant with respect to Awards of Performance Shares or Performance Units granted in any one Fiscal Year to any one Participant shall be two hundred fifty thousand (250,000) Shares. (e) Other Stock-Based Awards:The maximum aggregate grant with respect to Other Stock-Based Awards made in any one Fiscal Year to any one Participant shall be two hundred fifty thousand (250,000) Shares (or cash amounts based on the value of such number of Shares). To the extent required by Section 162(m) of the Code, Shares subject to Options or SARs which are canceled shall continue to be counted against the limits set forth in paragraphs (a) and (b) immediately preceding. 4.3.Adjustments in Authorized Shares.In the event of any corporate event or transaction (including a change in the Shares or the capitalization of the Company), such as a reclassification, recapitalization, merger, consolidation, reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), issuance of warrants or rights, dividend or other distribution (whether in the form of cash, stock or other property), stock split or reverse stock split, spin-off, split-up, combination or exchange of shares, repurchase of shares, or other like change in corporate structure, partial or complete liquidation of the Company or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in its discretion, in order to prevent dilution or enlargement of Participants’ rights under the Plan, shall substitute or adjust, as applicable, the number, class and kind of securities which may be delivered under Section 4.1; the number, class and kind, and/or price (such as the Option Price of Options or the Grant Price of SARs) of securities subject to outstanding Awards; the Award limits set forth in Section 4.2; and other value determinations applicable to outstanding Awards; provided, however, that the number of Shares subject to any Award shall always be a whole number.The Committee shall also make appropriate adjustments and modifications in the terms of any outstanding Awards to reflect or related to any such events, adjustments, substitutions or changes, including modifications of performance goals and changes in the length of Performance Periods, subject to the requirements of Article XI in the case of Awards intended to qualify as Performance-Based Compensation.Any adjustment, substitution or change pursuant to this Section 4.3 made with respect to an Award intended to be an Incentive Stock Option shall be made only to the extent consistent with such intent, unless the Committee determines otherwise, and any such adjustment that is made with respect to an Award that provides for Performance-Based Compensation shall be made consistent with the intent that such Award qualify for the performance-based compensation exception under Section 162(m) of the Code. The Committee shall not make any adjustment pursuant to this Section 4.3 that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A.All determinations of the Committee as to adjustments or changes, if any, under this Section 4.3 shall be conclusive and binding on the Participants. -15- 4.4.No Limitation on Corporate Actions.The existence of the Plan and any Awards granted hereunder shall not affect in any way the right or power of the Company, any Subsidiary or any Affiliate to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or business structure, any merger or consolidation, any issuance of debt, preferred or prior preference stock ahead of or affecting the Shares, additional shares of capital stock or other securities or subscription rights thereto, any dissolution or liquidation, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.Further, except as expressly provided herein or by the Committee, (i) the issuance by the Company of Shares or any class of securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, (ii) the payment of an ordinary dividend in cash or property other than Shares or (iii) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to Awards theretofore granted or the Option Price, Grant Price or purchase price per share applicable to any Award, unless the Committee shall determine, in its discretion, that an adjustment is necessary or appropriate. -16- ARTICLEV. ELIGIBILITY AND PARTICIPATION 5.1.Eligibility.Employees and Non-Employee Directors shall be eligible to become Participants and receive Awards in accordance with the terms and conditions of the Plan, subject to the limitations on the granting of ISOs set forth in Section 6.9(a), the granting of SARs set forth in Section 7.1 and the granting of Performance Units and Performance Shares set forth in Section 9.1. 5.2.Actual Participation.Subject to the provisions of the Plan, the Committee may, from time to time, select Participants from all eligible Employees and Non-Employee Directors and shall determine the nature and amount of each Award. ARTICLEVI. STOCK OPTIONS 6.1.Grant of Options.Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee.The Committee may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Committee or automatically upon the occurrence of specified events, including the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Option or within the control of others.The granting of an Option shall take place when the Committee by resolution, written consent or other appropriate action determines to grant such Option for a particular number of Shares to a particular Participant at a particular Option Price. 6.2.Award Agreement.Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which the Option shall become exercisable and such other provisions as the Committee shall determine, which are not inconsistent with the terms of the Plan; provided that if an Award Agreement does not contain exercisability criteria, the Option governed by such Award Agreement shall become exercisable in equal parts on each of the first five (5) anniversaries of the date on which the Option was granted, subject to the other terms and conditions of the Award Agreement and the Plan.The Award Agreement also shall specify whether the Option is intended to be an ISO or an NQSO.To the extent that any Option does not qualify as an ISO (whether because of its provisions or the time or manner of its exercise or otherwise), such Option, or the portion thereof which does not so qualify, shall constitute a separate NQSO. 6.3.Option Price.The Option Price for each Option shall be determined by the Committee and set forth in the Award Agreement; provided that, subject to Section 6.9(c), the Option Price of an Option shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted; provided further, that Substitute Awards or Awards granted in connection with an adjustment provided for in Section 4.3, in the form of stock options, shall have an Option Price per Share that is intended to maintain the economic value of the Award that was replaced or adjusted, as determined by the Committee. -17- 6.4.Duration of Options.Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and set forth in the Award Agreement; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary of its date of grant, subject to the respective last sentences of Sections 6.5 and 6.9(c). 6.5.Exercise of Options.Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance determine and set forth in the Award Agreement, which need not be the same for each grant or for each Option or Participant.An Agreement may provide that the period of time over which an Option other than an ISO may be exercised shall be automatically extended if on the scheduled expiration date of such Option the Optionee’s exercise of such Option would violate applicable securities laws; provided, however, that during such extended exercise period the Option may only be exercised to the extent the Option was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option first would no longer violate such laws. 6.6.Payment.Options shall be exercised by the delivery of a written notice of exercise to the Company, in a form specified or accepted by the Committee, or by complying with any alternative exercise procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for such Shares, which shall include applicable taxes, if any, in accordance with Article XVII.The Option Price upon exercise of any Option shall be payable to the Company in full either:(a) in cash or its equivalent; (b) subject to such terms, conditions and limitations as the Committee may prescribe, by tendering (either by actual delivery or attestation) unencumbered Shares previously acquired by the Participant exercising such Option having an aggregate Fair Market Value at the time of exercise equal to the total Option Price, (c) by a combination of (a) and (b); or (d) by any other method approved or accepted by the Committee in its sole discretion, including, if the Committee so determines, a cashless (broker-assisted) exercise that complies with all applicable laws and/or by the Company withholding Shares otherwise deliverable upon exercise of such Option; provided, however, that that the Option Price payable by any resident of the Republic of India shall be paid only on a cashless (broker-assisted) basis.Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment in accordance with the preceding provisions of this Section 6.6, the Company shall deliver to the Participant exercising an Option, in the Participant’s name, evidence of book entry Shares, or, upon the Participant’s request, Share certificates, in an appropriate amount based upon the number of Shares purchased under the Option, subject to Section 20.10.Unless otherwise determined by the Committee, all payments under all of the methods described above shall be paid in United States dollars. -18- 6.7.Rights as a Shareholder.No Participant or other person shall become the beneficial owner of any Shares subject to an Option, nor have any rights to dividends or other rights of a shareholder with respect to any such Shares, until the Participant has actually received such Shares following exercise of his or her Option in accordance with the provisions of the Plan and the applicable Award Agreement. 6.8.Termination of Employment or Service.Except as otherwise provided in the Award Agreement, an Option may be exercised only to the extent that it is then exercisable, and if at all times during the period beginning with the date of granting of such Option and ending on the date of exercise of such Option the Participant is an Employee or Non-Employee Director, and shall terminate immediately upon a Termination of the Participant.An Option shall cease to become newly exercisable upon a Termination of the holder thereof. Notwithstanding the immediately foregoing paragraph, an Option may only be exercised following Termination as provided below in this Section 6.8, unless otherwise provided by the Committee or in the Award Agreement: (a)In the event a Participant ceases to be an Employee because of Retirement or ceases to be a Non-Employee Director because of voluntary resignation, the Participant shall have the right to exercise his or her Option, to the extent exercisable as of the date of such Retirement or voluntary resignation, respectively, at any time within one (1) year after Retirement or voluntary resignation, respectively. (b)In the event a Participant ceases to be an Employee or Non-Employee Director due to Disability, the Option held by the Participant may be exercised, to the extent exercisable as of the date of such Termination, at any time within one (1) year after such Termination. (c)In the event a Participant’s employment with the Company or any Affiliate or Subsidiary or a Participant’s rendering of services as a Non-Employee Director to the Company ceases for reasons other than those described in subsections (a) or (b) immediately above and not due to Termination for Cause, his or her Option, to the extent exercisable as of the date of such Termination, may be exercised at any time prior to the first (1st) anniversary of the date of such Termination. (d)In the event a Participant dies either while an Employee or Non-Employee Director or after Termination under circumstances described in subsections (a), (b) or (c) immediately above within the applicable time period described therein, any Options held by such Participant, to the extent such Options would have been exercisable in accordance with the applicable subsection of this Section 6.8 as of the date of the Participant’s death, may be exercised at any time within one (1) year after the Participant’s death by the Participant’s beneficiary or the executors or administrators of the Participant’s estate or by any person or persons who shall have acquired the Option directly from the Participant by bequest or inheritance, in accordance herewith. -19- Notwithstanding the foregoing provisions of this Section 6.8 to the contrary, the Committee may determine in its discretion that an Option may be exercised following any such Termination, whether or not exercisable at the time of such Termination.Subsections (a), (b), (c) and (d) of this Section 6.8, and the immediately preceding sentence, shall be subject to the condition that, except as otherwise provided by the Committee, no Option may be exercised after a Participant’s Termination for Cause or after the expiration date of such Option specified in the applicable Award Agreement. 6.9.Limitations on Incentive Stock Options. (a) General.No ISO shall be granted to any individual otherwise eligible to participate in the Plan who is not an Employee of the Company or a Subsidiary on the date of granting of such Option.Any ISO granted under the Plan shall contain such terms and conditions, consistent with the Plan, as the Committee may determine to be necessary to qualify such Option as an “incentive stock option” under Section 422 of the Code.Any ISO granted under the Plan may be modified by the Committee to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code. (b)$100,000 Per Year Limitation.Notwithstanding any intent to grant ISOs, an Option granted under the Plan will not be considered an ISO to the extent that it, together with any other “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to subsection (d) of such Section) under the Plan and any other “incentive stock option” plans of the Company, any Subsidiary and any “parent corporation” of the Company within the meaning of Section 424(e) of the Code, are exercisable for the first time by any Participant during any calendar year with respect to Shares having an aggregate Fair Market Value in excess of $100,000 (or such other limit as may be required by the Code) as of the time the Option with respect to such Shares is granted.The rule set forth in the preceding sentence shall be applied by taking Options into account in the order in which they were granted. (c) Options Granted to Certain Shareholders.No ISO shall be granted to an individual otherwise eligible to participate in the Plan who owns (within the meaning of Section 424(d) of the Code), at the time the Option is granted, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary or any “parent corporation” of the Company within the meaning of Section 424(e) of the Code.This restriction does not apply if at the time such ISO is granted the Option Price of the ISO is at least 110% of the Fair Market Value of a Share on the date such ISO is granted, and the ISO by its terms is not exercisable after the expiration of five years from such date of grant. -20- ARTICLEVII. STOCK APPRECIATION RIGHTS 7.1.Grant of SARs.Subject to the terms and conditions of the Plan, SARs may be granted to Participants other than Non-Employee Directors at any time and from time to time as shall be determined by the Committee.The Committee may grant an SAR (a) in connection and simultaneously with the grant of an Option (a Tandem SAR) or (b) independent of, and unrelated to, an Option (a Freestanding SAR).The Committee shall have complete discretion in determining the number of Shares to which a SAR pertains (subject to Article IV) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to any SAR. 7.2.Grant Price.The Grant Price for each SAR shall be determined by the Committee and set forth in the Award Agreement, subject to the limitations of this Section 7.2.The Grant Price for each Freestanding SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date such Freestanding SAR is granted, except in the case of Substitute Awards or Awards granted in connection with an adjustment provided for in Section 4.3.The Grant Price of a Tandem SAR shall be equal to the Option Price of the related Option. 7.3.Exercise of Tandem SARs.Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option.A Tandem SAR shall be exercisable only when and to the extent the related Option is exercisable and may be exercised only with respect to the Shares for which the related Option is then exercisable.A Tandem SAR shall entitle a Participant to elect, in the manner set forth in the Plan and the applicable Award Agreement, in lieu of exercising his or her unexercised related Option for all or a portion of the Shares for which such Option is then exercisable pursuant to its terms, to surrender such Option to the Company with respect to any or all of such Shares and to receive from the Company in exchange therefor a payment described in Section 7.7.An Option with respect to which a Participant has elected to exercise a Tandem SAR shall, to the extent of the Shares covered by such exercise, be canceled automatically and surrendered to the Company.Such Option shall thereafter remain exercisable according to its terms only with respect to the number of Shares as to which it would otherwise be exercisable, less the number of Shares with respect to which such Tandem SAR has been so exercised.Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO:(a) the Tandem SAR will expire no later than the expiration of the related ISO; (b) the value of the payment with respect to the Tandem SAR may not exceed the difference between the Fair Market Value of the Shares subject to the related ISO at the time the Tandem SAR is exercised and the Option Price of the related ISO; and (c) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Option Price of the ISO. -21- 7.4.Exercise of Freestanding SARs.Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, in accordance with the Plan, determines and sets forth in the Award Agreement. 7.5.Award Agreement.Each SAR grant shall be evidenced by an Award Agreement that shall specify the number of Shares to which the SAR pertains, the Grant Price, the term of the SAR, and such other terms and conditions as the Committee shall determine in accordance with the Plan. 7.6.Term of SARs.The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however, that the term of any Tandem SAR shall be the same as the related Option and no SAR shall be exercisable more than ten (10) years after it is granted, subject to the last sentence of Section 6.5 in the case of a Tandem SAR. 7.7.Payment of SAR Amount.An election to exercise SARs shall be deemed to have been made on the date of Notice of such election to the Company.Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: (a) The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price of the SAR; by (b) The number of Shares with respect to which the SAR is exercised. Notwithstanding the foregoing provisions of this Section 7.7 to the contrary, the Committee may establish and set forth in the applicable Award Agreement a maximum amount per Share that will be payable upon the exercise of a SAR.At the discretion of the Committee, such payment upon exercise of a SAR shall be in cash, in Shares of equivalent Fair Market Value, or in some combination thereof. 7.8.Rights as a Shareholder.A Participant receiving a SAR shall have the rights of a Shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant. 7.9.Termination of Employment.Each SAR Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following such Participant’s Termination, subject to Section 6.8, as applicable to any Tandem SAR.Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination. -22- ARTICLEVIII. RESTRICTED STOCK AND RESTRICTED STOCK UNITS 8.1.Awards of Restricted Stock and Restricted Stock Units.Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine.Subject to the terms and conditions of this Article VIII and the Award Agreement, upon delivery of Shares of Restricted Stock to a Participant, or creation of a book entry evidencing a Participant’s ownership of Shares of Restricted Stock, pursuant to Section 8.6, the Participant shall have all of the rights of a shareholder with respect to such Shares, subject to the terms and restrictions set forth in this Article VIII or the applicable Award Agreement or as determined by the Committee.Restricted Stock Units shall be similar to Restricted Stock, except no Shares are actually awarded to a Participant who is granted Restricted Stock Units on the date of grant, and such Participant shall have no rights of a shareholder with respect to such Restricted Stock Units. 8.2.Award Agreement.Each Restricted Stock and/or Restricted Stock Unit Award shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine in accordance with the Plan.Any Restricted Stock Award must be accepted by the Participant within a period of ninety (90) days (or such shorter period as determined by the Committee at the time of award) after the award date, by executing such Restricted Stock Award Agreement and providing the Committee or its designee a copy of such executed Award Agreement and payment of the applicable purchase price of such Shares of Restricted Stock, if any, as determined by the Committee. 8.3.Nontransferability of Restricted Stock.Except as provided in this Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement. 8.4.Period of Restriction and Other Restrictions.The Period of Restriction shall lapse based on continuing service as a Non-Employee Director or continuing employment with the Company, a Subsidiary or an Affiliate, the achievement of performance goals, the satisfaction of other conditions or restrictions or upon the occurrence of other events, in each case, as determined by the Committee, at its discretion, and stated in the Award Agreement. 8.5.Delivery of Shares, Payment of Restricted Stock Units.Subject to Section 20.10, after the last day of the Period of Restriction applicable to a Participant’s Shares of Restricted Stock, and after all conditions and restrictions applicable to such Shares of Restricted Stock have been satisfied or lapse (including satisfaction of any applicable withholding tax obligations), pursuant to the applicable Award Agreement, such Shares of Restricted Stock shall become freely transferable by such Participant.After the last day of the Period of Restriction applicable to a Participant’s Restricted Stock Units, and after all conditions and restrictions applicable to Restricted Stock Units have been satisfied or lapse (including satisfaction of any applicable withholding tax obligations), pursuant to the applicable Award Agreement, such Restricted Stock Units shall be settled by delivery of Shares, a cash payment determined by reference to the then-current Fair Market Value of Shares or a combination of Shares and such cash payment as the Committee, in its sole discretion, shall determine, either by the terms of the Award Agreement or otherwise. -23- 8.6.Forms of Restricted Stock Awards.Each Participant who receives an Award of Shares of Restricted Stock shall be issued a stock certificate or certificates evidencing the Shares covered by such Award registered in the name of such Participant, which certificate or certificates may contain an appropriate legend.The Committee may require a Participant who receives a certificate or certificates evidencing a Restricted Stock Award to immediately deposit such certificate or certificates, together with a stock power or other appropriate instrument of transfer, endorsed in blank by the Participant, with signatures guaranteed in accordance with the Exchange Act if required by the Committee, with the Secretary of the Company or an escrow holder as provided in the immediately following sentence.The Secretary of the Company or such escrow holder as the Committee may appoint shall retain physical custody of each certificate representing a Restricted Stock Award until the Period of Restriction and any other restrictions imposed by the Committee or under the Award Agreement with respect to the Shares evidenced by such certificate expire or shall have been removed.The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Shares of Restricted Stock prior to the lapse of the Period of Restriction or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant who has received such Award.Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Stock Awards evidenced in such manner.The holding of Shares of Restricted Stock by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Shares of Restricted Stock, in accordance with this Section 8.6, shall not affect the rights of Participants as owners of the Shares of Restricted Stock awarded to them, nor affect the restrictions applicable to such shares under the Award Agreement or the Plan, including the Period of Restriction. 8.7.Voting Rights.Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction.A Participant shall have no voting rights with respect to any Restricted Stock Units. 8.8.Dividends and Other Distributions.During the Period of Restriction, Participants holding Shares of Restricted Stock shall be credited with any cash dividends paid with respect to such Shares while they are so held, unless determined otherwise by the Committee and set forth in the Award Agreement.The Committee may apply any restrictions to such dividends that the Committee deems appropriate.Except as set forth in the Award Agreement, in the event of (a) any adjustment as provided in Section 4.3, or (b) any shares or securities are received as a dividend, or an extraordinary dividend is paid in cash, on Shares of Restricted Stock, any new or additional Shares or securities or any extraordinary dividends paid in cash received by a recipient of Restricted Stock shall be subject to the same terms and conditions, including the Period of Restriction, as relate to the original Shares of Restricted Stock. -24- 8.9.Termination of Employment or Service.Except as otherwise provided in this Section 8.9, during the Period of Restriction, any Restricted Stock Units and/or Shares of Restricted Stock held by a Participant shall be forfeited and revert to the Company (or, if Shares of Restricted Sock were sold to the Participant, the Participant shall be required to resell such Shares to the Company at cost) upon the Participant’s Termination or the failure to meet or satisfy any applicable performance goals or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement. Each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Restricted Stock Units and/or Shares of Restricted Stock following such Participant’s Termination.Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination. 8.10. Compliance With Section 409A.Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which the Restricted Stock Unit is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A.If the Committee provides in an Award Agreement that a Restricted Stock Unit is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Section 409A. ARTICLEIX. PERFORMANCE UNITS AND PERFORMANCE SHARES 9.1.Grant of Performance Units and Performance Shares.Subject to the terms of the Plan, Performance Units and/or Performance Shares may be granted to Participants other than Non-Employee Directors in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee, in accordance with the Plan.A Performance Unit or Performance Share entitles the Participant who receives such Award to receive Shares or cash upon the attainment of performance goals and/or satisfaction of other terms and conditions determined by the Committee when the Award is granted and set forth in the Award Agreement.Such entitlements of a Participant with respect to his or her outstanding Performance Unit or Performance Share shall be reflected by a bookkeeping entry in the records of the Company, unless otherwise provided by the Award Agreement.The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards. -25- 9.2.Value of Performance Units and Performance Shares.Each Performance Unit shall have an initial value that is established by the Committee at the time of grant.Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant.The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the number and/or value of Performance Units and Performance Shares that will be paid out to the Participant. 9.3.Earning of Performance Units and Performance Shares.Subject to the terms of the Plan, after the applicable Performance Period has ended, the holder of Performance Units orPerformance Shares shall be entitled to receive payment on the number and value of Performance Units or Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals and/or other terms and conditions have been achieved or satisfied.The Committee shall determine the extent to which any such pre-established performance goals and/or other terms and conditions of a Performance Unit or Performance Share are attained or not attained following conclusion of the applicable Performance Period.The Committee may, in its discretion, waive any such performance goals and/or other terms and conditions relating to any such Award not intended to qualify as Performance-Based Compensation. 9.4.Form and Timing of Payment of Performance Units and Performance Shares.Payment of earned Performance Units and Performance Shares shall be as determined by the Committee and as set forth in the Award Agreement.Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Units and Performance Shares in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value of the earned Performance Units or Performance Shares as soon as practicable after the end of the Performance Period and following the Committee’s determination of actual performance against the performance goals and/or other terms and conditions established by the Committee.Such Shares may be granted subject to any restrictions imposed by the Committee, including pursuant to Section 20.10.The determination of the Committee with respect to the form of payment of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award. 9.5.Rights as a Shareholder.A Participant receiving a Performance Unit or Performance Share shall have the rights of a shareholder only as to Shares, if any, actually received by the Participant upon satisfaction or achievement of the terms and conditions of such Award and not with respect to Shares subject to the Award but not actually issued to such Participant. 9.6.Termination of Employment.Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Performance Units and/or Performance Shares following such Participant’s Termination.Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination. -26- 9.7.Compliance With Section 409A.Unless the Committee provides otherwise in an Award Agreement, each Performance Unit and/or Performance Share that is considered deferred compensation subject to the requirements of Code Section 409A shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which such Award is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A.If the Committee provides in an Award Agreement that a Performance Share or Performance Unit is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Code Section 409A. ARTICLEX. OTHER STOCK-BASED AWARDS 10.1.Other Stock-Based Awards.The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Shares), in such amounts (subject to Article IV) and subject to such terms and conditions, as the Committee shall determine. Such Other Stock-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States. 10.2.Value of Other Stock-Based Awards.Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion, and any such performance goals shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish performance goals, the number and/or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which such performance goals are met. 10.3.Payment of Other Stock-Based Awards.Payment, if any, with respect to an Other Stock-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash or Shares as the Committee determines. 10.4. Termination of Employment or Service.The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards following the Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in the applicable Award Agreement, but need not be uniform among all Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination. -27- 10.5.Compliance With Section 409A.Unless the Committee provides otherwise in an Award Agreement, each Other Stock-Based Award that is considered deferred compensation subject to the requirements of Code Section 409A shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which the Other Stock-Based Award is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A.If the Committee provides in an Award Agreement that an Other Stock-Based Award is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Code Section 409A. ARTICLEXI. PERFORMANCE MEASURES 11.1.Performance Measures.The objective performance goals upon which the granting, payment and/or vesting of Awards to Covered Employees that are intended to qualify as Performance-Based Compensation may occur shall be based on any one or more of the following Performance Measures selected by the Committee: (a) Earnings per share; (b)Net earnings or net income (before or after taxes); (c)Net sales or revenue; (d)Net operating profit; (e) Return measures (including return on assets, capital, invested capital, equity, sales or revenue); (f) Cash flow (including operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment); (g)Earnings before or after interest, taxes, depreciation and/or amortization; (h)Gross or operating margins; (i) Productivity ratios; (j) Revenue growth; (k) Expenses; (l) Margins; (m)Operating efficiency; (n)Customer satisfaction; (o)Working capital; (p)Market share; -28- (q)Share price (including growth measures, market capitalization, total shareholder return and return relative to market indices); and (r) Economic value added or EVA (net operating profit after tax minus capital multiplied by the cost of capital). Such performance goals shall be established by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Code Section 162(m)(4)(C), or any successor provision thereto, and the regulations thereunder, for performance-based compensation, and may be set forth in the applicable Award Agreement.Any Performance Measures may be used to measure the performance of the Company, its Affiliates, and/or Subsidiaries as a whole or any business unit of the Company, its Affiliates, and/or Subsidiaries or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Measure (g) above as compared to various stock market indices. 11.2.Evaluation of Performance.that is intended to qualify as Performance-Based Compensation shall not be made until the Committee certifies in writing that the applicable performance goals and any other material terms of such Award were in fact satisfied, except as otherwise provided in Section 11.3.The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period:(a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary, unusual and/or nonrecurring items of gain or loss, (f) acquisitions or divestitures, and (g) foreign exchange gains and losses.To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility. 11.3.Adjustment of Performance-Based Compensation.Notwithstanding any provision of the Plan to the contrary, with respect to any Award that is intended to qualify as Performance-Based Compensation, (a) the Committee may adjust downwards, but not upwards, any amount payable, or other benefits granted, issued, retained and/or vested pursuant to such an Award on account of satisfaction of the applicable performance goals on the basis of such further considerations as the Committee in its discretion shall determine, and (b) the Committee may not waive the achievement of the applicable performance goals, except in the case of the Participant’s death or Disability, or a Change of Control. 11.4.Committee Discretion.In the event that applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval.In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements of Code Section 162(m) and base vesting of such Awards on performance measures other than those set forth in Section 11.1. -29- ARTICLEXII. DIVIDEND EQUIVALENTS 12.1.Dividend Equivalents.Unless otherwise provided by the Committee, no adjustment shall be made in the Shares issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Shares prior to issuance of such Shares under such Award.The Committee may grant Dividend Equivalents based on the dividends declared on Shares that are subject to any Award, including any Award the payment or settlement of which is deferred pursuant to Section 20.6.Dividend Equivalents may be credited as of the dividend payment dates, during the period between the date the Award is granted and the date the Award becomes payable or terminates or expires.Dividend Equivalents may be subject to any limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time, and shall be paid at such times, as may be determined by the Committee.Unless the Award Agreement provides otherwise, Dividend Equivalents that are considered deferred compensation subject to the requirements of Code Section 409A shall be paid to the Participant at least annually, not later than the fifteenth day of the third month following the end of the calendar year in which the Dividend Equivalents are credited (or, if later, the fifteenth day of the third month following the end of the calendar year in which the Dividend Equivalents are no longer subject to a substantial risk of forfeiture within the meaning of Code Section 409A).Any Dividend Equivalents that are accumulated and paid after the date specified in the preceding sentence shall be explicitly set forth in a separate arrangement that provides for the payment of the dividend equivalents at a time and in a manner that satisfies the requirements of Code Section 409A.No Dividend Equivalents shall relate to Shares underlying an Option or SAR unless such Dividend Equivalent rights are explicitly set forth as a separate arrangement and do not cause any such Option or SAR to be subject to Code Section 409A. ARTICLEXIII. TRANSFERABILITY OF AWARDS; BENEFICIARY DESIGNATION 13.1.Transferability of Incentive Stock Options.No ISO or Tandem SAR granted in connection with an ISO may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or in accordance with Section 13.3. Further, all ISOs and Tandem SARs granted in connection with ISOs granted to a Participant shall be exercisable during his or her lifetime only by such Participant. -30- 13.2.All Other Awards.Except as otherwise provided in Section 8.5 or Section 13.3 or a Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided that the Committee may permit further transferability, on a general or a specific basis, and may impose conditions and limitations on any permitted transferability, subject to Section 13.1 and any applicable Period of Restriction.Further, except as otherwise provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee, or unless the Committee decides to permit further transferability, subject to Section 13.1 and any applicable Period of Restriction, all Awards granted to a Participant under the Plan, and all rights with respect to such Awards, shall be exercisable or available during his or her lifetime only by or to such Participant. With respect to those Awards, if any, that are permitted to be transferred to another individual, references in the Plan to exercise or payment related to such Awards by or to the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee.In the event any Award is exercised by or otherwise paid to the executors, administrators, heirs or distributees of the estate of a deceased Participant, or such a Participant’s beneficiary, or the transferee of an Award, in any such case, pursuant to the terms and conditions of the Plan and the applicable Agreement and in accordance with such terms and conditions as may be specified from time to time by the Committee, the Company shall be under no obligation to issue Shares thereunder unless and until the Company is satisfied, as determined in the discretion of the Committee, that the person or persons exercising such Award, or to receive such payment, are the duly appointed legal representative of the deceased Participant’s estate or the proper legatees or distributees thereof or the named beneficiary of such Participant, or the valid transferee of such Award, as applicable.Any purported assignment, transfer or encumbrance of an Award that does not comply with this Section 13.2 shall be void and unenforceable against the Company. 13.3.Beneficiary Designation.Each Participant may, from time to time, name any beneficiary or beneficiaries who shall be permitted to exercise his or her Option or SAR or to whom any benefit under the Plan is to be paid in case of the Participant’s death before he or she fully exercises his or her Option or SAR or receives any or all of such benefit.Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.In the absence of any such beneficiary designation, a Participant’s unexercised Option or SAR, or amounts due but remaining unpaid to such Participant, at the Participant’s death, shall be exercised or paid as designated by the Participant by will or by the laws of descent and distribution. ARTICLEXIV. RIGHTS OF PARTICIPANTS 14.1.Rights or Claims.No individual shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable Award Agreement.The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award, or to all Awards, or as are expressly set forth in the Award Agreement evidencing such Award.Without limiting the generality of the foregoing, nothing contained in the Plan or in any Award Agreement shall be deemed to: -31- (a) Give any Employee or Non-Employee Director the right to be retained in the service of the Company, an Affiliate and/or a Subsidiary, whether in any particular position, at any particular rate of compensation, for any particular period of time or otherwise; (b) Restrict in any way the right of the Company, an Affiliate and/or a Subsidiary to terminate, change or modify any Employee’s employment or any Non-Employee Director’s service as a Director at any time with or without Cause; (c) Give any Employee or Non-Employee Director the right to receive any bonus, whether payable in cash or in Shares, or in any combination thereof, from the Company, an Affiliate and/or a Subsidiary, nor be construed as limiting in any way the right of the Company, an Affiliate and/or a Subsidiary to determine, in its sole discretion, whether or not it shall pay any Employee or Non-Employee Director bonuses, and, if so paid, the amount thereof and the manner of such payment; or (d) Give any Participant any rights whatsoever with respect to an Award except as specifically provided in the Plan and the Award Agreement. 14.2.Adoption of the Plan.The adoption of the Plan shall not be deemed to give any Employee or Non-Employee Director or any other individual any right to be selected as a Participant or to be granted an Award, or, having been so selected, to be selected to receive a future Award. 14.3.Vesting.Notwithstanding any other provision of the Plan, a Participant’s right or entitlement to exercise or otherwise vest in any Award not exercisable or vested at the time of grant shall only result from continued services as a Non-Employee Director or continued employment with the Company or any Subsidiary or Affiliate, or satisfaction of any other performance goals or other conditions or restrictions applicable, by its terms, to such Award 14.4.No Effects on Benefits.Payments and other compensation received by a Participant under an Award are not part of such Participant’s normal or expected compensation or salary for any purpose, including calculating termination, indemnity, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments under any laws, plans, contracts, arrangements or otherwise.No claim or entitlement to compensation or damages arises from the termination of the Plan or diminution in value of any Award or Shares purchased or otherwise received under the Plan. -32- 14.5.One or More Types of Awards.A particular type of Award may be granted to a Participant either alone or in addition to other Awards under the Plan. ARTICLEXV. CHANGE OF CONTROL 15.1. Treatment of Outstanding Awards.In the event of a Change of Control, unless otherwise specifically prohibited by any applicable laws, rules or regulations or otherwise provided in any applicable Award Agreement, as in effect prior to the occurrence of the Change of Control, specifically with respect to a Change of Control: (a)Immediately prior to the occurrence of such Change of Control, any and all Options, SARs and Other Stock-Based Awards (if applicable) which are outstanding shall immediately become fully exercisable as to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the Award Agreement, and, in the event of a Participant’s Termination (including termination of employment or services with any successor of the Company, a Subsidiary or an Affiliate) under any circumstances during the one year period following the Change of Control, all Options, SARs and Other Stock-Based Awards (if applicable) held by such Participant (or such Participant’s beneficiary or transferee) shall remain exercisable at least until the first anniversary of such Termination or the expiration of the term of such Option, SAR or Other Stock-Based Award, if earlier. (b)Immediately prior to the occurrence of such Change of Control, any restrictions, performance goals or other conditions applicable to Restricted Stock Units, Shares of Restricted Stock and Other Stock-Based Awards previously awarded to Participants shall be immediately canceled or deemed achieved, the Period of Restriction applicable thereto shall immediately terminate, and all restrictions on transfer, sale, assignment, pledge or other disposition applicable to any such Shares of Restricted Stock shall immediately lapse, notwithstanding anything to the contrary in the Plan or the Award Agreement. (c)Immediately prior to the occurrence of such Change of Control, all Awards which are outstanding shall immediately become fully vested and nonforfeitable. (d)The target payment opportunities attainable under any outstanding Awards of Performance Units, Performance Shares and other Awards shall be deemed to have been fully earned for the entire Performance Period(s) immediately prior to the effective date of the Change of Control, unless actual performance exceeds the target, in which case actual performance shall be used.There shall be paid out to each Participant holding such an Award denominated in Shares, not later than five (5) days prior to the effective date of the Change of Control, a pro rata number of Shares (or the equivalent Fair Market Value thereof, as determined by the Committee, in cash) based upon an assumed achievement of all relevant targeted performance goals, unless actual performance exceeds the target, in which case actual performance shall be used, and upon the length of time within the Performance Period which has elapsed prior to the Change of Control.Awards denominated in cash shall be paid pro rata to applicable Participants in cash within thirty (30) days following the effective date of the Change of Control, with the pro-ration determined as a function of the length of time within the Performance Period which has elapsed prior to the Change of Control, and based on an assumed achievement of all relevant targeted performance goals, unless actual performance exceeds the target, in which case actual performance shall be used. -33- (e)Any Award the payment or settlement of which was deferred under Section 20.6 or otherwise shall be paid or distributed immediately prior to the Change of Control, except as otherwise provided by the Committee in accordance with Section 15.1(f). (f) In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change of Control, that any outstanding Award shall be adjusted by substituting for each Share subject to such Award immediately prior to the transaction resulting in the Change of Control the consideration (whether stock or other securities of the surviving corporation or any successor corporation to the Company, or a parent or subsidiary thereof, or that may be issuable by another corporation that is a party to the transaction resulting in the Change of Control) received in such transaction by holders of Shares for each Share held on the closing or effective date of such transaction, in which event the aggregate Option Price or Grant Price, as applicable, of the Award shall remain the same; provided, however, that if such consideration received in such transaction is not solely stock of a successor, surviving or other corporation, the Committee may provide for the consideration to be received upon exercise or payment of an Award, for each Share subject to such Award, to be solely stock or other securities of the successor, surviving or other corporation, as applicable, equal in fair market value, as determined by the Committee, to the per-Share consideration received by holders of Shares in such transaction. (g)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change of Control, that any outstanding Award (or portion thereof) shall be converted into a right to receive cash,on or as soon as practicable following the closing date or expiration date of the transaction resulting in the Change of Control in an amount equal to the highest value of the consideration to be received in connection with such transaction for one Share, or, if higher, the highest Fair Market Value of a Share during the thirty (30) consecutive business days immediately prior to the closing date or expiration date of such transaction, less the per-Share Option Price, Grant Price or outstanding unpaid purchase price, as applicable to the Award, multiplied by the number of Shares subject to such Award, or the applicable portion thereof. -34- (h)The Committee may, in its discretion, provide that an Award can or cannot be exercised after, or will otherwise terminate or not terminate as of, a Change of Control. 15.2.No Implied Rights; Other Limitations.No Participant shall have any right to prevent the consummation of any of the acts described in Section 4.3 or 15.1 affecting the number of Shares available to, or other entitlement of, such Participant under the Plan or such Participant’s Award.Any actions or determinations of the Committee under this Article XV need not be uniform as to all outstanding Awards, nor treat all Participants identically.Notwithstanding the adjustments described in Section 15.1, in no event may any Option or SAR be exercised after ten (10) years from the date it was originally granted, and any changes to ISOs pursuant to this Article XV shall, unless the Committee determines otherwise, only be effective to the extent such adjustments or changes do not cause a “modification” (within the meaning of Section 424(h)(3) of the Code) of such ISOs or adversely affect the tax status of such ISOs. 15.3.Termination, Amendment, and Modifications of Change of Control Provisions.Notwithstanding any other provision of the Plan (but subject to the limitations of Section15.1(g), the last sentence of Section 16.1 and Section 16.2) or any Award Agreement provision, the provisions of this Article XV may not be terminated, amended, or modified on or after the date of a Change of Control to materially impair any Participant’s Award theretofore granted and then outstanding under the Plan without the prior written consent of such Participant. 15.4.Compliance with Section 409A.Notwithstanding any other provisions of the Plan or any Award Agreement to the contrary, if a Change of Control that is not a Qualified Change of Control occurs, and payment or distribution of an Award constituting deferred compensation subject to Code Section 409A would otherwise be made or commence on the date of such Change of Control (pursuant to the Plan, the Award Agreement or otherwise), (a) the vesting of such Award shall accelerate in accordance with the Plan and the Award Agreement, (b) such payment or distribution shall not be made or commence prior to the earliest date on which Code Section 409A permits such payment or distribution to be made or commence without additional taxes or penalties under Section 409A, and (c) in the event any such payment or distribution is deferred in accordance with the immediately preceding clause (b), such payment or distribution that would have been made prior to the deferred payment or commencement date, but for Code Section 409A, shall be paid or distributed on such earliest payment or commencement date, together, if determined by the Committee, with interest at the rate established by the Committee.The Committee shall not extend the period to exercise an Option or Stock Appreciation Right to the extent that such extension would cause the Option or Stock Appreciation Right to become subject to Code Section 409A. Additionally, the Committee shall not take any action pursuant to this Article XV that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A. -35- ARTICLEXVI. AMENDMENT, MODIFICATION, AND TERMINATION 16.1.Amendment, Modification, and Termination.The Board may, at any time and with or without prior notice, amend, alter, suspend, or terminate the Plan, and the Committee may, to the extent permitted by the Plan, amend the terms of any Award theretofore granted, including any Award Agreement, in each case, retroactively or prospectively; provided, however, that no such amendment, alteration, suspension, or termination of the Plan shall be made which, without first obtaining approval of the shareholders of the Company (where such approval is necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii) any requirements under the Code relating to ISOs or for exemption from Section 162(m) of the Code, or (iii) any applicable law, regulation or rule (including the applicable regulations and rules of the SEC and any national securities exchange)), would: (a)except as is provided in Section 4.3, increase the maximum number of Shares which may be sold or awarded under the Plan or increase the maximum limitations set forth in Section 4.2; (b)except as is provided in Section 4.3, decrease the minimum Option Price or Grant Price requirements of Sections 6.3 and 7.2, respectively; (c)change the class of persons eligible to receive Awards under the Plan; (d)change the Performance Measures set forth in Section 11.1; (e)extend the duration of the Plan or the period during which Options or SARs may be exercised under Section 6.4 or 7.6, as applicable; or (f)otherwise require shareholder approval to comply with any applicable law, regulation or rule (including the applicable regulations and rules of the SEC and any national securities exchange). In addition, (A) no such amendment, alteration, suspension or termination of the Plan or any Award theretofore granted, including any Award Agreement, shall be made which would materially impair the previously accrued rights of a Participant under any outstanding Award without the written consent of such Participant, provided, however, that the Board may amend or alter the Plan and the Committee may amend or alter any Award, including any Agreement, either retroactively or prospectively, without the consent of the applicable Participant, (x) so as to preserve or come within any exemptions from liability under Section 16(b) of the Exchange Act, pursuant to the rules and releases promulgated by the SEC (including Rule 16b-3), and/or so that any Awardthat is intended to qualify as Performance-Based Compensation shall qualify for the performance-based compensation exception under Code Section 162(m) (or any successor provision), or (y) if the Board or the Committee determines in its discretion that such amendment or alteration either (I) is required or advisable for the Company, the Plan or the Award to satisfy, comply with or meet the requirements of any law, regulation, rule or accounting standard or (II) is not reasonably likely to significantly diminish the benefits provided under such Award, or that such diminishment has been or will be adequately compensated, and (B) except as is provided in Section 4.3, but notwithstanding any other provisions of the Plan, neither the Board nor the Committee may take any action (1) to amend the terms of an outstanding Option or SAR to reduce the Option Price or Grant Price thereof, cancel an Option or SAR and replace it with a new Option or SAR with a lower Option Price or Grant Price, or that has an economic effect that is the same as any such reduction or cancellation; or (2) to cancel an outstanding Option or SAR having an Option Price or Grant Price above the then-current Fair Market Value of the Shares in exchange for the grant of another type of Award, without, in each such case, first obtaining approval of the shareholders of the Company of such action. -36- 16.2.Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.The Board or the Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 4.3) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.Any such adjustment with respect to an Award intended to be an ISO shall be made only to the extent consistent with such intent, unless the Board or the Committee determines otherwise, and any such adjustment that is made with respect to an Award that is intended to qualify as Performance-Based Compensation shall be made consistent with the intent that such Award qualify for the performance-based compensation exception under Code Section 162(m) (or any successor provision).Additionally, neither the Board nor the Committee shall not make any adjustment pursuant to this Article XVI that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under the Plan. ARTICLEXVII. TAX WITHHOLDING AND OTHER TAX MATTERS 17.1.Tax Withholding.The Company and/or any Subsidiary or Affiliate are authorized to withhold from any Award granted or payment due under the Plan the amount of all Federal, state, local and non-United States taxes due in respect of such Award or payment and take any such other action as may be necessary or appropriate, as determined by the Committee, to satisfy all obligations for the payment of such taxes.The recipient of any payment or distribution under the Plan shall make arrangements satisfactory to the Company, as determined in the Committee’s discretion, for the satisfaction of any tax obligations that arise by reason of any such payment or distribution.The Company shall not be required to make any payment or distribution under or relating to the Plan or any Award until such obligations are satisfied or such arrangements are made, as determined by the Committee in its discretion. -37- 17.2.Withholding or Tendering Shares.Without limiting the generality of Section 17.1, the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by:(a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to his or her Award (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required Federal, state, local and non-United States withholding obligations using the minimum statutory withholding rates for Federal, state, local and/or non-U.S. tax purposes, including payroll taxes, that are applicable to supplemental taxable income) and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time as may be required to avoid the Company’s or the Affiliates’ or Subsidiaries’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee.All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. 17.3.Restrictions.The satisfaction of tax obligations pursuant to this Article XVII shall be subject to such restrictions as the Committee may impose, including any restrictions required by applicable law or the rules and regulations of the SEC, and shall be construed consistent with an intent to comply with any such applicable laws, rule and regulations. 17.4.Special ISO Obligations.The Committee may require a Participant to give prompt written notice to the Company concerning any disposition of Shares received upon the exercise of an ISO within:(i) two (2) years from the date of granting such ISO to such Participant or (ii) one (1) year from the transfer of such Shares to such Participant or (iii) such other period as the Committee may from time to time determine.The Committee may direct that a Participant with respect to an ISO undertake in the applicable Award Agreement to give such written notice described in the preceding sentence, at such time and containing such information as the Committee may prescribe, and/or that the certificates evidencing Shares acquired by exercise of an ISO refer to such requirement to give such notice. 17.5.Section 83(b) Election.If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to an Award as of the date of transfer of Shares rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, such Participant shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service.Neither the Company nor any Subsidiary or Affiliate shall have any liability or responsibility relating to or arising out of the filing or not filing of any such election or any defects in its construction. -38- 17.6.No Guarantee of Favorable Tax Treatment.Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Code Section 409A, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Code Section 409A or any other provision of federal, state, local, or non-United States law.The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan. ARTICLEXVIII. LIMITS OF LIABILITY; INDEMNIFICATION 18.1.Limits of Liability. (a)Any liability of the Company or a Subsidiary or Affiliate to any Participant with respect to any Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement. (b)None of the Company, any Subsidiary, any Affiliate, any member of the Board or the Committee or any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability, in the absence of bad faith, to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute. (c)Each member of the Committee, while serving as such, shall be considered to be acting in his or her capacity as a director of the Company.Members of the Board of Directors and members of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties. (d)The Company shall not be liable to a Participant or any other person as to:(i) the non-issuance of Shares as to which the Company has been unable to obtain from any regulatory body having relevant jurisdiction the authority deemed by the Committee or the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Option or other Award. 18.2.Indemnification.Subject to the requirements of Delaware law, each individual who is or shall have been a member of the Committee or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article III, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of the individual’s own willful misconduct or except as provided by statute.The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individual may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify or hold harmless such individual. -39- ARTICLEXIX. SUCCESSORS 19.1.General.All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. ARTICLEXX. MISCELLANEOUS 20.1.Drafting Context.Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.The words “Article,” “Section,” and “paragraph” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires. 20.2.Forfeiture Events. (a)Notwithstanding any provision of the Plan to the contrary, the Committee shall have the authority to determine (and may so provide in any Agreement) that a Participant’s (including his or her estate’s, beneficiary’s or transferee’s) rights (including the right to exercise any Option or SAR), payments and benefits with respect to any Award shall be subject to reduction, cancellation, forfeiture or recoupment in the event of the Participant’s Termination for Cause or due to voluntary resignation; serious misconduct; violation of the Company’s or a Subsidiary’s or Affiliate’s policies; breach of fiduciary duty; unauthorized disclosure of any trade secret or confidential information of the Company or a Subsidiary or Affiliate; breach of applicable noncompetition, nonsolicitation, confidentiality or other restrictive covenants; or other conduct or activity that is in competition with the business of the Company or any Subsidiary or Affiliate, or otherwise detrimental to the business, reputation or interests of the Company and/or any Subsidiary or Affiliate; or upon the occurrence of certain events specified in the applicable Award Agreement (in any such case, whether or not the Participant is then an Employee or Non-Employee Director).The determination of whether a Participant’s conduct, activities or circumstances are described in the immediately preceding sentence shall be made by the Committee in its good faith discretion, and pending any such determination, the Committee shall have the authority to suspend the exercise, payment, delivery or settlement of all or any portion of such Participant’s outstanding Awards pending an investigation of the matter. -40- (b)If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve- (12-) month period following the first public issuance or filing with the SEC (whichever just occurred) of the financial document embodying such financial reporting requirement. 20.3.Severability.In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 20.4.Transfer, Leave of Absence.For purposes of the Plan, a transfer of an Employee from the Company to an Affiliate or Subsidiary (or, for purposes of any ISO granted under the Plan, only a Subsidiary), or vice versa, or from one Affiliate or Subsidiary to another (or in the case of an ISO, only from one Subsidiary to another), and a leave of absence, duly authorized in writing by the Company or a Subsidiary or Affiliate, shall not be deemed a Termination of the Employee for purposes of the Plan or with respect to any Award (in the case of ISOs, to the extent permitted by the Code).The Committee shall have the discretion to determine the effects upon any Award, upon an individual’s status as an Employee or Non-Employee Director for purposes of the Plan (including whether a Participant shall be deemed to have experienced a Termination or other change in status) and upon the exercisability, vesting, termination or expiration of any Award in the case of:(a) any Participant who is employed by an entity that ceases to be an Affiliate or Subsidiary (whether due to a spin-off or otherwise), (b) any transfer of a Participant between locations of employment with the Company, an Affiliate, and/or Subsidiary or between the Company, an Affiliate or Subsidiary or between Affiliates or Subsidiaries, (c) any leave of absence of a Participant, (d) any change in a Participant’s status from an Employee to a Non-Employee Director, or vice versa; and (e) upon approval by the Committee, any Employee who experiences a Termination but becomes employed by a partnership, joint venture, corporation or other entity not meeting the requirements of an Affiliate or Subsidiary, subject, in each case, to the requirements of Code Section 422 applicable to any ISOs and Code Section 409A applicable to any Options and SARs. -41- 20.5.Exercise and Payment of Awards.An Award shall be deemed exercised or claimed when the Secretary of the Company or any other Company official or other person designated by the Committee for such purpose receives appropriate written notice from a Participant, in form acceptable to the Committee, together with payment of the applicable Option Price, Grant Price or other purchase price, if any, and compliance with Article XVII, in accordance with the Plan and such Participant’s Award Agreement. 20.6.Deferrals.To the extent provided in the Award Agreement, the Committee may permit or require a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the lapse or waiver of the Period of Restriction or other restrictions with respect to Restricted Stock orthe payment or satisfaction of Restricted Stock Units, Performance Units, Performance Shares, or Other Stock-Based Awards.If any such deferral election is required or permitted, (a) such deferral shall represent an unfunded and unsecured obligation of the Company and shall not confer the rights of a shareholder unless and until Shares are issued thereunder; (b) the number of Shares subject to such deferral shall, until settlement thereof, be subject to adjustment pursuant to Section 4.3; and (c) the Committee shall establish rules and procedures for such deferrals and payment or settlement thereof, which may be in cash, Shares or any combination thereof, and such deferrals may be governed by the terms and conditions of any deferred compensation plan of the Company or Affiliate specified by the Committee for such purpose.Notwithstanding any provisions of the Plan to the contrary, in no event shall any deferral under this Section 20.6 be permitted if the Committee determines that such deferral would result in the imposition of additional tax under Code Section 409A of the Code. 20.7.Loans.The Company may, in the discretion of the Committee, extend one or more loans to Participants in connection with the exercise or receipt of an Award granted to any such Participant; provided, however, that the Company shall not extend loans to any Participant if prohibited by law or the rules of any stock exchange or quotation system on which the Company’s securities are listed.The terms and conditions of any such loan shall be established by the Committee. 20.8.No Effect on Other Plans.Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or any Subsidiary or Affiliate, or prevent or limit the right of the Company or any Subsidiary or Affiliate to establish any other forms of incentives or compensation for their directors, officers or eligible employees or grant or assume options or other rights otherwise than under the Plan. 20.9.Section 16 of Exchange Act and Code Section 162(m).Unless otherwise stated in the Award Agreement, notwithstanding any other provision of the Plan, any Award granted to an Insider shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) that are requirements for the application of such exemptive rule, and the Plan and the Award Agreement shall be deemed amended to the extent necessary to conform to such limitations.Furthermore, notwithstanding any other provision of the Plan or an Award Agreement, any Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be subject to any applicable limitations set forth in Code Section 162(m) or any regulations or rulings issued thereunder (including any amendment to the foregoing) that are requirements for qualification as “other performance-based compensation” as described in Code Section 162(m)(4)(C), and the Plan and the Award Agreement shall be deemed amended to the extent necessary to conform to such requirements and no action of the Committee that would cause such Award not to so qualify shall be effective. -42- 20.10.Requirements of Law; Limitations on Awards. (a)The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. (b)If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of Shares upon any securities exchange or under any state, Federal or non-United States law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares hereunder, the Company shall have no obligation to allow the grant, exercise or payment of any Award, or to issue or deliver evidence of title for Shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee. (c)If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares pursuant to an Award is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company or any Subsidiary or Affiliate under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act, or otherwise with respect to Shares or Awards and the right to exercise or payment of any Option or Award shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Subsidiary or Affiliate. (d)Upon termination of any period of suspension under this Section 20.10, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all Shares available before such suspension and as to the Shares which would otherwise have become available during the period of such suspension, but no suspension shall extend the term of any Award. -43- (e)The Committee may require each person receiving Shares in connection with any Award under the Plan to represent and agree with the Company in writing that such person is acquiring such Shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Committee may prescribe.The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the Shares purchasable or otherwise receivable by any person under any Award as it deems appropriate.Any such restrictions shall be set forth in the applicable Award Agreement, and the certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions. (f) An Award and any Shares received upon the exercise or payment of an Award shall be subject to such other transfer and/or ownership restrictions and/or legending requirements as the Committee may establish in its discretion and may be referred to on the certificates evidencing such Shares, including restrictions under applicable Federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. 20.11.Participants Deemed to Accept Plan.By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan. 20.12.Governing Law.The Plan and all Award Agreements and other agreements hereunder shall be construed in accordance with and governed by the laws of the state of Delaware, without giving effect to the choice of law principles thereof, except to the extent superseded by applicable United States federal law.Unless otherwise provided in the Agreement, Participants are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement. 20.13.Plan Unfunded.The Plan shall be unfunded.The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of Shares or the payment of cash upon exercise or payment of any Award.Proceeds from the sale of Shares pursuant to Options or other Awards granted under the Plan shall constitute general funds of the Company. -44- 20.14.Administration Costs.The Company shall bear all costs and expenses incurred in administering the Plan, including expenses of issuing Shares pursuant to any Options or other Awards granted hereunder. 20.15.Uncertificated Shares.To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may nevertheless be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange. 20.16.No Fractional Shares.An Option or other Award shall not be exercisable with respect to a fractional Share or the lesser of fifty (50) shares or the full number of Shares then subject to the Option or other Award.No fractional Shares shall be issued upon the exercise or payment of an Option or other Award. 20.17.Deferred Compensation.If any Award would be considered deferred compensation as defined under Code Section 409A and would fail to meet the requirements of Code Section 409A, then such Award shall be null and void; provided, however, that the Committee may permit deferrals of compensation pursuant to the terms of a Participant’s Award Agreement, a separate plan, or a subplan which (in each case) meets the requirements of Code Section 409A. Additionally, to the extent any Award is subject to Code Section 409A, notwithstanding any provision herein to the contrary, the Plan does not permit the acceleration of the time or schedule of any distribution related to such Award, except as permitted by Code Section 409A. 20.18.Employees Based Outside of the United States.Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws or practices of countries other than the United States in which the Company, any Affiliate, and/or any Subsidiary operates or has Employees or Non-Employee Directors, the Committee, in its sole discretion, shall have the power and authority to: (a) Determine which Affiliates and Subsidiaries shall be covered by the Plan; (b) Determine which Employees and/or Non-Employee Directors outside the United States are eligible to participate in the Plan; (c) Grant Awards (including substitutes for Awards), and modify the terms and conditions of any Awards, on such terms and conditions as the Committee determines necessary or appropriate to permit participation in the Plan by individuals otherwise eligible to so participate who are non-United States nationals or employed outside the United States, or otherwise to comply with applicable non-United States laws or conform to applicable requirements or practices of jurisdictions outside the United States; (d) Establish subplans and adopt or modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 20.18 by the Committee shall be attached to the Plan as appendices; and -45- (e) Take any action, before or after an Award is made, that the Committee, in its discretion, deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals. Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any applicable law. *** 46
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AO 245B(Rev. 02/16) Judgment in a Criminal Case
UNITED STATES DISTRICT COURT
Southern District of Indiana
UNITED STATES OF AMERICA JUDGMENT IN A CRIMINAL CASE
v.
Case Number: 1:18CR00115-001
USM Number: 16401-028
ASHLEY MITCHELL Joseph Martin Cleary
Defendant’s Attorney
THE DEFENDANT:
☒ pleaded guilty to counts 1-3
☐ pleaded nolo contendere to count(s) which was accepted by the court.
☐ was found guilty on count(s) after a plea of not guilty
The defendant is adjudicated guilty of these offense(s):
Title & Section Nature of Offense Offense Ended Count
18 U.S.C. § 641 Theft of Section 8 Housing Benefits 11/01/17 1
18 U.S.C. § 641 Theft of Food Stamp Benefits 10/25/17 2
18 U.S.C. § 641 Theft of Medicaid Benefits 11/01/17 3
The defendant is sentenced as provided in pages 2 through 5 of this judgment. The sentence is imposed pursuant to the
Sentencing Reform Act of 1984.
☐ The defendant has been found not guilty on count(s)
☐ Count(s) dismissed on the motion of the United States.
IT IS ORDERED that the defendant shall notify the United States Attorney for this district within 30 days of any change of
name, residence, or mailing address until all fines, restitution, costs and special assessments imposed by this judgment are fully paid. If
ordered to pay restitution, the defendant shall notify the court and United States attorney of any material change in the defendant’s
economic circumstances.
10/11/18
Date of Imposition of Sentence:
A CERTIFIED TRUE COPY
Laura A. Briggs, Clerk
U.S. District Court
Southern District of Indiana Hon. Richard L. Young, Judge
By United States District Court
Deputy Clerk Southern District of Indiana
10/12/2018
Date
AO245B(Rev 02/16) Judgment in a Criminal Case Judgment Page 2 of 5
DEFENDANT: Ashley Mitchell
CASE NUMBER: 1:18CR00115-001
PROBATION
The defendant is hereby sentenced to probation for a term of 3 years per count, concurrent.
MANDATORY CONDITIONS
1. You must not commit another federal, state, or local crime.
2. You must not unlawfully possess a controlled substance.
3. You must refrain from any unlawful use of a controlled substance. You must submit to one drug test within 15 days of
release from imprisonment and at least two periodic least two periodic drug tests thereafter, as determined by the court.
☐ The above drug testing condition is suspended, based on the court’s determination that you pose a low risk of
future substance abuse. (check if applicable)
4. ☒ You must make restitution in accordance with 18 U.S.C. §§ 3663 and 3663A or any other statute authorizing a sentence
of restitution. (check if applicable)
5. ☒ You must cooperate in the collection of DNA as directed by the probation officer. (check if applicable)
6. ☐ You must comply with the requirements of the Sex Offender Registration and Notification Act (42 U.S.C. § 16901, et
seq.) as directed by the probation officer, the Bureau of Prisons, or any state sex offender registration agency in the location
where you reside, work, are a student, or were convicted of a qualifying offense. (check if applicable)
7. ☐ You must participate in an approved program for domestic violence. (check if applicable)
If this judgment imposes a fine or restitution, it is a condition of probation that the defendant pay in accordance
with the Schedule of Payments sheet of this judgment.
The defendant must comply with the conditions listed below.
CONDITIONS OF SUPERVISION
1. You shall report to the probation officer in a manner and frequency directed by the court or probation officer.
2. You shall permit a probation officer to visit you at a reasonable time at home or another place where the officer
may legitimately enter by right or consent, and shall permit confiscation of any contraband observed in plain view
of the probation officer.
3. You shall not knowingly leave the judicial district without the permission of the court or probation officer.
4. You shall answer truthfully the inquiries by the probation officer, subject to your 5th Amendment privilege.
5. You shall not meet, communicate, or otherwise interact with a person you know to be engaged, or planning to be
engaged, in criminal activity. You shall report any contact with persons you know to be convicted felons to your
probation officer within 72 hours of the contact.
6. You shall reside at a location approved by the probation officer and shall notify the probation officer at least 72
hours prior to any planned change in place or circumstances of residence or employment (including, but not
limited to, changes in who lives there, job positions, job responsibilities). When prior notification is not possible,
you shall notify the probation officer within 72 hours of the change.
7. You shall not own, possess, or have access to a firearm, ammunition, destructive device or dangerous weapon.
8. You shall notify the probation officer within 72 hours of being arrested, charged, or questioned by a law
enforcement officer.
9. You shall maintain lawful full time employment, unless excused by the probation officer for schooling, vocational
training, or other reasons that prevent lawful employment.
AO245B(Rev 02/16) Judgment in a Criminal Case Judgment Page 3 of 5
DEFENDANT: Ashley Mitchell
CASE NUMBER: 1:18CR00115-001
10. You shall make a good faith effort to follow instructions of the probation officer necessary to ensure compliance
with the conditions of supervision.
11. You shall participate in a mental health treatment program, as approved by the probation officer, and abide by the
rules and regulations of that program. The probation officer, in consultation with the treatment provider, shall
supervise participation in the program (provider, location, modality, duration, intensity, etc.). You shall take all
mental health medications that are prescribed by your treating physician. The court authorizes the release of the
presentence report and available evaluations to the treatment provider, as approved by the probation officer.
12. You shall provide the probation officer access to any requested financial information and shall authorize the
release of that information to the U.S. Attorney’s Office for use in connection with the collection of any
outstanding fines and/or restitution.
13. You shall not incur new credit charges, or open additional lines of credit without the approval of the probation
officer.
14. You shall complete 192 (8 hours per month) hours of community service within two years. The probation officer
shall supervise the participation in the program by approving the program (agency, location, frequency of
participation, etc.). You shall provide written verification of completed hours to the probation officer.
15. You shall participate in an educational services program at the direction of the probation officer and abide by the
rules and regulations of that program. Such programs may include high school equivalency preparation, English
as a Second Language classes, and other classes designed to improve your proficiency in skills such as reading,
writing, mathematics, or computer use.
16. You shall pay the costs associated with the following imposed conditions of supervised release, to the extent you
are financially able to pay: mental health treatment, and educational or vocational services program. The
probation officer shall determine your ability to pay and any schedule of payment.
I understand that I and/or the probation officer may petition the Court to modify these conditions, and the final decision to
modify these terms lies with the Court. If I believe these conditions are being enforced unreasonably, I may petition the
Court for relief or clarification; however, I must comply with the directions of my probation officer unless or until the Court
directs otherwise. Upon a finding of a violation of probation or supervised release, I understand that the court may (1)
revoke supervision, (2) extend the term of supervision, and/or (3) modify the condition of supervision.
These conditions have been read to me. I fully understand the conditions and have been provided a copy of them.
(Signed)
Defendant Date
U.S. Probation Officer/Designated Witness Date
AO245B(Rev 02/16) Judgment in a Criminal Case Judgment Page 4 of 5
DEFENDANT: Ashley Mitchell
CASE NUMBER: 1:18CR00115-001
CRIMINAL MONETARY PENALTIES
The defendant must pay the total criminal monetary penalties in accordance with the schedule of payments set forth
in this judgment.
Assessment JVTA Assessment¹ Fine Restitution
TOTALS $300.00 $98,733.70
☐ The determination of restitution is deferred until. An Amended Judgment in a Criminal Case (AO245C) will be entered
after such determination.
☒ The defendant must make restitution (including community restitution) to the following payees in the amount listed
below.
If the defendant makes a partial payment, each payee shall receive an approximately proportioned payment, unless
specified otherwise in the priority order or percentage payment column below. However, pursuant to 18 U.S.C. § 3664(i),
all nonfederal victims must be paid before the United States is paid.
Name of Payee Total Loss² Restitution Ordered Priority or Percentage
U.S. Department of $51,739.00 $51,739.00 1
Housing and Urban
Development
Indiana Family and $46,994.70 $46,994.70 1
Social Services
Administration
Totals $98,733.70
☒ Restitution amount ordered pursuant to plea agreement $ $98,733.70
☐ The defendant must pay interest on restitution and a fine of more than $2,500, unless the restitution or fine is paid in full
before the fifteenth day after the date of the judgment, pursuant to 18 U.S.C. § 3612(f). All of the payment options on
Sheet 6 may be subject to penalties for delinquency and default, pursuant to 18 U.S.C. § 3612(g).
☒ The court determined that the defendant does not have the ability to pay interest and it is ordered that:
☒ the interest requirement is waived for the ☐ fine ☒ restitution
☐ the interest requirement for the ☐ fine ☐ restitution is modified as follows:
¹ Justice for Victims of Trafficking Act of 2015, Pub. L. No. 114-22.
² Findings for the total amount of losses are required under Chapters 109A, 110, 110A, and 113A of Title 18 for offenses committed on
or after September 13, 1994, but before April 23, 1996.
AO245B(Rev 02/16) Judgment in a Criminal Case Judgment Page 5 of 5
DEFENDANT: Ashley Mitchell
CASE NUMBER: 1:18CR00115-001
SCHEDULE OF PAYMENTS
Having assessed the defendant’s ability to pay, payment of the total criminal monetary penalties is due as follows:
A ☐ Lump sum payment of $ _____ due immediately, balance due
☐ not later than _____, or
☐ in accordance with ☐ C, ☐ D, ☐ E, or ☐ F below; or
B ☒ Payment to begin immediately (may be combined with ☐ C, ☐ D, ☐ F or ☒ G below); or
C ☐ Payment in equal ____ (e.g., weekly, monthly, quarterly) installments of $ _____ over a period of _____ (e.g., months or years),
to commence _____ (e.g., 30 or 60 days) after the date of this judgment; or
D ☐ Payment in equal _____ (e.g., weekly, monthly, quarterly) installments of $ _____ over a period of _____ (e.g., months or years),
to commence ______ (e.g., 30 or 60 days) after release from imprisonment to a term of supervision; or
E ☐ Payment during the term of supervised release will commence within _____ (e.g., 30 or 60 days) after release from
imprisonment. The court will set the payment plan based on an assessment of the defendant’s ability to pay at that time; or
F ☐ If this case involves other defendants, each may be held jointly and severally liable for payment of all or part of the restitution
ordered herein and the Court may order such payment in the future. The victims' recovery is limited to the amount of loss, and
the defendant's liability for restitution ceases if and when the victims receive full restitution.
G ☒ Special instructions regarding the payment of criminal monetary penalties:
Any unpaid restitution balance during the term of supervision shall be paid at a rate of not less than 10 % of the defendant's
gross monthly income.
Unless the court has expressly ordered otherwise, if this judgment imposes imprisonment, payment of criminal monetary penalties is
due during the period of imprisonment. All criminal monetary penalties, except those payments made through the Federal Bureau of
Prisons’ Inmate Financial Responsibility Program, are made to the clerk of the court.
The defendant shall receive credit for all payments previously made toward any criminal monetary penalties imposed.
☐ Joint and Several
Defendant and Co-Defendant Names and Case Numbers (including defendant number), Total Amount, Joint and Several Amount, and
corresponding payee, if appropriate.
☐ The defendant shall pay the cost of prosecution.
☐ The defendant shall pay the following court cost(s): _____
☐ The defendant shall forfeit the defendant’s interest in the following property to the United States:
|
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 1 of 16
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
ARAM AKBARZADEH, )
)
Plaintiff, )
)
v. ) COMPLAINT FOR
) DECLARATORY AND
KIRT THOMPSON, in his official ) INJUNCTIVE RELIEF
capacity as Director, U.S. Citizenship )
and Immigration Services, Texas ) CIVIL ACTION NO.
Service Center, )
) AGENCY CASE NUMBER:
and ) SRC-18-905-27738
)
MERRICK GARLAND, in his official )
capacity as Acting Attorney General ) REQUEST FOR ORAL
of the United States, ) ARGUMENT
)
and )
)
ALEJANDRO MAYORKAS, in his )
official capacity as Secretary, U.S. )
Department of Homeland Security, )
)
and )
)
UR MENDOZA JADDOU, in her )
official capacity as Director, U.S. )
Citizenship and Immigration Services, )
)
Defendants. )
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Plaintiff Aram Akbarzadeh (“Plaintiff” or “Ms. Akbarzadeh”), through her undersigned
counsel, alleges as follows:
I. PRELIMINARY STATEMENT
1. Plaintiff is an extraordinary Medical Scientist specializing in the fields of tissue
engineering, stem cell research, and regenerative medicine. At the time of filing her EB-1A
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 2 of 16
petition, Ms. Akbarzadeh held a Master of Science degree in Plant Physiology from the Islamic
Azad University in Iran. Ms. Akbarzadeh is currently completing her Ph.D. at Tehran University
of Medical Sciences, focusing her thesis on “Tissue Engineering of Ovine Heart by GFP-Positive
Rat Cardiac Cells Seeding on the Acellular Myocardial Flap Using Special Design Bioreactors.”
2. In her self-sponsored I-140 EB-1A Immigrant Petition for Alien Worker of
Extraordinary Ability (“I-140 EB-1A petition”), Ms. Akbarzadeh provided evidence that she
qualified for an EB-1A classification by meeting three (3) of the ten (10) criteria found at 8
C.F.R. § 204.5(h)(3), specifically the following:
a. Associational Membership – 8 C.F.R. § 204.5(h)(3)(ii);
b. Judging the work of others in her field - 8 C.F.R. § 204.5(h)(3)(iv); and
c. Scholarly articles in professional publications - 8 C.F.R. § 204.5(h)(3)(vi).
See generally, Exhibit A, p. 1-47, and Exhibit B, Response to Request for Evidence, p. 1-74.
Ms. Akbarzadeh submitted evidence of her qualification under a fourth criteria (original
scientific contributions of major significance in the field – 8 C.F.R. § 204.5(h)(3)(v)) with her
RFE response, infra.
3. Ms. Akbarzadeh’s evidence included proof that she was a member of the National
Council for Development of Stem Cell Sciences and Technology (“National Committee”), which
is by invitation only, based on expertise and reputation of each candidate. See, Exhibit A, p 1-2.
4. In addition, evidence was provided to Defendant U.S. Citizenship and
Immigration Services (“USCIS”) showing that Ms. Akbarzadeh has been invited to judge the
work of her peers in her field through participation in the Lung and Heart Committee at the
National Committee. See, Exhibit B, p. 7.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 3 of 16
5. Lastly, Ms. Akbarzadeh provided Defendant USCIS with evidence showing that
her original scientific, scholarly research has been of major significance in her field, leading to
over two hundred (200) research citations, including in Scientific Reports and Analytical
Chemistry. See, Exhibit B, p. 8-12.
6. Defendant USCIS receipted Plaintiff’s I-140 petition (and her concurrently filed
Form I-485 Application to Adjust Status) and issued a Request for Evidence (“RFE”). In this
RFE, Defendant USCIS conceded that Ms. Akbarzadeh met one of the three claimed criteria
(authorship of scholarly articles in the field, in professional journals, or other major media), but
disputed that she met her two other claimed criteria. See, Exhibits C, I-140 Receipt Notice,
Exhibit D, I-485 Receipt Notice, and Exhibit E, RFE.
7. After receipt of the extensive RFE response filed by Ms. Akbarzadeh, which
included addition of one more criterion regarding significant contribution of major significance
in her field of expertise, supported by six (6) testimonial letters from experts 8 C.F.R. §
204.5(h)(3)(v), and further documentation regarding Ms. Akbarzadeh’s association membership
8 C.F.R. § 204.5(h)(3)(ii), and judging 8 C.F.R. § 204.5(h)(3)(iv) criteria, Defendant USCIS
issued a Decision denying her I-140 petition, concluding that she only met one of her four
claimed criteria under 8 C.F.R. §204.5(h)(3). See, Exhibits B and F, Decision.
8. The Decision failed to discuss the criterion regarding Ms. Akbarzadeh’s
original, scientific contribution of major significance in her field. It also did not consider the
newly submitted documents for judging and association membership criteria. See, Ex. F, p.2-5.
9. This action is brought against the Defendants for declaratory judgment, injunctive
relief, and review of an agency action under the Administrative Procedure Act (“APA”) based on
Defendants’ unlawful, arbitrary, and ultra vires denial of Plaintiff’s I-140 EB-1A petition, which
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 4 of 16
sought to classify her as “an alien with extraordinary ability” in the fields of tissue engineering,
stem cell research, and regenerative medicine.
II. STATEMENT OF FACTS
10. Plaintiff filed her I-140 EB-1A petition with USCIS seeking for herself an
immigrant visa under the employment-based first preference category (“EB-1A”) of the
Immigration and Nationality Act (“INA”). Satisfying at least three of ten “qualifying criteria”
found in 8 C.F.R. §204.5(h)(3) is a basis for classification. Three of the ten qualifying criteria
are:
a. Membership in associations in the field for which classification is sought, which
require outstanding achievements of their members, as judged by recognized
national or international experts in their disciplines or fields;
b. evidence of participation, either individually or on a panel, as a judge of the work
of others in the same or allied field of specialization for which classification is
sought; and
c. Original, scientific, artistic, athletic, or business-related contributions of major
significance in the field (this last criterion was asserted in Plaintiff’s RFE
response for the first time).
See, Exhibit E, p. 2-4
11. The submission of an I-140 Petition for Immigrant Worker, EB-1 classification,
pursuant to INA §203(b)(i)(A) provides for the immigration of aliens with extraordinary ability
in the sciences, arts, education, business, or athletics. As an alien of extraordinary ability in the
arts, Dr. Akbarzadeh may self-petition, pursuant to 8 CFR §204.5(h).
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 5 of 16
12. Plaintiff filed her I-140 EB-1 petition with Defendant USCIS’ Texas Service
Center on June 25, 2018. See, Exhibit C. Amongst the approximately eighty (80) pages of
printed evidence submitted, Plaintiff included evidence of her membership in associations
requiring outstanding achievements and of judging the work of others, pursuant to 8 C.F.R. §
204.5(h)(3)(ii) and (iv), as follows:
a. Letter from Professor Amir Ali Hamidieh, M.D., Chairman of the National
Council for Development of Stem Cell Sciences and Technology in Iran
(“National Council”);
b. Letter from Professor Abdol-Mohammad Kajbafzadeh, former Chair of the
Committee of Stem Cell Sciences in Urology and Nephrology at the National
Council; and
c. Letter from Plaintiff explaining that through her work on the Lung and Hearth
committee, she evaluated the scientific merits of nine (9) proposals in her field of
expertise and provided her recommendations regarding the importance of these
research proposals.
See, Exhibit A, p. 6 - 47.
13. In response Defendant USCIS issued a Request for Evidence (“RFE”) on April
21, 2020. See generally, Exhibit E. In its RFE, Defendant USCIS conceded that Plaintiff
satisfied one of the possible ten criteria under 8 C.F.R. §204.5(h)(3), namely:
a. Authorship of scholarly articles in the field, in professional or major trade
publications or other major media.
See, Exhibit E, p. 4.
14. The RFE stated, inter alia:
The plain language of this criterion requires evidence (1) of
membership in associations, (2) that the associations are in the
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 6 of 16
beneficiary’s field, (3) that the associations require outstanding
achievements of their members, and (4) that membership eligibility
is judged by recognized national or international experts in their
field.
As such, the submitted evidence does no (sic) meet this criterion.
The evidence submitted only demonstrates that the petitioner is a
member of the associations. (sic) There is no objective evidence to
ascertain whether the association requires outstanding achievement
of its members, that outstanding achievements are judged by
recognized national or international experts, and that the
association [is] in the field for which classification is sought.
Without objective documentary evidence about the associations,
the petitioner impedes USCIS in determining whether the
petitioner’s membership with the associations satisfy all of the
elements within this criterion.
Id., p. 3 (emphasis added). In making this unsubstantiated statement, Defendant USCIS and the
individual adjudicator assigned to decide this case demonstrate their bias against Plaintiff’s
evidence and their clear intention to ignore the evidence in the record of Plaintiff’s membership
in the National Council and her work judging research grant proposals submitted within her field
of expertise. Exhibits A and B, p. 1-74.
15. While Defendant USCIS cannot dictate the precise form of evidence required for
a petition’s approval (specifically “objective documentary evidence”), the agency appears to
have failed to consider the following expert letters that Ms. Akbarzadeh submitted in support of
her EB-1A I-140 petition:
a. Letters from Professor Amir Ali Hamidieh to the members of the Lung and Heart
Committee of the National Council (noting that one of Plaintiff’s duties as a
committee member was to evaluate “research proposals submitted to the National
Council…” as part of the National Council’s grant review process) (August 16,
2016, November 6, 2016, and December 27, 2016);
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 7 of 16
b. Dr. David Elmaleh, Associate Professor, Harvard University, Chairman & CEO,
Atroo, Inc., Boston, MA (September 9, 2020);
c. Dr. Anthony Atala, M.D., Professor, Urology and Director, Institute for
Regenerative Medicine, Wake Forest School of Medicine, Wake Forest
University, Winston-Salem, North Carolina (August 19, 2019);
d. Dr. Abdol-Mohammad Kajbafzadeh, M.D., Professor of Pediatric Urology,
Director, Pediatric Urology and Regenerative Medicine Research Center, Head,
Department of Pediatric Urology, Children’s Hospital Medical Center, Tehran
University of Medical Sciences (September 12, 2020);
e. Dr. Ali Tamayol, Ph.D., Associate Professor, University of Connecticut. School
of Dental Medicine, Department of Biomedical Engineering, Farmington,
Connecticut (September 14, 2020); and
f. Dr. Nasim Annabi, Ph.D., Tannas Fellow and Assistant Professor of Chemical
and Biomedical Engineering, University of California, Los Angeles (September
10, 2020);
g. Letter from Professor Amir Ali Hamidieh, M.D., explaining the membership
criteria for the invitation-only Lung and Heart Committee for the National
Council for Development of Stem Cell Sciences and Technology (June 18, 2018);
and
h. Letter from Plaintiff explaining her duties as a member of the Lung and Heart
Committee for the National Council for Development of Stem Cell Sciences and
Technology in Iran (September 14, 2020).
See, Ex. A, p. 6-47 and Ex. B, p. 16-55.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 8 of 16
16. In an example of objective, documentary evidence that USCIS either ignored or
did not review, Dr. Hamidieh’s expert letter provides evidence regarding Plaintiff’s membership
in an association requiring outstanding achievement as follows:
[Lung and Heart Committee - National Council] membership is by
invitation only, and members are invited based on their expertise in
the subject matter of the committee, and their national reputation in
the field. [Ms. Akbarzadeh] was invited to the Committee due to
her outstanding research and publications in tissue engineering
and organ transplant, related to heart and lung.
See, Ex. A, p. 6 (emphasis in bold added). Clearly, Dr. Hamidieh shared his expert opinion
about how and why Ms. Akbarzadeh’s invitation to join the Lung and Heart Committee was
based on her “outstanding research and publications in tissue engineering and organ transplant
[science]…” What is unclear is whether or not Defendant USCIS really considered this evidence
as part of its adjudication of Plaintiff’s I-140 petition. See generally, Exhibits E and F.
17. In another example of overlooked evidence, Dr. Abdol-Mohammad Kajbafzadeh
writes:
Ms. Akbarzadeh is a researcher of impressive breadth who has
conducted research that is considered break-through in multiple
research areas of tissue engineering. This is supported as well by
the fact that she was invited to be a member of the Lung and Heart
Committee for the National Council for Development of Stem Cell
Sciences and Technology in Iran (“National Council”), the highest
level national scientific professional association in this field…
Membership is by invitation only, and members are invited based
on their break-through scientific findings, and their national and
international reputation in their field of expertise. Such talents are
judged by at least two experts: Chairman of the National
Council, as well as Chairman of the respective committee. I am
aware of this process, because since 2004, I have been Chairman
of the Committee of Stem Cell Sciences in Urology and
Nephrology at the Council…
See, Exhibit A, p.31 (emphasis in bold added).
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 9 of 16
18. Dr. Kajbafzadeh goes on to explain how Ms. Akbarzadeh’s work on the Lung and
Heart Committee involved judging the work of peers in her field of science, writing:
Committee members perform two main functions: evaluation of
research proposals in their respective fields and making their
recommendations to the Council for funding of the proposal, as
well as sharing their own research findings with other committee
members.
For [the] evaluation process, committee members are invited to
meetings where they receive the proposals…[E]valuations are
done by individual members on evaluation sheets that are
collected at the end of each meeting and are not shared with other
members. Members evaluate scientific merits of the proposals,
assess possibility of success of the proposed research, and make
their own recommendations based on their judgment on
significance and applications of the proposed research…
…Please note that in Iran, Vice-Presidency for Science and
Technology (under which National Council operates) is equivalent
to National Science Foundation (“NSF”) in the U.S. and even more
crucial than NSF for research funding, because it is the main, if not
the only, source of funding in medical sciences in Iran. As such,
Committee membership is very prestigious and only a handful of
highly qualified researchers are able to join the Council. The fact
that Ms. Akbarzadeh was a member of Lung and Heart Committee
of the National Council is a clear evidence of her national
reputation and extraordinary abilities in her [field] of expertise.
See, Ex. A, p. 31-32 (emphasis in bold added).
19. Dr. Hamidieh also explains the responsibilities for members of the Lung and
Heart Committee, when he wrote:
As a Committee member, [Plaintiff’s] main duties included:
- Evaluating research proposals submitted to the Committee
by other researchers in her field of expertise; and
- Consulting with other Committee members and making
recommendations to the National Council about potential of
success of the submitted proposals, so that the National
Council could make its decision about approval or denial of the
requested grants.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 10 of 16
See, Exhibit B, p. 44 (emphasis in bold added).
20. USCIS denied Plaintiff’s EB-1A I-140 petition on November 13, 2020. The
USCIS denial contains no discussion whatsoever of Plaintiff’s evidence submitted under
criteria #5 (original scientific contributions of major significance in the field – 8 C.F.R. §
204.5(h)(3)(v)). It appears that Defendant USCIS gave no consideration to the evidence
submitted in response to the agency’s RFE. See, Exhibits E and F, p. 2-5.
21. The USCIS denial contains between four (4) and six (6) paragraphs that include
some discussion of the evidence submitted in support of criteria #2 (membership in associations),
but include no citations to legal authority for the agency’s position that it can ignore or
improperly discount evidence in the record. See, Exhibit F, p. 3-4. Defendant USCIS merely
lists its reasons for dissatisfaction with Plaintiff’s evidence, and then cites to an agency precedent
decision (Matter of E-M-, 20 I&N Dec. 77 (Comm. 1989) seemingly for the proposition that
since it is the final authority on the alien’s eligibility, that it somehow justifies the excuse-
making included as the agency’s “analysis.” Defendant USCIS also repeats its false statement
that, “While the evidence provided establishes the beneficiary is a member of an association, no
objective (sic) was provided to support the beneficiary’s membership was based on the
achievement of the members, as judged by recognized national (sic) international experts in her
discipline or field as requested (sic) the RFE. See, Exhibit F, p.4-5.
22. The USCIS denial similarly only contains between four (4) and six (6) short
paragraphs that include very little discussion of criteria #4 (judging the work of peers), but
include no citations to legal authority for the agency’s position that it can ignore or improperly
discount evidence in the record. See, Exhibit F, p. 4. The Denial includes the incorrect,
unfounded stated that:
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 11 of 16
While the evidence provided establishes the (sic) was invited to
judge the work of others, the letter from the beneficiary stating that
she judged the work is insufficient in establishing she officially
judged the work of other. (sic) No objective evidence was
provided to support the beneficiary participated as judge of the
work of others in the same field or allied field as requested the the
(sic) RFE.
This incredible misstatement of the evidence in the record ignores the fact that both Dr. Amir
Hamidieh and Dr. Abdol-Mohammad Kajbafzadeh wrote about Plaintiff judging the work of
others in her field in their letters. See, Exhibits A (p. 6), B (p.31 and 44-53), and F (p. 4).
III. JURISDICTION
23. This Honorable Court has subject matter jurisdiction over the claims alleged in
this action under (1) 28 U.S.C. § 1331 (federal question jurisdiction), because Plaintiff’s claims
arise under the laws of the United States, including 5 U.S.C. §§ 555 and 701, et seq. (“APA”), 8
U.S.C. § 1101, et seq. (“INA”) (including 8 U.S.C. § 1182). This court may grant relief in this
action under 5 U.S.C. §§ 553, et seq., and §§ 701, et seq.; and 28 U.S.C. §§ 2201, et seq.
(Declaratory Judgment Act).
24. This Honorable Court is not deprived of jurisdiction by 8 U.S.C. § 1252, INA §
242. See, e.g., Zadvydas v. Davis, 533 U.S. 678, 688 (2001) (finding that INA § 242 does not
bar a claim challenging agency authority that does not implicate discretion). Generally, a
narrower construction of the jurisdiction-stripping provision is favored over the broader one, as
reflected by the “familiar principle of statutory construction: the presumption favoring judicial
review of administrative action.” Kucana v. Holder, 130 U.S. 827, 839 (2010). Absent “clear
and convincing evidence” of congressional intent specifically to eliminate review of certain
administrative actions, the above-cited principles of statutory construction support a narrow
reading of the jurisdiction-stripping language of 8 U.S.C. § 1252(a)(2)(B)(ii). Id., at 839. See
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 12 of 16
also, Geneme v. Holder, 935 F.Supp.2d 184, 192 (D.D.C. 2013) (discussing Kucana’s citation to
a presumption favoring judicial review of administrative action when a statute does not specify
discretion.)
25. 8 U.S.C. § 1252(a)(5), INA § 242(a)(5), provides that “a petition for review filed
with an appropriate court of appeals in accordance with this section, shall be the sole and
exclusive means for judicial review of an order of removal entered or issued under any provision
of this Act[.]” As this is not an action to review a removal order but an action challenging
decisions by Defendants to deny Plaintiff’s EB-1A I-140 petition, which decision was arbitrary,
capricious, and contrary to law and settled agency practice, this Court retains original jurisdiction
under the APA and 28 U.S.C. § 1331, as well as for declaratory relief under 28 U.S.C. § 2201.
IV. VENUE
26. Venue is properly with this Court, pursuant to 28 U.S.C. § 1391(e)(1)(C), because
Plaintiff resides in this judicial district, and because no real property is involved in this matter.
V. PARTIES
27. Plaintiff is an extraordinary scientist, researcher, and author. Based on her
accomplishments, more fully outlined in her I-140 EB-1A petition, Plaintiff filed her I-140 EB-
1A petition on June 25, 2018 with the Texas Service Center of USCIS. See Ex. C.
28. Kirt Thompson is the Director of the Texas Service Center of the USCIS, who is
named herein only is his official capacity, as well as his successors and assigns. He is charged
with overseeing the operations of the TSC, which include adjudication of I-140 EB-1A petitions
processed there. He is further authorized to delegate certain powers and authority to subordinate
employees of the USCIS. Defendant Thompson works at the TSC, in Irving, Texas.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 13 of 16
29. Alejandro Mayorkas is the Secretary of the DHS and this action is brought against
him in his official capacity only, as well as his successors and assigns. He is charged with
overseeing the DHS, which includes sub-agency USCIS, and with implementing the INA. He is
further authorized to delegate certain powers and authority to subordinate employees of the
USCIS. DHS is headquartered at 245 Murray Lane, S.W., Washington, DC 20598.
30. Merrick Garland is the Attorney General of the United States and this action is
brought against him in his official capacity only, as well as his successors and assigns. He is
charged with certain functions involved in the implementation of the INA, and is further
authorized to delegate such powers and authority to subordinate employees of the Federal
Bureau of Investigation (“FBI”), which is an agency within the U.S. Department of Justice. The
DOJ is headquartered at 950 Pennsylvania Avenue, N.W., Washington, DC 20530.
31. Ur Mendoza Jaddou is the Director of USCIS, who is named herein only in her
official capacity, as well as her successors and assigns. She is generally charged with the
implementation of the INA, and is further authorized to delegate certain powers and authority to
subordinate employees of USCIS. USCIS is specifically assigned the adjudication of I-140 EB-1
petitions. USCIS is headquartered at 5900 Capital Gateway Drive, #2040, Camp Springs,
Maryland 20746.
VI. EXHAUSTION OF REMEDIES NOT REQUIRED
32. Plaintiff is not required to exhaust any administrative remedies before bringing
this complaint. The denial of the I-140 EB-1A petition by defendant USCIS is a final agency
action. There is no statutory or regulatory requirement to appeal to the agency in question. See,
Darby v. Cisneros, 509 U.S. 137, 146-47, 153 (1993); RCM Technologies, Inc. v. DHS, 614
F.Supp.2d 39, 45 (D.D.C. 2009).
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 14 of 16
VII. CLAIMS FOR RELIEF
Count I
(APA Violation by DHS/USCIS of 5 U.S.C. § 701, et seq.)
33. Plaintiff incorporates by reference all preceding paragraphs as if fully set forth
herein.
34. Pursuant to the APA, a person adversely affected by agency action in entitled to
judicial review. See 5 U.S.C. §702.
35. The APA requires this Court to hold unlawful and set aside any agency action that
is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” See, 5
U.S.C. § 706(2)(A).
36. Defendant USCIS’s decision to deny Plaintiff’s EB-1 I-140 petition was illegal,
improper, and is reviewable under 5 U.S.C. § 702.
37. As a result of defendant USCIS’s illegal conduct, Plaintiff is “suffering [a] legal
wrong because of agency action” and are “adversely affected or aggrieved by [the] agency
action,” and therefore are entitled to judicial review of the revocation under 5 U.S.C. § 702.
38. Defendants’ decision to deny Plaintiff’s I-140 petition despite the evidence in the
record demonstrating that she met at least 3 of the 10 specified criteria, supra, is “arbitrary,
capricious, an abuse of discretion, [and] otherwise not in accordance with law” and should be
“held unlawful and set aside” under 5 U.S.C. § 706(2)(A) and (D).
Count II
(Injunctive Relief for Violation of the Administrative Procedure Act 5 U.S.C. § 705)
39. Plaintiff incorporates by reference all preceding paragraphs as if fully set forth
herein.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 15 of 16
40. Pursuant to 5 U.S.C. § 705, this Court may issue all necessary and appropriate
process to postpone the effective date of an agency action or to preserve the status or rights of a
plaintiff or plaintiffs pending the conclusion of review proceedings (including preventing
Defendant USCIS from issuing a denial of Plaintiff’s pending I-485 application).
VIII. INJURIES TO PLAINTIFF
41. Defendants’ wrongful denial of Plaintiff’s EB-1A I-140 petition interferes with
her ability to pursue her research in the United States and thereby causes her substantial
professional, personal, and financial harm.
42. As a result of Defendants’ arbitrary, capricious, ultra vires, and otherwise
unlawful decision to deny her EB-1A I-140 petition, Plaintiff is unable to adjust her status to that
of a lawful permanent resident of the United States and to accrue time toward qualifying for
naturalization to be a U.S. citizen. Plaintiff is unable to plan for her future, her research
endeavors, and her living situation.
Complaint for Declaratory and Injunctive Relief
Case 1:21-cv-11316 Document 1 Filed 08/13/21 Page 16 of 16
RELIEF REQUESTED
WHEREFORE, Plaintiff prays that this Honorable Court:
(1) Declare that the denial of Plaintiff’s EB-1A I-140 is ultra vires, erroneous as a matter
of law, arbitrary and capricious, an abuse of discretion, and not otherwise in
accordance with law, and violates due process;
(2) Issue an order directing Defendants to reopen and approve Plaintiff’s EB-1A I-140
petition;
(3) Issue an order directing Defendants to complete processing of Plaintiff’s EB-1A I-140
petition within a reasonable time set by this Court;
(4) Issue an order directing Defendants to refrain from denying Plaintiff’s I-485 application
for adjustment of status until her EB-1A I-140 petition has been reopened and
properly adjudicated;
(5) Grant such other relief as this Court deems proper under the circumstances; and
(6) Grant attorney's fees, expenses and costs of court to Plaintiff, pursuant to the EAJA.
Respectfully submitted on this 12th day of August 2021.
/s/Anthony Drago, Jr., Esquire________________
Anthony Drago, Esq. (BBO #552437)
Anthony Drago, Jr., P.C.
88 Broad Street, 5th Floor
Boston, MA 02110
Tel: +1-978-964-6640
E-mail: [email protected]
/s/Brian S. Green, Esquire____________
(Motion for pro hac vice forthcoming)
The Law Office of Brian Green
9609 S University Boulevard, #630084
Littleton, CO 80130
Tel: +1-978-964-6640
E-mail: [email protected]
Attorneys for Plaintiff
Complaint for Declaratory and Injunctive Relief
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-6263
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
JAMES MICHAEL MARTIN,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Malcolm J. Howard,
District Judge. (CR-00-136; CA-03-973-5)
Submitted: May 19, 2005 Decided: May 26, 2005
Before LUTTIG, MOTZ, and GREGORY, Circuit Judges.
Dismissed by unpublished per curiam opinion.
James Michael Martin, Appellant Pro Se. Kenneth Fitzgerald
Whitted, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
James Michael Martin appeals the orders of the district
court dismissing as untimely his motion filed pursuant to 28 U.S.C.
§ 2255 (2000), and denying Martin’s motion filed under Fed. R. Civ.
P. 59(e).
Martin may not appeal from the denial of relief in a
§ 2255 proceeding unless a circuit justice or judge issues a
certificate of appealability. See 28 U.S.C. § 2253(c)(1) (2000).
Martin may satisfy this standard by demonstrating that reasonable
jurists would find both that his constitutional claims are
debatable and that any dispositive procedural rulings by the
district court are debatable or wrong. See Miller-El v. Cockrell,
537 U.S. 322 (2003); Slack v. McDaniel, 529 U.S. 473, 484 (2000);
Rose v. Lee, 252 F.3d 676, 683 (4th Cir. 2001). We have reviewed
the record and determine that Martin’s self-styled motion under
Rule 59(e) is, in substance, a second motion attacking his
conviction and sentence under 28 U.S.C. § 2255 (2000). See United
States v. Winestock, 340 F.3d 200, 206 (4th Cir. 2003). We,
therefore, treat Martin’s notice of appeal and appellate brief as
a request for authorization from this court to file a second or
successive § 2255 motion. See id. at 208. This court may
authorize a second or successive § 2255 motion only if the
applicant can show that his claims are based on (1) a new rule of
constitutional law, made retroactive to cases on collateral review
- 2 -
by the Supreme Court, that was previously unavailable; or (2) newly
discovered evidence that, if proven and viewed in light of the
evidence as a whole, would be sufficient to establish by clear and
convincing evidence that no reasonable factfinder would have found
him guilty of the offense. See 28 U.S.C. § 2244(b)(2), 2255. The
applicant bears the burden of making a prima facie showing of these
requirements in his application. See In re Fowlkes, 326 F.3d 542,
543 (4th Cir. 2003). In the absence of pre-filing authorization,
the district court is without jurisdiction to entertain the motion.
Evans v. Smith, 220 F.3d 306, 325 (4th Cir. 2000).
After reviewing Martin’s motions and the record in this
matter, we conclude that they do not meet the applicable standard.
We, therefore, deny Martin’s request for a certificate of
appealability and dismiss the appeal. We further deny Martin’s
implied request for authorization to file a second or successive
§ 2255 motion. We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional process.
DISMISSED
- 3 -
|
109 HR 2746 IH: To amend title XVIII of the Social Security Act to ensure that benefits under part D of such title have no impact on benefits under other Federal programs.
U.S. House of Representatives
2005-06-07
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
I
109th CONGRESS
1st Session
H. R. 2746
IN THE HOUSE OF REPRESENTATIVES
June 7, 2005
Mr. Holt introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to ensure that benefits under part D of such title have no impact on benefits under other Federal programs.
1.Benefits under the medicare drug program have no impact under other Federal programs
(a)In generalSection 1860D–42 of the Social Security Act (42 U.S.C. 1395w–152) is amended by adding at the end the following new subsection:
(c)Benefits have no impact on benefits under other Federal programsBenefits under this part, including the availability of negotiated prices under this part and premium and cost-sharing subsidies under section 1860D–14, shall not be treated as benefits or otherwise taken into account in determining an individual’s eligibility for, or the amount of benefits under, any other Federal program..
(b)Effective dateThe amendment made by this section shall take effect as if included in the enactment of section 101(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2071).
|
State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: July 9, 2015 520351
________________________________
DANIEL J. WALDRON et al.,
Respondents,
v
MEMORANDUM AND ORDER
PATRICIA HOFFMAN,
Appellant.
________________________________
Calendar Date: June 3, 2015
Before: Peters, P.J., McCarthy, Egan Jr. and Rose, JJ.
__________
Law Offices of Stephen A. Johnston, Plattsburgh (Stephen A.
Johnston of counsel), for appellant.
Law Office of Andrew D. Brockway, Plattsburgh (Andrew D.
Brockway of counsel), for respondents.
__________
Rose, J.
Appeal from an order of the Supreme Court (Ellis, J.),
entered July 3, 2014 in Clinton County, which granted plaintiffs'
motion for a preliminary injunction.
The parties own adjoining parcels of real property, title
to which was once unified, located on a downtown commercial block
in the City of Plattsburgh, Clinton County. During demolition of
the building located on defendant's property, her contractor
broke an active sewer pipe that ran from plaintiffs' building
into the basement of defendant's building where it connected to
defendant's sewer pipe. Defendant's contractor reconnected
plaintiffs' pipe, but defendant informed plaintiffs that, as part
of her construction project, their pipe would be capped and they
would no longer be permitted to route their sewer line through
-2- 520351
defendant's property. Plaintiffs commenced this action seeking,
among other things, a declaration that they have a prescriptive
or implied easement for their sewer pipe on defendant's property
and, pending resolution of these issues, they moved for a
preliminary injunction. Supreme Court granted the motion and
defendant appeals.1
"The purpose of a preliminary injunction is to maintain the
status quo and prevent the dissipation of property that could
render a judgment ineffectual" (Ruiz v Meloney, 26 AD3d 485, 486
[2006] [citation omitted]; see CPLR 6301). "The decision to
grant or deny a request for a preliminary injunction [is]
committed to the sound discretion of the trial court, [and] our
review is limited to whether Supreme Court has either exceeded or
abused its discretion as a matter of law" (Schulz v State of N.Y.
Exec., 108 AD3d 856, 857 [2013], lv dismissed 21 NY3d 1051 [2013]
[internal quotation marks and citation omitted]).
Although plaintiffs' sewer pipe was clearly visible in
defendant's basement, defendant contends that plaintiffs cannot
establish an easement by prescription because the function of the
pipe was not obvious. However, the photographs and evidence in
the record make clear that the pipe entered defendant's building
from the direction of plaintiffs' adjacent building and had been
there for decades prior to the commencement of the action.
Without reaching a conclusion that plaintiffs will prevail by
establishing an easement by prescription or implication, there is
enough evidence in the record to demonstrate a likelihood of
success on the merits (see generally Cooperstown Capital, LLC v
Patton, 60 AD3d 1251, 1252-1253 [2009]; Karabatos v Hagopian, 39
AD3d 930, 931 [2007]).
Certainly, any disruption to the status quo would render
plaintiffs' request for an easement ineffectual, and they have
made a plausible claim that if defendant were to unilaterally cut
off their residential and commercial tenants' access to the
sewer, the potential environmental impact, along with the damage
1
At oral argument, defendant's counsel advised that
defendant's construction project has since been completed.
-3- 520351
to their reputations and the goodwill they have as landlords,
would not be ascertainable, precluding them from recovering full
relief (see Clayton v Whitton, 233 AD2d 828, 830 [1996]; Pyramid
Ctrs. & Co. v Sarwill Assoc., 186 AD2d 968, 969 [1992]; Picotte
Realty v Gallery of Homes, 66 AD2d 978, 979 [1978]). Weighing
the harm to plaintiffs against defendant's aversion to having her
neighbor's sewage running through a pipe in the basement of her
building, we are unpersuaded that Supreme Court abused its
discretion in concluding that plaintiffs established a balancing
of the equities in their favor (see Confidential Brokerage
Servs., Inc. v Confidential Planning Corp., 85 AD3d 1268, 1269-
1270 [2011]; Pyramid Ctrs. & Co. v Sarwill Assoc., 186 AD2d at
969).
Peters, P.J., McCarthy and Egan Jr., JJ., concur.
ORDERED that the order is affirmed, with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court
|
Order entered August 11, 2015
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-15-00431-CR
JAMES COX, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 283rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. F11-59110-T
ORDER
The Court REINSTATES the appeal.
On July 13, 2015, we ordered the trial court to make findings regarding why the
reporter’s record had not been filed. On July 10, 2015, we received the reporter’s record.
Therefore, in the interest of expediting the appeal, we VACATE the July 13, 2015 order
requiring findings.
Appellant’s brief is due within thirty days of the date of this order.
/s/ LANA MYERS
JUSTICE
|
--------------------------------------------------------------------------------
Exhibit 10.66
EXECUTION VERSION
PURCHASE AGREEMENT
BY AND BETWEEN
PAYLETTERHOLDINGS LLC.
AS PURCHASER
AND
NET 1 APPLIED TECHNOLOGIES NETHERLANDS B.V.
AS SELLER
DATED JANUARY 23, 2020
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1 1.1. Defined Terms 1 1.2. Construction. 10 ARTICLE
II PURCHASE AND SALE 11 2.1. Purchase and Sale. 11 2.2. Purchase Price 11
2.3. Leakage 13 2.4. Expert Determination. 14 2.5 Completion. 15 2.6 Completion
Deliverables 15 ARTICLE III WARRANTIES 16 3.1. Warranties of the Seller
relating to the Seller and the Ownership Interest. 16 3.2. Warranties of the
Seller relating to the Group Companies. 17 3.3. Warranties of the Purchaser. 26
ARTICLE IV COVENANTS 28 4.1. Conduct of Business Prior to Completion. 28
4.2. Best Efforts; Cooperation and Assistance. 28 4.3. Access to Records. 29
4.4. Replacement of Directors. 29 4.5. Purchaser Financing. 30
4.6. Confidentiality; Public Announcements. 30 4.7. Employee Matters. 31
4.8 Director and Officer Liability and Indemnification. 31 4.9 Further
Assurances. 32 ARTICLE V CONDITIONS PRECEDENT 32 5.1. Conditions Precedent
to the Obligations of the Seller to Sell the Ownership Interest 32
5.2. Conditions Precedent to the Obligations of the Purchaser to Purchase the
Ownership Interest 32 ARTICLE VI INDEMNIFICATION 33 6.1. Indemnification 33
6.2. Survival. 33 6.3. Limitations on Liability 33 6.4. Claims for
Indemnification 35 6.5. W&I Insurance 36 6.6. W&I Insurance Covenants. 37
6.7. Sole and Exclusive Remedy. 37 6.8. Adjustment to Purchase Price. 38
ARTICLE VII TERMINATION 38 7.1 Termination. 38 7.2 Effect of Termination. 38
ARTICLE VIII MISCELLANEOUS 39 8.1 Entire Agreement. 39 8.2 Assignment 39 8.3 Tax
and Expenses. 39 8.4 No Right of Off-set/Set-off. 39 8.5 Governing Law and
Dispute Resolution. 39 8.6 Amendments and Waivers; Remedies Cumulative. 40
8.7 Severability. 40 8.8 Notices. 40 8.9 Counterparts 41 8.10 No Third Party
Beneficiary 41 8.11 Language. 41
--------------------------------------------------------------------------------
SCHEDULE A CONDUCT OF BUSINESS PRIOR TO COMPLETION SCHEDULE B SELLER
DISCLOSURE SCHEDULES EXHIBIT 2.3(C) FORM PLEDGE AGREEMENT EXHIBIT 4.4(A)
FORM RESIGNATION LETTER
--------------------------------------------------------------------------------
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into on this 23rd
day of January 2020 by and between:
(i) PayletterHoldings LLC., a company established and existing under the laws of
Korea with its registered office at 223, Yeoksam-ro, Gangnam-gu, Seoul, 06224,
Korea (the "Purchaser"); and
(ii) NET 1 Applied Technologies Netherlands B.V., a company established and
existing under the laws of the Netherlands with its registered office at
Strawinkylaan 3105, 1077ZX, Amsterdam, Netherlands (the "Seller").
The Purchaser and the Seller are hereinafter referred to each as a "Party" and
collectively as the "Parties".
WITNESSETH:
WHEREAS, the Seller owns 29,910 units, par value KRW 5,000 per unit, of NET 1
Applied Technologies Korea Limited, a limited liability company (yuhan-hoesa in
Korean) organized and existing under the laws of Korea with its registered
[email protected]., 11, Teheran-ro 107-gil, Gangnam-gu, Seoul, Korea (the
"Company"), representing 100% of the total equity interest of the Company (the
"Ownership Interest"); and
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Seller desires to sell and transfer to the Purchaser, and the
Purchaser desires to acquire and purchase from the Seller, the Ownership
Interest (the "Transaction").
NOW, THEREFORE, in consideration of the premises and of the mutual terms,
conditions and agreements set forth herein, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
302-838-2451. Defined Terms. As used in this Agreement, the following terms shall
have the meanings ascribed to such terms below.
"Action" means any action, suit, arbitration, appeal, petition, claim, mediation
or other proceeding, whether civil or criminal, before any Governmental
Authority, whether brought by such Governmental Authority or any third Person,
or any inquiry or investigation by any Governmental Authority.
"Affiliate" means, in respect of a Person, any other Person if it directly or
indirectly controls, is controlled by, or is under common control with, such
Person. For the purposes of this definition, "control" means (a) direct or
indirect ownership of Equity Interest, possessing more than fifty percent (50%)
of the voting power of a Person or (b) the ability, either directly or
indirectly, to direct or cause the direction of or to influence the direction of
that Person or the management of that Person, whether through ownership of
voting securities or by contract or otherwise.
1
--------------------------------------------------------------------------------
"Agreement" has the meaning set forth in the preamble.
"Anti-Corruption and Anti-Bribery Laws" means, collectively, (i) the principles
set out in, and all national and international laws enacted to implement, the
Organization for Economic Cooperation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions; (ii)
the Foreign Corrupt Practices Act of 1977 (U.S.), as amended, or any rules or
regulations thereunder; (iii) the UK Bribery Act 2010; and (iv) any other
applicable anti-corruption and/or anti-bribery laws, regulations or orders of
any Governmental Authority of any jurisdiction applicable to any Group Company
and/or the Seller, including Laws that prohibit the corrupt payment, offer,
promise, or authorization of the payment or transfer of anything of value
(including gifts or entertainment), directly or indirectly, to any Government
Official or any other Person to influence action by such Person or otherwise
obtain a business advantage, such as the Anti-Corruption and Bribery Prohibition
Act, the Improper Solicitation and Graft Act, the Public Officials Ethics Act,
and the Specialized Credit Finance Business Act.
"Base Purchase Price" has the meaning set forth in Section 2.2(a)(ii).
"Business Assets" has the meaning set forth in Section 3.2(j)(i).
"Business Day" means any day other than (i) any Saturday or Sunday or (ii) any
other day on which banks located in Korea or South Africa are required or
authorized by Law to be closed for business.
"Business Intellectual Property" has the meaning set forth in Section 3.2(p)(i).
"Business Systems" means all computer, hardware, software, systems, websites,
networks and other information technology and communication assets and equipment
used or held for use in the business of the Group Companies as currently
conducted (and all data stored therein or processed thereby) or to develop
manufacture, provide, distribute, support, maintain or test any product or
service of the business of the Group Companies, whether located on the premises
on any Owned Real Property or Leased Property or hosted at a third-party site.
"Capital Gains Tax" means all Taxes imposed by any Governmental Authority in
Korea on or by reference to capital gains in respect of the sale and purchase of
the Ownership Interest as contemplated hereby.
"CGT Withholding" has the meaning set forth in Section 2.2(e)(i).
"Company" has the meaning set forth in the recitals.
"Company Financial Statements" means the non-consolidated unaudited financial
statements of the Company as of and for the fiscal year ended June 30, 2019.
"Competing Transaction" has the meaning set forth in Section 4.10.
"Competition Laws" shall mean any Laws, including the Monopoly Regulation and
Fair Trade Act of Korea, relating to the regulation of monopolies or competition
in any jurisdiction.
2
--------------------------------------------------------------------------------
"Completion" has the meaning set forth in Section 2.5.
"Completion Date" means the date on which the Completion actually occurs.
"Completion Payment" has the meaning set forth in Section 2.2(d).
"Contract" means, with respect to a Person, any written or oral agreement,
contract, deed, instrument (including indenture, note, bond, loan or credit
agreement, instrument, lease, mortgage, deed of trust, license and commitment)
and binding understanding, including all amendments, supplements and
modifications thereto, whether or not in writing.
"Contract Deposit" has the meaning set for in Section 2.2(b).
"Covered Persons" has the meaning set forth in Section 4.9.
"Data Room" means the electronic documentation site established by Ansarada on
behalf of the Seller in connection with the Transaction.
"Debt Financing" has the meaning set forth in Section 3.3(d)(ii).
"Direct Claim" has the meaning set forth in Section 6.4(b).
"Director List" has the meaning set forth in Section 4.5(a).
"Employees" means all employees, directors and/or officers of the Group
Companies.
"Employee Benefit Plans" means any bonus, overtime, deferred compensation,
pension, profit sharing, stock option, employee stock purchase, severance pay,
leave, vacation, health, disability or accident insurance plan, housing, or
other employee benefit plans applicable to any Employees.
"Employee Group" means any body of which any Employees are members or which
represents any of them in matters relating to their employment.
"Encumbrance" means any and all liens, charges, security interests, mortgages,
pledges or other encumbrances, right of way, conditional sale, easement, option,
warrant, purchase right, right of first refusal, security interest, other title
retention agreement of any kind or nature, or other restriction of any kind or
character whatsoever, including any restriction on use, voting (in the case of
any security), transfer, receipt of income or exercise of any other attribute of
ownership.
"Enterprise Value" means the enterprise value agreed between the Parties as USD
212,018,644.
"Equity Financing" has the meaning set forth in Section 3.3(d)(ii).
"Equity Interest" means, with respect to any Person, any capital stock,
membership interest, unit of participation or other similar interest (however
designated) in such Person.
3
--------------------------------------------------------------------------------
"Excess CGT Withholding Amount" has the meaning set forth in Section 2.2(e)(iv).
"Financing Commitments" has the meaning set forth in Section 3.3(d)(ii).
"Fundamental Warranties" means those warranties of the Seller contained in
Sections 3.1(a), 3.1(b), 3.1(c) and 3.1(d).
"GAAP" means generally accepted accounting principles in the relevant
jurisdiction as in effect on the date such principles are employed or applied.
"Government Official" means any officer or employee of any Governmental
Authority, or of a public international organization, or any person acting in an
official capacity for or on behalf of any Governmental Authority, or for or on
behalf of any such public international organization, or any political party,
party official, or candidate thereof.
"Governmental Approvals" means any approval, consent, order, license, permit,
qualification, exemption, waiver or other authorization, issued, granted or
otherwise made available by any Governmental Authority.
"Governmental Authority" means any court, governmental commission, board or
other regulatory authority or agency.
"Governmental Order" means any judicial or administrative judgment, decision,
ruling, decree, order, settlement, injunction, writ, stipulation, determination
or award of any Governmental Authority.
"Group Companies" means the Company and the Subsidiaries, and "Group Company"
means any of them.
"Group Companies Financial Statements" means the Company Financial Statements,
KSNET Financial Statements and KSANP Financial Statements.
"Indemnified Party" has the meaning set forth in Section 6.3(a).
"Indemnified Purchaser Party" has the meaning set forth in Section 6.1(b).
"Indemnified Seller Party" has the meaning set forth in Section 6.1(a).
"Indemnifying Party" has the meaning set forth in Section 6.3(a).
"Intellectual Property" means intellectual property rights, which may exist or
to be created under the Laws of any jurisdiction in the world or any
international treaties or conventions, whether or not the subject of an
application or registration, including any of the following: Korean or foreign
(a) trademarks and service marks, including all applications and registrations
and the goodwill connected with the use of and symbolized by the foregoing, (b)
copyrights, including all applications and registrations related to the
foregoing, (c) trade secrets and confidential know-how, (d) patents and patent
applications, (e) internet domain registrations, and (f) other intellectual
property and related proprietary rights, interests and protections.
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"KFTC" means the Fair Trade Commission of Korea.
"Knowledge" means, with respect to the Seller, the actual knowledge of any
registered directors of the Seller or any Group Company.
"Korea" means the Republic of Korea.
"KRW" or "Korean Won" means Korean Won, the lawful currency of Korea.
"KSANP" means KSANP Co., Ltd, a company established and existing under the laws
of Korea with its registered [email protected]., 11, Seongnae-ro 6-gil, Gangdong-gu,
Seoul, Korea.
"KSANP Financial Statements" means the unaudited monthly management accounts of
the KSANP for the months ended on the last day of each month of the fiscal year
2019.
"KSNET" means KSNET Inc., a company incorporated and existing under the laws of
Korea with its registered [email protected]., 9, Teheran-ro 103-gil, Gangnam-gu,
Seoul, Korea.
"KSNET Financial Statements" means the non-consolidated audited financial
statements of KSNET as of and for the fiscal year ended June 30, 2019.
"Law" means any law, statute, regulation, ordinance, rule, order, decree,
judgment, consent decree or other binding directive issued, enacted or
promulgated by any Governmental Authority.
"Leakage" means:
(a) any dividend (in cash or in kind) or distribution declared, paid or made
(whether actual or deemed) by the Company to the Seller, or any repurchase,
redemption, repayment or return of share or loan capital or loan (or any other
relevant securities) by any Group Company to or for the benefit of the Seller or
any of its Affiliates (excluding the Group Companies);
(b) any payment by any Group Company of any transaction bonus, M&A bonus, other
than the transaction bonuses permitted under clause (j) of the definition of
"Permitted Leakage", or compensation, performance payment, service fees or other
compensation, however referred to, made or agreed to be made by any Group
Company to, or assets transferred or liabilities assumed, indemnified or
incurred by any Group Company for the benefit of, any Employee to the extent
such payment, transfer, assumption or indemnification is conditional on the
consummation of, or is made to facilitate, the Transaction;
(c) any payments made (or future benefits granted) to (or assets transferred to,
or liabilities assumed, indemnified, guaranteed, secured or incurred for the
benefit of) the Seller or any of its Affiliates (other than a Group Company), by
any Group Company (but excluding, for the avoidance of doubt, any payments of
base salary and accrued bonuses, and the provision of all other emoluments,
pensions and benefits, to Employees, in each case in the Ordinary Course of
Business);
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(d) any payments made or agreed to be made by any Group Company to, or at the
direction of or for the benefit of, the Seller or any of its Affiliates (other
than a Group Company), in respect of any Equity Interest of any Group Company
being issued, redeemed, purchased or repaid, or any other return of capital;
(e) the waiver or discount by any Group Company of any amount or obligation owed
to such Group Company by the Seller or any of its Affiliates (other than a Group
Company);
(f) the purchase by any Group Company from the Seller or any of its Affiliates
(other than a Group Company), of any assets;
(g) the transfer by any Group Company to the Seller or any of its Affiliates
(other than a Group Company) of any assets to the extent that such transfer is
at less than market value or otherwise not on arm's length terms;
(h) any payment by a Group Company of, or obligation on a Group Company to pay
or incur, any costs, professional fees, expenses or transaction bonuses to any
Person (including any consulting, advisory, management fee or commission) in
connection with the transactions contemplated by this Agreement or as a result
of the Completion or any disposal of the Ownership Interest, including any
costs, professional fees and expenses relating to any preparatory work carried
out on behalf of the Seller;
(i) any Tax paid or that will become payable by any Group Company to the extent
attributable to any of the foregoing; or
(j) any agreement or arrangement made or entered into by any Group Company to do
or give effect to any matter referred to in (a) to (i) above,
but excludes Permitted Leakage.
"Leakage Amount" has the meaning set forth in Section 2.3(b).
"Leakage Claim" has the meaning set forth in Section 2.4.
"Leakage Dispute" has the meaning set forth in Section 2.4.
"Leakage Expert" has the meaning set forth in Section 2.4(a).
"Leased Real Property" has the meaning set forth in Section 3.2(j)(iii).
"Liabilities" means any liabilities, losses, indebtedness or obligations
(whether known or unknown, absolute or contingent, accrued or fixed, or matured
or unmatured), including those arising under any Governmental Order or other Law
or equity (including any Law relating to Taxes), and those arising from any
Contract.
"Licensed Intellectual Property" has the meaning set forth in Section
3.2(p)(ii).
"Locked Box Date" means June 30, 2019.
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"Locked Box Interest" has the meaning set forth in Section 2.2(a).
"Long-Stop Date" means the date falling three (3) months after the date hereof.
"Losses" means any and all any losses, Liabilities, damages, awards, judgments,
fines and penalties, diminution in value, lost profits, costs and expenses
(including reasonable attorneys' fees and any costs and expenses of remediation
obligations), charges, actions, proceedings, claims, allegations and demands.
"Material Adverse Effect" means any event, fact, effect, circumstance or change,
that has had, individually or in the aggregate, a materially adverse effect on
(a) the business, results of operations, condition (financial or otherwise),
revenue, income, enterprise value, or assets of the Group Companies, taken as a
whole, or (b) the ability of the Seller to consummate the transactions
contemplated hereby; provided, however, that "Material Adverse Effect" shall not
include any event, fact or change, directly or indirectly, arising out of or
attributable to: (i) general economic conditions, (ii) conditions generally
affecting the industries in which the Group Companies operate, (iii) any changes
in financial, banking or securities markets in general, including any disruption
thereof and any decline in the price of any security or any market index or any
change in prevailing interest rates or exchange rates, (iv) acts of war (whether
or not declared), armed hostilities or terrorism, or the escalation or worsening
thereof, (v) any action required or permitted by this Agreement or any action
taken (or omitted to be taken) with the written consent of or at the written
request of the Purchaser, (vi) any changes in applicable Laws or accounting
rules (including Korean GAAP) or the enforcement, implementation or
interpretation thereof, (vii) the announcement, pendency or completion of the
transactions contemplated by this Agreement, (viii) any acts of God, or (ix) any
failure by the Group Companies to meet any internal or published projections,
forecasts or revenue or earnings predictions; provided, that, event, fact,
effect, circumstance or change set forth in clauses (i), (ii) and (iii) shall be
taken into account in determining whether there has been a Material Adverse
Effect if any such event, fact, effect, circumstance or change has a
disproportionate effect on the business, results of operations, condition
(financial or otherwise), revenue, income, enterprise value, or assets of the
Group Companies, taken as a whole.
"Material Contract" means Contracts entered into with merchants and agencies and
the following Contracts to which any Group Company is a party or by which any
Group Company or its properties are bound: (i) Contracts that involve
performance of services or delivery of goods or materials by or to any Group
Company of an amount or value in excess of one hundred million Korean Won (KRW
100,000,000) per month; (ii) Contracts that have an unexpired term of one year
or longer and cannot be terminated by any Group Company upon notice; (iii)
currently effective mortgages, indentures, loan or credit agreements, security
agreements, and other agreements and instruments relating to the borrowing of
money or extension of credit, individually in excess of three hundred million
Korean Won (KRW 300,000,000); (iv) any guarantee, pledge, performance or
completion bond, indemnification, surety, reimbursement, hold harmless or other
similar commitment with respect to the obligations or Losses of another Person;
(v) Contracts limiting the freedom of any Group Company (or that would purport
to limit the freedom of the Purchaser or any of its Affiliates) to engage or
participate, or compete with any other Person, in any line of business, market
or geographic area, or to make use of any Intellectual Property; (vi) Contracts
concerning a joint development or other similar arrangement with one or more
Persons, or providing for the development by or for any Group Company of
Intellectual Property (excluding nondisclosure or confidentiality Contracts
entered into in the ordinary course of business and confidentiality); (vii)
Contracts to grant any severance or termination pay or benefits (in cash or
otherwise) to any Employee, individual consultant, or any contractor of any
Group Company, in each case other than in the Ordinary Course of Business;
(viii) Contracts relating to the ownership of, formation of, operation of, or
investment in any business or enterprise, including joint ventures, minority
equity investments, partnership and similar Contracts; and (ix) Contracts or
series of related Contracts pursuant to which any Group Company has made
aggregate expenditures or payments in excess of one hundred million Korean Won
(KRW 100,000,000) per month in the past twelve (12) months and for which the
company has ongoing obligations or rights thereunder.
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"Non-Disclosure Agreement" has the meaning set forth in Section 4.7(a).
"Notice of Claim" has the meaning set forth in Section 6.4(b).
"Ordinary Course of Business" means any action taken by a Person in the ordinary
course of its day-to-day operations consistent with such Person's past practices
and in compliance with applicable Laws.
"Owned Intellectual Property" has the meaning set forth in Section 3.2(p)(ii).
"Owned Real Property" has the meaning set forth in Section 3.2(j)(ii).
"Ownership Interest" has the meaning set forth in the recitals.
"Party" or "Parties" has the meaning set forth in the preamble.
"Permitted Leakage" means:
(a) in relation to the Employees: (i) the payments of base salary accrued in the
ordinary course of employment, (ii) the payments of accrued bonuses in the
ordinary course of employment, (iii) the reimbursement of reasonable expenses
incurred in the course of employment, (iv) the provision of all other
emoluments, pensions and benefits in accordance with the terms of service
contracts disclosed to the Purchaser prior to the date of this Agreement and (v)
any reimbursement of the Employees' unused vacation accrued in the ordinary
course of employment;
(b) any capital expenditure incurred in the Ordinary Course of Business;
(c) any fees or charges payable by a Group Company in respect of services (and
past services) provided to such Group Company by the Seller or any of its
Affiliate in the Ordinary Course of Business and on arm's length terms;
(d) any matter undertaken at the written request of the Purchaser on the terms
and conditions disclosed to the Purchaser in advance;
(e) any payment expressly permitted under the terms of this Agreement;
(f) payment of any amount accrued or provided for in the Group Companies
Financial Statements;
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(g) payment for capital reduction by the Company in or around September 2019 and
related transactions in the amount of approximately KRW 10,002,000,000;
(h) payment for capital reduction by the Company in or around January 2020 and
related transactions in the amount of approximately KRW 11,940,000,000;
(i) payment by the Company of costs and professional fees not exceeding USD
1,744,310 in aggregate for (i) vendor due diligence in connection with the
Transaction or (ii) consultancy on various strategic initiatives implemented for
the benefit of, and to support, the businesses of KSNET and KSANP;
(j) payment by any Group Company of transaction bonuses not exceeding the
aggregate of KRW 3,208,050,000 plus USD 280,000 to officers (including the Chief
Executive Officer and Representative Director of the Company) and employees of
the Group Companies; and
(k) any Tax paid or that will become payable by any Group Company to the extent
attributable to any of the foregoing.
"Person" means any individual, partnership, limited liability company,
corporation, association, joint stock company, trust, entity, joint venture,
labor organization, unincorporated organization, or Governmental Authority.
"Pledge Agreement" has the meaning set forth in Section 2.2(c).
"Privacy Laws" has the meaning set forth in Section 3.2(v).
"Purchase Price" has the meaning set forth in Section 2.2(a)(i) or Section
2.2(a)(ii), as the case may be.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser's Group" means the Purchaser and its Affiliates (other than the Group
Companies).
"Released Parties" has the meaning set forth in Section 6.6(e).
"Representatives" means employees, directors, officers, financial advisors,
legal advisors, accountants and other advisors or representatives.
"Securities Transaction Tax" means the securities transaction tax that arises in
respect of the sale and purchase of the Ownership Interest as contemplated
hereby, pursuant to the Securities Transaction Tax Act of Korea.
"Seller" has the meaning set forth in the preamble.
"Seller Disclosure Schedules" means the Seller Disclosure Schedules attached
hereto as Schedule B.
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"South Africa" means the Republic of South Africa.
"Specially Related Person" means any Person who is prescribed to be a specially
related person under the Corporate Income Tax Act of Korea.
"STT Withholding" has the meaning set forth in Section 2.2(e)(i).
"Subsidiaries" means direct or indirect subsidiaries of the Company consisting
of KSNET and KSANP, and "Subsidiary" means any of them.
"Tax" means all taxes, including (i) income taxes, payroll and employee
withholding taxes, sales and use taxes, excise taxes, franchise taxes, gross or
net receipts taxes, occupation taxes, real and personal property taxes, ad
valorem taxes, stamp taxes, transfer taxes, capital taxes, import duties,
withholding taxes, workers' compensation taxes, and other obligations of the
same or of a similar nature, and (ii) any interest, fines, penalties in respect
of such taxes, payable to or imposed by any Tax Authority of any relevant
jurisdictions.
"Tax Authority" means any Governmental Authority exercising revenue, customs,
excise or other taxation function.
"Tax Return" has the meaning set forth in Section 3.2(q)(i).
"Termination Fee" has the meaning set forth in Section 7.2(b)(i).
"Third Party Claim" has the meaning set forth in Section 6.4(a).
"Third Party Indemnification Amount" has the meaning set forth in Section
6.3(d).
"Total Withholding" has the meaning set forth in Section 2.2(e)(i).
"Transaction" has the meaning set forth in the recitals.
"Transaction Documents" means this Agreement and the Pledge Agreement.
"U.S. Dollar" or "USD" means United States Dollars, the lawful currency of the
United States of America.
"W&I Insurance Policy" has the meaning set forth in Section 6.5.
"W&I Insurance Company" means AIG Korea Inc.
"W&I Insurance Premium" means the amount required to be paid to the W&I
Insurance Company in connection with the placement of the W&I Insurance Policy
(including amounts paid to the insurer at inception of such policy for costs
incurred by the insurer in respect of premium payments, diligence and other
fees, expenses and Taxes of the W&I Insurance Company related thereto).
1.2. Construction. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. Whenever the context requires, the gender of all words used in
this Agreement shall include the masculine, feminine, and neuter. Terms defined
in the singular shall have the corresponding meaning in the plural, and vice
versa. All references herein to Articles, Sections, Schedules and Exhibits
shall refer to articles, sections, schedules and exhibits, respectively, of this
Agreement. The use of the terms "including" or "include" shall in all cases
herein mean "including, without limitation" or "include, without limitation,"
respectively. Reference to any Law means such Law as amended, modified,
codified, replaced or re-enacted, in whole or in part, including rules,
regulations, enforcement procedures and any interpretations promulgated
thereunder, all as in effect on the date hereof. Reference to any Person
includes such Person's successors and assigns to the extent such successors and
assigns are permitted by the terms of any applicable agreement, and reference to
a Person in a particular capacity excludes such Person in any other capacity or
individually. The use of the terms "hereunder," "hereof," "hereto" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Article, Section or clause of or Exhibit or Schedule to this
Agreement. References to times of the day are to that time in Korea and
references to a day are to a period of twenty-four (24) hours running from
midnight to midnight.
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ARTICLE II
PURCHASE AND SALE
302-838-2451. Purchase and Sale. Subject to the terms and conditions contained
herein (including the Exhibits and Schedules attached hereto), at the
Completion, the Purchaser shall purchase, acquire and receive from the Seller,
and the Seller shall sell and deliver to the Purchaser, the Ownership Interest,
free and clear of all Encumbrances and together with all rights attaching to
them, including the right to receive all distributions and dividends declared,
paid, made or accruing from the Locked Box Date (save for any Permitted
Leakage), on the terms set out in this Agreement.
2.2. Purchase Price.
(a) The aggregate purchase price for the Ownership Interest shall be (i) USD
237,220,000 (the "Purchase Price") if the Completion occurs on or prior to March
10, 2020 or (ii) USD 237,220,000 (the "Base Purchase Price") plus interest
accrued on the Enterprise Value from (and excluding) the Locked Box Date to (and
including) the Completion [email protected]% per annum accrued on a daily basis (the
"Locked Box Interest"; and together with the Base Purchase Price, the "Purchase
Price") if the Completion occurs after March 10, 2020.
(b) Within five (5) Business Days from the date hereof, the Purchaser shall
transfer a contract deposit (the "Contract Deposit") in the amount of USD
23,722,000 by wire transfer of immediately available funds in US Dollars to the
bank account designated by the Seller in writing.
(c) To secure the Seller's obligation to return the Contract Deposit upon the
occurrence of an event requiring such return pursuant to the terms hereof,
immediately following the Seller's receipt of the Contract Deposit from the
Purchaser, the Seller shall establish a first priority pledge for the Purchaser
over the bank account of the Seller into which the Contract Deposit is paid
under Section 2.2(b). For purposes of this pledge, the Parties agree to enter
into a pledge agreement, in form and substance as attached hereto as Exhibit
2.2(c) (the "Pledge Agreement").
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(d) At the Completion, the Purchaser shall pay the Purchase Price (as reduced
pursuant to Section 2.2(e) and Section 2.3(b), if applicable) less the Contract
Deposit (the "Completion Payment") by wire transfer of immediately available
funds in U.S. Dollars to the bank account designated by the Seller in writing in
advance. No later than five (5) Business Days prior to Completion, the Seller
shall notify the Purchaser of the amount of: (i) any known Leakage and (ii) the
amount of Locked Box Interest, in each case [email protected].
(e) Withholdings, Refund and Tax Indemnity.
(i) In paying the Completion Payment to the Seller, the Purchaser shall withhold
(i) the Securities Transaction Tax in an amount equal to one-half percent (0.5%)
(or, if modified after the date hereof pursuant to applicable Law, such other
percentage) of the Purchase Price (the "STT Withholding") and (ii) the Capital
Gains Tax in an amount equal to the lesser of (A) eleven percent (11%) (or, if
modified after the date hereof pursuant to applicable Law, such other
percentage) of the Purchase Price or (B) twenty-two percent (22%) (or, if
modified after the date hereof pursuant to applicable Law, such other
percentage) of the net capital gain realized by the Seller from the sale of the
Ownership Interest (the "CGT Withholding", and together with the STT
Withholding, the "Total Withholding"); provided that the Seller and the
Purchaser shall agree in writing on the applicable amount of each of the STT
Withholding, the CGT Withholding and the Total Withholding by at least five (5)
Business Days prior to the Completion.
(ii) The Purchaser shall timely prepare any and all Tax Returns that are
required in connection with the Securities Transaction Tax and the Capital Gains
Tax, and shall pay (on behalf of the Seller) all applicable Securities
Transaction Tax and Capital Gains Tax in a timely manner pursuant to applicable
Laws. Within five (5) Business Days after each such payment, the Purchaser
shall provide to the Seller copies of all relevant payment receipts and
withholding tax statements with respect to the Securities Transaction Tax and
the Capital Gains Tax.
(iii) In the event that the National Tax Service of Korea or other relevant Tax
Authority makes any refund to the Purchaser with respect to the CGT Withholding
such that the amount of the Capital Gains Tax finally charged by such Tax
Authority is less than the amount of the CGT Withholding, the Purchaser shall
pay the refunded amount to the Seller by wire transfer of immediately available
funds to the bank account designated by the Seller, within five (5) Business
Days after the Purchaser receives the refunded amount from the National Tax
Service of Korea or other relevant Tax Authority. In addition, if the refund
interest is applicable and paid by the National Tax Service of Korea or other
relevant Tax Authority, the refund interest shall be transferred to such bank
account designated by the Seller.
(iv) Notwithstanding anything to the contrary contained in this Agreement, if
the Purchaser receives a written notice of tax assessment (including a pre-tax
assessment notice) or a similar written notice from the National Tax Service of
Korea or other relevant Tax Authority requiring the Purchaser to pay any amount
in excess of the amount of the CGT Withholding ("Excess CGT Withholding
Amount"), which shall consist of any Taxes payable to the relevant Tax Authority
in Korea as a result of any failure by the Seller to allow the Purchaser to
withhold and/or pay any withholding Taxes under Korean Tax Law, in respect of,
or as a result of, any of the capital gains of the Seller (or any direct or
indirect holder of interests in the Seller that the Tax Authority in Korea may
assert is the seller) arising from, or related to, the sale of the Ownership
Interest to the Purchaser, the Purchaser shall promptly, but in no event later
than three (3) Business Days from its receipt thereof, give the Seller a written
notice thereof together with a copy of all notices from the Tax Authority in
Korea. Not later than two (2) Business Days prior to the due date for payment
of any Excess CGT Withholding Amount set forth in the tax notice from the Tax
Authority in Korea (or set forth in any provision of Korean Tax Law), the Seller
shall pay to the Purchaser the Excess CGT Withholding Amount so as to enable the
Purchaser to pay the amount to the Tax Authority in Korea by the due date,
provided that the Seller has received a copy of all notices from the Tax
Authority in Korea sufficiently in advance of such due date to enable the Seller
to adequately assess and respond to such notices. Upon payment by the Seller of
the Excess CGT Withholding Amount to the Purchaser, the Purchaser shall (i) pay,
by the due date, such amount to the Tax Authority in Korea and deliver to the
Seller within three (3) Business Days of obtaining a receipt issued by the Tax
Authority in Korea, a copy of the receipt issued by the Tax Authority in Korea
evidencing such payment, (ii) give the Seller full discretion to appeal, at the
expense of the Seller, the assessment of the Excess CGT Withholding Amount by
engaging in domestic/international dispute resolution procedures regarding the
Excess CGT Withholding Amount (including tax appeals under Korean Tax Law, court
litigation and mutual agreement procedures under the International Tax
Coordination Law of Korea), including full discretion to accept or reject any
results of such appeal or any settlement, provided that if, and only if an
appeal is made in the name of the Purchaser in its capacity as a withholding
agent, the Purchaser will have the right to observe, and to cause its counsel or
other representatives to observe, to the extent practicable and at the expense
of the Purchaser, any material appeal proceedings with respect to the Excess CGT
Withholding Amount, and (iii) make best efforts to cooperate, at the expense of
the Seller, with the Seller and to take such necessary actions as may be
reasonably requested by the Seller in order for the Seller to assume control of
the negotiation, settlement or defense relating to the withholding Taxes, in
each case, at the expense of the Seller; provided that, in the case of each of
clauses (i) through (iii), any requested or otherwise contemplated cooperation,
grant of discretion (or continuation thereof) or any other actions on the part
of the Purchaser do not violate relevant Law.
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2.3. Leakage
(a) The Seller covenants to the Purchaser that in the period from the Locked
Box Date up to and including the Completion Date:
(i) neither it, nor any of its Affiliates (other than a Group Company), has
received or benefited (or will receive or benefit) from any amount of Leakage;
and
(ii) no arrangement or agreement has been made or entered into (or will be made
or entered into) that has resulted, or will result, in it or any of its
Affiliates (other than a Group Company) receiving any Leakage.
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Notwithstanding anything to the contrary contained herein, the Seller shall
have no liability to the Purchaser under this Section 2.3 if Completion does not
occur.
(b) If any Leakage is notified under Section 2.3(c) and the Seller agrees or is
otherwise determined hereunder, in each case at or prior to Completion, that
such Leakage has occurred, the Purchase Price shall be reduced by an amount
equal to the amount of such Leakage (a "Leakage Amount"), which shall discharge
the Seller's obligation to make payment of such Leakage Amount under Section
2.3(c) and Section 2.4.
(c) If any Leakage occurs during the period from the Locked Box Date until
immediately prior to Completion which has not been discharged pursuant to
Section 2.3(b), provided that the Purchaser has notified the Seller in writing
of its obligation to make such payment within six (6) months of the Completion
Date, the Seller shall, on written demand by the Purchaser setting out the
amount of such Leakage together with reasonable evidence thereof, if such Seller
agrees that such Leakage has occurred and to the amount notified by the
Purchaser, promptly pay to the Purchaser or, at the sole discretion of the
Purchaser, the applicable Group Company, an amount in cash equal to the amount
of such Leakage paid by the relevant Group Company.
(d) Notwithstanding anything to the contrary in this Agreement, no transaction,
other than any of the transactions or events provided for in clause (a) of the
definition of the term "Leakage" herein, undertaken on an arms' length basis and
in the Ordinary Course of Business between (x) any Group Company, on the one
hand, and (y) the Seller or any of its Affiliates, on the other hand, shall be
deemed to constitute Leakage.
(e) If any payment is to be made by the Seller to the Purchaser in respect of
any Leakage Claim, the payment shall be made by way of adjustment of the
Purchase Price paid by the Purchaser for the Ownership Interest under this
Agreement, which shall be deemed to have been reduced by the amount of such
payment.
(f) The liability of the Seller pursuant to Section 2.3 shall terminate on the
date falling six (6) months after the Completion Date, unless before that date
the Purchaser has notified the Seller in writing of such Leakage (including the
Purchaser's good faith estimate together with reasonably detailed supporting
documents, on a without prejudice basis, of the amount of the relevant Leakage)
in which case the Seller shall remain liable until the claim for such Leakage
has been satisfied, settled or withdrawn.
2.4. Expert Determination. If the liability for or quantum of Leakage
notified pursuant to Section 2.3 (a "Leakage Claim") is not agreed in writing
between the Purchaser and the Seller within ten (10) Business Days of the
Leakage Claim being notified to the Seller (the "Leakage Dispute"):
(a) the Leakage Dispute shall be referred to Samil PwC, as an independent
accounting firm, jointly appointed by the Purchaser and the Seller (the "Leakage
Expert"), which shall determine the amount of the Leakage (if any) paid by any
Group Company, such determination to be made by the Leakage Expert acting on the
following basis:
(i) the Leakage Expert shall act as an expert and not as an arbitrator, and the
amount of Leakage as determined by the Leakage Expert shall be final and binding
on the Parties except in case of fraud or manifest error;
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(ii) the Leakage Expert's terms of reference shall be limited to determining the
liability for and/or the quantum of Leakage as set out in the notice of the
relevant Leakage Claim;
(iii) the Leakage Expert's determination with respect to any Leakage Dispute
shall be within the range of values assigned by the Purchaser to such item in
the notice of the relevant Leakage Claim and the liability for or quantum of
Leakage in respect of such Leakage Claim asserted by the Seller;
(iv) except to the extent that the Purchaser and the Seller agree otherwise in
writing, the Leakage Expert shall determine his own procedure, but the procedure
of the Leakage Expert shall give the Purchaser and the Seller a reasonable
opportunity to make written and oral representations, allow a Party to the
Leakage Dispute to be present while oral representations are being made to the
Leakage Expert by the other Party, and require a Party to the Leakage Dispute to
supply to the other Party a copy of any written representations at the same time
as they are supplied to the Leakage Expert;
(v) the Leakage Expert's costs (including any fees and costs of any advisers
appointed by the Leakage Expert) shall be based upon the percentage that the
portion of the contested amount not awarded to each Party bears to the amount
actually contested between the Parties, as determined by the Leakage Expert.
For example, if USD100 is contested by the relevant Parties and USD75 is awarded
to the Purchaser, then the Purchaser shall pay 25% of the costs of the Leakage
Expert and the Seller shall pay 75% of the costs of the Leakage Expert; and
(vi) the Purchaser and the Seller shall cooperate with the Leakage Expert, and
shall comply with all reasonable requests (including requests for information
relating to a Group Company) made by the Leakage Expert in connection with the
carrying out of its duties.
(b) Following the Leakage Expert's determination of the amount of Leakage paid
by the relevant Group Company to, or for the benefit of, the Seller or any of
its Affiliates, if any, the Seller shall, within ten (10) Business Days from the
date the Leakage Expert's official report has been delivered to the Parties, pay
to the Purchaser or, at the sole discretion of the Purchaser, the applicable
Group Company, an amount in cash equal to the amount of any Leakage so
determined.
2.5. Completion. The Completion of the sale and purchase of the Ownership
Interest and the delivery of all of the other Completion deliverables set forth
herein (the "Completion") shall take place at the offices of Yulchon LLC,
located at Parnas Tower, 38F, 521 Teheran-ro, Gangnam-gu, Seoul 06164, Korea.
The Completion Date shall be (i) March 10, 2020, or (ii) such other date as the
Purchaser and the Seller may mutually agree.
2.6. Completion Deliverables.
(a) Purchaser's Deliverables at the Completion
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At the Completion, the Purchaser shall deliver (or cause to be delivered) to the
Seller the following items:
(i) remittance of the Completion Payment to the Seller in accordance with
Section 2.2(d);
(ii) a receipt to the Seller for the Ownership Interest;
(iii) a certified copy of resolutions and corporate authorizations of the
Purchaser authorizing the Purchaser's execution, delivery and performance of
this Agreement and other related documents;
(iv) documentation evidencing the Purchaser's obtainment of all Governmental
Approvals required to be obtained or made by the Purchaser at or prior to the
Completion under this Agreement and necessary for the consummation of the
Transaction contemplated by this Agreement; and
(v) a certified copy of the W&I Insurance Policy, duly executed by the Purchaser
and the W&I Insurance Company.
(b) Seller's Deliverables at the Completion. At the Completion, the Seller
shall deliver (or cause to be delivered) to the Purchaser the following items:
(i) original unit certificates representing the Ownership Interest and the
original share certificates representing all of the issued and outstanding
shares of KSNET;
(ii) original resignation letters of the registered directors and statutory
auditors of the Group Companies who will resign from their offices in accordance
with Section 4.5 (including certificates of seal impression and other documents
needed to register the resignations) in form attached hereto as Exhibit 4.5(a);
(iii) a receipt to the Purchaser for the Purchase Price;
(iv) a certified copy of unitholders' registry of the Company showing the
Purchaser as the registered owner of the Ownership Interest as of the Completion
Date, duly certified by the Company; and
(v) a certified copy of resolutions and corporate authorizations of the Seller
authorizing the Seller's execution, delivery and performance of this Agreement
and other related documents.
(c) Unless otherwise agreed by the Parties, all actions at the Completion are
inter-dependent and will be deemed to take place simultaneously and no delivery
or payment will be deemed to have been made until all deliveries and payments
under this Agreement due to be made at the Completion have been made.
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ARTICLE III
WARRANTIES
3.1. Warranties of the Seller relating to the Seller and the Ownership
Interest.Except as set forth in the Seller Disclosure Schedules, the Seller
hereby warrants to the Purchaser that the statements contained in this Section
3.1 are true and correct as of the date hereof and as of the Completion Date
(or, if made as of a date specified below, as of such date) with respect to the
Seller and/or the Ownership Interest.
(a) Organization and Existence; Authorization. The Seller is duly organized and
validly existing under the Laws of the jurisdiction of its organization, and has
requisite power and authority required to conduct its business as it is now
being conducted. The Seller has full authority and capacity to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
has been duly executed and delivered by the Seller, and this Agreement
constitutes the legal, valid and binding obligation of the Seller enforceable
against it in accordance with the terms hereof, except insofar as the
enforceability hereof may be limited by applicable bankruptcy, fraudulent
conveyance, or other similar Laws affecting the enforcement of creditors' rights
generally.
(b) Absence of Conflicts; No Consents. Neither the execution, delivery and
performance of this Agreement, nor the consummation of the Transaction, do not,
and will not result in a violation or breach of any provision of any Law
applicable to the Seller, require the consent, notice or other action by any
Person under, conflict with, result in a violation or breach of, constitute a
default under or result in the acceleration of, or the loss of any benefit
under, any Contract to which the Seller is a party, or result in a violation or
breach of any provision of the constitutional documents of the Seller. No
Governmental Approval, declaration or filing with, or notice to, any
Governmental Authority is required by or with respect to the Seller in
connection with the execution and delivery of this Agreement and the
consummation of the Transaction, except for such filings as may be required as
set forth in Section 3.1(b) of the Seller Disclosure Schedules.
(c) Ownership Interest in the Company. The Seller legally and beneficially owns
the Ownership Interest, free and clear of any Encumbrances. At the Completion,
the Purchaser shall acquire good, valid and marketable title to the Ownership
Interest free and clear of any Encumbrances. Upon consummation of the
Completion, the Purchaser will have acquired from the Seller good and valid
title to the Ownership Interest, free and clear of all Encumbrances, and the
Ownership Interest will constitute 100% of the total Equity Interest of the
Company on a fully diluted basis. The Seller is not a party to any shareholder
agreement, voting agreement, subscription agreement, or repurchase or redemption
agreement with respect to the Ownership Interest, or any other contract
pertaining to the payment of dividends, preemptive rights, capital
contributions, director nomination, drag-along, anti-dilution, registration
rights, rights of first refusal or other transfer restrictions, or any other
rights or obligations with respect to the Ownership Interest.
(d) Ownership Interest in KSNET. The Company legally and beneficially owns all
of the issued and outstanding shares of KSNET, free and clear of any
Encumbrances, which constitute 100% of the capital stock of KSNET on a fully
diluted basis. Neither the Seller nor the Company is a party to any shareholder
agreement, voting agreement, subscription agreement, or repurchase or redemption
agreement with respect to the capital stock of KSNET, or any other contract
pertaining to the payment of dividends, preemptive rights, capital
contributions, director nomination, drag-along, anti-dilution, registration
rights, rights of first refusal or other transfer restrictions, or any other
rights or obligations with respect to the capital stock of KSNET.
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(e) Action. There is no Action pending or, to the knowledge of the Seller,
threatened against the Seller that prohibits or restricts the Transaction.
3.2. Warranties of the Seller relating to the Group Companies. Except as set
forth in the Seller Disclosure Schedules, the Seller hereby warrants to the
Purchaser that the statements contained in this Section 3.2 are true and correct
in all material respects as of the date hereof and as of the Completion Date
(or, if made as of a date specified below, as of such date) with respect to the
Group Companies.
(a) Organization and Existence. Each Group Company is a company duly
established and validly existing under the Laws of Korea, and has all requisite
power and authority required to own, lease and operate its properties and to
conduct its business as it is now being conducted.
(b) Absence of Conflicts. The execution, delivery and performance by the
Seller of this Agreement and the consummation of the Transaction do not and will
not (i) violate or conflict with any provision of the articles of incorporation
or other constitutional documents of any Group Company, (ii) violate or conflict
with any Law applicable to the Group Companies or (iii) violate, conflict with,
result in the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
require consent or approval under, result in the termination of or a right of
termination or cancellation or modification under, accelerate the performance
required by, result in the creation of any Encumbrance upon any of the
properties, rights or assets under, or create in any party the right to
accelerate, terminate, modify or cancel any of the terms, conditions or
provisions of, any Material Contract or material Governmental Approval to which
any Group Company is a party or by which any Group Company or any of the
properties of any Group Company are bound.
(c) Capitalization. All of the Equity Interests of each Group Company (i) are
validly issued, fully paid and non-assessable, (ii) were not issued or acquired
in violation of any purchase or call option, right of first refusal,
subscription right, pre-emptive right or any similar right and (iii) were issued
in compliance with the Laws of Korea. There are no outstanding options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require any Group Company to
issue any of the Equity Interests, other than statutory pre-emptive rights under
applicable Laws. Other than the Subsidiaries, there is no corporation or other
Person of which more than 50% of the outstanding economic equity or voting power
of the outstanding voting equity securities is held, directly or indirectly, by
the Company.
(d) Financial Statements.
(i) The Company Financial Statements fairly present the financial condition and
results of operations, shareholders' equity and cash flow of the Company as of
the respective dates and for the periods covered thereby. The Company Financial
Statements have been prepared in accordance with the books, records and accounts
of the Company, which properly reflect all material transactions during the
relevant periods, are accurate and complete in all material respects and are
maintained in all material respects in accordance with Korean GAAP and
applicable Laws.
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(ii) The KSNET Financial Statements and the KSANP Financial Statements fairly
present the financial condition and the results of operations, shareholders'
equity and cash flow of the relevant Subsidiary as at the respective dates of
and for the periods covered thereby. The KSNET Financial Statements and the
KSANP Financial Statements have been prepared in accordance with the books,
records and accounts of the relevant Subsidiary, which properly reflect all
material transactions during the relevant periods, are accurate and complete in
all material respects and are maintained in all material respects in accordance
with Korean GAAP and applicable Laws.
(e) Position since Locked Box Date.
Since the Locked Box Date:
(i) the business of each of the Group Companies has been carried on in the
Ordinary Course of Business, and no material change in the nature or scope of
the business or operations of such Group Company has occurred;
(ii) except for dividends disclosed to the Purchaser in writing prior to the
date hereof, no dividend has been declared or paid by any Group Company;
(iii) except for capital reduction disclosed to the Purchaser in writing prior
to the date hereof, each Group Company has not repaid, repurchased or reduced
any of its issued Equity Interest;
(iv) no Equity Interest or debt securities have been issued or sold or agreed to
be issued or sold by any Group Company, except for any Equity Interest or debt
securities issued by KSNET to the Company;
(v) each Group Company has not:
(A) disposed or agreed to dispose of any of the assets included in the Group
Companies Financial Statements with a net book value or a purchase price in
excess of KRW 1,200,000,000 in the aggregate;
(B) created any Encumbrance over its Equity Interest or any of its material
assets, other than in order to finance the acquisition of assets in its Ordinary
Course of Business pursuant to any existing facility agreement;
(C) save in respect of those facilities disclosed in the Seller Disclosure
Schedules, entered into any facility or agreement pursuant to which it is
entitled to borrow any money except routine drawings or overdrafts not exceeding
KRW 1,200,000,000 in respect of any single transaction and other than normal
trade credit in the Ordinary Course of Business; and
(D) materially changed its accounting procedures, principles or practices; and
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(vii) no corporate action authorizing or approving any of the foregoing has been
taken by any Group Company, and no agreement to do any of the foregoing has been
entered into by any Group Company.
(f) No Undisclosed Liabilities. The Group Companies have no debts, commitments,
Losses or Liabilities, whether or not required to be reflected or reserved as a
liability in their balance sheet in accordance with Korean GAAP, except (i) as
reflected or reserved in the Group Companies Financial Statements or (ii) for
any liabilities or obligations that were incurred in the Ordinary Course of
Business since the Locked Box Date.
(g) Absence of Certain Changes. During the period from the Locked Box Date to
the date hereof, (a) there has not occurred any change, event or circumstances
that, individually or in the aggregate, has had or would reasonably be expected
have a Material Adverse Effect in the Group Companies, (b) the businesses of
each Group Company have been conducted in all material respects in the Ordinary
Course of Business, (c) no Group Company has acquired or divested any business
or Person through any merger, consolidation, purchase or sale of substantial
assets or equity interests or similar transaction or entered into any Contract,
letter of intent or similar arrangement with respect to the foregoing and (d)
there has been no material change by any Group Company in its accounting
principles, practices or methods except as required by Law or Korean GAAP.
(h) Action. Except as set forth in Section 3.2(h) of the Seller Disclosure
Schedules, there is no (i) Action pending, or to the Knowledge of the Seller,
threatened against any Group Company (or any of its directors, officers or
employees with respect to whom any Group Company may be obligated to indemnify
for any losses incurred as a result of any such Action), any of their respective
properties or assets or the Transaction or (ii) Action by or before any
Governmental Authority pending or, to the Knowledge of the Seller, threatened
against any Group Company (or any of its directors or Employees with respect to
whom any Group Company may be obligated to indemnify for any losses incurred as
a result of any such inquiry or investigation).
(i) Compliance with Laws; Permits. Each Group Company has been and is in
compliance with Laws and Governmental Orders applicable to it or any of its
businesses, operations, assets and properties, except for failures to comply or
violations prior to the date of this Agreement that have been fully cured
without any continuing ramifications. No Group Company is under any
investigation of, and has received or is subject to written notice of or, to the
Knowledge of the Seller, threatened in writing to be charged with, any material
violation of any Law or Governmental Order applicable to such Group Company or
its business and operations by any Governmental Authority.
(j) Real Property and other Assets.
(i) Each Group Company has good and valid title to, or valid leases/subleases,
licenses or rights to use pursuant to a valid and enforceable lease, license or
similar contractual arrangement, all of its material properties and assets (real
and personal, tangible and intangible) owned or used by it ("Business Assets"),
free and clear of any Encumbrances. Each Group Company is not currently in
material breach of any of the terms or conditions under any of its
leases/subleases. The Business Assets constitute all of the assets, rights and
properties (tangible and intangible) required for the conduct of, and such
assets, rights and properties will be sufficient for each Group Company to
conduct, the operations in the manner in which it is currently conducted and
proposed to be conducted, and there are no assets, properties or rights that are
material to any Group Company other than the Business Assets.
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(ii) Each Group Company owns and has good and valid title to all real property
owned in whole or in part by each Group Company as of the date hereof ("Owned
Real Property") and there are no actual, threatened or contemplated condemnation
or eminent domain Actions that may affect any Owned Real Property or any part
thereof. All of the lands, the buildings, and the structures, appurtenances and
equipment situated on the Owned Real Property in all material respects (i) are
in good operating condition and suitable for the purposes for which they are
presently being used and (b) have been built, established, maintained, used and
operated in compliance with all applicable Laws, Governmental Approvals or
agreements with any Governmental Authority or any other Person.
(iii) (A) Each Group Company has good and valid leasehold interest in each real
property leased by the Group Company as of the date hereof ("Leased Real
Property"), free and clear of all Encumbrances and (B) there are no material
defaults by any Group Company (or any conditions or events that, after notice or
the lapse of time or both, would constitute a default by any Group Company) and
there are no material defaults by any other party to such lease (or any
conditions or events that, after notice or the lapse of time or both, would
constitute a default by such other party) under such lease agreement.
(iv) The equipment, molds, tools, improvements and other tangible assets of
each Group Company included in the Business Assets have been operated in all
material respects in accordance with applicable Law and applicable Contracts
related thereto; and (B) are in all material respects in good operating
condition and repair, with reasonable wear and tear excepted, fit for the
purposes for which they are used in the relevant Group Company's operations as
currently conducted, and sufficient to permit its use in the continuing
operations of the Group Company.
(k) Environmental Matters. Each Group Company has been and is in compliance
with applicable environmental Laws in all material respects, except for failures
to comply or violations prior to the date of this Agreement that have been fully
cured without any continuing ramifications. Each Group Company possesses
material Governmental Approvals required under environmental Laws for the
relevant business of the Group Company as presently conducted. No Group Company
has received any notice from any Governmental Authority that there has been any
failure to comply with any environmental Laws, and to the Knowledge of the
Seller, there are no threatened Actions seeking to impose, or that would
reasonably be expected to result in, the imposition on any Group Company of any
material Loss arising under environmental Laws.
(l) Material Contracts.
(i) Each Material Contract to which any Group Company is a party is in full
force and effect and enforceable in accordance with its terms. Neither any
Group Company nor, to the Knowledge of the Seller, any other party to each such
contract is in violation or breach of, or in default under, nor has there
occurred an event or condition that with the passage of time or giving of notice
(or both) would constitute a default under, or permit the termination of, any
Material Contract.
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(ii) Except as set forth in Section 3.2(l)(ii) of the Seller Disclosure
Schedules, each Group Company is not and has not been subject to any claims or
other Action regarding a breach or potential breach of any provision of a
Material Contract including Actions initiated or filed by a Governmental
Authority, except for failures to comply or violations prior to the date of this
Agreement that have been fully cured without any continuing ramifications. To
the Knowledge of the Seller, no event has occurred or circumstance exists that
(with or without notice or lapse of time) is reasonably likely to contravene,
conflict with or result in a violation or breach of any Group Company's right to
terminate any Material Contract effective on the date hereof.
(iii) To the Knowledge of the Seller, no counterparty to the Material Contracts
has notified its intention explicitly to terminate or cease, hold or suspend
dealing under a Material Contract to which it is a party due to the Transaction.
(m) Employee Matters.
(i) Each Group Company has been and is in compliance with all applicable Laws
pertaining to labor and employment (including all Laws relating to labor
standards, terms and conditions of employment, working hours, employment
discrimination, labor relations, worker's compensation, severance pay,
dispatched and outsourced workers, labor unions and national social insurance),
rules of employment, collective bargaining agreements and employment contracts,
except for failures to comply prior to the date of this Agreement that have been
fully cured without any continuing ramifications.
(ii) There are no pending or, to the Knowledge of the Seller, threatened against
any Group Company by any current or former director, officer or employee or by
or with any Governmental Authority or arbitrator in connection with the
employment of any current or former director, officer or employee of such Group
Company, as the case may be.
(iii) There is no pending, or, to the Knowledge of the Seller, threatened in
writing, strike, lockout, work stoppage or collective labor dispute affecting
the Employees collectively.
(iv) All severance and employee pension plans are funded to the full extent
required by applicable Laws, and all amounts properly accrued as liabilities
with respect to any former or current directors, officers or employees of each
Group Company which have not been paid, have been properly accounted for on each
Group Company's books. There is no material accrued and outstanding but unpaid
payment or other benefit (including any salary, bonus, allowance, severance pay,
compensation for unused annual leave or any other compensation or benefit)
required to be provided to any current or former director, officer or employee
of a Group Company or any outsourced workers or dispatched workers provided by
third-party contractors to a Group Company, under applicable Laws. Except as
set forth in Section 3.2(m)(iv) of the Seller Disclosure Schedules, there are no
transaction bonuses, change of control payments, retention payments, stay
bonuses, payments with respect to stock appreciation rights, dividend equivalent
payments or other payments payable by any Group Company to any Persons,
including Employees, that arise pursuant to or in connection with the
Transaction.
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(v) No Group Company is required under applicable Laws to hire as a regular
employee, any individuals (such as outsourced workers or dispatched workers)
other than Employees.
(vi) Except as set forth in Section 3.2(m)(vi) of the Seller Disclosure
Schedules, no Group Company is a party to or bound by any currently effective
collective bargaining agreement, there are no labor unions or other
organizations or groups representing, purporting to represent or attempting to
represent any employees employed by any Group Company and no union
organizational campaign is in progress with respect to the Employees.
(n) Employee Benefit Plans.
(i) All Employee Benefit Plans have been, in all material respects,
established, operated, administered and maintained in accordance with its terms
and in compliance with applicable Laws.
(ii) Other than the mandatory employment benefits required under the applicable
Laws, there are no overdue payments, any Group Company does not maintain or
contribute to any pension, profit sharing, deferred compensation, bonus, stock
option, share appreciation right, severance, group or individual health, dental,
medical, life insurance, survivor benefit, or similar plan, policy or
arrangement, for the benefit of any director, officer, or employee of a Group
Company.
(iii) No Action is made, commenced or, to the Knowledge of the Seller,
threatened in writing against any Group Company with respect to any Employee
Benefit Plan of such Group Company (other than routine claims for benefits
payable in the ordinary course, and appeals of such denied claims).
(o) Permits and Licenses. Each Group Company holds, and is in compliance with
the terms, conditions and covenants of, all material Governmental Approvals (i)
pursuant to which such Group Company currently operates or holds any interest in
property or (ii) that are necessary for the lawful operation of the businesses
of such Group Company as presently conducted. Each such Governmental Approval
is valid and in full force and effect, and no Action is pending or, to the
Knowledge of the Seller, threatened relating to the revocation or limitation of
any of such Governmental Approvals. There exists no event or circumstance
which, whether with notice or lapse of time or both, could reasonably be
expected to result in a revocation, suspension or non-renewal of any such
Governmental Approval.
(p) Intellectual Property.
(i) Each Group Company owns, or has valid license or other right or consent to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted (the "Business Intellectual Property"). The Business
Intellectual Property constitute all of the Intellectual Property required for
the conduct of, and such Intellectual Property will be sufficient for each Group
Company to conduct, the operations in the manner in which it is currently
conducted and proposed to be conducted, and there are no Intellectual Property
that are material to any Group Company other than the Business Intellectual
Property.
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(ii) The relevant Group Company exclusively owns all right and has title to each
of the Intellectual Property owned by the Group Companies (the "Owned
Intellectual Property"), and has valid written licenses in respect of all
Intellectual Property used or held under license from third-parties for use in
the conduct of the businesses of the Group Companies as currently conducted (the
"Licensed Intellectual Property") to permit the relevant Group Company to
conduct its business as currently conducted, in each case free and clear of all
Encumbrances and without infringing or violating the rights of third parties in
the Licensed Intellectual Property. All registrations and applications for the
Owned Intellectual Property are subsisting and, valid and enforceable.
(iii) There are no pending or, to the Knowledge of the Seller, threatened
Actions of which any Group Company has been given notice by any Person against
its use of any Intellectual Property.
(iv) (A) No Group Company has conflicted with, impaired, constituted an
unauthorized use of, misappropriated, infringed upon or violated any
Intellectual Property of any other Person, nor has any Group Company received
any written notice in relation thereto and (B) to the Knowledge of the Seller,
no Person is infringing, violating or misappropriating any Owned Intellectual
Property, and no such claims have been asserted against any Person by the Seller
or any Group Company.
(v) The Intellectual Property owned by each Group Company, and the business of
each Group Company as currently conducted, and the current business practices,
methods and operations of each Group Company, do not infringe, misappropriate or
otherwise violate any Intellectual Property or other right of any Person
(including pursuant to any non-disclosure agreements or obligations to which the
Group Company or any of its employees or former employees is a party) as of the
date hereof.
(vi) The Business Systems used in the conduct of the Group Companies' operations
as currently conducted (i) operate and perform in all material respects in
accordance with their documentation and functional specifications and otherwise
as required by such businesses as presently conducted, and (ii) have not
materially malfunctioned, interrupted or failed. Each Group Company has taken
all commercially reasonable actions to maintain and protect the integrity,
security and continuous operation of the Business Systems and there have been no
material violations, outages, interruptions, failures or breaches of the same
(actual or attempted). Each Group Company has implemented commercially
reasonable backup and disaster recovery technology processes consistent with
generally-accepted industry standards.
(q) Taxes.
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(i) Except as set forth in Section 3.2(q)(i) of the Seller Disclosure Schedules,
each Group Company has timely filed with the appropriate Tax Authorities all Tax
returns, declarations and reports (each, a "Tax Return") that are required to be
filed by it, and all such Tax Returns are true, correct and complete in all
respects. No Tax Authority in any jurisdiction where any of the Group Company
does not file Tax Returns has made any written claim that a Group Company is
required to file Tax Returns in such jurisdiction.
(ii) All Taxes and Tax liabilities of each Group Company (including interest and
penalties) that are due and payable have be timely been paid or accrued on the
books and records of such Group Company in accordance with Korean GAAP. No
penalty or deficiency for any amount of Tax has been asserted or, to the
Knowledge of the Seller, threatened to be asserted against any Group Company.
(iii) All Taxes required to be withheld or collected by each Group Company have
been withheld and collected and, to the extent required by applicable Law,
timely paid to the relevant Governmental Authority.
(iv) No audit, investigation or Actions relating to any Taxes for which any
Group Company may be liable is pending or, to the Knowledge of the Seller,
threatened in writing by any Tax Authority.
(r) Related Party Transactions. All transactions and obligations made or
entered into between any Group Company, on the one hand, and any of its
officers, directors, shareholders, employees, agents, Affiliates or Specially
Related Persons, on the other hand, as well as their respective related
Contracts, within the past three (3) years were on terms and conditions that are
(i) consistent with past practice of such Group Company, (ii) no less favorable
than the terms and conditions for a comparable arm's-length transaction with an
unrelated third party at such time and (iii) in compliance with applicable Laws.
(s) Insurance. Each Group Company is subscribed for and maintains in full force
and effect all commercial insurance policies that are required under applicable
Law and other insurance policies relating to its business and assets that are
customarily obtained by businesses in the same industry in the region that such
business is conducted. Such insurance policies are adequate to insure against
risks, in the types and amounts reasonably foreseen, to which each Group Company
is exposed in the Ordinary Course of Business. All material insurance policies
of each Group Company as of the date hereof are currently in full force and
effect and will not be affected or terminated due to the Transaction. All
premiums due and payable under the material insurance policies have been paid by
the relevant Group Company, and there are no overdue payments. No written
notice of material default or termination has been received by any Group Company
in respect of any such material insurance policy.
(s) Accounts Receivable. All accounts receivable of each Group Company existing
on the date hereof and the Completion Date have arisen from the sale of goods or
services in the Ordinary Course of Business and constitute valid and undisputed
claims of each Group Company which are not subject to valid claims of set-off or
other defenses or counterclaims. All accounts receivable reflected on the Group
Companies Financial Statements and all accounts receivable arisen or arising
during the period from June 30, 2019 up to and including the Completion Date
(subject to the reserve for bad debts, if any, reflected in the Group Companies
Financial Statements) unless already collected, are and will be as of the
Completion Date good and collectible, without any discount or resort to
litigation or extraordinary collection activity.
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(u) Anti-Corruption and Anti-Bribery Laws; Money Laundering Laws. None of the
Seller, the Group Companies or any of their respective officers, directors,
employees, agents, representatives, consultants, or any other Person associated
with or acting for or on behalf of any Group Company, has, directly or
indirectly, in the case of (i) through (iii) below, in order to assist any Group
Company in obtaining or retaining business on behalf of, securing an improper
advantage on behalf of, or directing business to, a Group Company or any other
Person: (i) made, offered or promised to make or offer any payment, loan or
transfer of anything of value, including any reward, advantage or benefit of any
kind, to or for the benefit of any Government Official, candidate for public
office, political party or political campaign, for the purpose of (a)
influencing any act or decision of such Government Official, candidate, party or
campaign, (b) inducing such Government Official, candidate, party or campaign to
do or omit to do any act in violation of a lawful duty, (c) obtaining or
retaining business for or with any person, or (d) otherwise securing any
improper advantage; (ii) paid, offered or promised to pay or offer any bribe,
payoff, influence payment, kickback, unlawful rebate, or other similar unlawful
payment of any nature; (iii) made, offered or promised to make or offer any
unlawful contributions, gifts, entertainment or other unlawful expenditures;
(iv) established or maintained any unlawful fund of corporate monies or other
properties; (v) created or caused the creation of any false or inaccurate books
and records of any Group Company related to any of the foregoing; or (vi)
otherwise violated any provision of any Anti-Corruption and Anti-Bribery Laws.
No Group Company has violated financial recordkeeping and reporting requirements
of any money laundering laws in any material respect; and no action, suit or
proceeding by or before any governmental authority, any non-governmental
authority or any arbitrator involving any Group Company or its Subsidiaries with
respect to the money laundering laws is pending or, to the Knowledge of the
Seller, threatened.
(v) Data Protection. Each Group Company has complied in all material respects
with each Law applicable to privacy, data protection and security, export,
transfer and the online and offline collection and use of personal information,
including those under the Personal Information Protection Act of Korea, the Act
on the Promotion of IT Network Use and Information Protection and the Act on the
Protection, Use, etc. of Location Information (collectively, the "Privacy Laws")
in connection with its business, except for failures to comply prior to the date
of this Agreement that have been fully cured without any continuing
ramifications. No Group Company has received any written notice of any claims
or been charged with the violation of any such Privacy Laws by a Governmental
Authority or any other Person.
(w) No Broker. Neither the Seller nor any Group Company has engaged any
financial advisor, broker or finder, or incurred any liability for any financial
advisor's, brokerage or finder's fee or commission, or the reimbursement of
expenses, in connection with the Transaction and any transaction contemplated
hereby for which the Purchaser or any Group Company would be liable.
(x) No Other Warranties. Except for the warranties contained in this Article
III (including the related portions of the Seller Disclosure Schedules), none of
the Seller, the Group Companies or any other Person has made or makes any other
express or implied representation or warranty, either written or oral, on behalf
of the Seller or the Group Companies, including any representation or warranty
as to the accuracy or completeness of any information regarding the Group
Companies furnished or made available to the Purchaser and its representatives
(including any information, documents or material made available to the
Purchaser in the Data Room, management presentations or in any other form in
expectation of the Transaction) or as to the future revenue, profitability or
success of any Group Company or any representation or warranty arising otherwise
in Law.
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3.3. Warranties of the Purchaser. The Purchaser hereby warrants to the
Seller that the statements contained in this Section 3.3 are true and correct as
of the date hereof and as of the Completion Date (or, if made as of a date
specified below, as of such date).
(a) Organization and Existence; Authorization. The Purchaser is duly organized
and validly existing under the Laws of the jurisdiction of its organization, and
has requisite power and authority required to conduct its business as it is now
being conducted. The Purchaser has full authority and capacity to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
has been duly executed and delivered by the Purchaser, and this Agreement
constitutes the legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except insofar as the
enforceability hereof may be limited by applicable bankruptcy, fraudulent
conveyance, or other similar Laws affecting the enforcement of creditors' rights
generally.
(b) Absence of Conflicts; No Consents. Neither the execution and delivery of
this Agreement, nor the consummation of the Transaction, will conflict with or
result in a breach or violation under any Law applicable to the Purchaser, any
Contract, lease, license or other arrangement to which the Purchaser is a party,
or the articles of incorporation of the Purchaser. No Governmental Approval or
any third-party consent is required to be obtained by the Purchaser in
connection with the execution, delivery and performance of this Agreement or the
consummation of the Transaction.
(c) Action. There is no Action pending or, to the knowledge of the Purchaser,
threatened against the Purchaser that prohibits or restricts the Transaction.
(d) Financing.
(i) The amount of funds contemplated to be provided pursuant to the Financing
Commitments will be sufficient to (i) pay the Purchase Price, (ii) pay any and
all fees and expenses required to be paid by the Purchaser in connection with
the Transaction including the Debt Financing and (iii) satisfy all of the
Purchaser's other payment obligations contemplated hereunder.
(ii) The Purchaser has delivered to the Seller an accurate and complete copy of
the executed commitment letters among the Purchaser and its financing sources
and excerpts of those portions of each executed fee letter and engagement letter
associated therewith that contain any conditions to funding or other provisions
regarding the terms and conditions of the financing to be provided by such
commitment letters (such commitment letters, including all exhibits, schedules,
annexes and amendments thereto and each such fee letter and engagement letter,
collectively, the "Financing Commitments"), pursuant to which (x) the lender
parties thereto have committed, subject to the terms thereof, to lend the debt
amounts set forth therein (the "Debt Financing"), and (y) such investment
fund(s) have committed, subject to the terms thereof, to invest in the equity
capital of the Purchaser for purposes of financing the Transaction (the "Equity
Financing").
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(iii) The Financing Commitments are (x) legal, valid and binding obligations of
the Purchaser and each of the other parties thereto and (y) enforceable in
accordance with their respective terms against the Purchaser, and each of the
other parties thereto except as enforceability may be limited by bankruptcy Laws
or other similar Laws affecting creditors' rights. Prior to the date hereof and
the Completion Date, none of the Financing Commitments has been amended or
modified, and as of the date hereof and the Completion Date, (i) the respective
obligations and commitments contained in the Financing Commitments have not been
withdrawn or rescinded in any respect, (ii) the Financing Commitments are in
full force and effect, and (iii) there is no reasonable grounds for the
Purchaser to believe that any of the conditions to the Debt Financing or the
Equity Financing contemplated in the Financing Commitments will not be satisfied
or that the Debt Financing or the Equity Financing will not be made available to
the Purchaser on or prior to the Completion Date. Except for a fee letter with
respect to fees and related arrangements (in each case, that do not relate to
the conditionality of, or contain any conditions precedent to, the funding of
the financing contemplated by the Debt Financing or the Equity Financing), there
are no side letters or other agreements, contracts or arrangements related to
the funding or investing, as applicable, of the full amount of the Debt
Financing or the Equity Financing other than as expressly set forth in the
Financing Commitments and delivered to the Seller prior to the date hereof, and
there are no conditions precedent or other contingencies related to the funding
of the full amount of the Debt Financing or the Equity Financing, other than as
expressly set forth in the Financing Commitments and delivered to the Seller
prior to the date hereof. The Purchaser has fully paid, or caused to be fully
paid, any and all commitment or other fees which are due and payable on or prior
to the date hereof pursuant to the terms of the Financing Commitments. The
Purchaser is unaware of any fact or occurrence existing on the date hereof that
would reasonably be expected to make any of the assumptions or any of the
statements set forth in the Financing Commitments inaccurate or that would
reasonably be expected to cause the Financing Commitments to be ineffective.
ARTICLE IV
COVENANTS
4.1. Conduct of Business Prior to Completion.
(a) Except as otherwise agreed with the Purchaser in writing, between the
execution of this Agreement and the Completion, the Seller shall procure that
the business of each Group Company is carried on in all material respects only
in the Ordinary Course of Business and shall comply with the obligations set out
in Schedule A.
(b) Notwithstanding anything to the contrary in this Agreement, any Party or any
Group Company shall not (x) be prevented from undertaking, (y) be required to
obtain the consent of the Purchaser in relation to, or (z) incur any liability
as a result of effecting, any of the following on or prior to Completion:
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(i) any matter required by Law binding on such Person;
(ii) the implementation of any transaction or the taking of any action permitted
or provided for by this Agreement; or
(iii) in the case of the Seller and the Group Companies, the incurrence of
Permitted Leakage.
4.2. Best Efforts; Cooperation and Assistance. The Parties agree as set
forth below with respect to the period between the date hereof through the
Completion Date.
(a) The Seller and the Purchaser shall use their best efforts to take all
actions and do all things necessary, proper or advisable to consummate and make
effective, in compliance with all of the terms of this Agreement, the
Transaction (including satisfaction, but not waiver, of the conditions precedent
which it is responsible for or otherwise in control of, as set forth in Article
V) as soon as possible but no later than the Long-Stop Date. Each Party shall
cooperate with the other Party and use reasonable best efforts to satisfy all of
the Completion conditions in an expeditious manner. Subject to the terms and
conditions of this Agreement, neither Party shall, and shall permit any of its
Affiliates and Representatives to, take any actions, or omit to take any
actions, that would, or that would reasonably be expected to, result in any of
the conditions set forth in Article V not being satisfied.(b) The
Purchaser shall use its best efforts to give any notices to, make any filings
with, and obtain, as soon as practicable, any Governmental Approvals for which
it is responsible and, to the extent necessary, the Seller shall use its
reasonable efforts to assist the Purchaser in respect of the foregoing. The
Seller shall use its best efforts to give any notices to, make any filings with,
and obtain, as soon as practicable, any Governmental Approval for which it is
responsible and, to the extent necessary, the Purchaser shall use its reasonable
efforts to assist the Seller in respect of the foregoing. For the avoidance of
doubt, the Purchaser hereby represents that neither it nor any of its
Affiliates, successors or assigns are required to file any business combination
report with the KFTC in connection with the Transaction prior to the
Completion.
(c) The Purchaser shall not take or permit any of its Affiliates to take any
action that would reasonably be expected to prevent, materially delay or
materially impede the receipt of any Governmental Approval. The Purchaser shall
not withdraw any notification that it files pursuant to the applicable
Competition Laws, or commit to or agree with the KFTC to stay, toll or extend
any applicable waiting period under the applicable Competition Laws, without the
prior written consent of the Seller.
4.3. Access to Records. From the date of this Agreement until the
Completion, the Seller shall permit, and the Seller shall cause the Group
Companies to permit, Representatives of the Purchaser to have access, at
reasonable times, to a reasonable extent, and to the extent not in violation of
any Law, upon advance notice to the Seller, under the supervision of Seller's
personnel, and in a manner so as not to interfere with the normal business
operations of the Group Companies, to the premises, properties, personnel,
books, records, contracts and documents as the Purchaser may reasonably request
from time to time.
4.4. Third Party Consents. If the execution, delivery or performance by the
Seller of this Agreement or the consummation of the Transaction constitutes a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, requires consent or approval under, result in the
termination of or a right of termination or cancellation or modification under,
accelerate the performance required by, or create in any party the right to
accelerate, terminate, modify or cancel any of the terms, conditions or
provisions of, any Material Contract or material Governmental Approval to which
any Group Company is a party or by which any Group Company or any of the
properties of any Group Company are bound, then prior to the Completion, the
Seller shall, and shall cause the Group Companies to, use best efforts to duly
and timely obtain such waivers, consents, approvals. The Purchaser shall
reasonably cooperate with the Seller to assist the Seller to obtain such
waivers, consents and approvals. Prior to the Completion, the Seller shall, and
shall cause the Group Companies to duly and timely give all notices required
under the relevant Material Contracts and Governmental Approvals in connection
with the Transaction.
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4.5. Replacement of Directors.
(a) At least fifteen days prior to the Completion, the Purchaser shall deliver a
notice ("Director List") to the Seller (i) specifying the candidates for
registered directors and/or statutory auditor(s) of the Group Companies the
Purchaser desires to nominate, and (ii) containing a list of the registered
directors or the statutory auditor(s) of the Group Companies the Purchaser
desires to have resign from the Group Companies. Upon receipt of the Director
List, the Seller shall procure that each of the registered directors listed in
the Director List resign from their respective positions, effective as of the
Completion Date, by executing the resignation letter in the form attached hereto
as Exhibit 4.5(a), which executed form shall be delivered to the Purchaser at
the Completion.
(b) The Seller shall, or shall cause the Group Companies to, convene a general
meeting of the unitholders and/or shareholders of the Group Companies on or
prior to the Completion to elect the candidates set forth in the Director List
as registered directors and/or statutory auditor(s) of the Group Companies,
conditional upon the Completion.
4.6. Purchaser Financing.
(a) The Purchaser shall take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to arrange and
obtain the Debt Financing and the Equity Financing on the terms and conditions
described in the Financing Commitments, including (i) maintaining in effect the
Financing Commitments, (ii) satisfying on a timely basis all conditions
applicable to the Purchaser obtaining the Debt Financing and the Equity
Financing, (iii) entering into definitive agreements with respect thereto on
terms and conditions described in or contemplated by the Financing Commitments
and (iv) consummating the Debt Financing and the Equity Financing at or prior to
the Completion.
(b) The Purchaser acknowledges and agrees that obtaining the Debt Financing or
the Equity Financing is not a condition to the Completion. For the avoidance of
doubt, if the Debt Financing or the Equity Financing, as relevant, has not been
obtained, the Purchaser shall continue to be obligated, until such time as this
Agreement is terminated in accordance with its terms and subject to the
fulfillment or waiver of the conditions set forth in Article V, to complete the
purchase of the Ownership Interest and the other transactions contemplated by
this Agreement on the terms contemplated by this Agreement.
4.7. Confidentiality; Public Announcements.
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(a) The Purchaser acknowledges that the information provided to it in connection
with this Agreement and the Transaction is subject to the terms of the Mutual
Non-Disclosure Agreement, dated July 17, 2019, by and between Net 1 UEPS
Technologies, Inc. and Stonebridge Capital Inc. (the "Non-Disclosure
Agreement"), the terms of which are incorporated herein to apply to the
Parties. In the event of a conflict or inconsistency between the terms of this
Agreement and the Non-Disclosure Agreement, the terms of this Agreement shall
govern. Effective upon, and only upon, the Completion, the obligations under
the Non-Disclosure Agreement shall terminate except with respect to provisions
regarding disclosure and use of confidential information not related to the
business of the Group Companies, which shall continue in full force and effect
in accordance with the terms of the Non-Disclosure Agreement.
(b) Neither Party shall make, or cause to be made, any press release or public
disclosure or announcement or otherwise communicate with any news media in
respect of this Agreement or the Transaction without the prior written consent
of the other Party unless such disclosure is otherwise required by any
applicable Law or other relevant requirements of a securities exchange, in which
case such Party shall consult with the other Party, to the extent reasonably
practicable, with respect to the text thereof prior to issuing such press
release or public disclosure.
4.8. Employee Matters.
(a) Without prejudice to Section 4.8(b), until the Completion, the Purchaser
shall not, and shall procure that its Affiliates and their respective agents,
representatives and advisors shall not, without the express prior consent of the
Seller, make any statement, or communicate in any way, whether directly or
indirectly and whether itself or via any agent, representative or advisor, with
any Employee Group, agent or any of their respective representatives, agents or
advisors, in each case, in relation to any labor matters, and shall inform the
Seller promptly of any communication received from any Employee Group, agent or
any of their respective agents, representatives or advisors.
(b) The Purchaser shall cause the Group Companies not to: (i) change the working
terms and conditions of the Employees other than directors to be less favorable
than those existing as of the date hereof and (ii) terminate the employment of,
implement any headcount reduction or otherwise implement manpower restructuring
with respect to the Employees, in each case, for a period of three (3) years
following the Completion Date.
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4.9. Director and Officer Liability and Indemnification. Notwithstanding
anything to the contrary and without prejudice to any indemnity to which all
present and former directors and statutory auditors of the Group Companies (the
"Covered Persons") may be entitled, from and after the Completion, the Purchaser
shall waive and release the Covered Persons from and against claims for Losses
arising in the future out of or pertaining to any action or failure to take
action by any such Covered Person in their capacity as director or statutory
auditory, as applicable, in connection with the business or operation of the
Group Companies prior to the date that their resignation becomes effective.
From and after the Completion, the Purchaser shall not, and shall, to the
fullest extent permitted by Law, cause the Group Companies and its and their
respective officers, directors and Affiliates to not, assert or file any claim
against any Covered Person for any act performed or omission made in his/her
capacity as a director or statutory auditor of the Group Companies in connection
with the business or operation of the Group Companies prior to his/her
resignation, except in cases where such claims arose out of fraud of the
relevant Covered Person.
4.10. Exclusive Dealings. The Seller and its Affiliates (including the Group
Companies) shall not, and shall cause their respective Representatives not to,
directly or indirectly, (i) solicit, initiate or encourage (including through
the furnishing of information) the submission of any inquiries, indications of
interest, proposals or offers from any Person other than the Purchaser and its
Representatives concerning the direct or indirect sale of equity securities or
any assets of, or any merger, recapitalization, tender or exchange offer, or
other business combination transaction or strategic relationship or similar
transaction involving any of the equity securities or assets of, any Group
Company (a "Competing Transaction"), (ii) participate in any discussions or
negotiations regarding, or enter into any agreements or understandings relating
to, a Competing Transaction, or (iii) otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage (including through the
furnishing of any information), any effort or attempt by any third party to do
or seek any of the foregoing.
4.11. Further Assurances. At any time or from time to time after the Completion,
each of the Parties shall, to the extent commercially reasonable, execute and
deliver such other documents and instruments, provide such materials and
information and take such other actions as may be necessary, proper or
advisable, to the extent permitted by Law, to fulfill its obligations under this
Agreement or to otherwise effect the transactions contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions Precedent to the Obligations of the Seller to Sell the
Ownership Interest. The obligation of the Seller to sell the Ownership Interest
at the Completion is subject to the satisfaction, on or prior to the Completion
Date, of each of the following conditions, any of which may be waived in writing
by the Seller:
(a) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, or promulgated by any
Governmental Authority of competent jurisdiction that prohibits the consummation
of the Transaction.
(b) Warranties. The warranties of the Purchaser in Section 3.3 shall be true
and correct in all material respects (except for those warranties which are
qualified as to materiality, in which case such warranties shall be true and
correct in all respects).
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(c) Covenants. The Purchaser shall have duly performed and complied with, in
all material respects, all agreements, covenants and conditions required by this
Agreement and the other Transaction Documents to be performed or complied with
by it prior to or on the Completion Date.
(d) Transaction Documents. All of the Transaction Documents shall have been
duly executed by the parties thereto on or prior to the Completion Date.
(e) W&I Insurance Policy. The W&I Insurance Policy shall have been entered into
by and between the Purchaser and the W&I Insurance Company in accordance with
the terms and conditions set forth in Article VI of this Agreement.
5.2. Conditions Precedent to the Obligations of the Purchaser to Purchase
the Ownership Interest. The Purchaser's obligation to purchase the Ownership
Interest at the Completion from the Seller is subject to the satisfaction, on or
prior to the Completion Date, of the following conditions, any of which may be
waived in writing by the Purchaser:
(a) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, or promulgated by any
Governmental Authority of competent jurisdiction that prohibits the consummation
of the Transaction.
(b) Warranties. The warranties of the Seller in Sections 3.1 and 3.2 shall be
true and correct in all material respects (except for those warranties which are
qualified as to materiality, in which case such warranties shall be true and
correct in all respects).
(c) Covenants. The Seller shall have duly performed and complied with, in all
material respects, all agreements, covenants and conditions required by this
Agreement and the other Transaction Documents to be performed or complied with
by it prior to or on the Completion Date.
(d) Transaction Documents. All of the Transaction Documents shall have been
duly executed by the parties thereto on or prior to the Completion Date.
5.3. Frustration of Completion Conditions. The Purchaser may not rely on the
failure of any condition set forth in Section 5.2 to be satisfied if such
failure was primarily caused by the failure of the Purchaser to perform any of
its obligations under this Agreement. The Seller may not rely on the failure of
any condition set forth in Section 5.1 to be satisfied if such failure was
primarily caused by the failure of the Seller to perform any of its obligations
under this Agreement.
ARTICLE VI
INDEMNIFICATION
6.1. Indemnification.
(a) Subject to the limitations contained in this Agreement, the Purchaser agrees
to indemnify, defend and hold harmless the Seller, its Affiliates and their
respective shareholders, officers, directors, employees and agents
(collectively, the "Indemnified Seller Party") from and against (i) any and all
Losses that incurred as a result of any inaccuracy in or breach of any of the
warranties made by the Purchaser in Section 3.3 in this Agreement, and (ii) any
and all Losses that incurred as a result of any breach of, or failure by the
Purchaser to perform any of the Purchaser's covenants, agreements or other
obligations contained in this Agreement.
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(b) Subject to the limitations contained in this Agreement, including Sections
6.5 and 6.6, the Seller agrees to indemnify, defend and hold harmless the
Purchaser, its Affiliates and their respective shareholders, officers,
directors, employees and agents (collectively, the "Indemnified Purchaser
Party") from and against (i) any and all Losses that incurred as a result of any
inaccuracy in or breach of any of the warranties made by the Seller in Section
3.1 or 3.2 in this Agreement, and (ii) any and all Losses that incurred as a
result of any breach of, or failure by the Seller to perform any of the Seller's
covenants, agreements or other obligations contained in this Agreement.
6.2. Survival. The warranties of the Parties contained in Article III in
this Agreement and any claims based on breach or inaccuracy of the same shall
survive the Completion for a period of twenty-four (24) months from the
Completion Date (other than the Fundamental Warranties, which shall survive in
full force and effect until the date that is seven (7) years after the
Completion Date), provided that none of covenants, obligations and other
agreements contained in this Agreement shall survive the Completion Date other
than those which by their terms contemplate performance after the Completion
Date.
6.3. Limitations on Liability.
(a) No indemnification claim may be asserted against either Party unless written
notice of such claim is received by such Party (the "Indemnifying Party"),
describing in reasonable detail the facts and circumstances with respect to the
subject matter of such claim and, with respect to claims pursuant to Sections
6.1(a) and 6.1(b), on or prior to the end of the applicable survival period
stated in Section 6.2 from the Party seeking indemnification (each, an
"Indemnified Party").
(b) Except in case of fraud by the Seller, under no circumstances shall the
indemnification obligations of the Seller, in the aggregate, exceed US$1 in case
of any claim arising under Section 6.1(b)(i).
(c) Any Indemnified Party shall use its reasonable efforts to avoid or mitigate
any Losses which in the absence of mitigation might give rise to, or increase, a
liability in respect of any claim under this Agreement.
(d) In calculating the amount of any Losses payable to an Indemnified Party
hereunder, the amount of such Losses (i) shall not be duplicative of any other
Loss for which an indemnification claim has been actually paid, (ii) shall be
computed net of any amounts that such Indemnified Party is or may be entitled to
claim for (the "Third Party Indemnification Amount") under any other
indemnification agreements, understanding or similar arrangements other than
this Agreement with respect to such Losses, and (iii) shall be computed net of
any amounts that such Indemnified Party is or may be entitled to claim for under
any insurance policy with respect to such Losses. The Indemnified Party shall
use its best efforts to seek a remedy under such indemnification agreements,
understanding, insurance policy or other similar arrangements prior to seeking
indemnification from the Indemnifying Party. If the Indemnifying Party pays an
Indemnified Party for a claim and subsequently insurance proceeds or the Third
Party Indemnification Amount, as the case may be, in respect of such claim is
collected by such Indemnified Party, then such Indemnified Party promptly shall
remit to the Indemnifying Party the insurance proceeds or the Third Party
Indemnification Amount, as the case may be, up to the amount paid by the
Indemnifying Party to such Indemnified Party. In calculating the liability of
the Seller in respect of any claim, there shall be taken into account any net
quantifiable financial benefit to the Indemnified Purchaser Party as a result of
the matter giving rise to such claim, including the amount by which any Tax for
which the Indemnified Purchaser Party is accountable, liable to be assessed, is
actually reduced or extinguished (including by way of a credit applied to future
Taxes payable) as a result thereof. For the purpose of this Section 6.3(d),
recovery by, or financial benefit of, the Purchaser, the Group Companies or
their respective Affiliate shall be deemed to be a recovery by, or financial
benefit of, each of them.
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(e) Notwithstanding anything in this Agreement to the contrary, neither Party
shall be liable to the other Party for any consequential, indirect, special,
punitive or incidental damages; provided that the foregoing limitation shall not
relieve such Party from liability for damages to the extent such damages are
awarded to a third party in connection with a Third Party Claim..
(f) For purposes of this Article VI, the Seller shall not be liable for any
Losses based upon or arising out of (i) any inaccuracy or breach of any of the
warranties of the Seller contained in this Agreement if the Purchaser had
knowledge of such inaccuracy or breach prior to the Completion, (ii) any facts,
events, or occurrence fairly disclosed in the information or materials set forth
in, or that can be obtained through, the Seller Disclosure Schedules, the Data
Room or public searches, as the case may be, (iii) any voluntary act, omission,
transaction or arrangement by the Purchaser, (iv) matters to which the claims
relate is specifically provided for in the Group Companies Financial Statements,
(v) the passing of, or any change in, after the Completion Date, any Law or
accounting rules, or (vi) any change in the enforcement, implementation or
interpretation of the relevant Tax rules, policies, and rates.
(g) The disclosure of any item in the Seller Disclosure Schedules shall be
deemed a disclosure with respect to any warranties if the relevance of such item
to those warranties is reasonably apparent from the face of the Seller
Disclosure Schedules.
6.4. Claims for Indemnification.
(a) Third-Party Claims. All claims for indemnification made under this
Agreement resulting from, related to or arising out of a third-party claim
against an Indemnified Party (a "Third Party Claim") shall be made in accordance
with the following procedures. An Indemnified Party shall give prompt written
notification (not more than thirty (30) days after becoming aware of any Third
Party Claim) to the Indemnifying Party of the commencement of any action, suit
or proceeding relating to a Third-Party Claim for which indemnification may be
sought or, if earlier, upon the assertion of any such claim by a third party;
provided, that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party will relieve the Indemnifying Party from any obligation under
this Article VI except to the extent such delay actually and materially
prejudices the Indemnifying Party. Such notification shall include a
description in reasonable detail, to the extent known at the time, of the facts
constituting the basis for such Third-Party Claim, any material information
received by the Indemnified Party which is reasonably relevant to the applicable
Third Party Claim, and the amount of the Losses claimed. At any time after
delivery of such notification, the Indemnifying Party may, upon written notice
thereof to the Indemnified Party, assume control of the defense of such action,
suit, proceeding or claim, at the Indemnifying Party's expense. The Indemnified
Party shall take any actions reasonably necessary and in good faith to defend
such Third Party Claim prior to the time that it receives a notice from the
Indemnifying Party as contemplated by the foregoing sentence. The Indemnified
Party shall, and shall cause its Affiliates and its and their respective
shareholders, officers, directors, employees and agents to, cooperate reasonably
with the Indemnifying Party in such defense and make available to the
Indemnifying Party, at the Indemnifying Party's reasonable expense, all
witnesses, pertinent records, materials and information in the Indemnified
Party's possession or under the Indemnified Party's control relating thereto as
is reasonably requested by the Indemnifying Party. The Party not controlling
such defense may participate therein at its own expense. The Party controlling
such defense shall keep the other Party advised of the status of such action,
suit, proceeding or claim and the defense thereof and shall have the right to
settle such action, suit, proceeding or claim; provided, however, that (i) the
Indemnified Party shall not agree to any settlement of such action, suit,
proceeding or claim without the prior written consent of the Indemnifying Party,
and (ii) the Indemnifying Party shall not agree to any settlement of such
action, suit, proceeding or claim without the prior written consent of the
Indemnified Party, unless such settlement does not impose injunctive or
equitable relief on the Indemnified Party and includes a complete release of the
Indemnified Party without prejudice.
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(b) Procedure for Claims. In the event an Indemnified Party claims a right to
payment pursuant hereto with respect to any matter not involving a Third-Party
Claim (a "Direct Claim"), such Indemnified Party shall send written notice of
such claim to the appropriate Indemnifying Party (a "Notice of Claim"). Such
Notice of Claim shall specify in reasonable detail the legal basis for and the
underlying facts of such Direct Claim. For the avoidance of doubt, the Parties
agree and understand that Notice of Claim in respect of a breach of a warranty
must be sent by the Purchaser prior to the expiration of the relevant survival
period for such warranty under Section 6.2.
(c) Access to Information. In the event of an actual or potential claim, the
Purchaser shall procure that the Seller and its representatives are provided,
upon reasonable notice, with all such assistance, documentation, information and
access to premises and personnel of the Group Companies as they may reasonably
require to investigate, avoid, remedy, dispute, resist, appeal, compromise or
contest such claim and shall permit the Seller and its representatives to make
copies of such documentation and information to the extent relevant to the
claim.
6.5. W&I Insurance.
As of the date of this Agreement, the Purchaser shall have procured the W&I
insurance policy (the "W&I Insurance Policy") from the W&I Insurance Company on
terms disclosed to the Seller, which shall contain a waiver of the W&I Insurance
Company of its rights of subrogation, claims in contribution and rights acquired
by assignment against the Seller (except in case of fraud by the Seller). For
the avoidance of doubt, the Seller shall have no obligations towards any
premiums or payments to be made in connection with the obtainment and
maintenance of the W&I Insurance Policy. In the event of any conflict or other
inconsistency between the terms of this Section 6.5 and any other provisions of
this Agreement or any other contract, agreement or arrangement entered into by
either the Purchaser or the Seller in connection with the Transaction (including
the W&I Insurance Policy, as between the Parties), the terms of this Section 6.5
shall prevail. Notwithstanding anything to the contrary in this Agreement, the
Purchaser:
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(a) hereby warrants to the Seller that the executed copy of the W&I Insurance
Policy delivered by the Purchaser to the Seller on the date of this Agreement is
true, complete and up-to-date;
(b) acknowledges and agrees that, in reliance upon the W&I Insurance Policy,
neither the Purchaser nor any other Indemnified Purchaser Party shall be
entitled to make, and the Purchaser waives on behalf of itself and all the other
Indemnified Purchaser Parties any right such Person may have to make, any claim
against the Seller arising out of, and the Seller shall not be liable for, any
Losses suffered or incurred by any Indemnified Purchaser Party in connection
with any claims of any inaccuracy in or breach of any of the warranties made by
the Seller in Section 3.1 or Section 3.2 in this Agreement, except in case of
fraud by the Seller;
(c) acknowledges and agrees that, notwithstanding anything to the contrary in
this Agreement or any other contract, agreement or arrangement entered into by
either the Seller or the Purchaser in connection with the Transaction (including
the W&I Insurance Policy), the Seller provides Sections 3.1 and 3.2 in this
Agreement and (to the extent relating to any inaccuracy in or breach of any
warranty set forth in Section 3.1 or Section 3.2) Section 6.1(b)(i) hereof to
the Purchaser solely for purposes of satisfying the condition set forth in
Section 5.2(c) in this Agreement and to enable the Purchaser to make claims
against the W&I Insurance Company under the W&I Insurance Policy for any
inaccuracy in or breach of any warranty set forth in Sections 3.1 and 3.2
hereof, and any and all claims for any inaccuracy in or breach of any warranty
set forth in Section 3.1 or Section 3.2 by any Indemnified Purchaser Party shall
be made exclusively against the W&I Insurance Company under the W&I Insurance
Policy and, as such, the Indemnified Purchaser Parties shall not make any claim
against the Seller as a result of any Loss, except in case of fraud by the
Seller;
(d) acknowledges that the Seller has entered into this Agreement and will
complete the Transaction in reliance on the Purchaser having obtained the W&I
Insurance Policy and the provisions of this Section 6.5 and Section 6.6;
(e) agrees that it will not be entitled to make, and will not make, and waives
and releases any right it may have to make, any claims for any inaccuracy in or
breach of any of the warranties made by the Seller in Section 3.1 or Section 3.2
in this Agreement against the Seller, except in case of fraud by the Seller; and
(f) agrees that the provisions of this Section 6.5 will still apply
notwithstanding that the Purchaser is or may be unable to pursue or obtain any
remedy under the W&I Insurance Policy, whether due to policy validity (including
if the W&I Insurance Policy is invalid due to the insolvency, breach or default
of any Person), creditworthiness or otherwise.
302-838-2451. W&I Insurance Covenants. The Purchaser covenants with the Seller that
it shall:
(a) not (without the prior written consent of the Seller) agree to any
amendment, variation or waiver of the W&I Insurance Policy (or do anything which
has a similar effect);
(b) not (without the prior written consent of the Seller) novate, or otherwise
assign its rights under, the W&I Insurance Policy (or do anything which has
similar effect), save that the Purchaser may assign its rights under the W&I
Insurance Policy by way of security to the bank(s) providing debt financing for
the acquisition of the Ownership Interest;
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(c) not (without the prior written consent of the Seller) vitiate, terminate,
cancel or rescind the W&I Insurance Policy or take any steps to bring about or
result in the W&I Insurance Policy to be vitiated, terminated, cancelled or
rescinded or do anything which causes any right under the W&I Insurance Policy
not to have full force and effect;
(d) comply with the terms of any deliverables and payment obligations set out in
the W&I Insurance Policy; and
(e) include in the terms of the W&I Insurance Policy an express waiver and
release of all of the W&I Insurance Company's rights of subrogation,
contribution and rights acquired by assignment (or any similar or equivalent
rights) against the Seller or any of its Affiliates and any Person for whom they
are vicariously or contractually liable (such as their directors and officers)
(together, the "Released Parties") (save in relation to fraud by the Seller, in
which case the W&I Insurance Company shall be entitled to exercise its rights of
subrogation, contribution and rights acquired by assignment (or any similar or
equivalent rights) against the Seller), and an acknowledgment by the W&I
Insurance Company that each of the Released Parties is entitled to directly
enforce such waiver and release (and in respect of the waivers and releases the
Purchaser contracts with the W&I Insurance Company in its own right and on trust
for and for the benefit of each of the Released Parties).
Notwithstanding anything to the contrary herein, if there is any conflict or
inconsistency between (i) Sections 6.5 and 6.6 and (ii) any other provisions of
this Agreement, Sections 6.5 and 6.6 shall prevail.
6.7. Sole and Exclusive Remedy. From and after the Completion, the rights
provided to the Parties under Article VI shall be the sole and exclusive
remedies of the Indemnified Party with respect to claims under this Agreement or
otherwise relating to the Transaction, provided, that notwithstanding anything
to the contrary herein, nothing in this Section 6.7 shall limit the rights or
remedies of any Indemnified Party (i) in case of fraud by the Indemnifying
Party, or (ii) in seeking or obtaining specific performance and other equitable
relief in accordance with the terms of this Agreement.
6.8. Adjustment to Purchase Price. All indemnification payments or
reimbursements made by the Seller pursuant to this Article VI will be treated as
an adjustment to the Purchase Price unless otherwise required by applicable Law.
ARTICLE VII
TERMINATION
7.1. Termination. This Agreement may be terminated at any time prior to
the Completion:
(a) by mutual written agreement of the Seller and the Purchaser;
(b) by either the Seller or the Purchaser, in the event that the Completion has
not occurred by the Long-Stop Date by reason of failure of any conditions set
forth in Section 5.1 (in the case of termination by the Seller) or Section 5.2
(in the case of termination by the Purchaser); provided, that a Party to which
failure of any conditions applicable to it under Article V is attributable may
not terminate this Agreement pursuant to this Section 7.1(b);
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(c) by either the Seller or the Purchaser with a written notice to the other
Party if the other Party has materially breached any of its warranties,
covenants or obligations under this Agreement (other than a material breach
falling under Sections 7.1(d) and 7.1(e), as applicable) which breach would
result in the failure to satisfy any of the conditions set forth in Section 5.1
or 5.2, and has failed to cure such breach within twenty (20) days following
such written notice;
(d) by the Seller if all of the conditions precedent to the obligations of the
Purchaser under Section 5.2 have been satisfied or waived and the Purchaser has
failed to consummate the Completion in accordance with Section 2.3; or
(e) by the Purchaser if all of the conditions precedent to the obligations of
the Seller in Section 5.1 have been satisfied or waived and the Seller have
failed to consummate the Completion in accordance with Section 2.5.
7.2. Effect of Termination.
(a) In the event of termination of this Agreement pursuant to Section 7.1,
subject to Section 7.2(b), this Agreement shall become void and have no effect,
without any liability or obligation on the part of the Purchaser or the Seller,
other than the provisions of Section 4.7, Article VI, Article VII and Article
VIII, which shall remain in full force and effect and survive any termination of
this Agreement; provided, however, nothing herein shall relieve any Party from
any liability for any pre-termination breach by such Party of its covenants or
agreements set forth in this Agreement.
(b) Notwithstanding anything contained herein to the contrary, the Parties
acknowledge and agree:
(i) in the event that this Agreement is terminated by the Seller in accordance
with Section 7.1(d), the Seller shall be entitled to forfeit the Contract
Deposit including any interest accrued thereon and retain the full amount as
monetary penalty (wiyakbeol in Korean) that would compensate the Seller for the
expenses incurred and opportunities foregone as a result of the failure of the
consummation of the Transaction (the "Termination Fee");
(ii) in the event that this Agreement is terminated for any other reason either
by the Seller or the Purchaser, the Seller shall return the Contract Deposit,
including any interest accrued thereon, to the Purchaser within ten (10)
Business Days following such termination and the Purchaser shall not have any
obligation to pay the Termination Fee or any other amount as a monetary penalty;
and
(iii) in connection with the foregoing, the Parties hereby acknowledge and agree
that (x) the agreements contained in this Section 7.2 are an integral part of
this Agreement, and that without these agreements, the Seller and the Purchaser
would not have entered into this Agreement, and (y) the Termination Fee is a
fair and reasonable compensation for the Losses suffered or incurred by the
Seller by reason of any termination of this Agreement under circumstances in
which the Termination Fee is payable pursuant to this Section 7.2.
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ARTICLE VIII
MISCELLANEOUS
8.1. Entire Agreement. This Agreement constitutes the entire agreement of
the Parties in respect of the subject matter hereof and supersedes any prior
expressions of intent or understandings with respect thereto.
8.2. Assignment. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns. Neither Party may assign
any of its rights or delegate any of its obligations under this Agreement
without obtaining the prior written consent of the other Party. No assignment
shall relieve the assigning party of any of its obligations hereunder.
8.3. Tax and Expenses. Except as otherwise expressly provided in this
Agreement, each Party shall be responsible for and bear its own taxes, fees,
costs and expenses imposed, levied, assessed or incurred on or by the Party for
or in connection with the negotiation, preparation, execution and performance of
this Agreement and the Transaction, including fees and disbursements of legal
counsel; provided that, for the avoidance of doubt, the W&I Insurance Premium
and any other costs and expenses associated with obtaining the W&I Insurance
Policy shall be solely borne by the Purchaser.
8.4. No Right of Off-set/Set-off. Except as otherwise set forth herein,
neither Party shall have any right to off-set, deduct or set-off any payments
due pursuant to this Agreement against any other payment to be made pursuant to
this Agreement or otherwise.
8.5. Governing Law and Dispute Resolution. This Agreement and the rights
and obligations of the Parties hereunder shall be governed by, construed and
enforceable in accordance with the Laws of Korea, without giving effect to the
conflict of laws provisions thereof. In the event of any dispute or claim
arising out of or in connection with or relating to this Agreement or the breach
hereof, the Parties agree to negotiate in good faith to resolve any dispute
between them. If the negotiations do not resolve the dispute, claim or breach
to the reasonable satisfaction of the Parties within thirty (30) days, then such
dispute, claim or breach shall be finally settled by arbitration in accordance
with the Rules of Arbitration of the International Chamber of Commerce. Any
such arbitration shall be conducted in English in Singapore. For the purpose of
such arbitration, there shall be three (3) arbitrators appointed, and each of
the claimant and the respondent shall appoint one (1) arbitrator and each such
appointed arbitrator shall agree upon and appoint the third arbitrator. If the
two appointed arbitrators are unable to agree on a third arbitrator, the third
arbitrator shall be appointed in accordance with the Rules of Arbitration of the
International Chamber of Commerce. No Party shall disclose or permit the
disclosure of any information about the evidence adduced or the documents
produced by another Party in the arbitration proceedings or about the existence,
contents or results of the proceeding except as may be required by a
Governmental Authority or as required in an action in aid of arbitration or for
enforcement of an arbitral award.
8.6. Amendments and Waivers; Remedies Cumulative. Except as otherwise set
forth herein, this Agreement may be amended or modified only by an instrument in
writing duly executed by the Parties. The failure or delay of either Party to
require performance by the other Party of any provision of this Agreement shall
not affect its right to require performance of such provision nor shall any
single or partial exercise of the same preclude any further exercise thereof or
the exercise of any other right, power or remedy.
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8.7. Severability. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable Law, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. In such event, the Parties shall
use their respective best efforts to negotiate in good faith, a substitute,
valid and enforceable provision or agreement which most nearly affects the
Parties' intent in entering into this Agreement.
8.8. Notices. Each notice, demand or other communication to be given or
made under this Agreement shall be in writing and delivered by hand or
internationally recognized overnight air courier or transmitted by facsimile or
email to the relevant Party at its address, fax number or email address set out
below (or such other address, fax number or email address as the addressee has
by seven (7) Business Days' prior written notice specified to the other Party):
If to the Purchaser:
Stonebridge Capital Inc.
11F KFAS B/D, 211, Teheran-ro, Gangnam-gu, Seoul 06141, Stonebridge Capital Inc.
Attention: Hankook Park, Director
Fax: (+xx)x-xxx-xxx
Email: xxx
with a copy to (which shall not constitute notice):
Shin & Kim LLC
23F, D-Tower (D2), 17 Jongno 3-gil, Jongro-gu, Seoul 03155, Korea
Attention: Byung Tae Kim
Fax: (+xx)x-xxx-xxx
Email: xxx
If to the Seller:
Net1 UEPS Technologies, Inc.
Mailing Address: P.O. Box 2424, Parklands, 2121, Johannesburg, South Africa
Attention: Herman Kotze
Fax: (xx) xx xxx xxx
Email: [email protected]
with a copy to (which shall not constitute notice):
Yulchon LLC
Parnas Tower 38Fl., 521 Teheran-ro, Gangnam-gu, Seoul 06164, Korea
Attention: Jin Kook Lee
Fax: (+xx) x-xxx-xxxx
Email: xxx
Any notice, demand or other communication so addressed to the relevant Party
shall be deemed to have been duly given (a) if delivered by hand or
internationally recognized overnight air courier, when actually delivered to the
relevant address, and (b) if transmitted by fax or email, on the date of
confirmation of receipt, provided that if such day is not a working day in the
place to which it is sent, such notice, demand or other communication shall be
deemed delivered on the next following working day at such place.
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8.9. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to constitute an original but all of which shall
constitute one and the same instrument. Delivery of an executed counterpart of
this Agreement by telefacsimile or other electronic method of transmission shall
be equally as effective as delivery of an original executed counterpart of this
Agreement.
8.10. No Third Party Beneficiary. This Agreement is solely for the benefit of
the Parties and permitted assigns, and this Agreement shall not otherwise be
deemed to confer upon or give to any other third party, including any creditor,
any remedy, claim, liability reimbursement, cause of action or other right.
8.11. Language. This Agreement shall be executed in the English language.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized representative as of the date first above written.
THE SELLER
NET 1 Applied Technologies Netherlands B.V.
By: Herman G. Kotzé
Name: Herman G. Kotzé
Title: Director
[Signature Page]
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PURCHASER
PayletterHoldings LLC.
By: /s/ Billy Sungwoo Lee__
Name: Billy Sungwoo Lee
Title: Representative Director
[Signature Page]
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SCHEDULE A
CONDUCT OF BUSINESS PRIOR TO COMPLETION
The Seller shall procure that, between the time of entry into this Agreement and
the Completion, no Group Company does any of the following things without the
prior written consent of the Purchaser, such consent not to be unreasonably
withheld or delayed, provided that if the Seller does not receive any response
within five (5) Business Days, the Purchaser shall be deemed to have given
consent to such action:
1. make any substantial change in the nature or organisation of its business or
discontinue or cease to operate all or a material part of its business;
2. undertake any recapitalization, restructuring, reorganization, liquidation of
any Group Company;
3. transfer all or any material part of its business or assets to any other
Person;
4. borrow from financial institutions, issue any debt securities or otherwise
incur any indebtedness which would result in the increase of the outstanding
amount of such indebtedness of any Group Company as of the date hereof by more
than KRW 1,200,000,000;
5. acquire or dispose of any securities, interests in any entity, assets,
business or undertakings having an aggregate value in excess of KRW
1,200,000,000, in each case other than in the Ordinary Course of Business;
6. make any capital expenditure in excess of KRW 1,200,000,000; individually or
in the aggregate, or except for the capital expenditures disclosed by or on
behalf of the Seller to the Purchaser prior to the date hereof;
7. (i) merge or consolidate with or into any other Person, (ii) establish joint
ventures, partnerships or subsidiaries, whether or not wholly owned, or (iii)
enter into any proposed transaction or series of related transactions involving
a change of control or any liquidation, dissolution or winding-up of any Group
Company;
8. make or provide any loan or enter into any finance agreement other than
credit extended or received in the Ordinary Course of Business;
9. repay any loan except for any repayment or setoff by a Group Company to
another Group Company or in accordance with the terms of any written agreement
executed prior to the date of this Agreement or in the Ordinary Course of
Business, provided that for the avoidance of doubt, the repayment of any amounts
due under any revolving credit facility shall be considered in the Ordinary
Course of Business;
10. create any Encumbrance over any of its assets or undertaking other than (i)
in the Ordinary Course of Business or (ii) as required under any existing
finance documents;
11. enter into any guarantee, indemnity or similar undertaking, other than in
the Ordinary Course of Business;
[Schedule A]
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12. create, allot, issue, acquire, repay, reclassify, redeem, reduce or
repurchase any share capital of any Group Company or any options, warrants or
other securities that are convertible into, or exercisable or exchangeable for,
such shares or do any act which has the effect of diluting or reducing the
effective direct or indirect Equity Interest of the Seller in the Company or the
Company in KSNET;
13. split, combine, subdivide, reclassify or redeem, or purchase or otherwise
acquire, any outstanding securities of any Group Company, or undertake a capital
reduction of any Group Company;
14. declare, make or pay any dividend or other distribution to the Seller or its
Affiliates (other than a Group Company);
15. (i) grant or announce any increase in wages, salaries, compensation, bonuses
or incentives payable to any Employee, (ii) establish or increase or promise to
increase any benefits under any employee benefit plan, (iii) terminate any
director, officer or employee, (iv) hire or make an offer to hire any new
employee or independent contractor with annual compensation in excess of KRW
100,000,000); (v) enter into any, adopt, amend or terminate any employment,
change in control, severance or similar agreements with any Employee or
independent contractor, (vi) accelerate the time of payment or vesting of, or
lapsing of restrictions with respect to, or fund or otherwise secure the payment
of, any compensation or benefits under any employee benefit plan, in each except
(A) as may be required under applicable Law, (B) pursuant to the employee
benefit plans or collective bargaining agreements of the Group Companies in
effect on the date hereof, (C) in the ordinary course of business, (D) payment
of any accrued or earned but unpaid compensation, or (E) pursuant to employment,
retention or similar type of Contracts in effect as of the date hereof;
16. enter into or recognize any labor union or enter into or amend any
collective bargaining agreement or any other agreement with the trade union,
works council or other representative group of the Employees;
17. enter into, amend, modify, amend or terminate any Material Contract, save
for (i) any new lease agreements to the extent materially consistent with
economic terms set forth therein and (ii) any replacement or renewed lease
agreements following the expiry of any existing lease agreement to the extent
materially consistent with the pricing terms set forth therein;
18. other than in the Ordinary Course of Business, enter into any agreement or
transaction with a value in excess of KRW 1,200,000,000 between any Group
Company, on the one hand, and any Seller or any of its Affiliates, on the other
hand. For the avoidance of doubt, any such agreement or transaction not
exceeding such monetary thresholds shall be on arms' length terms;
19. sell, transfer, grant any security interest in or otherwise encumber or
dispose of any Group Company's Business Intellectual Property to any other
Person or abandon, allow to lapse, disclaim or dedicate to the public or fail to
make any filing, pay any fee or take any other action necessary to prosecute and
maintain in full force and effect any Group Company's Intellectual Property;
[Schedule A]
--------------------------------------------------------------------------------
20. amend or alter the articles of incorporation or other constitutional
documents of any Group Company;
21. appoint, remove or change the independent auditor or independent public
accountants of any Group Company;
22. make any change to the accounting principles, procedures, practices or
policies by reference to which its accounts are drawn up (other than as required
in order to comply with any changes to the relevant accounting standards);
23. commence, dismiss or settle any Action the claim value of which is KRW
1,200,000,000 or more or with any Governmental Authority;
24. fail to keep in force insurance policies or replacement or revised
provisions providing insurance coverage with respect to the assets, operations
and activities of the Group Companies as are currently in effect;
25. prepare or file any Tax Return inconsistent with past practice, adopt any
method on any such Tax Return that is inconsistent with methods used in prior
periods, make any Tax election, amend any Tax Return, enter into any tax
allocation agreement, tax sharing agreement, tax indemnity agreement or a
similar Contract, settle or compromise any Tax contest, enter into any closing
agreement or similar agreement relating to Taxes, otherwise settle any dispute
relating to Taxes, or request any ruling or similar guidance with respect to
Taxes;
26. change its residence for Tax purposes; or
27. agree to do any of the foregoing, whether such agreement takes effect on or
at any time after the date of this Agreement.
[Schedule A]
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SCHEDULE B
SELLER DISCLOSURE SCHEDULES
[Schedule B]
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EXHIBIT 2.2(C)
FORM OF PLEDGE AGREEMENT
PLEDGE AGREEMENT
This Pledge Agreement (this "Pledge Agreement") is entered into as of [•], 2020
(the "Effective Date") by and between NET 1 Applied Technologies Netherlands
B.V. ("Pledgor"), a company established and existing under the laws of the
Netherlands with its registered office at Strawinkylaan 3105, 1077ZX, Amsterdam,
Netherlands, and PayletterHoldings LLC. ("Pledgee"), a company incorporated and
existing under the laws of Korea with its registered office at 223, Yeoksam-ro,
Gangnam-gu, Seoul, 06224, Korea. Pledgor and Pledgee shall be individually
referred to as a "Party" and collectively as the "Parties".
RECITALS:
WHEREAS, Pledgor and Pledgee entered into that certain Purchase Agreement (the
"PA") dated as of January 23, 2020, pursuant to which Pledgor agreed to sell to
Pledgee, and Pledgee agreed to purchase from Pledgor, the Ownership Interest.
Capitalized terms used herein shall have the same meanings defined in the PA
unless otherwise defined herein; and
WHEREAS, immediately following the payment of the Contract Deposit in accordance
with Section 2.2(b) of the PA into the bank account (the "Bank Account") held in
the name of Pledgor at [•] Branch of KEB Hana Bank (the "Bank"), details of
which shall be as set forth on Annex A, in order to secure the obligation of
Pledgor to return the Contract Deposit (and interest accrued thereon) upon the
occurrence of an event requiring such return pursuant to Section 7.2(b)(ii) of
the PA (the "Secured Obligation"), Pledgor desires to establish a first priority
kun-pledge in favor of Pledgee over the Bank Account, in accordance with Section
2.2(c) of the PA and subject to the terms and conditions hereof.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1. ESTABLISHMENT OF PLEDGE
1.1 Pledgor, as the legal and beneficial owner of the Bank Account, hereby
establishes a first priority kun-pledge ("il-sun-wi-kun-jil-kwon") in favor of
Pledgee, on its right to claim the Contract Deposit in the Bank Account and
interest accrued thereon from the Bank (the "Deposit Claim Right", and such
pledge being the "Pledge"), and Pledgee hereby accepts such Pledge, as
collateral security for the due and punctual payment, performance and discharge
of the Secured Obligation.
1.2 Pledgor shall, on the Effective Date and immediately following its receipt
of the Contract Deposit from Pledgee, (a) send the Notification and Acceptance
of Establishment of Pledge in the form and substance set forth in Attachment 1.2
to the Bank, (b) procure from the Bank an acceptance of the Notification and
Acceptance of Establishment of Pledge with a fixed date seal affixed thereon,
and (c) deliver an original thereof to Pledgee.
[Exhibit]
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ARTICLE 2. OBLIGATIONS OF PLEDGOR
2.1 Pledgor shall not assign, transfer, sell, further pledge or otherwise
encumber the Deposit Claim Right.
2.2 Pledgor shall procure that (a) the Deposit Claim Right is not attached or
provisionally attached, and (b) the Bank does not have any right to set off any
of its claims against Pledgor against the Deposit Claim Right.
ARTICLE 3. SCOPE OF PLEDGE
The scope of the Pledge shall extend to the balance of the Bank Account,
including the Contract Deposit and any interest accrued thereon.
ARTICLE 4. ENFORCEMENT OF PLEDGE
Upon a failure by Pledgor to perform the Secured Obligation in full, Pledgee
shall become forthwith entitled, as and when it sees fit, to put into force and
to exercise all or any of the power possessed by Pledgee as the pledgee of the
Deposit Claim Right in or towards the satisfaction of the Secured Obligation,
including the right and power to demand, sue for, collect or receive, in the
name of Pledgee, any money or property at any time payable or receivable on
account of or in exchange for any of the Deposit Claim Right, but shall be under
no obligation to do so.
ARTICLE 5. TERMINATION OF PLEDGE
5.1 The Pledge shall be deemed automatically terminated concurrently upon the
Completion pursuant to Section 2.5 of the PA, in which case the Contract
Deposit, including any interest accrued thereon, shall be retained by Pledgor.
5.2 In the event the PA is terminated and, as a result of such termination, the
Contract Deposit, including any interest accrued thereon, is forfeited for the
benefit of, and retained by, the Seller in accordance with Section 7.2(b)(i) of
the PA, the Pledge shall be deemed automatically terminated at the time of such
termination of the PA.
5.3 In the event the PA is terminated and Pledgor is obligated to return the
Contract Deposit, including any interest accrued thereon, in accordance with the
terms of the PA, the Pledge shall be automatically terminated simultaneously
with such termination of the PA, and the Parties shall take actions required or
necessary to return the Contract Deposit to Pledgee pursuant to the terms of the
PA as soon as practicable, but in no event later than five (5) Business Days
from the date of the termination of the Pledge.
5.4 If the Pledge is terminated pursuant to Section 5.1 or Section 5.2 hereof,
Pledgee shall immediately give a notice of termination and release to the Bank
in the form and substance set forth in Attachment 5.4 to the Bank and take such
other actions requested by the Pledgor to effectuate and perfect the release of
the Pledge including delivering to Pledgor documents necessary for the release
of the Pledge.
[Exhibit]
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ARTICLE 6. MISCELLANEOUS
The Parties hereby agree that the provisions of Sections 8.3 through 8.11 of the
PA shall apply to this Pledge Agreement, and are incorporated herein by
reference, mutatis mutandis.
[Signature page follows.]
[Exhibit]
--------------------------------------------------------------------------------
IN WITNESSETH WHEREOF, the Parties have caused this Pledge Agreement to be
executed by their respective duly authorized representatives as of date first
written above.
PLEDGOR:
NET 1 APPLIED TECHNOLOGIES NETHERLANDS B.V.
By:
_________________________
Name:
Title:
PLEDGEE:
PAYLETTERHOLDINGS LLC.
By:
_____________________________
Name:
Title:
[Exhibit]
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Annex A to Pledge Agreement
Details of the Bank Account
Bank / Branch
Deposit Type
Account Number
[•]
[•]
[•]
[Exhibit]
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Attachment 1.2 to Pledge Agreement
Notification and Acceptance of Establishment of Pledge
[Bank form added]
[exhibit10-66x001.jpg]
[Exhibit]
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[exhibit10-66x002.jpg]
[Exhibit]
--------------------------------------------------------------------------------
[exhibit10-66x003.jpg]
[Exhibit]
--------------------------------------------------------------------------------
[exhibit10-66x004.jpg]
[Exhibit]
--------------------------------------------------------------------------------
Attachment 5.4 to Pledge Agreement
Notification for Termination and Release of Pledge
[Exhibit]
--------------------------------------------------------------------------------
[Bank form added]
[exhibit10-66x005.jpg]
[Exhibit]
--------------------------------------------------------------------------------
[exhibit10-66x006.jpg]
[Exhibit]
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EXHIBIT 4.5(A)
FORM RESIGNATION LETTER
Date: ____________, 2020
[Name of Company]
[Address]
Dear Sir,
I hereby resign as a [Director/Statutory Auditor] of [Name of Company] (the
"Company"), effective as of [⬤] (the "Resignation Date"). I confirm that with
this resignation, all authority granted to or by me in relation to the Company
is hereby terminated as of the Resignation Date. I hereby undertake to do all
reasonable things necessary to effect this resignation.
In connection with my resignation, I hereby confirm that I have no claim against
the Company for any salary, wages, severance, unpaid vacation, unreimbursed
business expenses, claims for indemnification, debts, fees, benefits or loss of
office, or on any other account whatsoever, and I release the Company from, and
waive my rights in relation to, any and all claims I have or may have against
the Company.
This resignation letter has been voluntarily prepared, and will not be revoked,
and I will not claim the cancellation or nullification thereof.
Sincerely,
________________________
Name:
[Note: For a Korean citizen, affix personal registered seal and attach a
Certificate of Personal Registered Seal. For a foreigner, this document must be
properly executed pursuant to one of the following methods: (1) if executed in
the signer's home country, then by a duly registered public notary in such
country, (2) if executed outside the signer's home country (residing abroad in a
country other than Korea), then by legalization by either the consulate/embassy
of Korea or the consulate/embassy of the signer's home country located in such
country, or (3) if executed in Korea, then by a duly registered public notary in
Korea.]
[Exhibit]
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236 So. 2d 616 (1970)
Emile WEBER, Individually, etc.
v.
The FIDELITY AND CASUALTY COMPANY OF NEW YORK et al.
No. 8002.
Court of Appeal of Louisiana, First Circuit.
May 25, 1970.
Rehearing Denied June 30, 1970.
Henry D. Salassi, Jr., of Breazeale, Sachse & Wilson, Baton Rouge, for appellant.
John T. Caskey, Jr., Asst. Dist. Atty., Baton Rouge, for appellees.
*617 Before LANDRY, SARTAIN and ELLIS, JJ.
LANDRY, Judge.
Defendant William Cooper and Nephews, Incorporated, manufacturer of an arsenical product known as "Cooper's Cattle Dip", and its insurer, Fidelity and Casualty Insurance Company of New York, appeal from the judgment of the trial court awarding plaintiff Emile Weber damages for the loss of cattle and personal injuries to plaintiff's minor sons, Steve and Karl, allegedly resulting from the defective manufacture of the above named product. Kalmbach-Burkett Company, Inc., local distributor of the cattle dip, was also made defendant. An amendment to the original petition asserts the majority of both of plaintiff's sons. The trial court rejected plaintiffs' demands against Kalmbach-Burkett and plaintiffs have not appealed therefrom. We reverse the judgment rendered below and dismiss plaintiffs' demands.
It is undisputed that seven head of cattle belonging to plaintiff Emile Weber died on August 31-September 1, 1963, of arsenic poisoning after having been sprayed with a solution containing defendant's cattle dip. It likewise appears Steve and Karl Weber became dizzy, nauseous and felt faint as a result of being exposed to the solution while spraying animals composing a small herd of cattle being raised by Steve as a 4-H Club project.
The trial court found as a fact that the cattle dip, an admittedly dangerous product, was the cause of the animals' death and the illness experienced by the Weber youths. He also found that the product was properly labeled and gave sufficient warning of its dangerous propensities. The trial court likewise found that plaintiff Steve Weber, who mixed the solution and sprayed the animals, substantially complied with the label instructions governing the preparation and application of the dip. Although the lower court recognized the possibility that other factors could have caused or contributed to the loss and injury, he concluded circumstantial evidence offered by plaintiffs warranted the finding that the dip was negligently manufactured.
The record discloses that Steve Weber was approximately 17 years of age at the time of the incident in question. For some four or five years he had been engaged in raising cattle as part of a 4-H Club project. His endeavors had produced a herd of approximately 12 cattle, some of which had won honors in stock shows. On the afternoon of August 31, 1963, he decided to spray his cattle to rid them of flies, known as cattle grubs, which lay eggs on cattle. The eggs apparently produce worms which enter the bodies of cattle causing large holes to appear in the animal's back.
To accommodate his son Steve, the senior Weber maintained a charge account with Kalmback-Burkett, a distributor of livestock feed and supplies. It appears that Steve had virtually unlimited authority to purchase from this source such feed and supplies as his cattle project required. Approximately four to five months prior to the incident in question, young Weber placed a telephone order with the distributor for a cattle spray in anticipation of spraying his herd on some future occasion. He did not, however, specify either the type of spray desired or the number of cattle to be sprayed. The employees of the distributor filled the Order by depositing a five gallon can of Cooper's Cattle Dip on its loading dock where it was picked up by young Weber after the distributor had closed for the day. The container of dip was brought to the plaintiffs' ranch home and stored in a barn or similar facility somewhat removed from the family residence.
The evidence discloses beyond doubt that the afternoon on which the spraying occurred was an extremely hot day. Steve Weber, assisted by his younger brother, Karl, on foot rounded up the cattle from a pasture measuring approximately 10 acres *618 in area. The animals were thusly herded into a pen near a shed or barn. They were then led singly by a rope halter from the pen to a shed where they were tied to a post and sprayed one at a time. After spraying, they were let out to pasture. Each animal was sprayed over its entire body, including its head. After the seventh or eighth animal was treated, signs of distress began to appear in that the sprayed animals staggered, fell and went into convulsions. The spraying operation was ceased immediately. The Senior Weber was summoned and in turn he enlisted the aid of a veterinarian. When the boys complained of dizziness, nausea and feeling faint, Mr. Weber immediately took them to a physician. The veterinarian worked the remainder of the afternoon and through the night attempting, without success, to save the animals that had been sprayed.
The container of Cooper's Cattle Dip displayed a large yellow label measuring approximately 14 by 7 inches. Detailed instructions for its use were printed in black thereon as follows:
"Directions for Use
For all Official Dippings in interstate movement of liverstock, add one gallon of Dip to every 127 gallons of water. For ranch use and other than official dipping, a dilution of one gallon of Cooper's Cattle Dip to 155 gallons of water will be found very effective. Always pour dip straight into the water and mix thoroughly with a plunger. There should be no previous mixing.
The stirring should be very thoroughly donethis is importantCooper's Cattle Dip dissolves readily but to be sure it is thoroughly mixed, proper attention must be given to this first stirring. No intermediate stirring is necessary, as no sediment forms in the mixed wash. Wash out cans to ensure the entire contents being used. In mixing the solution don't guess at the quantities of either water or Dip.
It is important that the Dip and water be accurately measured and the proper strength always maintained. This can be done with a Cooper's Cattle Dip Testing Outfit.
If mixed dip has stood several months, it should not be usedclean out dipping vat and start with fresh dip. Old mixed dip oxidizes in the vat and is stronger than the Testing Outfit indicates. This may cause burning.
Cooper's Cattle Dip is effective when applied as a sprayhowever, spraying should always be carefully donenever spray cattle bunched in a pentreat each animal individually in a chute.
Never rub dip on to skinthis is dangerous.
It is very necessary to rest and water cattle before dipping or spraying. Cattle should be rested in a shady place following dipping or spraying and never driven immediately after treatment. Cooper's Cattle Dip is a very reliable product and will give excellent results, but if cattle are heated or tired there is liability of burning. Dip or spray early in the day to assure cattle drying thoroughly before nightfallthis is especially important on cloudy or muggy days. Carelessness in this respect may result in serious loss.
Repeated Dipping or SprayingIf a second dipping or spraying is carried on in the interstate movement of live stock, an interval of not less than seven days after the first should be allowed."
At the bottom of the label appeared a red skull and crossbones on either side of which were the words "Caution Poison." Below this warning, the following admonition appeared in red:
"Cooper's Cattle Dip is a poisonous preparation and must be used in accordance with directions. Never increase the strength. Cooper's Cattle Dip will fulfill claims made for it at the strength designated.
*619 * * * * * *
CAUTION-Keep away from children, pets and food stuffs. Avoid excessive skin contact and wash off thoroughly after exposure. If on clothing remove and wash. Avoid inhalation and spray mist. Skin absorption or swallowing may be fatal to livestock. Rinse empty containers several times with water. Perforate or break, and bury containers, never re-use."
Steve Weber testified in essence that he read carefully the printed instructions on the can of dip after which he prepared the solution by adding one ordinary household cup of the dip to a 20 gallon garbage can which he had previously filled with water. Then with the aid of a stick he stirred the mixture vigorously in one direction and then reversed direction and stirred to be sure the dip and water were thoroughly mixed. Using a gasoline powered pesticide sprayer, he thoroughly sprayed each animal all over. He explained that the sprayer was equipped with one hose that was inserted into the solution of spray and a second hose containing a nozzle by which the spray could be adjusted. He also stated that both the garbage can and sprayer were clean before the operation commenced. In a pre-trial deposition, he stated that he poured the cup of dip into the garbage can and then filled the container with water. The only knowledge he had of the technique of dipping or spraying cattle was obtained from 4-H Club lectures and his own occasional reading of pamphlets on the subject. He conceded his past experience in spraying cattle consisted solely of his using a hand sprayer to spray his show animals on a few occasions. In these instances, he used a brand name product which we understand to be an all purpose cattle spray. He had never previously used either Cooper's Cattle Dip or a power sprayer to treat a relatively large number of livestock at one time. On the occasion in question, he never sought nor obtained any information regarding the use of Cooper's Cattle Dip or the employment of a power sprayer in its application to cattle.
Mr. Weber's testimony is substantially that when summoned to the scene, he found the cattle staggering or lying down in convulsions. He examined the can containing the concentrated dip and observed that so little was missing, it was difficult to tell whether any had been used. He also examined the garbage can in which the solution was mixed and found only two or three inches of mixture left in the bottom of the can. He summoned a veterinarian to attend to the animals. When his sons complained of headaches and nausea, he immediately sought medical advice. Fearful of the arsenic in the compound, a day or two following the incident, he caused the remainder of the cattle dip, the garbage pail, the cup used for measuring, the stick with which the mixture was stirred and the carcasses of the animals to be buried. A freeway, having since been erected over the site, neither the dip nor the carcasses of the animals were available for further examination.
Dr. M. C. Helouin, veterinarian, was summoned to the Weber home approximately one and one-half hours after the spraying. On arrival, he found the cattle in convulsions. He was certain they died of arsenic poisoning. His night long ministrations proved futile as all affected cattle died. He stated that although Cooper's Cattle Dip was widely used, he never personally used the product because it was dangerous. He always used and prescribed other products he considered safer. He conceded he did not check the spraying equipment to determine whether it had any connection with death of the cattle.
Dr. Paul Christofferson, Veterinary Director of the dip manufacturer, testified he is in charge of research, development and quality control of the product. He explained that the basic market for the dip is the Federal government and state governments. Batches of the dip are made only upon order from the Federal government. He explained that each batch is tested and also subject to analysis by representatives of the government. After the government *620 order is filled, the remainder is sold to states or placed on the market. He noted that it was customary to keep company records for three years and that no records were available regarding tests run on batches of dip made in 1963. He also noted that one cup of dip to 19 or 20 gallons of water would constitute a ratio of 1 part dip to 200 or 230 parts of water which would produce a solution so weak, it probably would not kill cattle ticks. Dr. Christofferson also explained that adding the dip to the water is vital because if water is added to the dip, the dip will remain at the bottom of the container in concentrated form. He likewise observed it is important that the cattle be well rested and watered before dipping or spraying. He explained that if the cattle are thirsty, they are apt to drink the dip or spray. If hot they absorb more of the arsenic through the skin.
Dr. C. M. Heflin, veterinarian, testified he had used the Cooper Dip for approximately 40 years without adverse results. In his opinion, a cup, consisting of six to eight ounces of the concentrate, in 19 or 20 gallons of water would not kill cattle. It was his further opinion that it would take approximately ten times the ordinary concentration of dip to prove fatal to cattle within an hour or so after application.
Plaintiffs, relying upon Arnold v. United States Rubber Company, La.App., 203 So. 2d 764, maintain defendant's liability is predicated on the rule that the manufacturer of a product dangerous to a user is liable to anyone who, without fault on his part, sustains injury because of a defect in design or manufacture of the product. This is unquestionably the law of this state. See also, Meche v. Farmers Drier & Storage Company, La.App., 193 So. 2d 807. In cases involving the sale of adulterated or impure food designed for human consumption, absolute liability is imposed upon the manufacturer or vendor. McCauley v. Manda Brothers Provisions Company, La.App., 202 So. 2d 492. In instances not involving the sale of food for human consumption, the liability of the manufacturer is not absolute. In such cases, the plaintiff alleging manufacture or sale of a dangerous product bears the burden of proving the alleged defectiveness thereof. Arnold v. United States Rubber Company, above; Evans v. Travelers Insurance Company, La.App., 212 So. 2d 506, and cases cited therein.
In the case at hand plaintiffs have offered no evidence whatsoever tending to establish the dip in question was negligently manufactured. That its use killed the cattle and caused plaintiffs to become ill does not per se, under the circumstances of this case, prove the product was improperly manufactured.
The expert evidence discloses beyond doubt that even when properly manufactured, the product is extremely dangerous to both humans and animals. It also appears the propensities of the product are such that one expert witness declined to use it because of the danger involved. Another expert suggests that use of the product according to directions of the manufacturer renders it relatively safe to handle. This conclusion appears substantiated by the record which establishes that the product has in fact been in general use for many years. A reasonable assumption from the evidence is that it is a product which should be used with utmost caution and not by persons inexperienced in its use and unaware of its properties. The very nature of the product requires that the manufacturer fully and completely inform and alert users to the necessity of strict compliance with directions for its safe usage. We find that the manufacturer has discharged this burden in this instance. The label on defendant's container expressly cautions the prospective user as to the dangerous qualities of the content; it prescribed a certain ratio of concentrate to water and warns the user not to guess at or estimate either the amount of water or dip. Express instructions are given as to the method of stirring. In addition, the instructions *621 expressly admonish that cattle be not dipped or sprayed unless rested and watered and afterward rested in a shady place. It warns of the probability of burning if cattle are dipped or sprayed with the solution and for that reason recommends that cattle be sprayed or dipped early in the day to assure thorough drying before nightfall. These latter admonitions are immediately followed by the statement that carelessness in their observation may lead to serious loss.
We disagree with the finding of the trial court that young Weber substantially complied with the manufacturer's instructions for the safe use of the product. The evidence establishes beyond doubt that the day in question was extremely hot. While the cattle were not driven in the sense they were herded a long distance, it is shown that they were brought in from a ten acre pasture where they were grazing. They were driven to a pen and the spraying began immediately. It does not appear that they were watered prior to the spraying operation. The spraying was commenced on a hot afternoon despite directions to the contrary. The ratio of concentrate to dip was not measured precisely as the directions suggested. There appears some doubt as to whether the dip was added to the water or vice versa.
Since the record establishes that the animals died of arsenic poisoning and plaintiff has offered no proof whatsoever that defendant's product was defective, only two conclusions appear plausible. Either Steve Weber mixed the concentrate stronger than he recalled or his carelessness in not following defendant's express instructions resulted in the "serious loss" of which defendant's label expressly warned. Because the cattle became distressed within such a short time following their spraying, we are inclined to the view that notwithstanding young Weber's testimony to the contrary, he probably either put too much dip in the quantity of water used or did not properly mix and stir the solution. Whatever may have been the cause of the loss, plaintiff has failed to establish negligence on defendant's part.
The judgment of the trial court is reversed, costs to be paid by plaintiffs.
Reversed and rendered.
|
599 F.2d 267
UNITED STATES of America, Appellee,v.William Maynard BERRY, Jr., Appellant.
No. 79-1087.
United States Court of Appeals,Eighth Circuit.
Submitted May 14, 1979.Decided May 23, 1979.
John E. Pruniski, III, Little Rock, Ark., for appellant.
W. H. Dillahunty, U. S. Atty., and Fletcher Jackson, Asst. U. S. Atty., Little Rock, Ark., for appellee.
Before LAY, ROSS and HENLEY, Circuit Judges.
PER CURIAM.
1
William Maynard Berry, Jr. appeals from his conviction by jury verdict for uttering and possessing a counterfeit federal reserve note in violation of 18 U.S.C. § 472.1 We affirm.
2
Berry does not dispute that he was identified at trial by eyewitnesses, fingerprints, vehicle type, color and license plate number as the person who passed four counterfeit bills in three different states. He argues that evidence of guilty knowledge and intent to defraud was insufficient to support his conviction and that the counterfeit bills should not have been admitted in evidence because their color was changed by the fingerprint testing process.
3
Section 472 requires proof that the defendant knew the bills were counterfeit and had a general intent to defraud unknown third parties with those bills. United States v. Pitts, 508 F.2d 1237, 1240 (8th Cir. 1974), Cert. denied, 421 U.S. 967, 95 S. Ct. 1958, 44 L. Ed. 2d 445 (1975). In reviewing the sufficiency of the evidence on these elements, we bear in mind the general rule that "(t) he verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." Glasser v. United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed. 680 (1942); Hamling v. United States, 418 U.S. 124, 94 S. Ct. 2887, 41 L. Ed. 2d 590 (1974).
4
Several items of evidence in the record provide a basis upon which the jury could have inferred that Berry knew the note was counterfeit and intended to use it to defraud third persons. First, Berry possessed three other counterfeit $20 bills, and passed two of them at different business establishments. See United States v. Dodd, 444 F.2d 1402, 1403 (8th Cir. 1971), Cert. denied, 404 U.S. 1021, 92 S. Ct. 693, 30 L. Ed. 2d 670 (1972) (eight bills passed at two different business establishments). In each instance, Berry used a rather large denomination, $20, to pay for small purchases of two to four dollars. See Moore v. United States, 375 F.2d 877, 879 (8th Cir.), Cert. denied, 389 U.S. 844, 88 S. Ct. 92, 19 L. Ed. 2d 110 (1967). Third, the bills were unusual in appearance and readily identifiable as counterfeit. See United States v. Dodd, supra; Moore v. United States, supra. Two service station attendants immediately noticed the unusual appearance of the bills and notified their managers, who called authorities. A cashier noticed that the margins on another bill were unusual, mentioned to Berry that the bill looked "funny," and took the bill to her supervisor. Finally, when interviewed by a Secret Service Agent on March 24, 1978, Berry said he had not been in the areas in which the bills were passed for two months. After a voluntary search of his wallet and discovery of a receipt dated March 18, 1978, for payment to a motel located in one of the cities, Berry changed his answer. He said he had been going to one of the areas where the bills were passed and changed his mind after spending a night in the motel. A jury could reasonably infer guilty knowledge and intent to defraud from the inconsistent statements. See United States v. Pitts, supra, 508 [email protected]. The evidence summarized above was clearly sufficient for the jury to infer Berry had guilty knowledge and intent to defraud.
5
The counterfeit bills introduced in evidence were a somewhat purplish color, which was caused by the use of Ninhydrin in the process of examining them for fingerprints. Berry argues that the bills should not have been admitted because they were not in substantially the same condition as they were when the crime was committed. Since the bills appeared more similar to genuine currency earlier, Berry argues that the change in color affected the probative value of the bills on the main issue of guilty knowledge and intent to defraud. While the appearance of the bills may have affected their probative value on the issue of intent, we hold that the court did not err in their admission. The bills were relevant, despite their changed color, on the issues of whether they were counterfeit and whether they were the bills passed by Berry. The latter was shown by chain of evidence testimony and fingerprinting test results. Moreover, the jury could not have made the prejudicial inference that the bills remained unchanged in the testing process. The prosecutor apparently explained the reason for the purplish color in his opening argument, and the bills were admitted only after an explanation for their changed color was elicited from witnesses by the prosecutor. Witnesses who testified that they immediately recognized bills as counterfeit based their conclusions largely on the bills' unusual margins. No cautionary instruction to prevent a prejudicial inference being drawn by the jury was requested. Under these circumstances, the counterfeit bills were properly admitted into evidence. See United States v. Skelley, 501 F.2d 447, 451 (7th Cir.), Cert. denied, 419 U.S. 1051, 95 S. Ct. 629, 42 L. Ed. 2d 647 (1974).
6
The judgment is affirmed.
1
Section 472 provides in part:
Whoever, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, . . . any falsely made, forged, counterfeited, or altered obligation or other security of the United States, shall be fined not more than $5,000 or imprisoned not more than fifteen years, or both.
|
359 Mich. 420 (1960)
102 N.W.2d 584
JOSLIN
v.
CAMPBELL, WYANT & CANNON FOUNDRY CO.
Docket No. 36, Calendar No. 48,300.
Supreme Court of Michigan.
Decided April 11, 1960.
*422 Marcus, Kelman, Loria, McCroskey & Finucan (Benjamin Marcus and Robert Libner, of counsel), for plaintiff.
E.G. Poxson, Jr., and James L. Schueler, for defendants.
SOURIS, J.
The only question presented by this case is whether the weekly compensation benefits payable to an employee suffering from an occupational disease compensable under the workmen's compensation act, PA 1912 (1st Ex Sess), No 10, as amended (CL 1948, § 411.1 et seq., as amended [Stat Ann 1950 Rev § 17.141 et seq., as amended]), are determined on the basis of the number of his dependents as of the date of the employee's disablement or as of the "date of injury", as that term is defined in section 1, part 2, of the act.[*] This question requires answer in this case because the employee's disablement, as that word is defined in the act, occurred substantially after his last day of work in the employment in which he was last subjected to the conditions resulting in his disability and in the interim his dependents increased from 1 to 4.
The facts necessary for decision are not in dispute. Plaintiff suffers from silicosis. He worked as a foundry employee of defendant from 1926 to 1946. Eleven years later, in 1957, he gave notice of disability to defendant and filed claim for compensation benefits. The referee found that plaintiff knew of his silicotic condition in 1946 and, therefore, that his notice to defendant and his claim for benefits were not made within the time prescribed by the statute.[] The appeal board reversed the referee's *423 order on the ground that plaintiff first became disabled from performing the work which caused his disability on October 2, 1957, and that plaintiff had given notice thereof and filed claim therefor within a few days thereafter. The appeal board ruled that the time limitation within which notice must be given and claim must be filed commenced on said date of disability and that plaintiff's notice and claim were well within such time limitation. The appeal board awarded plaintiff weekly compensation benefits determined, in part, by the number of persons dependent upon him in 1957.
The only error claimed by defendant is that the appeal board should have determined plaintiff's weekly compensation benefits on the basis of the number of persons dependent upon him in 1946 rather than in 1957. It is defendant's claim that plaintiff's dependency status on the "date of injury", as that term is defined in section 1 of part 2 of the act, determines the rate of his weekly compensation benefits and that the appeal board disregarded the statutory definition of "date of injury" when it counted plaintiff's dependents as of 1957.
Part 7 of the act was added by the occupational disease act of 1937, PA 1937, No 61 (CL 1948, § 417.1 et seq., as amended [Stat Ann § 17.220 et seq., as amended]). Claims for compensation for disability caused by silicosis are governed by the provisions of part 7 and also by such other parts of the act as are made applicable by specific reference or by clear implication.
For example, it is necessary to apply section 9 of part 2[**] to determine the compensation payable in occupational disease cases arising under part 7 as well as in other cases. But, section 9 of part 2 speaks *424 in terms of "time of the injury" in determining dependency status:
"(a) While the incapacity for work resulting from the injury is total, the employer shall pay, or cause to be paid as hereinafter provided, to the injured employee, a weekly compensation of 66-2/3% of his average weekly wages, but not more than $33 if such injured employee has no dependents; $36 per week if 1 dependent; $40 if 2 dependents; $45 if 3 dependents; $51 if 4 dependents and $57 if 5 or more dependents. Weekly payments shall in no event be less than $18 if there are no dependents; $20 if 1 dependent; $22 if 2 dependents; $24 if 3 dependents; $26 if 4 dependents; and $28 if 5 or more dependents, * * *
"(b) For the purposes of this section and of section 10, dependency shall be determined as follows:
"The following persons shall be conclusively presumed to be dependent for support upon an injured employee:
"1. The wife of an injured employee living with such employee as such wife at the time of the injury.
"2. A child under the age of 16 years, or over said age, if physically or mentally incapacitated from earning, living with his parent at the time of the injury of such parent.
"(c) In all other cases questions of dependency shall be determined in accordance with the fact, as the fact may be at the time of the injury. * * *
"(e) No increase in payments shall be made for increased numbers of dependents not so dependent at the time of the injury of an employee."
The term "time of the injury" is clearly more suitable when referring to disabilities resulting from the loss of an eye or an arm or the crushing of a foot than it is when referring to occupational diseases such as silicosis but, by statutory definition, it is made applicable to such diseases. Section 1 of part 2, in pertinent part, provides:
*425 "The term `time of injury' or `date of injury' as used in this act shall in the case of a disease or in the case of an injury not attributable to a single event be the last day of work in the employment in which the employee was last subjected to the conditions resulting in disability or death."
The normal meanings of the words used in sections 1 and 9 of part 2, supra, support defendant's claim that the appeal board erred, as a matter of law, in finding that plaintiff's dependency status should be determined as of a date other than in 1946, the last day of work in the employment in which he was last subjected to the conditions resulting in his disability. The record made before the referee, and relied upon by the appeal board, is barren of any evidence to support the board's implied finding that the time of injury occurred in 1957.
Plaintiff urges upon this Court a construction of the statute with which we cannot agree. His contention may be stated as follows:
Section 2 of part 7 provides that the disablement from occupational disease shall be treated as the happening of a personal injury; section 7 of part 7[***] requires the appeal board to determine the date of disablement; and section 1 (c) of part 7,[a] as amended by PA 1943, No 245, defines the words "disease" and "disability" as included in the term "personal injury". Hence, argues plaintiff, "the legislature in clear and express terms settled the problem of when the date of disablement or injury occurred, without the necessity for borrowing from any other part of the act." In short, plaintiff urges that in part 7 cases, we substitute the term "date of disablement" for the term "time of injury" wherever the latter term is used in section 9 of part 2. Plaintiff's argument merges "date of disablement" and "date of *426 injury" as applied to occupational disease cases so that not only would the employee's rights first accrue on the date of disablement found by the board (for example, for purposes of determining when notice must be given and claim made), but his weekly compensation benefit rate would also be determined as of such date (for example, for purposes of determining his dependency status, his average weekly wage, et cetera). As plaintiff notes in his brief, in those instances where the employee leaves his employment because he has become disabled from an occupational disease, the "date of injury" as defined in section 1 of part 2 and the "date of disablement" as found by the board pursuant to section 7 of part 7 might coincide and the construction of the statute urged by plaintiff would not affect the result. However, where disablement occurs substantially after the employee leaves his employment, the result might be affected materially if plaintiff's theory were accepted, as in the [email protected].
Considered alone, sections 2 and 7 of part 7 might be construed to authorize the result reached by the appeal board in this case and urged upon us by plaintiff. But this Court must construe a legislative enactment in its entirety. As this Court has previously stated, one provision may not be construed in such manner as to render another of no effect if such result can be avoided. Brady v. City of Detroit, 353 Mich. 243, 248. Earlier, this Court said:
"The entire act must be read, and the interpretation to be given to a particular word in one section arrived at after due consideration of every other section so as to produce, if possible, a harmonious and consistent enactment as a whole." City of Grand Rapids v. Crocker, 219 Mich. 178, 182, 183.
Applying the foregoing standards of statutory construction, some meaning must be given to section 1, *427 part 2, supra, which specifically defines "time of injury". Plaintiff suggests that that section applies only to injuries caused by repetitive trauma, but this suggestion requires that we ignore the specific legislative statement that it is applicable to "the case of a disease" as well as to "the case of an injury not attributable to a single event". As indicated above, the meaning to be given to section 1 of part 2 is that it applies to determine the "time of injury" in occupational disease cases as well as in others, as that term is used in section 9 of part 2.
Under part 2 of the act, rights to compensation accrue upon the happening of a personal injury, but in occupational disease cases under part 7 of the act, it is frequently impossible to determine with precision when the personal injury (see section 1 [c] of part 7, which defines "personal injury" to include disease) occurs. Further, if rights to compensation in occupational disease cases accrued upon the happening of the personal injury, the statutory time limitations for giving notice and filing claim would frequently expire before disablement occurred, thereby defeating the very purpose of the act. By section 2 of part 7, the legislature avoided this result. That section provides:
"The disablement of an employee resulting from such disease or disability shall be treated as the happening of a personal injury within the meaning of this act and the procedure and practice provided in this act shall apply to all proceedings under this part except where specifically otherwise provided herein." CL 1948, § 417.2 (Stat Ann 1950 Rev § 17.221).
It is significant that the term "happening of a personal injury", or its equivalent, is found elsewhere *428 in the act only in section 15 of part 2,[****] which sets forth the time limitations within which notice of injury must be given the employer and within which claim for compensation therefor must be made.
By enactment of section 2, part 7, the legislature provided that rights to compensation in occupational disease cases under part 7 shall accrue upon disablement in the same manner as such rights in personal injury cases under part 2 accrue at the time of injury. This Court frequently has held that such rights do accrue upon disablement, and that the statutory time limitations for giving notice and filing claim therefor commence as of the date of disablement. Johnston v. Commerce Pattern Foundry Machine Co., 326 Mich. 300; Baughman v. Vicker's, Inc., 323 Mich. 710; Gerlesits v. Lakey Foundry & Machine Co., 319 Mich. 229; and Mosier v. Marshall Furnace Co., 318 Mich. 113.
The foregoing interpretations of parts 2 and 7 of the act give meaning to all sections thereof. Thus, "date of disablement" determines when rights accrue, when notice must be given, and when claim must be filed, while "time of injury" determines the amount of weekly compensation benefits to be paid to the extent such benefits depend upon an employee's dependency status and his average weekly wage.
The result in this case discloses an anomalous disparity in the benefits available to the occupational disease victim as compared with the benefits available to the victim of an industrial "accident". The employee who is immediately disabled by injury, under the act, is entitled to receive compensation in part based upon the number of dependents he had at the time of his disability, the disability in such cases occurring at the same time as the injury. In such cases the legislature has recognized the desirability *429 of basing in part the rate of compensation to be paid from the moment of disability on the number of mouths there are then to be fed, the number of backs there are then to be clothed, and the number of minds there are then to be educated. Should not the victim of a compensable occupational disease, who suffers as much of a disability by disease as his brother suffers by injury, be treated similarly? Are not his dependents to be fed, clothed, and educated from the date of his disability or are only some of them? Who shall say that the victim of a compensable occupational disease should have realized his exposure to unknown danger and should have so arranged his life that at the moment of his disablement there would be no dependents who were not in being on that crucial, but then apparently insignificant, "date of injury"? Thus do we have 2 standards for the measurement of compensation for victims of industrial disability. It requires little imagination to recognize the need for elimination of such disparity, but if it is to be done, it must be done by this State's legislature. As Mr. Justice CARR said, in Jones v. Grand Ledge Public Schools, 349 Mich. 1, at p 11: "It is not within the province of this Court to read therein a mandate that the legislature has not seen fit to incorporate. Our duty is to apply the law as we find it."
The appeal board should have determined the weekly benefits to which plaintiff is entitled on the basis of the number of his dependents as of the date of his injury in 1946, as defined in section 1, part 2. To avoid any possible confusion, this opinion holds only that the date of injury, as defined in section 1 of part 2, is the date as of which the number of claimant's dependents are determined for the purpose of computing the weekly benefits to which he is entitled.
*430 The award of the appeal board is reversed to the extent indicated above, and this cause is remanded to said appeal board solely for determination of plaintiff's weekly benefits and entry of an award in accordance with this opinion. A question of public concern being involved, no costs will be allowed.
DETHMERS, C.J., and CARR, KELLY, SMITH, BLACK, EDWARDS, and KAVANAGH, JJ., concurred.
NOTES
[*] CLS 1956, § 412.1 (Stat Ann 1959 Cum Supp § 17.151). The issue in this case is not affected by the 1954 amendment to this section. REPORTER.
[] Section 10, part 7 (CL 1948, § 417.10 [Stat Ann 1950 Rev § 17.229]).
[**] CLS 1956, § 412.9 (Stat Ann 1959 Cum Supp § 17.159). REPORTER.
[***] CL 1948, § 417.7 (Stat Ann 1950 Rev § 17.226). REPORTER.
[a] CL 1948, § 417.1 (Stat Ann 1950 Rev § 17.220). REPORTER.
[****] CLS 1956, § 412.15 (Stat Ann 1959 Cum Supp § 17.165). REPORTER.
|
Citation Nr: 1046525
Decision Date: 12/13/10 Archive Date: 12/20/10
DOCKET NO. 08-11 850 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Manila, the
Republic of the Philippines
THE ISSUE
Whether new and material evidence has been received to reopen
service connection for the cause of the Veteran's death, and, if
so, whether the reopened claim should be granted.
REPRESENTATION
Appellant represented by: The American Legion
ATTORNEY FOR THE BOARD
Thomas H. O'Shay, Counsel
INTRODUCTION
The Veteran served with the Philippine Commonwealth Army,
including the Recognized Guerillas, in the service of the U.S.
Armed Forces, Far East (USAFFE) from August 1943 to March 1946.
The appellant is his surviving spouse.
This matter comes before the Board of Veterans' Appeals (Board)
on appeal of a rating decision by the Department of Veterans
Affairs (VA) Regional Office (RO) in Manila, the Republic of the
Philippines.
Please note this appeal has been advanced on the Board's docket
pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A.
§ 7107(a)(2) (West 2002).
FINDINGS OF FACT
1. A July 2002 rating decision denied service connection for the
cause of the Veteran's death; the appellant was notified of this
decision and of her appellate rights with respect thereto, but
did not appeal.
2. The evidence received since the July 2002 VA decision is not
duplicative or cumulative of evidence previously of record, and
raises a reasonable possibility of substantiating the claim.
3. The Veteran was not a prisoner-of-war during his period of
service with the USAFFE.
4. The Veteran died of cardiorespiratory arrest due to
thrombotic cerebral vascular disease involving the left medial
cerebral artery (MCA); at the time of his death, service
connection was not in effect for any disorder.
5. The Veteran did not have ischemic heart disease,
hypertension, malaria, or pulmonary tuberculosis in service or
after service.
6. The Veteran's death is not etiologically related to service
or to any disorder originating in or as a result of service.
CONCLUSIONS OF LAW
1. The July 2002 rating decision is final. 38 U.S.C.A. §
7105(b) (West 2002);
38 C.F.R. §§ 3.104, 20.302, 20.1103 (2010).
2. The evidence received since the July 2002 VA decision is new
and material, and the issue of service connection for the cause
of the Veteran's death is reopened.
38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156(a) (2010).
3. The veteran's death was not proximately due to or the result
of a disease or injury incurred in service, or due to a service-
connected disability. 38 U.S.C.A. §§ 1110, 1310, 5103, 5103A,
5107 (West 2002 & Supp. 2010); 38 C.F.R. §§ 3.159, 3.303, 3.310,
3.312 (2010).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
Under 38 U.S.C.A. § 5103 (West 2002), VA must notify the claimant
of the information and evidence not of record that is necessary
to substantiate the claim, and of which information and evidence
that VA will seek to provide and which information and evidence
the claimant is expected to provide.
In Kent v. Nicholson, 20 Vet. App. 1 (2006), the United States
Court of Appeals for Veterans Claims (Court) additionally held
that in claims to reopen VA's duty to notify includes advising
the claimant of the information and evidence that is necessary to
reopen the claim, and of the information and evidence necessary
to establish entitlement to the underlying claim for the benefit
sought. The Court further held that VA must, in the context of a
claim to reopen, look at the bases for the denial in the prior
decision and to respond with a notice letter that describes what
evidence would be necessary to substantiate that element or
elements required to establish service connection that were found
insufficient in the previous denial.
In addition, in Hupp v. Nicholson, 21 Vet. App. 342 (2007), the
Court addressed VA's 38 C.F.R. § 5103(a) notice obligation in the
context of a claim for Dependency and Indemnity Compensation
(DIC) benefits under 38 U.S.C.A.
§ 1310. The Court held that, because the RO's adjudication of a
DIC claim hinges first on whether a veteran was service-connected
for any condition during his or her lifetime, the 38 U.S.C.A. §
5103(a) notice in such a claim must include 1) a statement of the
conditions (if any) for which a veteran was service connected at
the time of his or her death; 2) an explanation of the evidence
and information required to substantiate a DIC claim based on a
previously service-connected condition; and 3) an explanation of
the evidence and information required to substantiate a DIC claim
based on a condition not yet service connected. Hupp, 21 Vet.
App. at 352-53.
In the decision below, the Board is reopening the appellant's
claim; any deficiency in the notice provided her as to how to
reopen her claim therefore is harmless. In any event, the record
shows that the appellant was provided with 38 U.S.C.A. § 5103(a)-
compliant notice in August 2003 and February 2010, including with
respect to the elements mentioned in Hupp. Her claim was last
readjudicated in a March 2010 supplemental statement of the case,
thereby rendering any deficiency in the timing of the notice
harmless. See Prickett v. Nicholson, 20 Vet. App. 370, 376
(2006). Moreover, it is clear that the appellant has actual
notice of the information and evidence necessary to substantiate
her claim. In fact, and as will be discussed in further detail
below, she has prodigiously submitted fabricated documents which,
had they been authentic, would have supported her claim.
As to VA's duty to assist the appellant, there is no suggestion
by the appellant or the record of any outstanding evidence. VA
has obtained the Veteran's actual service documents. Although
the appellant has submitted several other "service documents",
as will be discussed at a later point those are demonstrably (or
at least clearly) fabricated, and the Board does not find that
those documents imply in the least that there remain outstanding
service records for the Veteran.
The appellant has indicated that the Veteran received treatment
at the Western Visayas Medical Center. In July 2001, that
facility indicated that the Veteran's records were lost due to
fire. As those records are obviously unavailable, there is no
duty on VA's part to make any attempts at obtain the records.
The record also shows that the appellant has, in a piecemeal
fashion over the years since 2002, submitted documents she says
she continues to find in the Veteran's personal papers that
purport to support her claim. The documents are supposedly from
physicians and from a medical facility, and cover the period
since 1942. The RO submitted most of those documents for a
forensics analysis by VA's Inspector General, and the Inspector
General in February 2006 determined that they were inauthentic.
Since that time, the appellant has continued to submit similar
documents which mostly relate the same information as those
already determined to lack authenticity. Although the RO has not
submitted the documents submitted after February 2006 for
forensic analysis, the Board finds that such action is not
required given the appellant's clear and unrelenting propensity
for submitting fabricated documents, and as the post-2006
documents are inconsistent with earlier documents that are
authentic.
The record shows that VA has not obtained a medical opinion in
connection with this claim. In Delarosa v. Peake, 515 F.3d 1319
(Fed. Cir. 2008), the Federal Circuit held that VA's duty to
obtain a medical opinion under 38 U.S.C. § 5103A(d) does not
apply to a claim of service connection for the cause of a
Veteran's death, as the applicability of that provision is
explicitly limited to claims for disability compensation.
Moreover, the Board notes that 38 U.S.C. § 5103A(a) does not
always require VA to assist the claimant in obtaining a medical
opinion or examination. Under § 5103A(a), VA only needs to make
reasonable efforts to assist a claimant in obtaining a medical
opinion when such opinion is "necessary to substantiate the
claimant's claim for a benefit." Here, as will be discussed in
greater detail below, the Board finds that there is no evidence
that the disabilities that caused or contributed to the Veteran's
death had their onset in service and there is no competent
evidence suggesting a link between these disabilities and his
active service. Moreover, there is no competent evidence of
record showing a link between any other disability to service or
the cause of death. Thus, notwithstanding the fact that VA had
no obligation to obtain a medical opinion, the Board finds there
was no basis to obtain one.
As will be discussed below, the Board has determined that the
claim should be reopened, but denied on the merits. Although the
Board is reaching the merits of the case, whereas the RO did not
consider the case beyond the question of whether new and material
evidence had been received, the Board finds that the appellant
nevertheless has not been prejudiced. See Bernard v. Brown, 4
Vet. App. 384, 392-94 (1993). In this regard the Board points
out that the basis for the RO's refusal to reopen the claim and
the Board's denial on the merits is essentially the same, namely
that the appellant's "evidence" is demonstrably or clearly
fabricated, and that absent that evidence, her claim is not
supported. She has consistently submitted information and
argument related to the merits of her claim, rather than as to
whether the claim should be reopened.
In sum, the facts relevant to this appeal have been properly
developed, and there is no further action to be undertaken to
comply with the provisions of 38 U.S.C.A. §§ 5103(a), 5103A (West
2002) or 38 C.F.R. § 3.159 (2010). Therefore, the appellant will
not be prejudiced as a result of the Board proceeding to the
merits of the claim. See Bernard v. Brown, 4 Vet. App. 384, 392-
94 (1993).
The United States will pay compensation to any veteran disabled
by disease or injury incurred in or aggravated by active service,
who was discharged or released under conditions other than
dishonorable from the period of service in which the disease or
injury was incurred, provided the disability is not the result of
the person's own willful misconduct. 38 U.S.C.A. § 1110 (West
2002); 38 C.F.R.
§ 3.303 (2010).
Service in the Philippine Scouts and in the organized military
forces of the Government of the Commonwealth of the Philippines,
including recognized guerrilla service, is recognized service for
certain VA purposes, as authorized by
38 U.S.C.A. § 107 (West 2002); 38 C.F.R. § 3.40 (2010).
Service of persons enlisted under section 14 of Public Law No.
190, 79th Congress (Act of Oct. 6, 1945), is included for
compensation and dependency and indemnity compensation, but not
for pension benefits. All enlistments and reenlistments of
Philippine Scouts in the Regular Army between October 6, 1945,
and June 30, 1947, inclusive, were made under the provisions of
Public Law No. 190, as it constituted the sole authority for such
enlistments during that period. This provision does not apply to
officers who were commissioned in connection with the
administration of Public Law No. 190. 38 C.F.R. § 3.40(b)
(2010).
Service as a Philippine Scout in the Regular Army inducted
between October 6, 1945, and June 30, 1947, inclusive, and in the
Commonwealth Army of the Philippines from and after the dates and
hours when called into service of the Armed Forces of the United
States by orders issued from time to time by the General Officer,
U.S. Army, pursuant to the Military Order of the President of the
United States dated July 26, 1941, is included for compensation
benefits, but not for pension benefits. Service department
certified recognized guerrilla service and unrecognized guerrilla
service under a recognized commissioned officer, only if the
person was a former member of the United States Armed Forces
(including the Philippine Scouts), or the Commonwealth Army,
prior to July 1, 1946, is included for compensation benefits, but
not for pension benefits. 38 C.F.R. § 3.40(b), (c), and (d)
(2010).
Service connection may be granted for disability resulting from
disease or injury incurred or aggravated during active service.
38 U.S.C.A. § 1110; 38 C.F.R.
§ 3.303. Service incurrence of cardiovascular disease or brain
hemorrhage may be presumed if manifested to a compensable degree
within one year of the veteran's discharge from service (or three
years, in the case of active tuberculosis).
38 U.S.C.A. §§ 1101, 1112, 1113 (West 2002); 38 C.F.R. §§ 3.307,
3.309 (2010).
Service connection may also be granted for disability which is
proximately due to or the result of a service-connected disease
or injury. 38 C.F.R. § 3.310(a). Additional disability resulting
from the aggravation of a nonservice- connected condition by a
service- connected condition is also compensable under 38 C.F.R.
§ 3.310(a). Allen v. Brown, 7 Vet. App. 439, 448 (1995) (en
banc).
The Board notes that VA amended its regulation pertaining to
secondary service connection, effective from October 10, 2006.
See 71 Fed. Reg. 52,744 (2006) (codified at 38 C.F.R. § 3.310).
The new regulation appears to place additional evidentiary
burdens on claimants seeking service connection based on
aggravation; specifically, in terms of establishing a baseline
level of disability for the non-service-connected condition prior
to the aggravation. Because the new law appears more restrictive
than the old, and because the appellant's appeal was already
pending when the new provisions were promulgated, the Board will
consider this appeal under the law in effect prior to October 10,
2006. See, e.g., Kuzma v. Principi, 341 F.3d 1327 (Fed. Cir.
2003) (new regulations cannot be applied to pending claims if
they have impermissibly retroactive effects).
If the veteran is a former prisoner of war, stroke or its
complications, atherosclerotic heart disease or hypertensive
vascular disease (including hypertensive heart disease) and their
complications (including myocardial infarction, congestive heart
failure, and arrhythmia), as well as any anxiety state, or
dysthymic disorder or depressive neurosis, shall be service
connected if manifest to a degree of disability of 10 percent or
more at any time after discharge or release from active military
service, even though there is no record of such disease in
service, provided the rebuttable presumption of provisions of 38
C.F.R. § 3.307 are also satisfied. 38 C.F.R. § 3.309(c).
To establish service connection for the cause of the veteran's
death, the evidence must show that disability incurred in or
aggravated by service either caused or contributed substantially
or materially to the cause of death. For a service-connected
disability to be the cause of death, it must singly or with some
other condition be the immediate or underlying cause or be
etiologically related thereto. For a service-connected
disability to constitute a contributory cause, it is not
sufficient to show that it casually shared in producing death but
rather it must be shown that there was a causal connection. 38
U.S.C.A. § 1310; 38 C.F.R. § 3.312.
Service-connected diseases or injuries involving active processes
affecting vital organs receive careful consideration as a
contributory cause of death, the primary cause being unrelated,
from the viewpoint of whether there were resulting debilitating
effects and general impairment of health to an extent that would
render the person materially less capable of resisting the
effects of other disease or injury primarily causing death. 38
C.F.R. § 3.312(c)(3). Further, there are primary causes of death
which by their very nature are so overwhelming that eventual
death can be anticipated irrespective of coexisting conditions,
but, even in such cases, there is for consideration whether there
may be a reasonable basis for holding that a service-connected
condition was of such severity as to have a material influence in
accelerating death. 38 C.F.R. § 3.312(c)(4).
Generally, a claim which has been denied in a final rating
decision may not thereafter be reopened and allowed. 38 U.S.C.A.
§ 7105(c) (West 2002). The exception to this rule is 38 U.S.C.A.
§ 5108, which provides that if new and material evidence is
presented or secured with respect to a claim which has been
disallowed, the Secretary shall reopen the claim and review the
former disposition of the claim.
The Board must consider the question of whether new and material
evidence has been received because it goes to the Board's
jurisdiction to reach the underlying claim and adjudicate the
claim de novo. See Barnett v. Brown, 83 F.3d 1380 (Fed. Cir.
1996). If the Board finds that no such evidence has been
offered, that is where the analysis must end, and what the RO may
have determined in that regard is irrelevant. Further analysis,
beyond consideration of whether the evidence received is new and
material, is neither required nor permitted. Id. at 1384. See
also Jackson v. Principi, 265 F.3d 1366 (Fed. Cir. 2001).
Under 38 C.F.R. § 3.156(a), evidence is considered "new" if it
was not previously submitted to agency decisionmakers.
"Material" evidence is evidence which, by itself or when
considered with previous evidence of record, relates to an
unestablished fact necessary to substantiate the claim. New and
material evidence can be neither cumulative nor redundant of the
evidence of record at the time of the last prior final denial of
the claim sought to be reopened, and must raise a reasonable
possibility of substantiating the claim.
In determining whether evidence is new and material, the
"credibility of the evidence is to be presumed." Justus v.
Principi, 3 Vet. App. 510, 513 (1992).
A July 2002 VA decision denied service connection for the cause
of death. The appellant was notified of this decision and of her
appellate rights with respect thereto, but did not appeal.
Consequently, the claim may be considered on the merits only if
new and material evidence has been received since the time of the
July 2002 VA decision. 38 U.S.C.A. § 5108; 38 C.F.R. § 3.156
(2010).
The evidence previously of record at the time of the July 2002
decision included the Veteran's service treatment records showing
that at discharge, he was noted to have had residuals of shrapnel
wound to the right thigh. Examination of the cardiovascular and
respiratory systems were negative for any abnormalities, and
chest X-ray studies were normal. The examination report did not
reference hypertension, malaria or tuberculosis. The report did
not suggest the Veteran was being discharged on account of
disability.
The evidence previously considered also included statements by
the Veteran in which he initially indicated that his right leg
wound occurred in June 1943, and later asserted the wound
occurred in June 1944 (during his period of recognized service).
In none of his statements, including the affidavit he completed
at discharge, did he suggest he was ever captured by the
Japanese, or indicate that he had hypertension, ischemic heart
disease, malaria, tuberculosis, or psychiatric problems.
The evidence previously considered also included a May 1953
affidavit by Z.B. and I.S., and an April 1977 affidavit by J.S.
and P.A. The former reflects the affiants' recollection that the
Veteran was wounded in the right leg in June 1944, and the latter
reflects the affiants' recollection that the injury occurred in
September 1944.
An April 1954 service department certification on file prior to
July 2002 notes, in describing the Veteran's service, that he was
not a former prisoner-of-war.
The evidence on file in July 2002 also included a May 2002
statement by Dr. O. Poral, the physician who completed the
Veteran's death certificate. Dr. Poral noted that he was the
attending physician at the time of death, and he explained that
the Veteran died from cardiorespiratory arrest probably secondary
to uncal herniation secondary to cerebrovascular disease.
The previously considered evidence also included a May 1997
Computed Tomography scan of the Veteran's brain showing the
presence of subdural hematoma, subdural effusion, and cerebellar
atrophic changes.
The previously considered evidence included the Veteran's death
certificate showing that he died in May 1997 of cardiorespiratory
arrest due to thrombotic cerebrovascular disease involving the
left middle cerebral artery. The certificate does not mention
ischemic heart disease.
The evidence previously considered lastly included several
statements by the appellant that the Veteran had malaria and
pulmonary tuberculosis in service, that he was discharged from
service due to tuberculosis, and that through the years he had
experienced chills and recurring malaria which had caused
hypertension.
Pertinent evidence added to the record since the July 2002 rating
decision includes a
February 1942 (prior to the Veteran's recognized period of
service) statement by Dr. C. Nobleza, who indicated that the
Veteran was then under observation and treatment for
hypertension.
The added evidence also includes a September 1944 statement by
Dr. A. Cruz, which indicates that the Veteran was admitted that
month for shock resulting from torture by the Japanese during
captivity. He explained that cranial X-ray studies showed
contusions and mild hematoma from a blow to the head.
The added evidence also includes another version of the Veteran's
discharge examination which was clearly altered as to the name of
the actual examinee. The Veteran's name was hand-written in on
the report, and the examination report does not contain any
reference to the shell fragment wound that was noted on the
original examination report. The report noted an eye abnormality
not present on the original examination report sent by the
service department, indicated that the cardiovascular system was
abnormal, and noted that chest X-ray studies showed the presence
of tuberculosis.
The added evidence includes a May 1945 "examination report"
noting that X-ray studies of the right knee revealed shrapnel. A
"Note" appended to the report indicated that the Veteran
suffered from high blood pressure secondary to the shrapnel
wound. The added evidence also includes purported service
records from February 1946 to May 1946, which indicate that the
Veteran had hypertension and ischemic heart disease considered to
be in the line of duty. A February 1946 "Special Order" from a
military hospital added to the record indicates that the Veteran
was scheduled to receive a Certificate of Disability Discharge.
The added evidence includes a clinical record dated in March 1946
indicating that the Veteran had received a certificate of
disability discharge based on hypertension, ischemic heart
disease and gunshot wound of the left knee.
The added evidence includes February 1946, March 1946 and March
1950 statements by Dr. M.T. In the February statement, he notes
that the Veteran was found to have ischemic heart disease when
processing out of service. In the March 1946 statement, he
indicated that the Veteran was hospitalized in 1945 for
hypertension and ischemic heart disease. In the March 1950
statement, he noted that the Veteran had been under his treatment
since 1946 for "nervous" and hypertension, which was due to
service in the USAFFE. He noted that the Veteran's medical
records were not available because of some calamity involving
termites.
The evidence added to the record also includes an undated
Certification by A.C. which purportedly was prepared before the
Veteran's death. Dr. A.C. identifies himself as a physician who
in 1950 treated the Veteran for "nervous" and hypertension due
to USAFFE service.
The added evidence includes private medical records purportedly
covering the period from February 1947 to September 1978. The
records purport to show that the Veteran had been treated since
1947 for ischemic heart disease.
The added evidence includes an October 1973 affidavit by B.A. and
A.C., who indicate that the Veteran was wounded in a September
1944 raid.
The evidence also includes an October 1973 affidavit by B.A., who
asserts that he had treated the Veteran in 1947 for ischemic
heart disease due to service.
The added evidence includes a September 1981 Certification by Dr.
J.C., who indicates that he had treated the Veteran since 1974
for hypertension and "nervous" that was due to service with the
USAFFE.
The added evidence includes a June 2004 statement by Dr. Poral
noting that he had treated the Veteran since 1982. He explained
that the Veteran had been suffering from cerebrovascular disease
of the thrombotic type, and died because of complications from
hemorrhage secondary to cerebrovascular disease.
The Regional Office sent the private medical records for 1947 to
1978, as well as the medical statements on file, to VA's Office
of the Inspector General for a forensics analysis of the ink,
print, paper and typewriter used in the preparation of those
documents, in order to determine their authenticity. In February
2006, the Inspector General's office responded that most of the
medical records and medical statements submitted by the appellant
(and which purported to span the years 1942 to 1978) either were
written in the same ink which was not commercially available
until 1985, or showed evidence of technology in their preparation
which was not available until years after the dates on the
documents. Several of the documents were not tested, in light of
the clear pattern of inauthenticity in the documents submitted by
the appellant. Those specifically tested included the private
medical records for 1947 to 1978, the February 1942 statement of
Dr. Nobleza, the September 1944 statement of A. Cruz, the
February 1946 statement of M.T. the October 1973 statement of
B.A., and the first altered copy of the discharge examination.
The documents not tested only covered the 1970s.
The appellant thereafter submitted yet another copy of a
discharge examination report, on which hypertension and ischemic
heart disease were now noted. The report differed in several
other respects from the other two already on file.
The evidence added to the record includes another version of the
Veteran's death certificate submitted by the appellant. The
certificate is identical to the former one in terms of dates, but
does not contain any signatures, and does not indicate that it
was meant to replace the first certificate. The cause of death
is still identified as cardiorespiratory arrest, but the language
of "involving the left [medial cerebral artery]" is not
present, and the words "schemic [sic] heart disease" were added
as a significant contributing factor to death.
The newly added evidence lastly includes statements by the
appellant in which she alleges that the Veteran had hypertension
in service, and that after service, he had suffered from
depression, nervousness and hypertension. She also maintains
that the documents she submitted from the decedent's files were
all authentic.
The records submitted between July 2002 and February 2006 are
clearly fabricated, and therefore do not support reopening of the
claim. The appellant has, however, submitted certain documents
purporting to be service documents showing the presence of
ischemic heart disease in service, and has submitted a version of
a death certificate indicating "schemic" heart disease as
contributing to death. Although those documents closely approach
the description of inherently incredible, given the appellant's
documented propensity to submit fabricated documents which are
clearly inconsistent with documents received decades before her
claim, the Board will nevertheless presume the credibility of the
evidence for the limited purpose of reopening the claim. The
claim of service connection for the cause of the Veteran's death
is reopened.
Turning to the merits, the Board finds that the preponderance of
the evidence is clearly against the claim. According to the
death certificate originally submitted by the appellant, the
Veteran died from cardiopulmonary arrest from cerebral vascular
disease. Although the appellant recently submitted a version
which adds "schemic heart disease" as a contributing factor to
death, the Board finds that the latter document is not genuine
for several reasons. First, the document is not signed, and does
not represent itself as constituting an amendment to the original
death certificate. Second, the proper term is "ischemic" heart
disease, and the Board finds it unlikely a completing physician
would make such an error in identifying a medical condition.
Third, Dr. Poral, the attending physician who actually completed
the original death certificate, and who treated the Veteran from
1982 to his death, submitted two statements in which he
identified the conditions from which the Veteran died; those
conditions were listed on the original death certificate. The
Board finds it extraordinarily unlikely that Dr. Poral, in
treating the Veteran over the course of 15 years, overlooked the
presence of ischemic heart disease in the Veteran, particularly
in relation to death. The Board also points out that the
recently submitted death certificate is a photocopy, and leaves
off a portion of the description of the fatal cerebrovascular
disease, which further suggests the recent death certificate is a
fabrication. Moreover, and as will be discussed in further
detail below, the sudden addition of "[i]schemic heart disease"
to the death certificate is consistent with a demonstrated
pattern by the appellant of submitting fabricated documents
designed to buttress her theory that the Veteran had ischemic
heart disease which caused or contributed to his death.
In short, the Board finds that the first death certificate
submitted by the appellant is genuine, and reflects the actual
cause of death for the Veteran, namely cardiorespiratory arrest
due to cerebral vascular disease of the thrombotic type.
The original service discharge examination shows that examination
of the cardiovascular examination and the lungs was normal. The
report does not mention ischemic heart disease, hypertension or
tuberculosis. Nor does the report mention malaria, or suggest
that the Veteran was being discharged on account of any
disability. The appellant has submitted two other versions of
the discharge examination, both of which contain rather obvious
alterations. The first altered document shows that
cardiovascular examination was abnormal, and that chest X-ray
studies showed tuberculosis. Interestingly, the document does
not mention a shell fragment wound. Although the document is
manifestly fake just from a visual inspection, VA's Office of the
Inspector General conducted a forensics analysis of it, and
determined that the toner used in the signatures was not
technologically available in 1946. The second altered document
added ischemic heart disease and hypertension to the list of
disorders the Veteran purportedly had at service discharge.
The Board finds that the second altered discharge examination is
also a fabrication, and that the first discharge examination
added to the file is the authentic document. First, the original
examination was added to the claims files decades before the
appellant began her claim, and was received directly from the
service department. The Board finds that this lends credence to
the document as being the more authentic of the three versions on
file. Second, it has already been established that the second
version submitted by the appellant is not authentic, suggesting
that the third version is just as likely to be a fabrication.
Third, the submission of two different versions of the discharge
examination, both apparently coming, according to the appellant,
from the decedent's personal papers, is consistent with her
general pattern of submitting documents responsive to her
allegation that the Veteran had hypertension and ischemic heart
disease in service, but which ultimately turn out to be
fabrications. The Board consequently finds that the first
discharge examination added to the file is the authentic
examination report. As already indicated, that report is silent
for any reference to cardiovascular or respiratory abnormalities.
It is also silent for any reference to cerebrovascular
abnormalities, or to the malaria the appellant claims led to
hypertension.
The Board notes that the appellant appears to allege that the
Veteran was a prisoner-of-war during his period of recognized
service. The U.S. service department in April 1954 has already
certified that he was not a former prisoner-of-war. Neither the
Veteran himself, or the service comrades (other than A.C.) who
purported to write on his behalf ever suggested he was a captive
of the Japanese. Although A.C. indicated that the Veteran was
captured by the Japanese, his statement was determined by VA's
Office of the Inspector General to lack authenticity. If in fact
A.C. did write the statement, he fraudulently dated the document
in September 1944, rather than sometime after 1984 when it was
actually created. In either event, the statement lacks any
credibility. As to the appellant's own assertions, she does not
contend that she served alongside the Veteran in combat;
therefore, she could not have personal knowledge of any captivity
other than what she may have been told. Given that the Veteran
himself had numerous opportunities to mention a period of
captivity but did not do so, and in light of the service
department's certification, the Board finds the appellant's
suggestion he was captured in service to lack credibility.
In short, the competent and credible evidence shows that the
Veteran was not a former prisoner-of-war. Consequently, his
fatal cerebrovascular disease may not be presumed to have been
incurred in service, and neither can any cardiovascular disease
he may have had.
The Board has considered the "service documents" recently
submitted by the appellant which purport to show ischemic heart
disease and hypertension in service. The Board finds that they
are not authentic. In this regard, the Board points out that it
is unlikely that a medical examiner, who is only looking at the
Veteran's right knee (although the wound to the right leg was
actually to the thigh) would gratuitously mention hypertension,
and then to provide an unsolicited opinion as to etiology. The
Board also points out that the records are inconsistent with the
authentic version of the discharge examination, which makes no
mention of ischemic heart disease or hypertension, which are both
conditions which would appear rather significant enough for an
examiner to at least mention. The Board also points out that the
documents indicating the Veteran was actually discharged for
ischemic heart disease and hypertension refer to the left knee
wound as being a third cause for the discharge; again, the wound
was actually to the right thigh. The service documents the
appellant has slowly submitted through the years are inconsistent
with the authentic version of the discharge examination, and are,
in the Board's opinion, fabrications.
The appellant has also submitted a number of private medical
records purporting to show that since 1947 the Veteran has been
shown to have ischemic heart disease. VA's Office of the
Inspector General has determined that those records are not
authentic, having been written in ink that was not commercially
available until 1985. The Board affords greater evidentiary
weight to the findings of the Inspector General, which are based
on scientific testing, than the appellant's bald assurance that
all the documents she has submitted (including the two manifestly
different versions of the discharge examination) are genuine.
The same is true with respect to the multiple medical opinions on
file submitted by the appellant. Those documents were either
determined to be inauthentic by VA's Office of Inspector General,
or are nevertheless fabrications, as they convey the same
information as the demonstrably inauthentic documents, suggesting
that the appellant was unable to obtain authentic documents in
support of her claim. In fact, when the inauthentic documents
are removed from consideration, there actually is no post-service
medical evidence on file suggesting the Veteran had ischemic
heart disease, hypertension, tuberculosis or malaria. The Board
has considered the appellant's own assertions that the Veteran
had those disorders, and points out that in some circumstances, a
layperson such as the appellant is competent to offer a diagnosis
of disability. See Jandreau v. Nicholson, 492 F. 3d 1372 (Fed.
Cir. 2007). The Board finds, however, that nonobservable
conditions, particularly those (such as ischemic heart disease,
tuberculosis, and malaria) which are typically diagnosed in
conjunction with diagnostic studies, are far outside the realm of
what a layperson can competently diagnose. In the context of the
inauthentic and fabricated documents that the appellant has
submitted since the last Board decision, given that the prior
Board decision made her aware were fabricated documents, the
Board finds that the appellant's willingness to submit known
falsified and inauthentic documents to VA for the purpose of
obtaining compensation make it very unlikely that the recently
added factual assertions in her own written statements in support
of her claim for compensation are of any trustworthiness to be of
any probative value.
Nor is there any competent or credible post-service evidence of
the fatal conditions even remotely contemporaneous with service.
The appellant has submitted a prodigious number of medical
statements and records purporting to show that the Veteran had
hypertension and ischemic heart disease in service and
thereafter. As they have been shown either to be demonstrably
fake (through the February 2006 forensics analysis), or clearly
fabricated based on their similarity to the ones which have been
proven fake, the Board finds that there is no competent post-
service evidence that the Veteran even had ischemic heart
disease, hypertension, tuberculosis, or malaria.
Boiled down to its essence, the competent and credible evidence
on file shows that the Veteran's fatal conditions, namely
cardiorespiratory arrest due to cerebral vascular disease, did
not originate in service or until decades after service, and that
the Veteran's death was not otherwise related to any disorder
that originated in, or was otherwise due to, service. According,
the preponderance of the evidence therefore is against the claim,
service connection for the cause of the Veteran's death is
denied. See 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v.
Derwinski, 1 Vet. App. 49 (1990).
ORDER
New and material evidence having been received, the claim of
service connection for the cause of the Veteran's death is
reopened.
Service connection for the cause of the Veteran's death is
denied.
____________________________________________
J. Parker
Acting Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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