-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JQyZxZjMBkUJwMXvKoTxSlIypwyO2++K46QvmP2KI98Q5txS1iVNHDB8aFbURjK1 uyVD+RcQNoNjukYV3vyDpQ== 0001047469-98-011953.txt : 19980330 0001047469-98-011953.hdr.sgml : 19980330 ACCESSION NUMBER: 0001047469-98-011953 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19980327 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAND UNION CO /DE/ CENTRAL INDEX KEY: 0000316236 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 221518276 STATE OF INCORPORATION: DE FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-07824 FILM NUMBER: 98575617 BUSINESS ADDRESS: STREET 1: 201 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470-0966 BUSINESS PHONE: 2018906000 MAIL ADDRESS: STREET 1: 201 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470 FORMER COMPANY: FORMER CONFORMED NAME: SUCCESSOR TO GRAND UNION CO/VA/ DATE OF NAME CHANGE: 19600201 10-K/A 1 FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 29, 1997 Commission File Number 0-26602 THE GRAND UNION COMPANY (Exact name of registrant as specified in its charter) Delaware 22-1518276 - -------------------------------- ------------------ (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 - --------------------------------------------- -------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 973-890-6000 -------------------- Securities registered pursuant to Section 12 (b) of the Act: Title of each class Name of each exchange on which registered - ---------------------------------- ----------------------------------------- Common Stock, Par Value $0.01 National Market System of NASD - ---------------------------------- ----------------------------------------- Securities registered pursuant to Section 12 (g) of the Act: None -------------------- Indicate by check mark whether the registrant (1) has 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 requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / X / The aggregate market value of the voting stock held by nonaffiliates of the registrant as of June 24, 1997 is approximately $16,200,000, based upon the closing sales price of the Common Stock on such date. Voting stock includes the Class A Cumulative Convertible Preferred Stock and the Class B Cumulative Convertible Preferred Stock. For the purpose of this calculation, all members of the Board of Directors and all stockholders with sole or shared voting power over 10% or more of the Company's Common Stock are presumed to be affiliates. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No ----- ------ As of June 24, 1997 there were issued and outstanding 10,000,000 shares, par value $0.01 per share, of the Registrant's Common Stock. Documents Incorporated by Reference: The Proxy Statement for the 1997 Annual Meeting of Shareholders has been incorporated by reference partially in Part III hereof. 1 [EXPLANATORY NOTE] THIS REPORT ON FORM 10-K/A AMENDS AND RESTATES IN ITS ENTIRETY PART IV ITEM 14 OF THE ANNUAL REPORT ON FORM 10-K OF THE GRAND UNION COMPANY FOR THE FISCAL YEAR ENDED MARCH 29, 1997. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON FORM 8-K THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT: (a) FINANCIAL STATEMENTS All financial statements as set forth under Item 8. (b) REPORT ON FORM 8-K No reports on Form 8-K were filed during the fourth quarter of Fiscal 1997. (c) EXHIBITS
Exhibit Number Description of Document - ----- ----------------------- 2.1 Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company ("Grand Union"), filed with the United States Bankruptcy Court, District of Delaware, on April 19, 1995, incorporated by reference to Exhibit T3E1 to Grand Union's Form T-3 dated May 8, 1995. 2.2 Findings of Fact, Conclusions of Law and Order Confirming the Second Amended Plan of Reorganization proposed by Grand Union, dated May 31, 1995, incorporated by reference to Exhibit 2.2 to Grand Union's Annual Report on Form 10-K for the fiscal year ended April 1, 1995 ("Fiscal 1995"). 2.3 Minute Order Clarifying Findings of Fact, Conclusions of Law and Order Confirming Second Amended Plan of Reorganization proposed by Grand Union, dated June 14, 1995, incorporated by reference to Exhibit 2.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995.
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3.1 Certificate of Incorporation of Grand Union, as amended through January 6, 1997.(1) 3.2 Certificate of Designation of Class A Convertible Preferred Stock, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 3.3 Certificate of Designation of Class B Convertible Preferred Stock, dated as of June 11, 1997.(1) 3.4 By-laws of The Grand Union Company, as amended through September 12, 1996, incorporated by reference to Exhibit 3.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 4.1 Form of New Common Stock Certificate of Grand Union, incorporated by reference to Exhibit 4.1 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.2 Warrant Agreement dated as of June 15, 1995, between Grand Union and American Stock Transfer & Trust Company, as Warrant Agent for 300,000 Series 1 Warrants and 600,000 Series 2 Warrants, incorporated by reference to Exhibit 4.5 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.3 Registration Rights Agreement dated as of June 15, 1995, among Grand Union and Each of the Persons Named in Schedule A thereto for the New Common Stock, incorporated by reference to Exhibit 4.6 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.4 Registration Rights Agreement dated as of June 15, 1995, by and among Grand Union and The Holders Named therein for the Registrable Notes, incorporated by reference to Exhibit 4.7 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.5 Indenture dated as of June 15, 1995, between Grand Union, as Issuer and IBJ Schroeder Bank & Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, including form of the 12% Senior Notes due 2004, incorporated by reference to Exhibit 4.2 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.6 First Supplement Indenture, dated September 9, 1996, to the Indenture dated as of June 15, 1995, between Grand Union, as Issuer, and IBJ Schroeder Bank & Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 4.7 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to Bankers Trust Company ("Bankers Trust"), as Collateral Agent, incorporated by reference to Exhibit 4.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.8 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 4.4 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.1 Agreement to Hold Separate dated July 17, 1989, by and among MTH Holdings Inc. ("MTH Holdings"), GU Acquisition Corporation ("GUAC"), Salomon Inc. and the Federal Trade Commission (the "FTC") entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.5 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-29707) (the "1989 Grand Union Registration Statement"). 10.2 Agreement containing Consent Order among MTH Holdings, GUAC and the FTC entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.6 to the 1989 Grand Union Registration Statement. 10.3 Asset Purchase Agreement, dated as of January 25, 1990, by and between Grand Union and Price Chopper Operating Co. of Vermont, Inc., incorporated by reference to Exhibit No. 10.15 to Holdings Registration Statement on Form S-1 (Registration No. 33-32879).
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10.4 Asset Purchase Agreement, dated as of February 9, 1990, by and between Grand Union and Price Chopper Operating Co., Inc., incorporated by reference to Exhibit No. 10.49 to GUAC's Registration Statement on Form S-1 (Registration No. 33-22398). 10.5 Agreement and Master Sublease dated as of July 30, 1990, by and between Grand Union and P&C Food Markets, Inc. ("P&C Foods"), incorporated by reference to Exhibit No.10.18 to Holdings' Report on Form 10-Q dated July 21, 1990 (Commission File No. 33-29707). 10.6 Asset Purchase Agreement dated as of February 4, 1993, between The Great Atlantic & Pacific Tea Company, Inc. and Grand Union, incorporated by reference to Exhibit No. 2.1 to Grand Union's Report on Form 8-K dated February 4, 1993. 10.7 Asset Purchase Agreement dated as of September 20, 1993 among Foodarama Supermarkets, Inc., ShopRite of Malverne, Inc. and Grand Union, incorporated by reference to Exhibit No. 10.19 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-70956). 10.8 Letter dated June 15, 1995, containing MTH Settlement Agreement between Miller Tabak Hirsch + Co. ("MTH") and Grand Union in connection with (i) the termination of the Agreement, dated July 22, 1992, between MTH and Grand Union, and (ii) the Second Amended Plan of Reorganization, dated April 19, 1995, of Grand Union, incorporated by reference to Exhibit 10.15 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.9 Agreement dated as of April, 1995, among Grand Union, Grand Union Capital Corporation ("Capital"), Holdings, the Official Committee of Unsecured Creditors of Capital and certain holders of Zero Coupon Notes issued by Capital and guaranteed by Holdings named therein, incorporated by reference to Exhibit 10.16 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.10 Waiver dated June 14, 1995, with respect to the Second Amended Chapter 11 Plan of Grand Union, among Grand Union, Bankers Trust, the Official Committee of Unsecured Creditors of Grand Union and the Informal Committee of Senior Noteholders, incorporated by reference to Exhibit 10.17 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.11 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent incorporated by reference to Exhibit 10.10 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.12 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union and Bankers Trust, as Collateral Agent (included in Exhibit 4.4), incorporated by reference to Exhibit 10.11 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.13 Subsidiary Security Agreement dated as of June 15, 1995, among the corporations listed on Schedule 1 thereto and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 10.12 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.14 Subsidiary Guaranty dated as of June 15, 1995, made by each of the corporations from time to time listed on Annex A attached thereto in favor of the Banks and the Agent from time to time party to the Credit Agreement, incorporated by reference to Exhibit 10.13 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.15 Form of Indenture of Open-End Mortgage, Deed of Trust, Deed to Secure Debt, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing, dated as of June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 10.14 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.16 Amended and Restated Credit Agreement dated as of June 15, 1995, (the "Credit Agreement"), among Grand Union, the lending institutions listed from time to time on Schedule 1 thereto, and
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Bankers Trust, as Agent, including Exhibits A-1, A-2 and A-3, and various Schedules thereto, incorporated by reference to Exhibit 10.9 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.18 Second Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.19 Third Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 10.20 Fourth Amendment to the Amended and Restated Credit Agreement incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 4, 1997. 10.21 Fifth Amendment to the Credit Agreement.(1) 10.22 Sixth Amendment to the Credit Agreement.(1) 10.23 Seventh Amendment to the Credit Agreement.(1) 10.24 Eighth Amendment to the Credit Agreement.(1) 10.25** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.26** First Amendment to the Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.27** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated January 2, 1996, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.28** Agreement with C&S Wholesalers Inc. dated January 21, 1996. 10.29* Third Amendment and Restatement of The Grand Union Company Supplemental Retirement Program for Key Executives effective as of June 15, 1995, incorporated by reference to Exhibit 10.8 to Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.30 Executive Severance Policy, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.31* The Grand Union Company 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996. 10.32* First Amendment to the 1995 Equity Incentive Plan of the Grand Union Company, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.33* Second Amendment to the 1995 Equity Incentive Plan.(1) 10.34* Resolution amending the number of shares issuable under the 1995 Equity Incentive Plan.(1) 10.35* Letters dated December 14, 1995, with respect to the 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.36* Option Agreement with Jeffrey P. Freimark.(1)
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10.37 The Grand Union Company 1995 Non-Employee Directors Stock Option Plan, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996. 10.38* First Amendment to the 1995 Non-Employee Directors' Stock Option Plan of The Grand Union Company, incorporated by reference to Exhibit 10.6 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.39* Resolution amending the number of shares issuable under the 1995 Non-Employee Directors' Stock Option Plan.(1) 10.40* Letters dated April 3, 1996, with respect to the 1995 Non-Employee Directors' Stock Option Plan, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.41 Non-competition Agreement between The Grand Union Company and Joseph J. McCaig, incorporated by reference to Exhibit 10.23 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.42 Non-competition Agreement between The Grand Union Company and William A. Louttit, incorporated by reference to Exhibit 10.24 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.43 Non-competition Agreement between The Grand Union Company and Kenneth R. Baum, Jr., incorporated by reference to Exhibit 10.25 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.44 Non-competition Agreement between The Grand Union Company and Darrell W. Stine, incorporated by reference to Exhibit 10.26 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.45 Non-competition Agreement between The Grand Union Company and Gilbert C. Vuolo, incorporated by reference to Exhibit 10.27 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.46 Form of Indemnification Agreement between the Company and R. Stangeland, D. Josephs, W. Kagler, D. McClure, Jr., D. Ying, J. McCaig, W. Louttit, K. Baum, D. Stine, G. Vuolo and J. Schroeder, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.47 Form of Indemnification Agreement between the Company and J. Costello, C. Miller, G. Moore and J.R. Stonesifer, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 10.48 Investment Banking Agreement between The Grand Union Company and Donaldson, Lufkin & Jenrette, incorporated by reference to Exhibit 10.28 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.49 Stock Purchase Agreement dated July 30, 1996, among The Grand Union Company, Trefoil Capital Investors II, L.P. and GE Investment Private Placement Partners II, A Limited Partnership incorporated by reference to Exhibit 10.1 to The Grand Union Company report filed on Form 8-K dated July 30, 1996. 10.50 Amendment No. 1 to the Stock Purchase Agreement dated July 30, 1996, among the Grand Union Company, Trefoil Capital Investors II, L.P., and GE Investment Private Placement Partners II, a Limited Partnership.(1) 10.51 Management Agreement between The Grand Union Company and Shamrock Capital Advisors, Inc., dated July 30, 1996, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996.
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10.52 Stock Purchase Agreement by and between The Grand Union Company and Roger Stangeland, dated as of February 25, 1997.(1) 10.53 Amendment No. 1, dated March 20, 1997, to the Stock Purchase Agreement between The Grand Union Company and Roger Stangeland, dated as of February 25, 1997.(1) 10.54 Assignment and Assumption Agreement by and between Roger Stangeland and The Stangeland Family Limited Partnership, dated March 20, 1997.(1) 10.55 Stockholder Agreement between Trefoil Capital Investors II, L.P., a Delaware limited partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware corporation.(1) 10.56 Addendum to Stockholder Agreement among Trefoil Capital Investors II, L.P., a Delaware limited partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware corporation.(1) 10.57 Acceleration and Exchange Agreement, dated as of June 5, 1997, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, including Exhibits thereto.(1) 10.58 Amendment No. 1, dated as of June 5, 1997, to the Registration Rights Agreement dated as of July 30, 1996, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited Partnership, a Delaware limited partnership.(1) 21.1 Subsidiaries of Grand Union.(1) 27.1 Financial Data Schedule.(1)
* Compensatory plan or arrangement ** Confidential treatment requested (1) Previously filed 7 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE GRAND UNION COMPANY (Registrant) /s/ Jeffrey P. Freimark Date: March 27, 1998 ---------------------------------------- Jeffrey P. Freimark Executive Vice President, Chief Financial Officer 8 EXHIBIT INDEX
Exhibit Number Description of Document - ----- ----------------------- 2.1 Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company ("Grand Union"), filed with the United States Bankruptcy Court, District of Delaware, on April 19, 1995, incorporated by reference to Exhibit T3E1 to Grand Union's Form T-3 dated May 8, 1995. 2.2 Findings of Fact, Conclusions of Law and Order Confirming the Second Amended Plan of Reorganization proposed by Grand Union, dated May 31, 1995, incorporated by reference to Exhibit 2.2 to Grand Union's Annual Report on Form 10-K for the fiscal year ended April 1, 1995 ("Fiscal 1995"). 2.3 Minute Order Clarifying Findings of Fact, Conclusions of Law and Order Confirming Second Amended Plan of Reorganization proposed by Grand Union, dated June 14, 1995, incorporated by reference to Exhibit 2.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 3.1 Certificate of Incorporation of Grand Union, as amended through January 6, 1997.(1) 3.2 Certificate of Designation of Class A Convertible Preferred Stock, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 3.3 Certificate of Designation of Class B Convertible Preferred Stock, dated as of June 11, 1997.(1) 3.4 By-laws of The Grand Union Company, as amended through September 12, 1996, incorporated by reference to Exhibit 3.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 4.1 Form of New Common Stock Certificate of Grand Union, incorporated by reference to Exhibit 4.1 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.2 Warrant Agreement dated as of June 15, 1995, between Grand Union and American Stock Transfer & Trust Company, as Warrant Agent for 300,000 Series 1 Warrants and 600,000 Series 2 Warrants, incorporated by reference to Exhibit 4.5 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.3 Registration Rights Agreement dated as of June 15, 1995, among Grand Union and Each of the Persons Named in Schedule A thereto for the New Common Stock, incorporated by reference to Exhibit 4.6 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.4 Registration Rights Agreement dated as of June 15, 1995, by and among Grand Union and The Holders Named therein for the Registrable Notes, incorporated by reference to Exhibit 4.7 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.5 Indenture dated as of June 15, 1995, between Grand Union, as Issuer and IBJ Schroeder Bank & Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, including form of the 12% Senior Notes due 2004, incorporated by reference to Exhibit 4.2 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.6 First Supplement Indenture, dated September 9, 1996, to the Indenture dated as of June 15, 1995, between Grand Union, as Issuer, and IBJ Schroeder Bank & Trust Company, as Trustee for the 12% Senior Notes due September 1, 2004, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 4.7 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to Bankers Trust Company ("Bankers Trust"), as Collateral Agent, incorporated by reference to Exhibit 4.3 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 4.8 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 4.4 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.1 Agreement to Hold Separate dated July 17, 1989, by and among MTH Holdings Inc. ("MTH Holdings"), GU Acquisition Corporation ("GUAC"), Salomon Inc. and the Federal Trade Commission (the "FTC") entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.5 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-29707) (the "1989 Grand Union Registration Statement"). 10.2 Agreement containing Consent Order among MTH Holdings, GUAC and the FTC entered into in the matter of MTH Holdings and GUAC before the FTC, incorporated by reference to Exhibit No. 10.6 to the 1989 Grand Union Registration Statement. 10.3 Asset Purchase Agreement, dated as of January 25, 1990, by and between Grand Union and Price Chopper Operating Co. of Vermont, Inc., incorporated by reference to Exhibit No. 10.15 to Holdings Registration Statement on Form S-1 (Registration No. 33-32879). 10.4 Asset Purchase Agreement, dated as of February 9, 1990, by and between Grand Union and Price Chopper Operating Co., Inc., incorporated by reference to Exhibit No. 10.49 to GUAC's Registration Statement on Form S-1 (Registration No. 33-22398). 10.5 Agreement and Master Sublease dated as of July 30, 1990, by and between Grand Union and P&C Food Markets, Inc. ("P&C Foods"), incorporated by reference to Exhibit No.10.18 to Holdings' Report on Form 10-Q dated July 21, 1990 (Commission File No. 33-29707). 10.6 Asset Purchase Agreement dated as of February 4, 1993, between The Great Atlantic & Pacific Tea Company, Inc. and Grand Union, incorporated by reference to Exhibit No. 2.1 to Grand Union's Report on Form 8-K dated February 4, 1993. 10.7 Asset Purchase Agreement dated as of September 20, 1993 among Foodarama Supermarkets, Inc., ShopRite of Malverne, Inc. and Grand Union, incorporated by reference to Exhibit No. 10.19 to Grand Union's Registration Statement on Form S-1 (Registration No. 33-70956). 10.8 Letter dated June 15, 1995, containing MTH Settlement Agreement between Miller Tabak Hirsch + Co. ("MTH") and Grand Union in connection with (i) the termination of the Agreement, dated July 22, 1992, between MTH and Grand Union, and (ii) the Second Amended Plan of Reorganization, dated April 19, 1995, of Grand Union, incorporated by reference to Exhibit 10.15 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.9 Agreement dated as of April, 1995, among Grand Union, Grand Union Capital Corporation ("Capital"), Holdings, the Official Committee of Unsecured Creditors of Capital and certain holders of Zero Coupon Notes issued by Capital and guaranteed by Holdings named therein, incorporated by reference to Exhibit 10.16 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.10 Waiver dated June 14, 1995, with respect to the Second Amended Chapter 11 Plan of Grand Union, among Grand Union, Bankers Trust, the Official Committee of Unsecured Creditors of Grand Union and the Informal Committee of Senior Noteholders, incorporated by reference to Exhibit 10.17 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.11 Amended and Restated Borrower Pledge Agreement dated as of June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent incorporated by reference to Exhibit 10.10 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.12 Amended and Restated Borrower Security Agreement dated as of June 15, 1995, between Grand Union and Bankers Trust, as Collateral Agent (included in Exhibit 4.4), incorporated by reference to Exhibit 10.11 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.13 Subsidiary Security Agreement dated as of June 15, 1995, among the corporations listed on Schedule 1 thereto and Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 10.12 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.14 Subsidiary Guaranty dated as of June 15, 1995, made by each of the corporations from time to time listed on Annex A attached thereto in favor of the Banks and the Agent from time to time party to the Credit Agreement, incorporated by reference to Exhibit 10.13 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.15 Form of Indenture of Open-End Mortgage, Deed of Trust, Deed to Secure Debt, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing, dated as of June 15, 1995, made by Grand Union to Bankers Trust, as Collateral Agent, incorporated by reference to Exhibit 10.14 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.16 Amended and Restated Credit Agreement dated as of June 15, 1995, (the "Credit Agreement"), among Grand Union, the lending institutions listed from time to time on Schedule 1 thereto, and Bankers Trust, as Agent, including Exhibits A-1, A-2 and A-3, and various Schedules thereto, incorporated by reference to Exhibit 10.9 to Grand Union's Annual Report on Form 10-K for Fiscal 1995. 10.18 Second Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.19 Third Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 10.20 Fourth Amendment to the Amended and Restated Credit Agreement incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 4, 1997. 10.21 Fifth Amendment to the Credit Agreement.(1) 10.22 Sixth Amendment to the Credit Agreement.(1) 10.23 Seventh Amendment to the Credit Agreement.(1) 10.24 Eighth Amendment to the Credit Agreement.(1) 10.25** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.26** First Amendment to the Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated June 15, 1995, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.27** Supply and Distribution Agreement between The Grand Union Company and C&S Wholesalers, dated January 2, 1996, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-QA for the period ended January 6, 1996. 10.28** Agreement with C&S Wholesalers Inc. dated January 21, 1996. 10.29* Third Amendment and Restatement of The Grand Union Company Supplemental Retirement Program for Key Executives effective as of June 15, 1995, incorporated by reference to Exhibit 10.8 to Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.30 Executive Severance Policy, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.31* The Grand Union Company 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996. 10.32* First Amendment to the 1995 Equity Incentive Plan of the Grand Union Company, incorporated by reference to Exhibit 10.4 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.33* Second Amendment to the 1995 Equity Incentive Plan.(1) 10.34* Resolution amending the number of shares issuable under the 1995 Equity Incentive Plan.(1) 10.35* Letters dated December 14, 1995, with respect to the 1995 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.36* Option Agreement with Jeffrey P. Freimark.(1) 10.37 The Grand Union Company 1995 Non-Employee Directors Stock Option Plan, incorporated by reference to Exhibit 10.2 to Grand Union's Quarterly Report on Form 10-Q for the period ended January 6, 1996. 10.38* First Amendment to the 1995 Non-Employee Directors' Stock Option Plan of The Grand Union Company, incorporated by reference to Exhibit 10.6 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.39* Resolution amending the number of shares issuable under the 1995 Non-Employee Directors' Stock Option Plan.(1) 10.40* Letters dated April 3, 1996, with respect to the 1995 Non-Employee Directors' Stock Option Plan, incorporated by reference to Exhibit 10.5 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.41 Non-competition Agreement between The Grand Union Company and Joseph J. McCaig, incorporated by reference to Exhibit 10.23 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.42 Non-competition Agreement between The Grand Union Company and William A. Louttit, incorporated by reference to Exhibit 10.24 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.43 Non-competition Agreement between The Grand Union Company and Kenneth R. Baum, Jr., incorporated by reference to Exhibit 10.25 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.44 Non-competition Agreement between The Grand Union Company and Darrell W. Stine, incorporated by reference to Exhibit 10.26 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.45 Non-competition Agreement between The Grand Union Company and Gilbert C. Vuolo, incorporated by reference to Exhibit 10.27 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.46 Form of Indemnification Agreement between the Company and R. Stangeland, D. Josephs, W. Kagler, D. McClure, Jr., D. Ying, J. McCaig, W. Louttit, K. Baum, D. Stine, G. Vuolo and J. Schroeder, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the period ended July 20, 1996. 10.47 Form of Indemnification Agreement between the Company and J. Costello, C. Miller, G. Moore and J.R. Stonesifer, incorporated by reference to Exhibit 10.1 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 10.48 Investment Banking Agreement between The Grand Union Company and Donaldson, Lufkin & Jenrette, incorporated by reference to Exhibit 10.28 of Grand Union's Annual Report on Form 10-K for the fiscal year ended March 30, 1996. 10.49 Stock Purchase Agreement dated July 30, 1996, among The Grand Union Company, Trefoil Capital Investors II, L.P. and GE Investment Private Placement Partners II, A Limited Partnership incorporated by reference to Exhibit 10.1 to The Grand Union Company report filed on Form 8-K dated July 30, 1996. 10.50 Amendment No. 1 to the Stock Purchase Agreement dated July 30, 1996, among the Grand Union Company, Trefoil Capital Investors II, L.P., and GE Investment Private Placement Partners II, a Limited Partnership.(1) 10.51 Management Agreement between The Grand Union Company and Shamrock Capital Advisors, Inc., dated July 30, 1996, incorporated by reference to Exhibit 10.7 to Grand Union's Quarterly Report on Form 10-Q for the period ended October 12, 1996. 10.52 Stock Purchase Agreement by and between The Grand Union Company and Roger Stangeland, dated as of February 25, 1997.(1) 10.53 Amendment No. 1, dated March 20, 1997, to the Stock Purchase Agreement between The Grand Union Company and Roger Stangeland, dated as of February 25, 1997.(1) 10.54 Assignment and Assumption Agreement by and between Roger Stangeland and The Stangeland Family Limited Partnership, dated March 20, 1997.(1) 10.55 Stockholder Agreement between Trefoil Capital Investors II, L.P., a Delaware limited partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware corporation.(1) 10.56 Addendum to Stockholder Agreement among Trefoil Capital Investors II, L.P., a Delaware limited partnership, GE Investment Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, Roger Stangeland, an individual, and The Grand Union Company, a Delaware corporation.(1) 10.57 Acceleration and Exchange Agreement, dated as of June 5, 1997, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited Partnership, a Delaware limited partnership, including Exhibits thereto.(1) 10.58 Amendment No. 1, dated as of June 5, 1997, to the Registration Rights Agreement dated as of July 30, 1996, by and among The Grand Union Company, Trefoil Capital Investors II, L.P., a Delaware limited partnership, and GE Investments Private Placement Partners II, A Limited Partnership, a Delaware limited partnership.(1) 21.1 Subsidiaries of Grand Union.(1) 27.1 Financial Data Schedule.(1)
* Compensatory plan or arrangement ** Confidential treatment requested (1) Previously filed EX-10.28 2 SUPPLY AND OPERATING AGREEMENT Exhibit 10.28 SUPPLY AND OPERATING AGREEMENT BETWEEN THE GRAND UNION COMPANY AND C&S WHOLESALE GROCERS, INC. DATED AS OF JANUARY 21, 1996 TABLE OF CONTENTS Page ---- ARTICLE I. CERTAIN DEFINITIONS ......................................... 1 SECTION 1.1. Certain Defined Terms ....................................... 1 ARTICLE II. SCOPE AND TERM AGREEMENT, CHANGEOVER PROVISIONS, MERCHANDISE ..................................... 5 SECTION 2.1. Agreement ................................................... 5 SECTION 2.2. Term ........................................................ 5 SECTION 2.3. Changeover Provisions ....................................... 6 SECTION 2.4. Provisions Relating to Merchandise .......................... 6 ARTICLE III. PURCHASE, SALE AND DISTRIBUTION ............................. 8 SECTION 3.1. Agreement ................................................... 8 SECTION 3.2. Delivery .................................................... 8 SECTION 3.3. Price ....................................................... 9 SECTION 3.4. Other Pricing Provisions .................................... 9 SECTION 3.5. Payments .................................................... 10 SECTION 3.6. Service Level ............................................... 11 ARTICLE IV. OPERATION AND FEES .......................................... 12 SECTION 4.1. Operation of Facility ....................................... 12 SECTION 4.2. Non-Merchandise Inventory ................................... 12 SECTION 4.3. Use of Slots; Storage ....................................... 13 SECTION 4.4. Payment of Costs and Fees ................................... 13 SECTION 4.5. Determination of Operating Expense Amount and Other Costs ............................................. 13 SECTION 4.6. Cooperation ................................................. 14 SECTION 4.7. Maintenance of Fees ......................................... 14 * ARTICLE V. CERTAIN COVENANTS ........................................... 15 SECTION 5.1. Information ................................................. 15 * SECTION 5.3. Sublease; Assignment ........................................ 15 * SECTION 5.5. Compliance with Law ......................................... 16 SECTION 5.6. Insurance ................................................... 16 * SECTION 5.8. Affirmation and Acknowledgment .............................. 17 ARTICLE VI. MONTGOMERY INVENTORY ........................................ 17 SECTION 6.1. Initial Inventory ........................................... 17 SECTION 6.2. Inventory Administrative Charge ............................. 18 SECTION 6.3. Inventory Limits ............................................ 18 ARTICLE VII. ADDITIONAL BUSINESS ......................................... 19 SECTION 7.1. Additional Business ......................................... 19 ARTICLE VIII. TERMINATION ................................................. 20 SECTION 8.1. Termination by C&S .......................................... 20 *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. i SECTION 8.2. Termination by Grand ........................................ 21 SECTION 8.3. Termination of Sublease ..................................... 22 SECTION 8.4. Negotiations, Interim Period ................................ 22 SECTION 8.5. Waiver ...................................................... 23 ARTICLE IX. REPRESENTATIONS AND WARRANTIES .............................. 23 SECTION 9.1. Representations and Warranties of C&S ....................... 23 SECTION 9.2. Representation and Warranties of Grand Union ................ 24 ARTICLE X. GENERAL PROVISIONS .......................................... 24 SECTION 10.1. Entire Agreement ............................................ 24 SECTION 10.2. Expenses .................................................... 24 SECTION 10.3. Amendments .................................................. 25 SECTION 10.4. Notices ..................................................... 25 SECTION 10.5. Binding Effect; Assignment .................................. 25 SECTION 10.6. Counterparts ................................................ 26 SECTION 10.7. Confidentiality ............................................. 26 SECTION 10.8. Relationship of Parties ..................................... 27 SECTION 10.9. No Third-Party Beneficiaries ................................ 27 SECTION 10.l0.Severability ................................................ 27 SECTION 10.11.Headings .................................................... 28 SECTION 10.12.Governing Law ............................................... 28 SECTION 10.13.Arbitration ................................................. 28 Exhibit A - Montgomery Lease Agreement dated September 29, 1989 Exhibit B - Existing Grand Union Stores Exhibit C - Merchandise Exhibit D - Operating Expenses and Other Costs Exhibit E - Forms of Notices Exhibit F - Form of Landlord Consent Exhibit G - Overage/Shortage Policy Exhibit H - Montgomery Facility Slots Exhibit I - Montgomery Facility Storage * Exhibit K - Terms of Sublease * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. ii SUPPLY AND OPERATING AGREEMENT, dated as of January 21, 1996 (this "Agreement"), between THE GRAND UNION COMPANY, a Delaware corporation ("Grand Union"), and C&S WHOLESALE GROCERS, INC., a Vermont corporation ("C&S"). W I T N E S S E T H: WHEREAS, Grand Union operates supermarkets and food stores in the States of New York, Vermont, New Jersey, Connecticut, Pennsylvania and New Hampshire; and WHEREAS, certain of such stores are presently supplied through a facility leased by Grand Union in Montgomery, New York, pursuant to that certain lease agreement attached hereto as Exhibit A (the "Montgomery Facility"); and WHEREAS, C&S is a wholesale supplier of food products and other merchandise sold in supermarkets and food stores; and WHEREAS, Grand Union intends to retain possession of the Montgomery Facility (except as otherwise provided herein), and Grand Union and C&S desire to enter into an agreement relating to Merchandise to be provided to Grand Union through the Montgomery Facility; NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, Grand Union and C&S hereby agree as follows: ARTICLE I. CERTAIN DEFINITIONS SECTION 1.1. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Agreement" has the meaning specified in the preamble to this Agreement. "Assignment" has the meaning specified in Section 5.3. * "Bank Agreement" shall mean the Amended and Restated Credit Agreement dated as of June 15, 1995 among Grand Union, Bankers Trust Company, as agent, and the lending institutions *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. party thereto, as amended from time to time, and any other revolving credit agreement that provides for the refinancing or replacement of the revolving credit obligations of Grand Union under such Credit Agreement. "Base Costs" has the meaning specified in section 8.2. * "Business Day" means a day on which banks in New York, New York and Boston, Massachusetts are open for business. "Changeover Date" means the date specified in the Changeover Election Notice as the date on which the C&S Purchase Period shall commence. "Changeover Election Notice" has the meaning specified in Section 2.3 "Contract Year" means any consecutive twelve-month period during the Term commencing on January 21 and ending the following January 20, the first such Contract Year to commence January 21, 1996. "C&S Purchase Period" means the period commencing on the Changeover Date and ending on the date on which this Agreement expires or otherwise terminates. "C&S Supply Agreements" means the two Supply and Distribution Agreements between C&S and Grand Union dated as of June 15, 1995 and January 2, 1996, as amended from time to time. "Employee Costs" means payroll, fringe benefits and other amounts payable to employees of Grand Union, pursuant to the Labor Service Agreement or otherwise, for their services in connection with the operation of the Montgomery Facility. "Event of Force Majeure" means, with respect to any Person, any event, circumstance or condition described in any of clauses (a) through (e) below that is beyond the control of such Person, and is not the result of negligence or failure of such Person to act with due care, and that prevents such Person from performing, in whole or in part, its obligations under this Agreement. The following occurrences shall be deemed to be Events of Force Majeure: (a) Acts of God, fire, explosion, accident, flood, storm or other natural phenomenon; (b) war (whether declared or undeclared); (c) national defense requirements; (d) compliance with any law, rule, regulation or governmental order that (x) becomes effective after the date hereof and (y) is binding on such Person, and compliance therewith by such Person is not voluntary or optional; and (e) producers or manufacturers establish industry-wide allocations or restrictions on quantities of products available to such Person. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 2 "Event of Insolvency" means that, with respect to any Person, such Person shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Person seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur, or such Person shall take any corporate action to authorize any of the actions set forth above in this definition. * "Grand Union Merchandise" means Merchandise owned by Grand Union and held at the Montgomery Facility as of the commencement date of this Agreement. "Grand Union Purchase Period" means the period commencing on the first day of the Term and ending on the day prior to the Changeover Date. "Grand Union Stores" shall mean (i) all existing Grand Union stores currently supplied by the Montgomery Facility as itemized on Exhibit B and (ii) all new Grand Union stores hereafter acquired. "Indenture" means the Indenture dated as of June 15, 1995 between Grand Union and IBJ Schroder Bank & Trust Company, as Trustee, as amended from time to time, and any indenture or other agreement that provides for the refinancing or replacement of the Notes issued by Grand Union under such Indenture. "Labor Service Agreement" means the agreement referred to in Section 5.4. "Lease" has the meaning specified in Section 5.3(a). "Liquidity Amount" means at any time of determination hereunder, the amount then available for borrowing by Grand Union under the Bank Agreement. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 3 "Merchandise" means products in the following categories currently carried by Grand Union at the Montgomery Facility and which are to be sold by Grand Union through Grand Union Stores: health, beauty care and cosmetics products and general merchandise supplied through the Montgomery Facility. The Merchandise is more particularly described in Exhibit C hereto. "Montgomery Facility" has the meaning specified in the second recital to this Agreement. "Non-Merchandise Inventory" has the meaning specified in Section 4.2. "Operating Expense Amount" has the meaning provided in Section 4.5(a). "Operating Expenses" means the * "Order and Polling Schedules" means the order and polling schedules as mutually agreed to by C&S and Grand Union from time to time. "Other Costs" means costs incurred by C&S in connection with the Montgomery Facility of the kinds specified in Part II of Exhibit D hereto. "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity or any government or governmental authority or agency. "Service Level" means at any time during the C&S Purchase Period a percentage reflecting the ratio of (i) the number of cases of Merchandise actually delivered or available for pick-up within the delivery windows as provided in the applicable delivery schedules and in accordance with the requirements of Section 3.2 hereof to (ii) the total number of cases of such Merchandise ordered by Grand Union for delivery or pick-up, as the case may be, during the same period, less unauthorized Merchandise and manufacturers' out-of-stock Merchandise, and as otherwise determined in accordance with the provisions of Section 3.6. "Service Level Breach" has the meaning specified in Section 3.6. "Sublease" has the meaning specified in section 5.3. "Sublease Effective Date" has the meaning specified in Section 5.3. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 4 "Term" has the meaning specified in Section 2.2. "Termination Fee" has the meaning specified in section 8.2. "Weekly Fee" has the meaning specified in section 4.4. ARTICLE II. SCOPE AND TERM OF AGREEMENT; CHANGEOVER PROVISIONS; MERCHANDISE SECTION 2.1. Agreement. Grand Union hereby agrees to purchase from C&S, subsequent to the shipment of the Grand Union Merchandise to Grand Union Stores, substantially all of Grand Union's requirements for Merchandise, and C&S hereby agrees to supply to Grand Union all merchandise ordered by Grand Union hereunder, upon the terms and subject to the conditions herein set forth. (a) Grand Union Purchase Period. C&S authorizes Grand Union, during the Grand Union Purchase Period, to act as agent of C&S for the procurement of Merchandise. Grand Union shall negotiate, procure, process, purchase and pay for such Merchandise, which shall be delivered to the Montgomery Facility. C&S shall reimburse Grand Union for such purchases based on the provisions of section 3.5. At all times during the Grand Union Purchase Period, Grand Union shall purchase Merchandise only in such amounts and on such terms as may be permitted under Article VI of this Agreement. Grand Union shall not hold itself out as an agent for C&S except for the limited purpose set forth in this Section 2.1(a). (b) Direct-to-Store Purchases. Subject to the provisions of the first paragraph of this Section 2.1, Grand Union shall have the right to supply Merchandise to Grand Union Stores on a "direct-to-store" basis, rather than through purchases from the Montgomery Facility as provided herein. Subject to such provisions, Grand Union may supply Merchandise on a direct-to-store basis at any time and from time to time and notwithstanding that Merchandise of any particular kind had previously been, or may thereafter be, supplied through purchase from the Montgomery Facility. Merchandise supplied on a direct-to-store basis may be delivered for cross-docking at the Montgomery Facility. SECTION 2.2. Term. (a) Implementation will begin on January 21, 1996, and the term of this Agreement (the "Term") will begin on January 21, 1996 and end on January 20, 2002; provided, however, that if the Term has not been extended by written agreement *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 5 entered into prior to January 20, 2002 the Term shall be extended, without any action of the parties hereto, for an additional year, to expire January 20, 2003. Notwithstanding the foregoing provisions, if the date on which Grand Union commences purchasing substantially all of its requirements of Merchandise from C&S occurs after January 21, 1996, the Term will commence on the first Sunday after such date. (b) C&S has the right, which may be exercised by giving notice to Grand Union at any time prior to July 1, 2002 to extend the Term for two additional Contract Years and a portion of a third additional Contract Year so that the Term is extended to February 24, 2005. Grand Union shall also have the right, which may be exercised by giving notice to C&S at any time prior to July 1, 2002 to extend the Term for two additional Contract Years and a portion of a third additional Contract Year so that the Term is extended to February 24, 2005. All fees set forth in this Agreement shall remain unchanged during such extension, except as otherwise expressly provided herein. SECTION 2.3. Changeover Provisions. During the Grand Union Purchase Period, Grand Union will purchase Merchandise directly from vendors as provided in Section 2.1(a), and certain provisions of this Agreement, as specified herein, are applicable only during the Grand Union Purchase Period. C&S shall have the right, by written notice given to Grand Union at any time, to elect that C&S shall purchase Merchandise hereunder directly from vendors. Such notice shall state that C&S elects to have the C&S Purchase Period commence, stating the commencement date of such Period, which shall be not earlier than 90 days after the date of such notice. Certain provisions of this Agreement, as specified herein, shall be applicable only during the C&S Purchase Period. All provisions of this Agreement that do not by their terms apply only to the Grand Union Purchase Period or the C&S Purchase Period shall apply to both such Periods. SECTION 2.4. Provisions Relating to Merchandise. (a) At all times during the Term, Grand Union agrees to take all reasonable measures to assure that the Merchandise (other than Grand Union Merchandise) is deemed for all purposes to be the property of C&S. Such measures shall include, but not be limited to, segregating such Merchandise from Non-Merchandise Inventory and other property of Grand Union; posting signs identifying such Merchandise as property of C&S; and correctly identifying the ownership of such Merchandise in all relevant communications with third parties, including any collateral certificates furnished by Grand Union to its lenders. If so requested by C&S, Grand Union agrees to execute and deliver appropriate UCC-1 financing statements or other documentation for filing in public records. (b) Promptly upon commencement of the Term, Grand Union shall give written notice (the forms of which are appended *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 6 to this Agreement as Exhibit E) (i) to all vendors of Merchandise, that Grand Union is making purchases of Merchandise in its capacity as agent for C&S and (ii) to its bank agent and the landlord under the Lease, that Merchandise (other than Grand Union Merchandise) in the Montgomery Facility is the property of C&S. Upon commencement of the C&S Purchase Period, Grand Union shall give notice to such vendors that Grand Union's authority to act as C&S' agent has terminated. Grand Union shall deliver copies of each such notice to C&S. (c) Within 30 days following commencement of the Term, Grand Union shall obtain from each holder of a security interest in inventory at the Montgomery Facility that filed a UCC-1 financing statement with respect to such inventory UCC-3s suitable for filing in all locations where such holders have filed UCC-1 financing statements, acknowledging C&S' rights with respect to Merchandise, such UCC-3s to be in form and substance reasonably satisfactory to C&S. Further, within 60 days following commencement of the Term, Grand Union shall furnish C&S with a search report from a recognized search firm identifying all holders of security interests in inventory at the Montgomery Facility with filed UCC-1 financing statements with respect to such inventory. Such search report shall be conducted for filings during the period from October 15, 1995 through the date of the search. Grand Union shall, within 30 days after delivery of such search report to C&S, deliver appropriate UCC-3s suitable for filing in all locations where such holders have filed UCC-1 financing statements if UCC-3s were not previously delivered with respect to such holders pursuant to this subsection (c). (d) On Friday of each week during the Grand Union Purchase Period, Grand Union agrees to furnish to C&S a certificate, signed by its Chief Financial Officer (or his designee), certifying the quantity of Merchandise in the Montgomery Facility (by shopkeeping unit) and that payments to vendors are being made in accordance with normal terms. (e) To provide C&S collateral security for Grand Union's obligation to act as C&S' agent to pay for Merchandise, as well as to provide collateral security for the payment and performance of all other obligations owing from Grand Union to C&S under this Agreement and the C&S Supply Agreements, Grand Union agrees to provide a stand-by, irrevocable letter of credit in favor of C&S in the amount of $2,625,000. Such letter of credit shall be issued by a bank reasonably satisfactory to C&S and shall be delivered to C&S no later than February 15, 1996. The letter of credit shall provide that it may be drawn upon (i) the occurrence of any event permitting C&S to terminate this Agreement or either of the C&S Supply Agreements; or (ii) failure by Grand Union to provide C&S a replacement letter of credit not less than thirty days prior to the expiration date of the existing letter of credit. Grand Union shall have the right to require that C&S release and return to Grand Union any such letter of credit and any proceeds of any drawing on such letter 7 of credit obtained pursuant to clause (ii) if, as of any date within 30 days after any interest payment date under the Indenture on which Grand Union shall have paid the full amount of the interest then due on the Notes outstanding under the Indenture, the Liquidity Amount is at least $40 million and Grand Union shall have delivered to C&S a certificate of the Chief Financial Officer (or his designee) of Grand Union setting forth such Liquidity Amount and the calculation thereof. Thereafter, the Chief Financial Officer of Grand Union (or his designee) shall provide quarterly certificates setting forth the Liquidity Amount and the calculation thereof. If at any time following the release and return of any such letter of credit the Liquidity Amount falls below $40 million, Grand Union shall deliver to C&S another letter of credit on the same terms and conditions set forth above. ARTICLE III. PURCHASE, SALE AND DISTRIBUTION SECTION 3.1. Agreement. During the C&S Purchase Period, C&S shall negotiate, procure, process, purchase and pay for Merchandise from vendors thereof, and shall maintain stock and inventory thereof at the Montgomery Facility, at such times and in such amounts as shall be necessary to provide Merchandise to Grand Union pursuant to section 2.1. SECTION 3.2. Delivery. (a) All Merchandise and Non-Merchandise Inventory ordered hereunder for Grand Union Stores whose grocery and perishable inventory requirements are serviced by C&S pursuant to the C&S Supply Agreements shall be delivered by C&S F.O.B. destination to the C&S distribution center applicable to each such Grand Union Store where such Merchandise shall be "cross-docked" in accordance with the C&S Supply Agreements (or any future agreements) and delivered to such Grand Union Stores in accordance with the C&S Supply Agreements (or future agreements). Title to, and risk of loss with respect to, such Merchandise shall remain with C&S until delivery to the respective Grand Union Store. (b) All Merchandise and Non-Merchandise Inventory ordered hereunder for Grand Union Stores that are not serviced by C&S pursuant to the C&S Supply Agreements shall be picked up at the Montgomery Facility by Grand Union in accordance with schedules to be agreed to by the parties from time to time. Title to, and risk of loss with respect to, such Merchandise shall pass to Grand Union upon pick-up from the Montgomery Facility. 8 SECTION 3.3. Price. (a) Grand Union Purchase Period. During the Grand Union Purchase Period, C&S will sell Merchandise to Grand Union based on * (b) C&S Purchase Period. During the C&S Purchase Period, C&S will sell Merchandise to Grand Union at * SECTION 3.4. Other Pricing Provisions. In addition to the provisions of Section 3.3(b), the following provisions shall be applicable to the purchase and supply by C&S of Merchandise hereunder during the C&S Purchase Period: * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 9 (d) C&S will carry Grand Union's full assortment of private label Merchandise and will treat private label Merchandise as it does any other product. (e) Grand Union will be responsible for providing C&S with ad quantity requirements. * SECTION 3.5. Payments. (a) During the Grand Union Purchase Period, C&S will pay Grand Union * the purchase price of the Merchandise purchased by Grand Union as C&S' agent * (b) During the Grand Union Purchase Period, Grand Union will pay C&S * the Merchandise shipped to Grand Union Stores during the preceding week. * (c) During the C&S Purchase Period, Grand Union will pay C&S * Merchandise shipped to Grand Union Stores, based on * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 10 (d) Grand Union will pay C&S * for fees and charges, other than Merchandise payments, under this Agreement. (e) Grand Union will provide to C&S * C&S will pay Grand Union by wire transfer * (f) In the event Grand Union or C&S fails to make any payment as provided in this Section 3.5, C&S or Grand Union will immediately provide written notice to the counterparty that payment has not been received and the counterparty will have *. If the payment is not received within * C&S shall have the right *. If payment is not received within * from receipt by Grand Union or C&S of such notice, C&S or Grand Union shall have the right to terminate this Agreement as provided in Section 8.1 or 8.2. Notwithstanding the foregoing, each party agrees to notify the other promptly if it believes there is an error. The parties agree to use their best efforts to resolve any disputes * of such notice. If any such dispute is not resolved *, the parties will submit the dispute to binding arbitration as provided in Section 10.13. For purposes of this Section 3.5, time is of the essence, subject to the express provisions hereof. (g) The parties agree to establish jointly an overage/shortage policy, attached hereto as Exhibit G (the "Credit Policy"), which will provide for a shortage adjustment factor on all shipments based on actual audits performed by C&S personnel and witnessed by Grand Union representatives. The Credit Policy will also provide for store delivery documentation and remedy procedures in the event of a "missing pallet." SECTION 3.6. Service Level. C&S agrees that, during the C&S Purchase Period, the Service Level for all Merchandise ordered by Grand Union hereunder will be maintained at a minimum *. C&S will provide Grand Union, during such Period, a weekly Service Level Reconciliation Report showing, with respect to each invoice, the number of cases ordered, the number of cases shipped or available for pick-up, as the case may be, the number of cases that are out of stock (including "warehouse scratches") and the number of cases that are unauthorized. Service Level percentages will not be adversely affected by any error by Grand Union in booking advertising and feature items, including sales levels of feature items in excess of projections made by Grand Union. If the Service Level for any week falls below the level *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 11 required by the first sentence of this Section 3.6 (a "Service Level Breach"), Grand Union shall give notice to C&S and C&S shall use its best efforts to immediately restore the required Service Level. If, during * following the occurrence of a Service Level Breach the required Service Level is achieved, then the Service Level Breach shall be cured. Failure to achieve the required Service Level during * shall constitute a breach of this Agreement by C&S, * Notwithstanding the foregoing provisions, C&S will not be in breach of this Section 3.6 if its failure to maintain the Service Level as provided herein is a result of a material default by Grand Union under this Agreement, picketing or other labor disputes at Grand Union Stores or an Event of Force Majeure. ARTICLE IV. OPERATION AND FEES SECTION 4.1. Operation of Facility. (a) Prior to the Sublease Effective Date, Grand Union shall operate and manage the Montgomery Facility in accordance with normal operating procedures and subject to the provisions of this Agreement. From and after the Sublease Effective Date, C&S shall operate and manage the Montgomery Facility in accordance with normal operating procedures and subject to the provisions of the Sublease, the Assignment, if entered into, and this Agreement, provided that Grand Union shall provide employees for such operation in accordance with the Labor Service Agreement. The provisions of Section 3.2 hereof with respect to title to, and risk of loss with respect to, Merchandise will be applicable both before and after the Sublease Effective Date. SECTION 4.2. Non-Merchandise Inventory. The parties acknowledge that Grand Union currently utilizes, and will continue to utilize, the Montgomery Facility for cigarettes and certain grocery and other products that do not constitute Merchandise and that C&S will have no rights hereunder in respect of such inventory ("Non-Merchandise Inventory"). The parties agree to cooperate in establishing procedures for segregation, handling and recordkeeping, and for other administrative matters, relating to Non-Merchandise Inventory. Physical inventories with respect to Non-Merchandise Inventory and with respect to inventory acquired by or through C&S hereunder will be taken on the same date as agreed to by the parties. Costs solely and exclusively relating to Non-Merchandise Inventory shall be allocated solely and exclusively to Grand Union, and C&S shall bear none of such costs. Costs that relate to both Non-Merchandise Inventory and Merchandise inventory * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 12 * C&S agrees that, if the Sublease or the Assignment is entered into, C&S will enter into or will provide such agreements as shall be necessary so that Grand Union may continue to utilize the Montgomery Facility for Non-Merchandise Inventory as referred to above. SECTION 4.3. Use of Slots; Storage. (a) Grand Union and C&S acknowledge that Exhibit H hereto reflects the current numbers of in-use and open slots in the "quick-pick" portion of the Montgomery Facility. Grand Union and C&S further acknowledge that Grand Union will have the right, in its sole discretion, to add selected single items to the products for which such slots are used, but that Grand Union will use reasonable efforts, consistent with business requirements, to maintain slot counts generally at current levels in order to accommodate C&S' needs as contemplated by Section 7.1. (b) Grand Union and C&S will segregate the storage section of the Montgomery Facility based on the diagram set forth as Exhibit I hereto. SECTION 4.4. Payment of Costs and Fees. (a) Prior to the Sublease Effective Date, Grand Union shall pay (i) to the Persons entitled thereto, * (ii) to C&S for its provision of Merchandise hereunder, * the amount determined pursuant to Section 4.5(b) hereof. (b) Prior to the Sublease Effective Date, C&S shall pay to Grand Union, * (c) From and after the Sublease Effective Date: (i) C&S shall pay, to the Persons entitled thereto (or to Grand Union, for the purpose of making such payments),*; and (ii) Grand Union shall pay to C&S * SECTION 4.5. Determination of Operating Expense Amount and Other Costs (a) The Operating Expense Amount shall consist of the amount determined in accordance with the following provisions of this Section, as adjusted on an annual basis to reflect * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 13 (b) Other Costs shall be determined * the parties agree to cooperate and negotiate in good faith in the determination of Other Costs. (c) Notwithstanding the foregoing provisions, determinations with respect to * (d) Notwithstanding any other provision of this Agreement to the contrary, *. SECTION 4.6. Cooperation. The parties agree to cooperate and negotiate in good faith in the determination of the amounts and adjustments provided for in Sections 4.4 and 4.5. SECTION 4.7. Maintenance of Fees. * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 14 ARTICLE V. CERTAIN COVENANTS SECTION 5.1. Information. During the C&S Purchase Period, C&S agrees to provide Grand Union, in addition to the pricing reports provided for in Section 3.3, with such information as Grand Union may reasonably request from time to time in order to monitor compliance by C&S with the provisions of, and to carry out the transactions contemplated by, this Agreement. C&S further agrees that Grand Union will be allowed to conduct, * Grand Union agrees to provide C&S with such information and with such access to the Montgomery Facility as C&S may reasonably request in order to monitor compliance by Grand Union with the provisions of, and to carry out the transactions contemplated by, this Agreement. SECTION 5.2. Reclamation. * SECTION 5.3. Sublease; Assignment. (a) C&S shall have the right to request that Grand Union enter into a sublease of the Montgomery Facility (the "Sublease") upon the terms set forth in Exhibit K. Grand Union will agree to indemnify C&S against any environmental liabilities with respect to the leased premises arising out of a release of hazardous substances occurring prior to the effective date of the Sublease. The Sublease shall take effect no later than 90 days following the date of C&S' request that the parties enter into a Sublease. Grand Union represents and warrants to C&S that a true and correct copy of the Lease for the Montgomery Facility (the "Lease"), as in effect on the date of this Agreement, is appended to this Agreement as Exhibit A. During the Term, Grand Union agrees to comply with the terms of the Lease (except for any non-compliance that would not materially affect C&S' rights or obligations hereunder) and agrees not to amend, modify or extend that Lease without the prior written consent of C&S, which consent shall not be unreasonably withheld, delayed or conditioned. (b) C&S shall have the right to request that Grand Union's rights, interests and obligations under the Lease (including for this purpose the Sublease) be assigned to C&S, effective as of a date not earlier than the fourth anniversary of *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 15 the date of this Agreement. C&S shall give Grand Union notice of such request not later than 90 days prior to the date on which such assignment (the "Assignment") is to be effective as aforesaid, specifying such date, provided that no such notice shall be given, and no assignment shall be effective, unless the Sublease is in effect at each such time. Grand Union and C&S agree to negotiate in good faith with respect to the terms of the Assignment, taking into consideration the purposes of this Agreement and the terms of the Sublease. (c) Within 45 days following the commencement of the Term, Grand Union shall obtain (i) from the landlord under the Lease a Consent and Waiver in substantially the form appended to this Agreement as Exhibit F and (ii) all lender approvals to the Sublease and the Assignment. The Sublease and the Assignment shall by their terms be subject to the provisions of this Agreement. (d) C&S agrees that, if the Assignment becomes effective, C&S will not (i) further assign its rights or interests in and to the Assignment or the Lease, (ii) cease operations at or otherwise close the Montgomery Facility or (iii) enter into any agreement providing for any action referred to in clauses (i) or (ii), unless it shall have offered Grand Union the right to re-acquire the Lease upon the terms upon which the Assignment was made. SECTION 5.4. * SECTION 5.5. Compliance with Law. Each of Grand Union and C&S covenants and agrees that in performing its obligations hereunder, it will comply with all applicable laws, rules, regulations and orders and will have and maintain all permits, licenses and authorizations necessary for the conduct of its business and the performance of its obligations hereunder. SECTION 5.6. Insurance. C&S agrees that all material properties and risks of C&S shall at all times be covered by valid and currently effective insurance policies or binders of insurance or programs of self-insurance in such types and amounts as are consistent with customary practices and standards of companies engaged in businesses and operations similar to those of C&S. Grand Union agrees that all material properties and risks of Grand Union shall at all times be covered by valid and currently effective insurance policies or binders of insurance or programs of self-insurance in such types and amounts as are consistent with customary practices and standards of companies engaged in businesses and operations similar to those of Grand Union. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 16 SECTION 5.7. * SECTION 5.8. Affirmation and Acknowledgment. Grand Union affirms and acknowledges that (i) upon an Event of Insolvency with respect to Grand Union or a failure by Grand Union to make any payment when due pursuant to Section 3.5 of this Agreement, C&S may fully enforce against Grand Union any and all rights that C&S may possess pursuant to Section 2-702 of the Uniform Commercial Code as enacted in the State of New York ("Section 2-702"), including without limitation, the right to reclaim goods delivered to Grand Union upon the terms and conditions set forth in Section 2-702, and (ii) upon a failure of Grand Union to make any payment when due under this Agreement or either of the C&S Supply Agreements (a "Grand Union Payment Obligation"), including without limitation, those payment obligations arising under each of Sections 3.05, 4.01, 4.05 and 7.04 of either of the C&S Supply Agreements, C&S may, and is hereby authorized by Grand Union, at any time and from time to time, to the fullest extent permitted by applicable law, without advance notice to Grand Union (any such notice being expressly waived by Grand Union), to set off and apply any and all amounts owed by C&S to Grand Union under this Agreement, including without limitation against any or all of the Grand Union Payment Obligations that have not been paid when due and remain unpaid, irrespective of whether or not C&S has exercised any other rights that it has or may have with respect to such Grand Union Payment Obligations. Grand Union shall execute and deliver to C&S, from time to time during the term of this Agreement, such documents as C&S may reasonably request to create, maintain, acknowledge or confirm the rights of C&S affirmed and acknowledged by Grand Union pursuant to this Section 5.8. ARTICLE VI. MONTGOMERY INVENTORY SECTION 6.1. Initial Inventory. Grand Union Merchandise will be shipped to Grand Union Stores *. In the event that any portion of such Merchandise is identified as being unsalable *. The parties agree that for purposes of payment and *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 17 purchase terms under this Agreement, shipments of Merchandise to Grand Union Stores from the date of commencement of this Agreement * SECTION 6.2. Inventory Administrative Charge. Grand Union agrees to minimize excess inventory under this Agreement at all times. Grand Union will pay an annual inventory administrative charge at a rate per annum equal to * In determining charges under this Section 6.2, appropriate allocations will be made to reflect proportionate inventory drawn in the event that C&S is serving other Persons at the Montgomery Facility pursuant to Section 7.1 hereof. SECTION 6.3. Inventory Limits. During the Grand Union Purchase Period, C&S shall not be required to reimburse Grand Union, pursuant to Section 2.1(a), for purchases of inventory by Grand Union to the extent the respective week's C&S inventory balance exceeds *. During the C&S Purchase Period, the inventory purchased and kept for Grand Union will not exceed *. For purposes of this Section 6.3, inventory shall be measured as of *. Prior to commencement of the Term, Grand Union and C&S shall analyze the categories of inventory at the Montgomery Facility and measure each of the following categories: (i) "turn" inventory, (ii) "all other" inventory, *. Based upon this analysis, Grand Union and C&S shall establish the amount of inventory in each category required by Grand Union for its everyday business needs and its seasonal business needs. The parties will measure "all other" inventory on a weekly basis, and * The following example illustrates this analysis: * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 18 * Grand Union will communicate to C&S its requirements and needs in these areas on a basis consistent with the practices established in the C&S Supply Agreement dated June 15, 1995. Grand Union has advised C&S that as of December 1995, "turn" inventory amounts to * and "all other" inventory amounts to *. Within 90 days of commencement of the Term, the parties shall recalculate the levels of "turn" inventory and "all other" inventory and adjust such inventory levels accordingly. The inventory levels are based upon annual estimated inventory purchases by Grand Union of *. If the annual level of inventory purchases by Grand Union changes during the Term of the Agreement, the inventory levels provided for in Section 6.3 shall change by mutual agreement of the parties. C&S agrees that, upon delivery of the Merchandise, it will *. Notwithstanding the foregoing, the provisions of this Section 6.3 shall be reevaluated and adjusted as appropriate and on a periodic basis to take into account other business serviced by C&S pursuant to Section 7.1. ARTICLE VII. ADDITIONAL BUSINESS SECTION 7.1. Additional Business. (a) Grand Union agrees that, if the Changeover Date has occurred, C&S may utilize the Montgomery Facility to supply food products and other merchandise to supermarkets and food stores other than Grand Union. C&S agrees that any such increase in the utilization of the Montgomery Facility shall not interfere *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 19 in any significant respect with C&S' obligations to Grand Union under this Agreement. In the event of any conflict (as to, for example, scheduling or allocation of employees) between the requirements of Grand Union under this Agreement and the requirements of or relating to other business serviced by C&S pursuant to this Section 7.1, the * (b) Physical inventories shall be taken *. The costs of such physical inventories shall be allocated to Grand Union and C&S based upon the respective amounts of inventory held for Grand Union and for such other customers. (c) During the C&S Purchase Period, for purposes of Grand Union's annual store LIFO calculation, C&S will supply Grand Union * ARTICLE VIII. TERMINATION SECTION 8.1. Termination by C&S. C&S may terminate this Agreement (i) in the event of a default by Grand Union under Section 3.5 which remains uncured * receipt by Grand Union of written notice thereof from C&S (subject, however, to the provisions of such Section for arbitration), (ii) in the event that Grand Union materially breaches its other obligations under this Agreement and such breach is curable and remains uncured after * receipt by Grand Union of written notice of such breach from C&S, (iii) upon the occurrence of an Event of Insolvency with respect to Grand Union (provided, however, that C&S shall not terminate this Agreement upon the occurrence of an Event of Insolvency in the event that Grand Union is otherwise in compliance with the terms of this Agreement and Grand Union provides adequate assurance of future performance under this Agreement) or (iv) upon termination of either of the C&S Supply Agreements pursuant to Section 7.01 thereof. Notwithstanding the foregoing, in the event that Grand Union defaults under Section 3.5 * C&S may, on the occurrence of * terminate this Agreement immediately upon notice to Grand Union. In the event of termination by C&S under this Section 8.1, Grand Union shall pay to C&S, as full and liquidated damages (including damages for lost profits), the applicable termination fee set forth in this Article VIII. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 20 SECTION 8.2. Termination by Grand Union. Grand Union may terminate this Agreement (i) in the event of a default by C&S under Section 3.5 which remains uncured for * of written notice thereof from Grand Union (subject to the provisions of such Section for arbitration), (ii) in the event that C&S materially breaches its other obligations under this Agreement and such breach is curable and remains uncured after * written notice of such breach from Grand Union, (iii) upon the occurrence of an Event of Insolvency with respect to C&S (provided, however that Grand Union shall not terminate this Agreement upon the occurrence of an Event of Insolvency in the event that C&S is otherwise in compliance with the terms of this Agreement and C&S provides adequate assurance of future performance under this Agreement) or (iv) upon the termination of either of the C&S Supply Agreements pursuant to Section 7.02 thereof. Notwithstanding the foregoing, in the event that C&S defaults under Section * in any Contract Year and thereafter cures its default within the *, or if a Service Level Breach occurs under Section * in any Contract Year and such Breach is thereafter cured within the *, Grand Union may, on the occurrence of any subsequent default under Section 3.5 or any subsequent Service Level Breach, as the case may be, occurring in the same Contract Year, terminate this Agreement immediately upon notice to C&S. Grand Union may also terminate this Agreement *. In the event that Grand Union exercises its rights to terminate *, Grand Union * and shall pay to C&S the applicable Termination Fee as full and liquidated damages to C&S. Grand Union shall pay the Termination Fee and all amounts due and owing C&S resulting from the inventory repurchase upon the expiration of the *. As used herein, "Termination Fee" shall mean that amount equal to * The following example illustrates the calculation of the Termination Fee: * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 21 * The parties acknowledge that it would be difficult and costly to assess and establish C&S' losses arising out of termination of this Agreement on account of Grand Union's breach or Grand Union's early termination *. Nonetheless, the parties believe that the termination fee provisions set forth above are reasonable in light of the costs C&S will incur to perform its obligations under this Agreement and the damages C&S will suffer in the event of such termination (including but not limited to damages for lost profits, incidental damages and other consequential damages). Notwithstanding any of the foregoing provisions of this Article VIII or any other provision of this Agreement to the contrary, (i) no Termination Fee (or any damages) shall be payable by Grand Union as a result of or in connection with any termination of this Agreement (x) as a result of the failure of Grand Union to obtain any consent or other document provided for in Section 2.4(c) or 5.3(c) or the failure to obtain any such consent or document within the period required therefor or (y) pursuant to clause (iv) of Section 8.1 and (ii) no damages shall be payable by either party hereto on account of any breach of this Agreement (other than breach of a payment obligation) that results from an Event of Force Majeure. SECTION 8.3. Termination of Sublease. Upon any termination of this Agreement pursuant to Section 8.1 or 8.2, the Sublease, if any, shall automatically terminate at the same time. SECTION 8.4. Negotiations; Interim Period. (a) The parties shall meet at least * provided for in Section 8.1(ii) or Section 8.2(ii) hereof to attempt to cure any breach as provided in such Sections. (b) During the period following delivery of any notice of termination and prior to the termination of this Agreement, each party shall perform its obligations under this Agreement in substantially the same manner as they were performed prior to the date of delivery of such notice, with no disruption to Grand Union's supply of Merchandise; provided, however, that the parties shall negotiate in good faith to agree to a "winding-up" schedule for such period. *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 22 SECTION 8.5. Waiver. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party or (b) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. ARTICLE IX. REPRESENTATIONS AND WARRANTIES SECTION 9.1. Representations and Warranties of C&S. C&S hereby represents and warrants to Grand Union as follows: (a) Corporate Organization and Authority. C&S (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Vermont and is authorized to transact business in the States of New Hampshire and New York; and (ii) has the corporate power and authority to own and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) Authorization. C&S has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered on behalf of C&S and constitutes the legal, valid and binding obligation of C&S, enforceable in accordance with its terms. (c) No Consents; Conflicts. No consent, authorization by, approval of or other action by, and no notice to, or filing or registration with, any governmental authority, agency, regulatory body, lender, lessor, franchisee or other Person is required for the execution, delivery or performance of this Agreement by C&S, other than those that have been obtained and are in full force and effect. The execution, delivery and performance of this Agreement will not result in any violation or breach of any provision of the charter or by-laws of C&S, any judgment, decree or order to which C&S is a party or by which it is bound, any indenture, mortgage or other agreement or instrument to which C&S is a party or by which it is bound or any statute, rule or regulation applicable to C&S. 23 SECTION 9.2. Representation and Warranties of Grand Union. Grand Union hereby represents and warrants to C&S as follows: (a) Corporate Organization and Authority. Grand Union (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is authorized to transact business in the States of New Hampshire, Vermont and New York; and (ii) has the corporate power and authority to own and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) Authorization. Grand Union has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered on behalf of Grand Union and constitutes the legal, valid and binding obligation of Grand Union, enforceable in accordance with its terms. (a) No Consents; Conflicts. No consent, authorization by, approval of or other action by, and no notice to, or filing or registration with, any governmental authority, agency, regulatory body, lender, lessor, franchisee or other Person is required for the execution, delivery or performance of this Agreement by Grand Union, other than any consents (including consent of any lender) necessary in connection with the Sublease and the Assignment, which consents will be obtained in accordance with Sections 2.4(c) and 5.3(c). The execution, delivery and performance of this Agreement will not result in any violation or breach of any provision of the charter or by-laws of Grand Union, any judgment, decree or order to which Grand Union is a party or by which it is bound, any indenture, mortgage or other agreement or instrument to which Grand Union is a party or by which it is bound or any statute, rule or regulation applicable to Grand Union. ARTICLE X. GENERAL PROVISIONS SECTION 10.1. Entire Agreement. This Agreement, together with the documents referred to herein, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between the parties hereto with respect to the subject matter hereof. SECTION 10.2. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors 24 and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the party incurring the same. SECTION 10.3. Amendments. This Agreement may not be amended or modified except (i) by an instrument in writing signed by, or on behalf of, each of Grand Union and C&S, or (ii) by a waiver in accordance with Section 8.5. SECTION 10.4. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy (such telecopy transmission to be effective only if made by confirmed transmission to the telecopier number set forth below for such party) or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this section 10.4); (a) If to Grand Union: William A. Louttit Executive Vice President and Chief Operating Officer The Grand Union Company 20 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Telephone: (201) 890-6000 Telecopier: (201) 890-6012 (b) If to C&S: Richard B. Cohen President and Chief Executive Officer C&S Wholesale Grocers, Inc. Old Ferry Road Brattleboro, Vermont 05301 Telephone: (802) 275-6700 Telecopier: (802) 257-6620 SECTION 10.5. Binding Effect; Assignment. (a) This Agreement shall be binding upon and inure to the benefit of Grand Union and C&S and their respective successors and assigns; provided that (i) C&S shall not have the right to assign or subcontract its rights or obligations hereunder or any interest herein (excluding the transportation of Merchandise) without the prior written consent of Grand Union, which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) Grand Union may assign its rights and delegate its obligations hereunder only so long as (w) Grand Union is not in default under this Agreement, (x) Grand Union shall assign, and the assignee shall assume, all such rights and obligations, 25 (y) the assignment is to a Person or Persons who are acquiring all or substantially all of Grand Union's business or assets, and (z) Grand Union demonstrates, to the reasonable satisfaction of C&S, that such Person has the financial capability to perform the obligations of Grand Union hereunder. C&S agrees that it shall respond, in respect of clause (z) above, promptly, and in any event with 10 business days of receipt of notice from Grand Union of any such proposed assignment. Failure by C&S to respond to Grand Union within such 10 business day period shall be deemed to be a confirmation by C&S to Grand Union of its reasonable satisfaction with the financial capability of the proposed assignee. (b) The provisions of subsection (a) of this Section 10.5 shall not prohibit the assignment by Grand Union of its duties, obligations, rights and interests under this Agreement to the lenders (or an agent therefor) under the Bank Agreement as security for obligations of Grand Union thereunder or under agreements or instruments provided for therein, and C&S hereby consents to any such assignment; provided, however, that such C&S consent is expressly conditioned upon the assignee's assumption of all of Grand Union's duties and obligations under this Agreement. C&S agrees to execute and deliver such further consents or other instruments as Grand Union or any such lender may reasonably request to confirm or implement any such assignment, provided that (i) the rights and interests of C&S hereunder are not thereby affected in any material respect and (ii) such other consent or instrument expressly acknowledges the assignee's assumption of Grand Union's duties and obligations under this Agreement. SECTION 10.6. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. SECTION 10.7. Confidentiality. Each of Grand Union and C&S agrees to and will cause its respective authorized agents, representatives, affiliates, employees, officers, directors, accountants, counsel and other designated representatives (collectively, "Representatives") to (i) treat and hold as confidential (and not disclose or provide access to any Person to) all records, books, contracts, instruments, computer data and other data and information (collectively, "Information") concerning the other in its possession or furnished by the other or the other's Representatives pursuant to this Agreement, (ii) in the event that either party or its Representatives become legally compelled to disclose any such Information, provide the other party with prompt written notice of such requirement so that such other party may seek a protective order or other remedy or waive compliance with this Section 10.7, and (iii) in the event that such protective order or other remedy is not obtained, or the other party waives 26 compliance with this Section 10.7, furnish only that portion of such Information which is legally required to be provided and exercise its best efforts to obtain assurances that confidential treatment will be accorded such Information; provided, however, that this sentence shall not apply to any Information that, at the time of disclosure, is available publicly and was not disclosed in breach of this Agreement by such party or its Representatives; and provided further, however, that C&S agrees that Grand Union is the owner of all Information relating to Grand Union's purchasing practices and that Grand Union may in its sole discretion sell such purchasing related information to third parties. The provisions of clauses (i) and (ii) above shall not preclude a party from disclosing Information to its Representatives or to its lenders or their Representatives (provided that each such Representative shall be advised of the confidential nature of such Information) or from disclosing Information to or filing Information within any governmental authority or agency with jurisdiction over such party. Each party agrees and acknowledges that remedies at law for any breach of its obligations under this Section 10.7 are inadequate and that in addition thereto the other party shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach, without the necessity of demonstrating the inadequacy of monetary damages. SECTION 10.8. Relationship of Parties. In all matters relating to this Agreement, both parties shall be acting solely as independent contractors and shall be solely responsible for the acts of their employees, officers, directors and agents. Employees, agents or contractors of one party shall not be considered employees, agents (except for the limited purpose specified in Section 2.1(a)) or contractors of the other party. SECTION 10.9. No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties thereto and their permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever. SECTION 10.10. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 27 SECTION 10.11. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 10.12. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws thereof. SECTION 10.13. Arbitration. (a) Any matter required to be submitted to arbitration pursuant to Section 3.5 of this Agreement shall be subject to this Section 10.13. Any such matter shall be submitted to binding arbitration in Springfield, Massachusetts (or another location agreed to by the parties) in accordance with the rules and procedures of the American Arbitration Association (or another organization agreed to by the parties). The arbitration shall be conducted in accordance with (i) the terms of this Section 10.13; (ii) the commercial arbitration rules of the American Arbitration Association (or the corresponding rules of any such other organization); (iii) the Federal Arbitration Act (Title 9 of the United States Code); and (iv) to the extent the foregoing are inapplicable, unenforceable or invalid, the laws of the State of New York. Judgment upon any award rendered hereunder may be entered in any court having jurisdiction. (b) A single arbitrator shall be selected by mutual agreement of the parties, or, if the parties fail to reach such agreement within ten days after either party has requested arbitration hereunder in writing, by, or in a manner provided by the American Arbitration Association (or such other organization referred to above). (c) The arbitrator is empowered to resolve the mater in dispute by summary ruling substantially similar to a summary judgment and motion to dismiss. The arbitrator shall resolve all disputes in accordance with applicable substantive law. The determination of the arbitrator shall be binding on all parties and shall not be subject to further review or appeal except as allowed by applicable law. The costs and expenses of the arbitrator shall be apportioned between the parties hereto as determined by the arbitrator in such manner as the arbitrator deems reasonable. (d) The arbitrator and the parties shall take all actions necessary to the end that the arbitration proceeding shall be conducted as promptly as practicable. (e) The provisions of this Section 10.13 shall not preclude a party from exercising any right or remedy with respect to any matter that is not expressly required to be submitted to arbitration pursuant to Section 3.5 of this Agreement. 28 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above. THE GRAND UNION COMPANY By: /s/ William A. Louttit --------------------------------- Name: William A. Louttit Title: Executive Vice President Chief Operating Officer C&S WHOLESALE GROCERS, INC. By: /s/ William C. Hamlin --------------------------------- Name: William C. Hamlin Title: Senior Vice President 29 EXHIBITS Exhibit A - Montgomery Lease Agreement dated September 29, 1989 Exhibit B - Existing Grand Union Stores Exhibit C - Merchandise Exhibit D - Operating Expenses and Other Costs Exhibit E - Forms of Notices Exhibit F - Form of Landlord Consent Exhibit G - Overage/Shortage Policy (eliminated by agreement of the parties) Exhibit H - Montgomery Facility Slots Exhibit I - Montgomery Facility Storage (eliminated by agreement of the parties) Exhibit J - Assumptions and Information Relating to Operating Expenses and Other Costs Exhibit K - Terms of Sublease Exhibit L - * * Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. EXHIBIT A THIS LEASE, dated the 29TH day of September 1989, between MACK BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY '89 ASSOCIATES L.P., doing business as BRACKEN '89 JOINT VENTURE, with offices at c/o The Mack Company, 370 West Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as the "Landlord"); and THE GRAND UNION COMPANY, with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as the "Tenant"). W I T N E S S E T H: ARTICLE I DEMISE OF PREMISES SECTION 1.01. The Landlord, for and in consideration of the rents to be paid and of the covenants and agreements hereinafter contained to be kept and performed by the Tenant, hereby demises and leases unto the Tenant, and the Tenant hereby hires and takes from the Landlord, for the term and the rent, and upon the covenants and agreements hereinafter set forth, the premises situated in the Town of Montgomery, County of Orange, State of New York, commonly known as Bracken Road, Montgomery, New York, and identified on the tax assessment map of said Town as Section 30, Lot 65.2 in Block 1, and about to be identified as Section 30, Lot 71 in Block 1, as more particularly described on Exhibit A attached hereto and made a part hereof (such premises together with the Building as hereinafter defined being hereinafter referred to as the "Demised Premises"). The Landlord and the Tenant covenant and agree as follows: ARTICLE II TERM OF LEASE SECTION 2.01. The term of this Lease and the demise of the Demised Premises shall be for twenty (20) years beginning on September 29, 1989 and ending at 12:00 midnight on September 28, 2009 or on such earlier or later termination as hereinafter set forth (which term is hereinafter called the "Term"). ARTICLE III RENT SECTION 3.01. The Tenant shall pay to the Landlord, during the Term without counterclaim, deduction or setoff, rent in the amount of Twenty-seven Million Nine Hundred Twelve Thousand Nine Hundred Twenty-five and 00/100 ($27,912,925.00) Dollars, payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. SECTION 3.02. The rent shall accrue at the following yearly and monthly rates: COPR. 1989 DOLLINGER & DOLLINGER, P.A. YEARS YEARLY RENT MONTHLY RENT 1-10 $1,292,000.00 $107,666.67 11-15 $1,428,260.00 $119,021.67 16-20 $1,570,325.00 $130,860.42 The aforesaid monthly rents shall be payable in advance on the first day of each calendar month during the Term, except that a proportionately lesser sum may be paid for the first and last months of the Term of this Lease if the Term commences on a date other than the first day of the month, in accordance with the provisions of this Lease hereinafter set forth. The rent shall be payable at the office of the Landlord, at the address above set forth, or as may otherwise be directed by notice from the Landlord to the Tenant. SECTION 3.03. The Tenant shall, and will, during the Term well and truly pay, or cause to be paid, to the Landlord, the monthly payments of rent as herein provided and all other sums that may become due and payable by the Tenant, hereunder, at the time and in the manner herein provided, without counterclaim, offset or deduction; and all other sums due and payable by the Tenant hereunder may, at the Landlord's option, be deemed to be, and treated as, additional rent, and added to any fixed rent due and payable by the Tenant hereunder, and, in the event of nonpayment of such other sums, the Landlord shall have all the rights and remedies herein provided for in the case of the nonpayment of rent, or of a breach of any covenant to be performed by the Tenant. SECTION 3.04. The rent payable by the Tenant pursuant to this Lease is intended to be net to the Landlord, and all other charges and expenses imposed upon the Demised Premises or incurred in connection with its use, occupancy, care, maintenance, operation and control, including but not limited to the charges and expenses payable pursuant to Articles VII and VIII of this Lease, shall be paid by the Tenant, excepting liens resulting from acts or omissions of the Landlord and other payments to be paid or obligations undertaken by the Landlord as specifically provided in this Lease. ARTICLE IV THE DEMISED PREMISES SECTION 4.01. The Demised Premises consists of a building of approximately 225,000 gross rentable square feet (which building is hereinafter called the "Building") previously erected thereon and approximately 12.066 acres of land, which the Tenant acknowledges that it has inspected and is fully familiar with its condition and is leasing the same in an "AS IS" condition. SECTION 4.02. The Demised Premises hereinabove described constitutes a self-contained unit and nothing in this Lease shall impose upon the Landlord any obligation to provide any services for the benefit of the Tenant, including but not limited to water, gas, electricity, heat or janitorial, unless and to the extent expressly provided in this Lease. PAGE 2 ARTICLE V USE SECTION 5.01. The Demised Premises may be used for any lawful use by the Tenant. SECTION 5.02. The aforesaid permitted use does not permit the stacking of merchandise and/or materials against walls or columns, nor does it permit the hanging of equipment from (or otherwise loading) the roof or structural members of the Building except in accordance with the standards set forth with respect to good and sound engineering practices. Notwithstanding anything contained herein to the contrary, any damage or wear and tear to the walls, columns, roof or structural members of the Building arising out of or in connection with any of the activities described in this Section 5.02 shall not be deemed to be ordinary wear and tear and shall be repaired, restored and/or replaced by Tenant at its sole cost and expense. ARTICLE VI QUIET ENJOYMENT SECTION 6.01. The Landlord covenants that if, and so long as, the Tenant pays the rent, and any additional rent as herein provided, and performs the covenants hereof, the Landlord shall do nothing to affect the Tenant's right to peaceably and quietly have, hold and enjoy the Demised Premises for the Term herein mentioned, subject to the provisions of this Lease. ARTICLE VII ADDITIONAL RENT, TAXES, ASSESSMENTS, WATER RATES, CHARGES, ETC. SECTION 7.01. The Tenant shall pay, before any interest or penalties accrue thereon, all real estate taxes, water and sewer rates and charges and all other governmental charges imposed during the Term on the Demised Premises or on the rents, as such, payable to the Landlord hereunder, and on request shall exhibit to the Landlord receipted bills or other proof of payment. There shall be apportioned any tax or charge relating to the fiscal year in which the Term of this Lease terminates. The Tenant shall be responsible for any tax or charge relating to the fiscal year in which the Term of this commenced. SECTION 7.02. The Tenant shall not be required to pay any estate, inheritance, devolution, succession, transfer, legacy or gift tax charged against the Landlord or the estate or interest of the Landlord in the Demised Premises or upon the right of any person to succeed to the same or any part thereof by inheritance, succession, transfer or gift, nor any capital stock tax or corporate franchise tax incurred by the Landlord, nor any income tax upon or against the income of the Landlord (including any rental income derived by the Landlord from the Demised Premises). SECTION 7.03. The Tenant shall pay all assessments that may be imposed upon the Demised Premises by reason of any specific public improvement (including but not limited to PAGE 3 assessments for street openings, grading, paving and sewer installations and improvements) except that if by law any such special assessment is payable, or may, at the option of the taxpayer, be paid, in installments, the Tenant may, whether or not interest accrues on the unpaid balance thereof, pay the same and any accrued interest on any unpaid balance thereof in installments as each installment becomes due and payable, but in any event before any penalty or cost may be added thereto for nonpayment of any installment or interest. Any such benefit, assessment or installment thereof relating to a fiscal period in which the Term of this Lease begins or ends shall be apportioned. SECTION 7.04. The Tenant, in its name or the Landlord's name shall have the right to contest, or review, by appropriate proceedings, in such manner as it may deem suitable, at its own expense, and without expense to the Landlord, any tax, assessment, water and sewer rents or charges, or other charges payable by the Tenant pursuant to this Lease, and upon the request of the Tenant, the Landlord will protest any tax, assessment, water or sewer rent or charge, or any other charge payable by the Tenant pursuant to this Lease, which shall be contested or reviewed by the Tenant. Any refund resulting from such contest or review shall be assigned to and belong to the Tenant and shall be paid to the Tenant promptly upon its receipt by the Landlord. If the refund relates to a tax year that is apportioned between the Landlord and the Tenant, the refund shall be apportioned between the Landlord and the Tenant. ARTICLE VIII INSURANCE SECTION 8.01. During the Term, Tenant shall maintain the following insurance, insuring the Landlord and ground lessor, if any, and any mortgagee(s), as their respective interests may appear: (A) Insurance against damage to the Building by all risks of direct physical loss (at Landlord's option to include earthquake and flood) with the policy to contain either the agreed amount endorsement or a replacement cost endorsement, in amounts sufficient to prevent the Landlord from becoming a co-insurer, but in no event less than one hundred (100%) percent of the Building's then replacement value. Policy to include a contingent liability endorsement and/or demolition and increased cost of construction endorsement in order for the Building to be constructed in accordance with all requirements and regulations which may be applicable at the time of loss or damage, of all governmental agencies having jurisdiction over the Building and construction of such Building. (B) If appropriate, boiler and machinery insurance coverage for all eligible objects, including pressure vessels and air conditioning equipment, with the electrical apparatus clause, with such limits as may be reasonably necessary to properly insure the values at risk in the Building. PAGE 4 (C) Plate glass insurance. At the option of the Tenant, Tenant may elect to self-insure for plate glass. (D) The policies of insurance provided for herein shall be from a company rated in the A.M. Best Key Rating Guide with a policyholder's service rating of A+ and a financial rating of XV. The company shall be licensed by the State of New York and a certificate (s) evidencing the existence of such policy shall be delivered to the Landlord, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term. At least fifteen (15) days prior to the expiration or termination date of any policy, the Tenant shall deliver a renewal or replacement policy, or certificate (s) evidencing the existence thereof, to Landlord together with proof of the payment of the premium therefor. All insurance maintained pursuant to this Article VIII may be effected by blanket insurance policies. SECTION 8.02. The Tenant shall provide and keep in force, during the Term of this Lease, for the benefit of the Landlord and ground lessor, if any, comprehensive general liability insurance policies in standard form (containing the so-called "occurrence clause"), insuring the Landlord and Landlord's managing agent as an additional named insured with respect to ownership, operation, maintenance, use and control against liability for injury or damage to persons or property in or upon the Demised Premises during the Term of this Lease, which shall include a contractual liability endorsement. Said policies shall be written by insurance companies licensed to do business in the State of New York and shall cover the entire Demised Premises as well as any sidewalk in front of the same, and shall be in the minimum amount of Three Million and 00/100 ($3,000,000.00) Dollars. SECTION 8.03. Tenant represents, said representation being specifically designed to induce the Landlord to execute this Lease, that Tenant's personal property, fixtures, betterments, improvements, goods and inventory at the Demised Premises and any other items which Tenant may bring to the Premises or which may be under Tenant's care, custody and control which may be subject to any claim for damages or destruction shall never exceed the amount of insurance which Tenant is required to carry pursuant to this Lease and for which Tenant shall name the Landlord as an additional named insured as its interest may appear. If at any time the value of the aforesaid exceeds the amount of such insurance, Tenant covenants to so notify Landlord and at the same time to immediately increase the amount of insurance required to be carried pursuant to Section 8.01 to an amount sufficient to cover the aforesaid to preclude any liability on Landlord's or Landlord's ground lessor's or mortgagee's part to Tenant. Should Tenant fail to do so, or fail to maintain insurance coverage adequate to cover the aforesaid, then Tenant shall not be in default hereunder unless Tenant makes a claim against Landlord for damages or destruction which would have been covered by insurance but for Tenant's failure to meet its obligations as set forth in this Article VIII. PAGE 5 SECTION 8.04. Tenant is and shall be in exclusive control and possession of the Demised Premises as provided herein, and Landlord shall not in any event whatsoever be liable for any injury or damage to any property or to any person happening on or about the Demised Premises, nor for any injury or damage to the Demised Premises, nor to any property of Tenant, or of any other person contained therein. Tenant shall indemnify and save Landlord harmless against and from all liabilities, claims, suits, fines, penalties, damages, losses, fees, costs and expenses (including reasonable attorneys' fees) which may be imposed upon, incurred by or asserted against Landlord by reason of: (A) Any work or thing done in, on or about the Demised Premises or any part thereof by or on behalf of Tenant; (B) Any use, occupation, condition, operation of the Demised Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway or space adjacent thereto or any occurrence on any of the same on the part of Tenant; (C) Any act or omission on the part of Tenant or any subtenant or any employees, licensees or invitees; (D) Any accident, injury (including death) or damage to any person or property occurring in, on or about the Demised Premises, or any part thereof or in, on or about any street, alley, sidewalk, curb, vault, passageway or space adjacent thereto alleged to have been caused by Tenant's acts or omissions; and (E) Any failure on the part of Tenant to perform or comply with any of the covenants, agreements, terms or conditions contained in this Lease, or recording of this Lease. The provisions of this Paragraph shall survive the expiration or earlier termination thereof for as long as any applicable statute of limitations. SECTION 8.05. All losses paid under the policy or policies carried pursuant to Section 8.01 shall be adjusted by the Landlord and Tenant and the proceeds thereof shall be payable to the Landlord, to be held in trust to be used for repair and restoration of the Demised Premises by the Tenant. If the proceeds of insurance are not sufficient to cover the cost of restoration as required by Tenant, then Tenant shall be responsible for the cost of any deficiency. Each insurance policy carried by Tenant and insuring the Demised Premises and its fixtures and contents against loss by fire, water and causes covered by standard extended coverage, shall be written in a manner so as to provide that the insurance company waive all rights of recovery by way of subrogation against Landlord in connection with any loss or damage covered by such policies. Neither party shall be liable to the other for any loss or damage caused by fire, water or any of the risks enumerated in standard extended coverage insurance, provided such insurance was obtainable at the time of such loss or damage. If such insurance policies are obtainable only by the payment of an PAGE 6 additional premium charge, the same shall be obtained and such additional premium paid for by the Tenant. If the release of either Landlord or Tenant, as set forth in the third sentence of this Paragraph, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released but shall be deemed secondary to the latter's insurer. SECTION 8.06. The Tenant shall also furnish insurance for such other hazards and in such amounts as the Landlord may reasonably require and as at the time are commonly insured against with respect to buildings similar in character, general location and use and occupancy to the Demised Premises in relative amounts normally carried with respect thereto. The Landlord reserves the right at any time and from time to time to require that the limits for any of the insurance required pursuant to Article VIII be increased to limits as at the time are reasonable with respect to Tenant's use and to buildings similar in character, general location and use and occupancy to the Demised Premises. SECTION 8.07. Landlord shall maintain rent insurance against the loss of rent and additional rent for no less than one (1) year as provided herein, and Tenant shall reimburse Landlord for the entire cost of said rent insurance, promptly when billed, as additional rent. SECTION 8.08. All policies required pursuant to this Article VIII shall contain provision for thirty (30) days' written notice by registered mail to the Landlord of any change or cancellation of said policy. ARTICLE IX REPAIRS SECTION 9.01. The Tenant shall keep the Demised Premises in good condition and repair, and shall redecorate, paint and renovate the Demised Premises as may be necessary to keep them in good condition and repair and good appearance. The Tenant shall keep the Demised Premises and all parts thereof in a clean and sanitary condition and free from trash, inflammable material and other objectionable matter. The Tenant shall keep the sidewalks and roadways forming part of the Demised Premises clean and free of obstructions, snow and ice. Throughout the Term of this Lease, the Tenant, at its sole cost and expense, will take good care of the Demised Premises and the sidewalks and curbs adjoining the Demised Premises and will keep the same in good order and condition and make all necessary repairs thereto, structural and nonstructural, interior and exterior, ordinary and extraordinary, foreseen and unforeseen. The Tenant shall replace, at the Tenant's expense, all glass in and on the Demised Premises which may become broken after the date of Tenant's occupancy. When used in this Article, the term "repairs" shall include all necessary replacements and renewals. All repairs made by Tenant shall be equal in quality and class to the original work. The Tenant shall quit and surrender the Demised Premises at the end of the Term in as good condition as the reasonable use thereof will permit and in compliance with the requirements stated herein and in a "broom-clean" condition, and shall, by way of example and not by way of limitation, clean and reseal all concrete floors. PAGE 7 SECTION 9.02. The Tenant shall not make any alterations, additions or improvements to the Demised Premises without the prior written consent of the Landlord, which Landlord shall not unreasonably withhold. In making its determination, Landlord shall consider, among other considerations, the standards set forth with respect to good and sound engineering practices. Notwithstanding the provisions of this Section 9.02, Landlord's prior written consent shall not be required for any alterations, additions or improvements which, in the aggregate, do not exceed the cost of Five Hundred Thousand and 00/100 ($500,000.00) Dollars per lease year, and which do not adversely affect any structural portion of the Building or any Building mechanical, electrical, HVAC, or plumbing system. All erections, alterations, additions and improvements, whether temporary or permanent in character, which may be made upon or to the Demised Premises either by the Landlord or the Tenant, except furniture or movable trade fixtures installed at the expense of the Tenant, shall be the property of the Landlord and shall remain upon and be surrendered with the Demised Premises as a part thereof at the expiration or sooner termination of this Lease, without compensation to the Tenant; or, in the alternative and at the direction of Landlord, Tenant shall remove all or so much of the property therefrom as directed or such property shall be conclusively deemed abandoned and may be removed by Landlord, and Tenant shall reimburse Landlord for the cost of such removal. Landlord may have any such property stored at Tenant's risk and expense. Landlord, at Landlord's option, may require as a condition of its consent, that Tenant remove, at the expiration or sooner termination of the Lease Term, any erections, alterations, additions or improvements made by Tenant, and restore the Demised Premises to a substantially similar condition to that in existence as of the commencement date of the Lease, and that the Tenant use contractors approved by Landlord. ARTICLE X CASUALTY SECTION 10.01. If the Demised Premises or the Building is damaged or destroyed by fire, explosion, the elements or otherwise during the Term so as to render the Demised Premises wholly untenantable or unfit for occupancy, or should the Demised Premises be so badly injured that the same cannot be repaired within one hundred eighty (180) days from the happening of such injury, then, and in such case, the Term hereby created shall, at the option of either the Landlord or the Tenant, terminate upon the giving of a notice of termination. If a notice of termination is given, the Term of this Lease shall terminate effective as of the date of such damage or destruction, and the Tenant shall immediately surrender the Demised Premises and all the Tenant's interest therein to the Landlord, and pay rent to the time of such damage or destruction, and the Landlord may re-enter and repossess the Demised Premises discharged from this Lease and may remove all parties therefrom. SECTION 10.02. Should the Demised Premises be rendered untenantable and unfit for occupancy, but yet be repairable within one hundred eighty (180) days from the happening of said injury, the Landlord will make the proceeds of insurance available to Tenant so that Tenant may repair the Demised Premises with reasonable speed, and the rent shall not PAGE 8 accrue after said injury and while repairs are being made, provided Landlord receives the proceeds of rent insurance, but shall recommence immediately after such repairs shall be completed. SECTION 10.03. If the Demised Premises shall be so slightly injured as not to be rendered untenantable and unfit for occupancy, the Tenant shall repair the same with reasonable promptness and the rent accrued and accruing shall not cease or terminate. The Tenant shall immediately notify the Landlord in case of fire or other damage to the Demised Premises. SECTION 10.04. Notwithstanding anything to the contrary in Section 10.01, neither the Landlord nor the Tenant shall have any option to terminate this Lease upon the happening of an injury referred to in Section 10.01 provided that the happening of such injury occurs at a time when the unexpired Term of this Lease is one (1) year or more. In such event, the Landlord shall make the proceeds of insurance available to the Tenant and the Tenant shall repair the Demised Premises, even to the extent of rebuilding the Building if necessary. The Tenant shall promptly enter and repair the Demised Premises with reasonable speed, making due allowance for conditions beyond the Tenant's control, including, but not limited to time lost in adjusting insurance claims and strikes, and the rent shall not accrue after such injury and while repairs are being made, provided Landlord receives the proceeds of rent insurance, but shall recommence immediately after said repairs shall be completed. Landlord shall have no obligation to repair or restore Tenant's improvements. Notwithstanding anything contained herein to the contrary, in the event the happening of an injury referred to in Section 10.01 occurs when the unexpired Term of this Lease is less than one (1) year and Landlord exercises its option to terminate this Lease, then and in that event, Tenant can negate Landlord's termination by exercising its option to renew in accordance with Article XXXII. SECTION 10.05. Prior to the performance of any work by Tenant pursuant to the provisions of this Article X, Tenant shall first submit plans and specifications to Landlord and Landlord shall have the right to review and approve said plans and specifications and to require modifications thereto. All work shall be performed by Tenant in accordance with good and sound engineering practices and in compliance with all laws, ordinances and regulations. SECTION 10.06. Notwithstanding anything contained to the contrary in this Article X, in the event the proceeds of insurance are not sufficient to cover the cost of restoration, the Tenant shall be responsible for the cost of any deficiency. ARTICLE XI CONDEMNATION SECTION 11.01. If, during the Term, twenty-five (25%) percent or more of the area of the Demised Premises shall be taken under any power of eminent domain or condemnation then, at the option of the Tenant, to be exercised in writing within thirty (30) days of the taking of title thereto, this Lease shall expire within thirty (30) days of the date of such notice and the rent herein reserved shall be apportioned as of said date. However, if the Tenant does not exercise the afore- PAGE 9 mentioned option, or if the taking does not deprive the Tenant of at least twenty-five (25%) percent of the area of the Demised Premises, this Lease shall not expire but the rent shall be equitably apportioned. If the Landlord and the Tenant fail to agree upon an equitable apportionment, the rent for the Building, after such taking, shall be determined in accordance with the Commercial Rules of the American Arbitration Association, in the City of New York, New York, and the arbitrator shall be empowered to assess the costs and expenses of the proceedings as part of the determination. Pending such determination the Tenant shall pay, on account of the rent, such proportion of the rent reserved in this Lease as the total area of the Building after the taking bears to the total area of the Building before the taking, subject to adjustment in accordance with the arbitrator's award. If the Landlord can, after such taking, construct an addition to the remaining Building so as to restore all of the Building area and Building facilities theretofore taken, the Landlord shall, subject to the adequacy of the condemnation award and to the mortgagee making the same available to the Landlord, promptly construct such addition and restore such facilities so taken and upon the completion of such restoration, the full rent reserved by this Lease shall be reinstated, as of the date of such restoration, and, if the Tenant is able to occupy and use the Building, the proportionate rent shall be paid by the Tenant as herein provided, during the period between the taking and the restoration of the Building and facilities. No part of any award shall belong to the Tenant except that nothing contained herein is intended to affect or limit the Tenant's claim for fixtures or other improvements owned by Tenant provided the same does not diminish the Landlord's award. It is expressly understood and agreed that the provisions of this Article XI shall not be applicable to any condemnation or taking for governmental occupancy for a limited period of time. ARTICLE XII COMPLIANCE WITH LAWS, ETC. SECTION 12.01. The Tenant shall not do or permit anything to be done in the Demised Premises which shall constitute a public nuisance or which will conflict with the regulations of the Fire Department or with any insurance policy upon said improvements or any part thereof. SECTION 12.02. The Tenant shall, at its own expense, obtain all necessary environmental and operating permits and comply with all requirements of law and with all ordinance or orders, rules and regulations of any State, Municipal or other public authority affecting the Demised Premises and with all requirements of the Fire Insurance Exchange or similar body, and of any liability insurance company insuring the Landlord against liability for accidents in or connected with the Demised Premises including, but not limited to laws, ordinance, orders, rules and regulations which apply to the interior or exterior of the Demised Premises, the structural or nonstructural parts thereof, and to make all improvements and repairs required by such laws, ordinances, orders, rules and regulations, ordinary or extraordinary, foreseen or unforeseen. SECTION 12.03. Tenant acknowledges the existence of environmental laws, rules and regulations now or hereafter PAGE 10 enacted by any federal, state or municipal authority and Tenant agrees to comply therewith. Tenant agrees not to generate, store, manufacture, refine, transport, treat, dispose of, or otherwise permit to be present on or about the Demised Premises, any Hazardous Substances. As used herein, Hazardous Substances shall be defined as any "hazardous chemical," "hazardous substance" or similar term as defined in the Comprehensive Environmental Responsibility Compensation and Liability Act, as amended (42 U.S.C. 9601, ET SEQ.), any rules or regulations promulgated thereunder, or in any other applicable federal, state or local law, rule or regulation dealing with environmental protection. It is understood and agreed that the provisions contained in this Article shall be applicable notwithstanding the fact that any substance shall not be deemed to be a Hazardous Substance at the time of its use by the Tenant but shall thereafter be deemed to be a Hazardous Substance. Tenant agrees to indemnify and hold harmless the Landlord and each mortgagee of the Demised Premises from and against any and all liabilities, damages, claims, losses, judgments, causes of action, costs and expenses (including the reasonable fees and expenses of counsel) which may be incurred by the Landlord or any such mortgagee or threatened against the Landlord or such mortgagee, relating to or arising out of any breach by Tenant of the undertakings set forth in this Article, said indemnity to survive the Lease expiration or sooner termination. ARTICLE XIII SUBORDINATION SECTION 13.01. This Lease is and shall be subject and subordinate to all present and future first mortgages or deeds of trust affecting the Demised Premises, provided (i) that any such mortgage, deed of trust, or ground lease shall include therein a covenant on the part of the holder thereof or the landlord thereunder (as the case may be) substantially to the effect that it will not at any time join Tenant as a party defendant in any action which may be brought to foreclose said mortgage or deed of trust or terminate said ground lease (as the case may be), or disturb Tenant's possession of the Demised Premises, so long as Tenant is not in default under any provision of this Lease, or provided Landlord obtains a non-disturbance agreement in favor of Tenant from said first mortgagee or holder of any deed of trust or the landlord thereunder (as the case may be) providing the above, and provided further that in either event Tenant agrees, at the first mortgagee's option or at the option of the holder of any deed of trust or at the option of the landlord under the ground lease (as the case may be), to attorn to said mortgagee or holder of said trust deed or landlord (as the case may be), and (ii) that any such mortgagee shall agree to make the proceeds of casualty insurance available to Landlord for restoration. The Tenant shall execute, any instrument which may be deemed necessary or desirable by the Landlord to further effect or to evidence the subordination of this Lease to any such mortgage or deed of trust. The Landlord may assign this Lease to any such mortgagee or trust deed holder in connection with any such lien superior to this Lease, and the Tenant shall execute, at no expense to the Tenant, any instrument which may be necessary or desirable by the Landlord or the PAGE 11 holder of said lien in connection with said assignment. Any expense incurred in the preparing, executing or recording of such assignment to any such holder shall be without expense or cost to the Tenant. The Tenant further agrees, upon not less then ten (10) days' prior written request of the Landlord, to certify by written instrument duly executed and acknowledged to any mortgagee, trust deed holder or purchaser, or any proposed mortgage lender, trust deed holder or purchaser, that this Lease is in full force and effect, or if not, in what respect it is not, that this Lease has not been modified, or the extent to which it has been modified, that there are no existing defaults hereunder to the best of the knowledge of the party so certifying, or specifying the defaults, if any. Any such certification in connection with a mortgage shall be without prejudice as between the Landlord and the Tenant, it being agreed that any document required hereunder shall not be used in any litigation between the Landlord and the Tenant. ARTICLE XIV DEFAULTS, REMEDIES SECTION 14.01. If, during the Term, any one or more of the following acts or occurrences (any one of such occurrences or acts being hereinafter called an Event of Default) shall happen: (A) The Tenant shall default in making any payment of rent or any additional rent as and when the same shall become due and payable, and such default shall continue for a period of ten (10) days after notice from the Landlord that such payment is due and unpaid; or (B) The Tenant shall default in the performance of or compliance with any of the other covenants, agreements, terms or conditions of this Lease to be performed by the Tenant (other than any default curable by payment of money), and such default shall continue for a period of thirty (30) days after written notice thereof from the Landlord to the Tenant, or, in the case of a default which cannot with due diligence be cured within thirty (30) days, the Tenant shall fail to proceed promptly (except for unavoidable delays) after the giving of such notice and with all due diligence to cure such default and thereafter to prosecute the curing hereof with all due diligence (it being intended that as to a default not susceptible of being cured with due diligence within thirty (30) days, the time within which such default may be cured shall be extended for such period as may be reasonably necessary to permit the same to be cured with all due diligence); or (C) The Tenant or any guarantor of this Lease shall make an assignment for the benefit of creditors or file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any reorganization, composition, readjustment or similar relief under any present or PAGE 12 future bankruptcy or other applicable law, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of the Tenant or any guarantor of this Lease or of all or any substantial part of its properties or of all or any part of the Demised Premises; or (D) If, within sixty (60) days after the filing of an involuntary petition in bankruptcy against the Tenant or any guarantor of this Lease, or the commencement of any proceeding against the Tenant or such guarantor seeking any reorganization, composition, readjustment or similar relief under any law, such proceeding shall not have been dismissed, or if, within sixty (60) days after the appointment, without the consent or acquiescence of the Tenant or such guarantor, of any trustee, receiver or liquidator of the Tenant or such guarantor, or of all or any part of the Demised Premises, such appointment shall not have been vacated or stayed on appeal or otherwise, or if, within sixty (60) days after the expiration of any such stay, such appointment shall have been vacated, or if, within sixty (60) days after the taking possession, without the consent or acquiescence of the Tenant or such guarantor, of the property of the Tenant, or of such guarantor by any governmental office or agency pursuant to statutory authority for the dissolution or liquidation of the Tenant or such guarantor, such taking shall not have been vacated or stayed on appeal or otherwise; or (E) If the Demised Premises shall be abandoned by the Tenant for a period of thirty (30) consecutive days, then, and in any such event, and during the continuance thereof, the Landlord may, at its option, then or thereafter while any such Event of Default shall continue and notwithstanding the fact that the Landlord may have any other remedy hereunder or at law or in equity, by notice to the Tenant, designate a date, not less than ten (10) days after the giving of such notice, on which this Lease shall terminate; and thereupon, on such date the Term of this Lease and the estate hereby granted shall expire and terminate upon the date specified in such notice with the same force and effect as if the date specified in such notice was the date hereinbefore fixed for the expiration of the Term of this Lease, and all rights of the Tenant hereunder shall expire and terminate, but the Tenant shall remain liable as hereinafter provided. Additionally, Tenant agrees to pay, as additional rent, all attorney's fees and other expenses incurred by the Landlord in enforcing any of the obligations under this Lease, this covenant to survive the expiration or sooner termination of this Lease. Notwithstanding anything contained herein to the contrary, the abandonment of the Demised Premises shall not be deemed to be a default hereunder so long as Tenant shall continue to pay rent and additional rent and shall otherwise comply with all of the terms and conditions of this Lease, including but not limited to repair, maintenance and insurance obligations. PAGE 13 SECTION 14.02. If this Lease is terminated as provided in Section 14.01, or as permitted by law, the Tenant shall peaceably quit and surrender the Demised Premises to the Landlord, and the Landlord may, without further notice, enter upon, re-enter, possess and repossess the same by summary proceedings, ejectment or other legal proceedings, and again have, repossess and enjoy the same as if this Lease had not been made, and in any such event neither the Tenant nor any person claiming through or under the Tenant by virtue of any law or an order of any court shall be entitled to possession or to remain in possession of the Demised Premises, and the Landlord, at its option, shall forthwith, notwithstanding any other provision of this Lease, be entitled to recover from the Tenant in lieu of all other claims for damages on account of such termination) as and for liquidated damages an amount equal to the excess of all rents reserved hereunder for the unexpired portion of the Term of this Lease discounted at the rate of six (6%) percent per annum to the then present worth, over the fair rental value of the Demised Premises at the time of termination for such unexpired portion of the Term (the rent received on a reletting shall be conclusively accepted as the fair rental value). Nothing herein contained shall limit or prejudice the right of the Landlord, in any bankruptcy or reorganization or insolvency proceeding, to prove for and obtain as liquidated damages by reason of such termination an amount equal to the maximum allowed by any bankruptcy or reorganization or insolvency proceedings, or to prove for and obtain as liquidated damages by reason of such termination, an amount equal to the maximum allowed by any statute or rule of law whether such amount shall be greater or less than the excess referred to above. SECTION 14.03. If the Landlord re-enters and obtains possession of the Demised Premises, as provided in Section 14.02 of this Lease, following an Event of Default, the Landlord shall have the right, without notice, to repair or alter the Demised Premises in such manner as the Landlord may deem necessary or advisable so as to put the Demised Premises in good order and to make the same rentable, and shall have the right, at the Landlord's option, to relet the Demised Premises or a part thereof, and the Tenant shall pay to the Landlord on demand all reasonable expenses incurred by the Landlord in obtaining possession, and in altering, repairing and putting the Demised Premises in good order and condition and in reletting the same, including reasonable fees of attorneys and architects, and all other reasonable expenses or commissions, and the Tenant shall pay to the Landlord upon the rent payment dates following the date of such re-entry and including the date for the expiration of the Term of this Lease in effect immediately prior to such re-entry, the sum of money which would have been payable by the Tenant as rent hereunder on such rent payment dates if the Landlord has not re-entered and resumed possession of the Demised Premises, deducting only the net amount of rent, if any, which the Landlord shall actually receive (after deducting from the gross receipts the expenses, costs and payments of the Landlord which in accordance with the terms of this Lease would have been borne by the Tenant) in the meantime from and by any reletting of the Demised Premises, and the Tenant shall remain liable for all sums otherwise payable by the Tenant under this Lease, including but not limited to the expense of the Landlord aforesaid, as well as for any deficiency aforesaid, and the Landlord shall have the right from time to time to begin and maintain successive actions or other legal proceedings against the Tenant for the recovery of such deficiency, expenses or damages or for a sum equal to any rent payment and additional PAGE 14 rent. As an alternative remedy, the Landlord shall be entitled to damages against the Tenant for breach of this Lease, at any time (whether or not the Landlord shall have become entitled to or shall have received any damages as hereinabove provided) in an amount equal to the excess, if any, of the rent and additional rent which would be payable under this Lease at the date of the expiration of the Term, less the amount of rent and additional rent received by the Landlord upon any reletting, both discounted to present worth at the rate of six (6%) percent per annum, semiannually. The obligation and liability of the Tenant to pay the rent and the additional rent shall survive the commencement, prosecution and termination of any action to secure possession of the Demised Premises. Nothing herein contained shall be deemed to require the Landlord to wait to begin such action or other legal proceedings until the date when this Lease would have expired had there not been an Event of Default. SECTION 14.04. The Tenant hereby waives all right of redemption to which the Tenant or any person under it may be entitled by any law now or hereafter in force. The Landlord's remedies hereunder are in additional to any remedy allowed by law. SECTION 14.05. In the event of any breach or threatened breach by Tenant of any of the agreements, terms, covenants or conditions contained in this Lease, Landlord shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right or remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary dispossess proceedings, and other remedies were not provided for in this Lease. During the pendency of any proceedings brought by Landlord to recover possession by reason of default, Tenant shall continue all money payments required to be made to Landlord, and Landlord may accept such payments for use and occupancy of the Demised Premises. In such event, Tenant waives its right in such proceedings to claim as a defense that the receipt of such money payments by Landlord constitutes a waiver by Landlord of such default. ARTICLE XV ASSIGNMENT AND SUBLEASE SECTION 15.01. (A) The Tenant may assign this Lease and sublet the whole or any part of the Demised Premises, with the consent of the Landlord which consent shall not be unreasonably withheld subject to the following conditions: (1) A copy of the assignment or sublease shall be furnished to the Landlord. (2) The assignee shall assume by written instrument all of the obligations of this Lease, and a copy of such assumption agreement shall be furnished to the Landlord within ten (10) days of its execution. (3) The Tenant and each assignee shall be and remain liable for the observance of all of the covenants and provisions of this Lease, including but not limited to the payment of the rent reserved herein, through the entire Term of PAGE 15 this Lease, as the same may be renewed, extended or otherwise modified. (4) The Tenant and any assignee shall promptly pay to Landlord one-half (1/2) of any net consideration received for any assignment or one-half (1/2) of the net rent, as and when received in excess of the rent required to be paid by Tenant for the area sublet, computed on the basis of an average square foot rent for the entire Building. As used herein, net consideration and/or net rent shall mean gross rent or gross consideration less any reasonable brokerage or tenant work paid by Tenant in connection with the assignment or sublet, said brokerage or tenant work to be amortized over the term of the assignment or sublet. (B) Notwithstanding anything herein contained, the Tenant may assign or sublet the whole or any part of the Demised Premises to an affiliated corporation, or to any corporation with which it shall be merged or which shall acquire the assets of the Tenant, all without notice to the Landlord. (C) In any event, the acceptance by the Landlord of any rent from the assignee, or of any of the subtenants, or the failure of the Landlord to insist upon a strict performance of any of the terms, conditions and covenants herein shall not release the Tenant herein, nor any assignee assuming this Lease, from any and all of the obligations herein during and for the entire Term of this Lease. (D) Notwithstanding anything herein contained, prior to any sublet of the whole or any portion of the Demised Premises or an assignment of the within Lease to any other party, other than sublets or assignments permitted by Subsection (B) hereof, the Tenant shall first offer, in writing, to surrender the Demised Premises to the Landlord, and the Landlord shall either accept or refuse to accept such surrender within ten (10) days after the receipt of such offer, failing which the offer shall automatically be deemed refused. In the event Landlord shall accept such surrender, the within tenant shall be released from any and all obligations hereunder. (E) The Landlord may require a payment to cover its handling charges for each request for consent to any sublet or assignment prior to its consideration of the same, which payment shall be equal to those charges, if any, assessed by Landlord's mortgagee. (F) The Tenant acknowledges that its sole remedy with respect to any assertion that the Landlord's failure to consent to any sublet or assignment is unreasonable shall be the remedy of specific performance and the Tenant shall have no other claim or cause of action against the Landlord as a result of the Landlord's actions in refusing to consent thereto. (G) Without limiting any of the provisions of Article XIV, if pursuant to the Federal Bankruptcy Code (or any similar Law hereafter enacted having the same general purpose), Tenant is permitted to assign this Lease, notwithstanding the restrictions contained in this Lease, adequate assurance of future performance by an assignee expressly permitted under such Code shall be deemed to mean the deposit of cash security in an PAGE 16 amount equal to the sum of one (1) year's fixed rent plus an amount equal to the sum of all other charges due and payable by Tenant hereunder for the Calendar Year preceding the year in which such assignment is intended to become effective, which deposit shall be held by Landlord for the balance of the Term, without interest, as security for the full performance of all of Tenant's obligations under this Lease, to be held and applied in the manner specified for security in Section 22.02. (H) Except as specifically set forth above, no portion of the Demised Premises or of Tenant's interest in this Lease may be acquired by any other person or entity, whether by assignment, mortgage, sublease, transfer, operation of law or act of the Tenant, nor shall Tenant pledge its interest in this Lease or in any security deposit required hereunder. ARTICLE XVI NOTICES SECTION 16.01. All notices, demands, consents, approvals, requests and instruments or documents by this Lease required or permitted to be given to or served upon the Landlord or the Tenant shall be in writing. Any such notice, demand, consent, approval, request, instrument or document shall be sufficiently given or served if sent by certified or registered mail, postage prepaid, addressed at the address set forth below, or at such other address as it shall designate by notice, as follows: If to the Landlord: MACK BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY '89 ASSOCIATES L.P. doing business as BRACKEN '89 JOINT VENTURE c/o The Mack Company 370 West Passaic Street Rochelle Park, NJ 07662 With Copy to: DOLLINGER & DOLLINGER, P.A. 365 West Passaic Street Rochelle Park, NJ 07662 Attn: Martin E. Dollinger If to the Tenant: THE GRAND UNION COMPANY 201 Willowbrook Boulevard Wayne, NJ 07470-0966 Attn: Vice President, Real Estate Any notice so sent shall be deemed given or served on the second (2nd) business day following the date mailed as aforesaid. ARTICLE XVII HOLDING OVER SECTION 17.01. If the Tenant shall remain in the Demised Premises after the expiration of the Term without having executed and delivered a new lease with the Landlord, such holding over shall not constitute a renewal or extension of this PAGE 17 Lease. The Landlord may, at its option, elect to treat the Tenant as one who has not removed at the end of its Term, and thereupon be entitled to all the remedies against the Tenant provided by law in that situation, or the Landlord may elect, at its option, to construe such holding over as a tenancy from month to month, subject to all the terms and conditions of this Lease, except as to duration thereof, and in that event the Tenant shall pay monthly rent in advance which is the greater of (i) two hundred (200%) percent of the fair rental value then being obtained for the Demised Premises or (ii) two hundred (200%) percent of the rent payable for the month immediately preceding such holdover. ARTICLE XVIII LIENS SECTION 18.01. This Lease may be cancelled by the Landlord if any mechanic's lien is filed against the Demised Premises as a result of alterations, additions or improvements made by the Tenant and not discharged by payment or bonding within thirty (30) days after notice by the Landlord to the Tenant. In addition, after thirty (30) days' written notice to the Tenant, the Landlord, at its option, may pay and discharge such lien, without inquiring into the validity thereof, and the Tenant shall, on demand of the Landlord, reimburse the Landlord as additional rent hereunder for the total expense incurred by the Landlord in discharging such lien. ARTICLE XIX CONDITION OF DEMISED PREMISES, LOSS, ETC. SECTION 19.01. After the commencement of the Tenant's occupancy, the Landlord shall not be responsible for the loss of, or damage to, property or injury to persons occurring in or about the Demised Premises, for any reason whatsoever, to include but not be limited to: any existing or future condition, defect, matter or thing in the Demised Premises; the acts, omissions or negligence of other persons or tenants in and about the Demised Premises; theft or burglary from the Demised Premises; the negligence of Landlord, its agents, servants or invitees; and defects, errors or omissions in the construction or design of the Demised Premises and/or the Building including the structural and nonstructural portions thereof. Tenant covenants and agrees to make no claim for any such loss, damage or injury at any time. ARTICLE XX INSPECTION, FOR SALE AND FOR RENT SIGNS SECTION 20.01. The Landlord, or its agents, shall have the right to enter the Demised Premises at reasonable hours to examine the same, or to exhibit the Demised Premises to prospective purchasers. For twelve (12) months prior to the expiration of the Term, the Landlord, or its agents, may exhibit the Demised Premises to prospective tenants and may place the usual "To Let" signs thereon. PAGE 18 ARTICLE XXI SIGNS SECTION 21.01. No sign, advertisement or notice shall be affixed to or placed upon any part of the Demised Premises by the Tenant, except in such manner of annexation as shall be in accordance with good and sound engineering practices, provided: (i) that Tenant shall comply with all applicable governmental ordinances and regulations and receives all necessary governmental approvals required for erection and maintenance of the sign and (ii) no later than the last day of the Term, Tenant shall, at Tenant's expense, remove the sign and repair all injury done by or in connection with the installation or removal of the sign. ARTICLE XXII ADVANCE RENT, SECURITY AND LATE CHARGE SECTION 22.01. Simultaneously herewith, the Tenant has deposited with the Landlord the sum of One Hundred Seven Thousand Six Hundred Sixty-six and 67/100 ($107,666.67) Dollars, as advance rent for the first month of the Tenant's rental obligation. SECTION 22.02. In the event of the insolvency of Tenant or in the event of the entry of a judgment in bankruptcy in any court against Tenant which is not discharged within thirty (30) days after entry, or in the event a petition is filed by or against Tenant under any chapter of the bankruptcy laws of the State of New York or the United States of America, then and in such event Landlord may require the Tenant to deposit security in an amount which in Landlord's sole judgment would be sufficient to adequately assure Tenant's performance of all of its obligations under this Lease, including all payments subsequently accruing. Failure of Tenant to deposit the security required by this Section within ten (10) days after Landlord's written demand shall constitute a material breach of this Lease by Tenant. SECTION 22.03. Anything in this Lease to the contrary notwithstanding, at Landlord's option, Tenant shall pay a "Late Charge" of eight (8%) percent of any installment of rent or additional rent paid more than ten (10) days after the due date thereof, to cover the extra expense involved in handling delinquent payments. Notwithstanding anything contained herein to the contrary, in the event that Landlord shall be charged a late charge on any mortgage, then and in that event, Tenant shall pay a Late Charge of eight (8%) percent of any installment of rent or additional rent paid after the due date thereof, provided, however, that the first time during any Lease year that Tenant shall be late in the payment of rent, Landlord shall not impose a Late Charge. ARTICLE XXIII FINANCIAL STATEMENTS SECTION 23.01. The Tenant agrees, within ninety (90) days after the end of the Tenant's accounting year, at the request of the Landlord, or at the request of the holder of any PAGE 19 first mortgage upon the Demised Premises, to furnish to the Landlord or mortgagee, a certified balance sheet and profit and loss statement for the last accounting year. ARTICLE XXIV BROKER SECTION 24.01. The Landlord and the Tenant represent and warrant one to the other that no broker brought about this transaction, and the Landlord and the Tenant agree to indemnify and hold each other harmless from any and all claims of any brokers arising out of or in connection with the negotiations of or the entering into this Lease by the Landlord and the Tenant. ARTICLE XXV SHORT FORM OR MEMORANDUM OF LEASE SECTION 25.01. At the request of either party the Landlord and the Tenant will execute and deliver, in duplicate original counterparts, a recordable memorandum of this Lease identifying the Demised Premises and stating the commencement and termination dates of the Term of this Lease. ARTICLE XXVI WAIVER OF TRIAL BY JURY SECTION 26.01. The Landlord and the Tenant waive trial by jury in any action, proceeding or counterclaim brought by either the Landlord or the Tenant against the other in any matters whatsoever arising out of or in any way connected with this Lease, the Tenant's use or occupancy of the Demised Premises, and/or any claim of injury or damage. ARTICLE XXVII WAIVER OF DISTRAINT SECTION 27.01. Landlord waives all lien, right, interest and claim it might otherwise have in and waives its right of distraint of, the machinery, fixtures and other property of the Tenant, and in any other property of any nature whether on or off the Demised Premises, belonging to the Tenant. The provisions of this section are intended to apply to the Landlord's common law (if any) and statutory right of distraint because of failure to pay rent. ARTICLE XXVIII MISCELLANEOUS SECTION 28.01. PARTIAL INVALIDITY. If any term or provision of this Lease or the application thereof to any party or circumstances shall to any extent be invalid or unenforceable, the remainder of this Lease or the application of such term or provision to parties or circumstances other than those to which it is held invalid or unenforceable, shall not be PAGE 20 affected thereby, and each term and provision of this Lease shall be valid and enforced to the fullest extent permitted by law. SECTION 28.02. WAIVERS. One or more waivers by either party of the obligation of the other to perform any covenant or condition shall not be construed as a waiver of a subsequent breach of the same or any other covenant or condition. The receipt of rent by the Landlord, with knowledge of any breach of this Lease by the Tenant or of any default on the part of the Tenant in the observance or performance of any of the conditions or covenants of this Lease, shall not be deemed to be a waiver of any provision of this Lease. Neither acceptance of the keys nor any other act or thing done by the Landlord or any agent or employee during the Term herein demised shall be deemed to be an acceptance of a surrender of said Demised Premises, excepting only an agreement in writing signed by the Landlord accepting or agreeing to accept such a surrender. SECTION 28.03. NUMBER, GENDER. Wherever herein the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders. SECTION 28.04. SUCCESSORS, ASSIGNS. The terms, covenants and conditions herein contained shall be binding upon and inure to the benefit of the respective parties and their successors and assigns. SECTION 28.05. HEADINGS. The Article and marginal headings herein are intended for convenience in finding the subject matters, are not to be taken as part of this Lease and are not to be used in determining the intent of the parties to this Lease. SECTION 28.06. ENTIRE AGREEMENT. This instrument contains the entire and only agreement between the parties and no oral statements or representations or prior written matter not contained in this instrument shall have any force or effect. This Lease shall not be modified in any way or terminated except by a writing executed by both parties. SECTION 28.07. LANDLORD. The term "Landlord" as used in this Lease means only the holder, for the time being, of the Landlord's interest under this Lease so that in the event of any transfer of title to the Demised Premises the Landlord shall be and hereby is entirely freed and relieved of all obligations of the Landlord hereunder accruing after such transfer, and it shall be deemed without further agreement between the parties that such grantee, transferee or assignee has assumed and agreed to observe and perform all obligations of the Landlord hereunder arising during the period it is the holder of the Landlord's interest hereunder. SECTION 28.08. WORDS OF DUTY. Whenever in this Lease any words of obligation or duty are used, such words or expressions shall have the same force and effect as though made in the form of covenants. SECTION 28.09. CUMULATIVE REMEDIES. The specified remedies to which the Landlord or the Tenant may resort under PAGE 21 the terms of this Lease are cumulative and are not intended to be exclusive of any other remedies or means of redress to which the Landlord or the Tenant may lawfully be entitled in case of any breach or threatened breach of any provision of this Lease. SECTION 28.10. NO OPTION. The submission of this Lease Agreement for examination does not constitute a reservation of, or option for, the Demised Premises, and this Lease Agreement becomes effective as a Lease Agreement only upon execution and delivery thereof by Landlord and Tenant. SECTION 28.11. ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a lesser amount than the rent and additional charges payable hereunder shall be deemed to be other than a payment on account of the earliest stipulated basic rent and additional rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment for rent or additional rent 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 rent and additional rent or pursue any other remedy provided herein or by law. SECTION 28.12. CORPORATE AUTHORITY. If Tenant is a corporation, Tenant represents and warrants that this Lease and the undersigned's execution of this Lease has been duly authorized and approved by the corporation's Board of Directors. The undersigned officers and representatives of the corporation executing this Lease on behalf of the corporation represent and warrant that they are officers of the corporation with authority to execute this Lease on behalf of the corporation, and within fifteen (15) days of execution hereof, Tenant will provide Landlord with a corporate resolution confirming the aforesaid. ARTICLE XXIX PERSONAL LIABILITY SECTION 29.01. Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Lease by Landlord, that there shall be absolutely no personal liability on the part of Landlord, its successors, assigns or any mortgagee in possession (for the purposes of this Paragraph, collectively referred to as "Landlord"), with respect to any of the terms, covenants and conditions of this Lease, and that Tenant shall look solely to the equity of Landlord in the Building for the satisfaction of each and every remedy of Tenant in the event of any breach by Landlord of any of the terms, covenants and conditions of this Lease to be performed by Landlord, such exculpation of liability to be absolute and without any exceptions whatsoever. ARTICLE XXX GUARANTY SECTION 30.01. This Lease is expressly conditioned on the execution by CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP. of the guaranty of the terms, covenants and conditions in this Lease to be performed and observed by Tenant PAGE 22 in the form and substance attached hereto and made a part hereof as Exhibit B. ARTICLE XXXI CROSS-COLLATERALIZATION SECTION 31.01. Tenant acknowledges that this Lease shall be cross-collateralized with its lease with Mack Waterford Properties Limited and Bells Lane '89 Associates L.P. doing business as Waterford '89 Joint Venture dated May 1, 1989 covering the property located in the Town of Waterford, Saratoga County, New York, so that a default under that lease shall be deemed a default under this Lease and, similarly, a default under this Lease shall be deemed a default under the aforesaid lease dated May 1, 1989. ARTICLE XXXII RENEWAL OPTIONS SECTION 32.01. Tenant is hereby granted four (4) options to renew this Lease upon the following terms and conditions: (A) At the time of each renewal, the Tenant shall not be in default in accordance with the terms and provisions of this Lease, and shall be in possession of the Demised Premises pursuant to this Lease. (B) Each of the renewal options shall be deemed automatically exercised unless Tenant notifies Landlord to the contrary, in writing, at least twelve (12) months before the expiration of the Term, or twelve (12) months before the expiration of the preceding renewal term, as the case may be. (C) The renewal terms shall be for the term of five (5) years each, the first renewal term to commence at the expiration of the Term of this Lease, the second renewal term to commence upon the expiration of the first renewal term, the third renewal term to commence upon the expiration of the second renewal term, and the fourth renewal term to commence upon the expiration of the third renewal term, and all of the terms and conditions of this Lease, other than the rent, shall apply during any such renewal terms. (D) The basic rent to be paid during the first renewal term shall be Eight Million Two Hundred Ninety-eight Thousand Nine Hundred Sixty-five and 00/100 ($8,298,965.00) Dollars; the basic rent to be paid during the second renewal term shall be Nine Million One Hundred Twenty-eight Thousand Eight Hundred Sixty and 00/100 ($9,128,860.00) Dollars; the basic rent to be paid during the third renewal term shall be Ten Million Forty-one Thousand Seven Hundred Fifty and 00/100 ($10,041,750.00) Dollars; and PAGE 23 the basic rent to be paid during the fourth renewal term shall be Eleven Million Forty-five Thousand Nine Hundred Twenty-five and 00/100 ($11,045,925.00) Dollars. The basic rent during each of the renewal terms shall be payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and shall accrue at the following yearly and monthly rates: Renewal Term Yearly Rent Monthly Rent First (Years 21-25) $1,659,793.00 $138,316.08 Second (Years 26-30) $1,825,772.00 $152,147.67 Third (Years 31-35) $2,008,350.00 $167,362.50 Fourth (Years 36-40) $2,209,185.00 $184,098.75 The aforesaid monthly rents shall be payable in advance on the first day of each calendar month during the respective renewal term, except that a proportionately lesser sum may be paid for the first month of any of the renewal terms if said renewal term commences on a date other than the first of the month. ARTICLE XXXIII RIGHT OF FIRST OFFER TO PURCHASE SECTION 33.01. Tenant shall have the right of first offer to purchase the Demised Premises during the Term of this Lease as the same may be renewed. Landlord will advise the Tenant of the terms and conditions Landlord would be willing to accept with respect to the sale of the Demised Premises, and Tenant shall have thirty (30) days within which to respond to Landlord's offer. Should Tenant decline Landlord's offer or fail to respond, then, and in such event, Tenant shall lose any prospective rights of first offer and Landlord shall be free to sell to any other party upon substantially similar terms but at the basic price no less than that quoted to Tenant, provided that title closes within twelve (12) months from the date of Tenant's refusal or from the expiration of said thirty (30) day period should Tenant fail to respond. Any downward deviation from the basic price as quoted to Tenant or any proposed sale after the aforesaid twelve (12) month period will necessitate a PAGE 24 re-offer to the Tenant, upon the terms and conditions contained in this Article. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written. BRACKEN '89 JOINT VENTURE BY: MACK BRACKEN ROAD PROPERTIES LIMITED By:/S/ -------------------------------- BY: MONTGOMERY '89 ASSOCIATES L.P. BY: HAMPSHIRE MANAGEMENT COMPANY, General Partner By: /S/ James E. Hanson II ---------------------- JAMES E. HANSON II, PRESIDENT THE GRAND UNION COMPANY, Tenant By: /S/ Robert F. Catherman ----------------------------------- PAGE 25 Exhibit B GUARANTY OF LEASE WHEREAS, THE GRAND UNION COMPANY, with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as "Tenant") is desirous of entering into the lease hereinafter mentioned; and WHEREAS, CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP., with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter, individually and collectively, referred to as "Guarantor") has requested MACK BRACKEN ROAD PROPERTIES LIMITED AND MONTGOMERY 89 ASSOCIATES L.P. DOING BUSINESS AS BRACKEN 89 JOINT VENTURE, WITH OFFICES AT C/O THE MACK COMPANY, 370 West Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as "Landlord") to enter into a lease with the Tenant, for a Term of twenty (20) years with four (4), five (5) year renewal options, for a building situated in the Town of Montgomery, County of Orange, State of New York, commonly known as Bracken Road, Montgomery, New York (hereinafter referred to as "Lease"); and WHEREAS, the Landlord has refused to enter into the said Lease unless the Guarantor guarantees said Lease in the manner hereinafter set forth. NOW, THEREFORE, to induce the Landlord to enter into said Lease, which Lease is dated this day and is being executed simultaneously herewith, the Guarantor hereby agrees as follows: 1. (a) The Guarantor jointly and severally unconditionally guarantees to the Landlord and the successors and assigns of the Landlord the full and punctual performance and observance, by the Tenant, of all of the terms, covenants and conditions in said Lease contained on Tenant's part to be kept, performed or observed. (b) If, at any time, default shall be made by the Tenant in the performance or observance of any of the terms, covenants or conditions in said Lease contained on the Tenant's part to be kept, performed or observed, the Guarantor will keep, perform and observe the same, as the case may be, in place and stead of the Tenant. (c) The liability of the Guarantor hereunder shall be enforceable against the Guarantor without the necessity for any suit or proceedings on the Landlord's part of any kind or nature whatsoever against the Tenant. 2. Any act of the Landlord, or the successors or assigns of the Landlord, consisting of a waiver of any of the terms or conditions of said Lease, or the giving of any consent to any manner or thing relating to said Lease, or the granting of any indulgences or extensions of time, to the Tenant, may be done without notice to the Guarantor and without releasing the obligations of the Guarantor hereunder. 3. The obligations of the Guarantor hereunder shall not be released by Landlord's receipt, application or release of security given for the performance and observance of covenants and conditions in said Lease contained on the Tenant's part to be performed or observed; nor by any modification of such Lease, but in the case of any such modification the liability of the Guarantor shall be deemed modified in accordance with the terms of any such modification of the Lease. 4. The liability of the Guarantor hereunder shall in no way be affected by (a) the release or discharge of the Tenant in any creditors' receivership, bankruptcy or other proceedings; (b) the impairment, limitation or modification of the liability of the Tenant or the estate of the Tenant in bankruptcy, or of any remedy for the enforcement of the Tenant's said liability under the Lease, resulting from the operation of any present or future provision of the National Bankruptcy Act or other statute or from the decision in any court; (c) the rejection or disaffirmance of the Lease in any such proceedings; (d) the assignment or transfer of the Lease by the Tenant; (e) any disability or other defense of the Tenant, or (f) the cessation from any cause whatsoever of the liability of the Tenant. 5. Until all the covenants and conditions in said Lease on the Tenant's part to be performed and observed are fully performed and observed, the Guarantor: (a) shall have no right of subrogation against the Tenant by reasons of any payments or acts of performance by the Guarantor hereunder; (b) waives any right to enforce any remedy which the Guarantor now or hereafter shall have against the Tenant by reason of any one or more payment or acts of performance in compliance with the obligations of the Guarantor hereunder. 6. This Guaranty shall apply to the said Lease and to any renewal or extension thereof. 7. This instrument may not be changed, modified, discharged or terminated orally or in any manner other than by an agreement in writing signed by the Guarantor and the Landlord. IN WITNESS WHEREOF, the Guarantor has hereunto set his hands and seals the 29TH day of SEPTEMBER 1989. GUARANTOR: CAVENHAM HOLDINGS BY: /S/ Robert Terrence Galvin --------------------------- VICE PRESIDENT THE GRAND UNION ACQUISITION CORP. BY: /S/ Robert Terrence Galvin ------------------------- VICE PRESIDENT PAGE 2 GUARANTY OF LEASE WHEREAS, THE GRAND UNION COMPANY, with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter referred to as "Tenant") is desirous of entering into the lease hereinafter mentioned; and WHEREAS, CAVENHAM HOLDINGS and THE GRAND UNION ACQUISITION CORP., with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 (hereinafter, individually and collectively, referred to as "Guarantor") has requested MACK BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY 89 ASSOCIATES L.P. doing business as BRACKEN 89 JOINT VENTURE, with offices at c/o The Mack Company, 370 West Passaic Street, Rochelle Park, New Jersey 07662 (hereinafter referred to as "Landlord") to enter into a lease with the Tenant, for a Term of twenty (20) years with four (4), five (5) year renewal options, for a building situated in the Town of Montgomery, County of Orange, State of New York, commonly known as Bracken Road, Montgomery, New York (hereinafter referred to as "Lease"); and WHEREAS, the Landlord has refused to enter into the said Lease unless the Guarantor guarantees said Lease in the manner hereinafter set forth. NOW, THEREFORE, to induce the Landlord to enter into said Lease, which Lease is dated this day and is being executed simultaneously herewith, the Guarantor hereby agrees as follows: 1. (a) The Guarantor jointly and severally unconditionally guarantees to the Landlord and the successors and assigns of the Landlord the full and punctual performance and observance, by the Tenant, of all of the terms, covenants and conditions in said Lease contained on Tenant's part to be kept, performed or observed. (b) If, at any time, default shall be made by the Tenant in the performance or observance of any of the terms, covenants or conditions in said Lease contained on the Tenant's part to be kept, performed or observed, the Guarantor will keep, perform and observe the same, as the case may be, in place and stead of the Tenant. (c) The liability of the Guarantor hereunder shall be enforceable against the Guarantor without the necessity for any suit or proceedings on the Landlord's part of any kind or nature whatsoever against the Tenant. 2. Any act of the Landlord, or the successors or assigns of the Landlord, consisting of a waiver of any of the terms or conditions of said Lease, or the giving of any consent to any manner or thing relating to said Lease, or the granting of any indulgences or extensions of time, to the Tenant, may be done without notice to the Guarantor and without releasing the obligations of the Guarantor hereunder. 3. The obligations of the Guarantor hereunder shall not be released by Landlord's receipt, application or release of security given for the performance and observance of covenants and conditions in said Lease contained on the Tenant's part to be performed or observed; nor by any modification of such Lease, but in the case of any such modification the liability of the Guarantor shall be deemed modified in accordance with the terms of any such modification of the Lease. 4. The liability of the Guarantor hereunder shall in no way be affected by (a) the release or discharge of the Tenant in any creditors' receivership, bankruptcy or other proceedings; (b) the impairment, limitation or modification of the liability of the Tenant or the estate of the Tenant in bankruptcy, or of any remedy for the enforcement of the Tenant's said liability under the Lease, resulting from the operation of any present or future provision of the National Bankruptcy Act or other statute or from the decision in any court; (c) the rejection or disaffirmance of the Lease in any such proceedings; (d) the assignment or transfer of the Lease by the Tenant; (e) any disability or other defense of the Tenant, or (f) the cessation from any cause whatsoever of the liability of the Tenant. 5. Until all of the covenants and conditions in said Lease on the Tenant's part to be performed and observed are fully performed and observed, the Guarantor: (a) shall have no right of subrogation against the Tenant by reasons of any payments or acts of performance by the Guarantor hereunder; and (b) waives any right to enforce any remedy which the Guarantor now or hereafter shall have against the Tenant by reason of any one or more payment or acts of performance in compliance with the obligations of the Guarantor hereunder. 6. This Guaranty shall apply to the said Lease and to any renewal or extension thereof. 7. This instrument may not be changed, modified, discharged or terminated orally or in any manner other than by an agreement in writing signed by the Guarantor and the Landlord. IN WITNESS WHEREOF, the Guarantor has hereunto set his hands and seals the ____day of September 1989. GUARANTOR: CAVENHAM HOLDINGS BY:__________________________________ THE GRAND UNION ACQUISITION CORP. BY:__________________________________ PAGE 2 DESCRIPTION ALL THAT CERTAIN PLOT, piece or parcel of land situate, lying and being in the Town of Montgomery, County of Orange and State of New York, and being more particularly bounded and described as follows: BEGINNING at a point on the northerly side of Bracken Road, said point being the southeasterly corner of the premises, being marked by an iron pipe, being the southwesterly corner of the lands now or formerly of Toohey (Tax Lot 30-1-25 on the Town of Montgomery tax map) and running thence (1) North 84 32 22 West along the northerly side of Bracken Road 583.56 feet to the southwesterly corner of the premises and the southeasterly corner of lands to be retained by Anthonisen, thence; (2) northeasterly along the westerly line of the premises and the easterly line of those lands to be retained by Anthonisen the following two (2) courses and distances: (a) North 05 27 38 East 190.97 feet, thence; (b) North 21 43 58 East 636.85 feet to a point in the southerly line of lands now or formerly of Geraghty, being the northwesterly corner of the premises and the northeasterly corner of those lands to be retained by Anthonisen, thence; (3) South 68 16 02 East along the northerly line of the premises (and through a stone wall for a portion thereof) and the southerly line of lands now or formerly of Geraghty (Tax Lot 24-1-7.1), Yannone (Tax Lot 24-1-7.2), Compa (Tax Lot 24-1-18.1) and DeWitt (Tax Lot 24-1-13) the distance of 768.00 feet to a point in the westerly line of lands now or formerly of Bromberg, Jacobowitz and Kramer (Tax Lot 23-1-57.1) and being the northeasterly corner of the premises and the southeasterly corner of lands now or formerly of DeWitt, thence; (4) South 22 45 57 West along the westerly line of said lands now or formerly of Bromberg, Jacobowitz and Kramer 367.78 feet to an iron marking the southwesterly corner of said lands of Bromberg, Jacobowitz and Kramer and being the northwesterly corner of other lands to be retained by CONTINUED DESCRIPTION CONTINUED PAGE 2 Anthonisen, thence; (5) South 22 59 41 West along the westerly line of said others lands to be retained by Anthonisen 99.71 feet to an iron pipe marking the northeasterly corner of lands now or formerly of Toohey (as aforesaid), thence; (6) North 76 53 32 West along the northerly line of said lands now or formerly of Toohey 132.45 feet to the northwesterly corner of said lands now or formerly of Toohey, thence; (7) South 26 38 04 West along the westerly line of said lands now or formerly of Toohey 170.01 feet to an iron pipe on the northerly side of Bracken Road, being the southwesterly corner of said lands now or formerly of Toohey, the southeasterly corner of the premises and the point or place of beginning. October 2, 1989 The Grand Union Company 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Re: Lease Agreement between Mack Bracken Road Properties Limited and Montgomery 89 Associates L.P., and The Grand Union Company; Bracken Road, Montgomery, NY Gentlemen: Notwithstanding anything contained in the above-referenced lease to the contrary, in the event our lender shall require the maintenance of an escrow reserve for the tax or insurance obligations of the Tenant or for any other reoccurring charges required pursuant to the lease, you agree to promptly pay to the escrowee appointed by the lender the required amount as same may be periodically adjusted from time to time. You shall be free to deal directly with said lender in an effort to obtain said lender's waiver of any such requirement or to arrange for the escrowee to maintain any such escrow reserve in an interest-bearing account for your benefit. If the foregoing accurately reflects our understanding, please sign and return a copy of this letter to the undersigned. Very truly yours, MACK BRACKEN ROAD PROPERTIES LIMITED BY: ------------------------- MONTGOMERY 89 ASSOCIATES L.P. BY: HAMPSHIRE MANAGEMENT COMPANY, General Partner By: /s/ James E. Hanson II ------------------------- JAMES E. HANSON II THE GRAND UNION COMPANY BY: Raymond H. Ayers ---------------------- Raymond H. Ayers Vice President October 2, 1989 The Grand Union Company 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Re: Lease Agreement between Mack Bracken Road Properties Limited and Montgomery 89 Associates L.P. ("Landlord"), and The Grand Union Company ("Tenant"); Bracken Road, Montgomery, New York Gentlemen: Notwithstanding anything contained in the above-referenced lease to the contrary, in the event Landlord is unable to obtain a nondisturbance agreement from a future mortgagee as required by Section 13.01 of the Lease as a result of the requirements set forth in said Section 13.01 that said mortgagee must agree to make the proceeds of casualty insurance available to Landlord for restoration, then, and in that event, you hereby agree that said requirement obligating said mortgagee to make the proceeds of casualty insurance available to Landlord for restoration shall be deemed waived and eliminated from the provisions of said Section 13.01 with the express understanding that in the event of a casualty Landlord will make available to the Tenant for restoration of the Premises an amount equal to the proceeds of insurance, provided that at the time of the casualty there shall be at least ten (10) years remaining in the Term of the Lease, failing which you shall be required to exercise the next successive renewal option(s) such that the remaining term of the Lease shall be at least ten (10) years. In the event casualty occurs at any time after the expiration of the first year of the third renewal term and if Landlord does not elect to make available to the Tenant an amount equal to the insurance proceeds, then, and in that event, Tenant shall have the right to cancel and terminate the Lease provided that Tenant shall pay to Landlord any difference in the amount of insurance proceeds and the costs of restoration of the Premises, in the event the cost of restoration shall exceed the amount of insurance proceeds. The Grand Union Company October 2, 1989 Page Two If the foregoing accurately reflects our understanding, please sign and return a copy of this letter to the undersigned. Very truly yours, MACK BRACKEN ROAD PROPERTIES LIMITED BY: ------------------------- MONTGOMERY 89 ASSOCIATES L.P. BY: HAMPSHIRE MANAGEMENT COMPANY, General Partner By: /s/ James E. Hanson II ------------------------- JAMES E. HANSON II THE GRAND UNION COMPANY BY: Raymond H. Ayers ---------------------- Raymond H. Ayers Vice President New York Region EXHIBIT B KIM KOHLER as of 1/15/96 102 OPERATING STORE LOCATION STATE COUNTY OPERATING STORES 1 PORT JEFFERSON NY SUFFOLK 6 LITTLE NECK NY QUEENS 7 HERRICKS NY NASSAU 8 NORTH PORT WASHINGTON NY NASSAU 36 MASSAPEQUA NY NASSAU 38 SMITHTOWN NY SUFFOLK 39 WEST HEMPSTEAD NY NASSAU 52 GARDEN CITY NY NASSAU 64 NORTH BELLMORE NY NASSAU 65 WEST BABYLON NY SUFFOLK 68 DEER PARK NY SUFFOLK 82 SAYVILLE NY SUFFOLK 84 COMMACK NY SUFFOLK 95 NORTH PORT NY SUFFOLK 98 WEST ISLIP NY SUFFOLK 107 MAHOPAC NY PUTNAM 114 PEEKSKILL NY WESTCHESTER 130 TARRYTOWN NY WESTCHESTER 137 LARCHMONT NY WESTCHESTER 155 DARIEN CT FAIRFIELD 203 PLEASANTVILLE NY WESTCHESTER 207 NEW CANAAN CT FAIRFIELD 212 RIDGEFIELD CT FAIRFIELD 213 NORWALK CT FAIRFIELD 227 CROTON-ON-HUDSON NY WESTCHESTER 231 NEWTOWN CT FAIRFIELD 239 DOBBS FERRY NY WESTCHESTER 242 TRUMBULL CT FAIRFIELD 247 MT KISCO NY WESTCHESTER 248 CHAPPAQUA NY WESTCHESTER 416 BLEEKER ST. NY MANHATTAN 422 COLD SPRING NY PUTNAM 434 BRONX-TREMONT NY BRONX 437 GLENVILLE CT FAIRFIELD 801 BEACON NY DUTCHESS 805 EASTCHESTER NY WESTCHESTER 810 WESTPORT CT FAIRFIELD 811 GREENWICH CT FAIRFIELD 812 GLENBROOK CT FAIRFIELD 820 FISHKILL NY DUTCHESS 823 CARMEL NY PUTNAM 825 MONROE CT FAIRFIELD 827 NEW FAIRFIELD CT FAIRFIELD 828 SOUTHBURY CT NEW HAVEN 829 PAWLING NY DUTCHESS 3100 ELMWOOD PARK NJ BERGEN 3101 DOVER TOWNSHIP NJ OCEAN 3103 SUFFERN NY ROCKLAND 3109 HACKENSACK NJ BERGEN 3110 MATAMORAS PA PIKE 3112 WOODRIDGE NJ BERGEN EXHIBIT B KIM KOHLER as of 1/15/96 STORE LOCATION STATE COUNTY 3109 HACKENSACK NJ BERGEN 3110 MATAMORAS PA PIKE 3112 WOODBRIDGE NJ BERGEN 3114 MONROE NY ORANGE 3116 WASHINGTONVILLE NY ORANGE 3120 MANALAPAN NJ MONMOUTH 3122 LIVINGSTON NJ ESSEX 3150 GOSHEN NY ORANGE 3151 FAIRLAWN-RADBURN NJ BERGEN 3180 RIDGEWOOD NJ BERGEN 3197 SOMMERVILLE NJ SOMERSET 3250 BERKELEY HEIGHTS NJ UNION 3253 NORTH BRUNSWICK NJ MIDDLESEX 3269 CORNWALL NY ORANGE 3273 DENVILLE NJ MORRIS 3277 HIGHLAND FALLS NY ORANGE 3281 TENAFLY NJ BERGEN 3282 CLIFTON-LEXINGTON NJ PASSAIC 3286 CLOSTER NJ BERGEN 3291 TEANECK NJ BERGEN 3400 MILFORD PA PIKE 3451 CLIFTON-BROAD NJ PASSAIC 3457 WALDWICK NJ BERGEN 3463 RAMAPO NY ROCKLAND 3472 MONTVALE-CHESTNUT NJ BERGEN 3477 DUMONT NJ BERGEN 3480 LAKE HIAWATHA NJ MORRIS 3481 GREENWOOD LAKE NY ORANGE 3486 BUTLER NJ MORRIS 3489 BASKING RIDGE NJ SOMERSET 3491 MT IVY NY ROCKLAND 3492 POINT PLEASANT NJ OCEAN 3498 MONTVALE-KINDERKAMACK NJ BERGEN 3499 STONY POINT NY ROCKLAND 3545 SOUTH BRUNSWICK NJ MIDDLESEX 3551 WARWICK NY ORANGE 3552 OAKLAND NJ BERGEN 3553 PARAMUS NJ BERGEN 3554 SPARTA NJ SUSSEX 3556 LANDING NJ MORRIS 3558 HOWELL TOWNSHIP NJ MONMOUTH 3562 BRICKTOWNSHIP NJ OCEAN 3563 FLEMINGTON NJ HUNTERDON 3564 ROCKY HILL NJ SOMERSET 3565 RAMSEY NJ BERGEN 3568 MATAWAN NJ MONMOUTH 3570 WESTWOOD NJ BERGEN 3571 RINGWOOD NJ PASSAIC 3572 TOMS RIVER NJ OCEAN 3573 BELLEVILLE NJ ESSEX 3574 WYCKOFF NJ BERGEN 3575 WEST NYACK NY ROCKLAND 3576 FORT LEE NJ BERGEN 3580 MIDDLETOWN NJ MONMOUTH NORTHERN REGION - --------------- EXHIBIT B KIM KOHLER as of 1/15/96 128 OPERATING OPERATING STORES 1103 JOHNSON VT LAMOILLE 1106 FORT EDWARDS NY WASHINGTON 1107 ROUSES POINT NY CLINTON 1112 ALBANY-LIQUOR STORE NY ALBANY 1113 POULTNEY VT RUTLAND 1114 CORINTH NY SARATOGA 1134 BURLINGTON VT CHITTENDON 1135 KEESVILLE NY ESSEX 1139 WOODSTOCK NY ULSTER 1147 LA GRANGE NY DUTCHESS 1153 PORT HENRY NY ESSEX 1160 MANCHESTER VT BENNINGTON 1161 ENOSBURG FALLS VT FRANKLIN 1166 STOWE VT LAMOILLE 1167 SOUTH BURLINGTON VT CHITTENDEN 1169 RUTLAND VT RUTLAND 1171 SARANAC LAKE NY FRANKLIN 1175 WHITEHALL NY WASHINGTON 1183 PLATTSBURG-AIRBASE NY CLINTON 1195 SCHROON LAKE NY ESSEX 1197 ST. ALBANS VT FRANKLIN 1198 NORTHVILLE NY FULTON 1370 TUPPER LAKE NY FRANKLIN 1802 FORT PLAIN NY MONTGOMERY 1803 STAMFORD NY DELAWARE 1804 INDIAN LAKE NY HAMILTON 1805 SARANAC LAKE NY ESSEX 1810 LUDLOW VT WINDSOR 1811 WINDSOR VT WINDSOR 1812 BRUNSWICK-TROY NY RENSSLAER 1814 SOUTH BURLINGTON VT CHITTENDEN 1815 GRANVILLE NY WASHINGTON 1816 PLEASANT VALLEY NY DUTCHESS 1818 WAITSFIELD VT WASHINGTON 1819 ESSEX CENTER VT CHITTENDON 1820 NEWPORT VT ORLEANS 1821 ESSEX JUNCTION VT CHITTENDON 1823 BURNT HILLS NY SARATOGA 1824 RHINEBECK NY DUTCHESS 1825 ELIZABETHTOWN NY ESSEX 1826 CHESTERTOWN NY WARREN 1828 NORTHFILED VT WASHINGTON 1836 BENNINGTON VT BENNINGTON 1844 BALLSTON SPA NY SARATOGA 1845 CHAMPLAIN NY CLINTON 1852 HOOSICK FALLS NY RENSSELAER 1855 ELSMERE NY ALBANY 1859 PERU NY CLINTON 1861 BRATTLEBORO VT WINDHAM 1867 GREENWICH NY WASHINGTON EXHIBIT B KIM KOHLER as of 1/15/96 128 OPERATING STORE LOCATION STATE COUNTY 1870 BARRE VT WASHINGTON 1872 PALANTINE BRIDGE NY MONTGOMERY 1873 TICONDEROGA NY ESSEX 1874 HYDE PARK NY DUTCHESS 1876 MILTON VT CHITTENDON 1878 DOVER PLAIN NY DUTCHESS 1879 LOUDONVILLE NY ALBANY 1884 BRISTOL VT ADDISON 1885 HARDWICK VT ULSTER 1888 ELLENVILLE NY ULSTER 1892 MALTA NY SARATOGA 1893 WINOOSKI VT CHITTENDEN 1895 AMENIA NY DUTCHESS 1897 HUDSON FALLS NY WASHINGTON 1899 RAVENA NY ALBANY 1900 MIDDLEBURGH NY SCHOHARIE 1902 LAKE PLACID NY ESSEX 1903 COXSACKIE NY GREENE 1905 WATERVLIET NY ALBANY 1906 GLENMONT NY ALBANY 1907 HIGHLAND NY ULSTER 1908 FAIR HAVEN VT RUTLAND 1909 NORTH CREEK NY WARREN 1914 HANOVER NH GRAFTON 1915 WEST LEBANON NH GRAFTON 1922 MORRISVILLE VT LAMOILLE 1925 KINGSTON NY ULSTER 1928 SPRINGFIELD VT WINDSOR 1930 GUILDERLAND NY ALBANY 1933 MONTPELIER VT WASHINGTON 1935 SCHENECTADY NY SCHENECTADY 1937 AUSABLE FORKS NY ESSEX 1938 LINCOLN NH GRAFTON 1939 BRADFORD VT ORANGE 1940 NISKAYUNA NY SCHENECTADY 1941 BOLTON LANDING NY WARREN 1942 WILLSBORO NY ESSEX 1943 HOPEWELL JUNCTION NY DUTCHESS 1946 WATERFORD NY SARATOGA 1947 SCOTIA NY SCHENECTADY 1950 SAUGERTIES NY ULSTER 1951 WILMINGTON VT WINDHAM 1953 SCHODACK NY RENSSELAER 1954 WARRENSBURG NY WARREN 1955 CAMBRIDGE NY WASHINGTON 1957 MECHANICVILLE NY SARATOGA 1958 SWANTON VT FRANKLIN 1960 EAST GREENBUSH NY RENNSELAER 1962 BROADALBIN NY FULTON 1966 COLCHESTER VT CHITTENDON 1967 RANDOLPH VT ORANGE 1968 WATERBURY VT WASHINGTON 1969 WHITE RIVER VT WINDSOR 1973 TANNERSVILLE NY GREENE 1974 ROTTERDAM NY SCHENECTADY 1975 CLIFTON PARK NY SARATOGA EXHIBIT B KIM KOHLER as of 1/15/96 STORE LOCATION STATE COUNTY 1974 ROTTERDAM NY SCHENECTADY 1975 CLIFTON PARK NY SARATOGA 1977 VALATIE NY COLUMBIA 1979 WAPPINGERS FALLS NY DUTCHESS 1981 WOODSTOCK VT WINDSOR 1983 ST. JOHNSBURY VT CALEDONIA 1985 NORTH CLARENDON VT RUTLAND 1988 CHATHAM NY COLUMBIA 1989 SCHAGHTICOKE NY RENSSELAER 1992 BRANDON VT RUTLAND 1993 MIDDLEBURY VT ADDISON 1994 SOUTH GLENS FALLS NY SARATOGA 1996 PLATTSBURG NY CLINTON 1997 SARATOGA NY SARATOGA 2101 SIDNEY NY DELAWARE 2110 BINGHAMTON NY BROOME 2133 VESTAL NY BROOME 2150 HAMILTON NY MADISON 2312 VESTAL PLAZA NY BROOME 2356 HANCOCK NY DELAWARE 2359 NORWICH NY CHENAGO 2362 ONEONTA NY OTSEGO 2370 BINGHAMTON NY BROOME 2373 DELHI NY DELAWARE CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 Exhibit C - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 085 00 00 HEALTH & BEAUTY AIDS 085 01 00 ORAL HYGIENE 085 01 01 TOOTHPASTE - TUBE - TARTAR 085 01 02 TOOTHPASTE - TUBE - NON TARTAR 085 01 03 TOOTHPASTE - PUMP - TARTAR 085 01 04 TOOTHPASTE - PUMP - NON TARTAR 085 01 05 TOOTHPASTE - SMOKERS/MISC 085 01 06 TOOTH POLISH 085 01 10 DENTURE CLEANSERS 085 01 11 DENTURE ADHESIVES 085 01 12 ORAL HYGIENE MEDICATIONS 085 01 20 TOOTHBRUSHES 085 01 21 DENTAL FLOSS 085 01 30 MOUTHWASH 085 01 31 BREATH SPRAY/DROPS 085 01 98 ORAL HYGIENE PREPACKS 085 01 99 ORAL HYGIENE RACKS 085 02 00 HAIR CARE PREPARATIONS 085 02 01 HAIR CARE PREPARATIONS HAIR SPRAY AEROSOL 085 02 02 HAIR CARE PREPARATIONS HAIR SPRAY NON AEROSOL 085 02 03 HAIR CARE PREPARATIONS WIG ACCESSORIES 085 02 04 HAIR CARE PREPARATIONS WAVESET GEL & LOTIONS 085 02 05 HAIR CARE PREPARATIONS SHAMPOOS REG CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 085 02 06 HAIR CARE PREPARATIONS DANDRUFF SHAMPOOS 085 02 07 HAIR CARE PREPARATIONS CREME RINSES 085 02 08 HAIR CARE PREPARATIONS CONDITIONERS 085 02 09 HAIR CARE PREPARATIONS HAIR COLORINGS 085 02 10 HAIR CARE PREPARATIONS HAIR COLORINGS ACCESSORIES 085 02 11 HAIR CARE PREPARATIONS HOME PERMANENTS 085 02 12 HAIR CARE PREPARATIONS MEN'S HAIR SPRAYS 085 02 13 HAIR CARE PREPARATIONS MEN'S TONIC & CREAMS 085 02 14 HAIR CARE PREPARATIONS STYLING SPRITZS 085 03 00 DEODORANTS & ANTI PERSPIRANTS 085 03 01 DEODORANTS CREAM & PAD 085 03 02 DEODORANTS STICK 085 03 03 ANTI PERSPIRANTS STICK 085 03 04 DEODORANTS ROLL ON 085 03 05 ANTI PERSPIRANTS ROLL ON 085 03 06 DEODORANTS SPRAYS 085 03 07 ANTI PERSPIRANTS SPRAYS 085 03 08 BODY SPRAYS (IMPULSE, ETC) 085 03 99 MISC DEOD & ANTI PERSPIRANTS 085 04 00 SHAVING SUPPLIES 085 04 01 SHAVING SUPPLIES RAZORS 085 04 02 SHAVING SUPPLIES BLADES 085 04 03 SHAVING SUPPLIES CREAMS & GELS 085 04 04 SHAVING SUPPLIES AFTER SHAVE & COLOGNE 085 04 99 SHAVING SUPPLIES, OTHERS 085 05 00 BABY PRODUCTS/BABY NEEDS NON-HBA 085 05 01 BABY PRODUCTS POWDER 085 05 02 BABY PRODUCTS BABY OILS 085 05 03 BABY PRODUCTS BABY LOTIONS & CREAMS 085 05 04 BABY PRODUCTS BABY OINTMENTS 085 05 05 BABY PRODUCTS BABY SHAMPOOS 085 05 06 BABY PRODUCTS BABY BOTTLES & ACCESSORIES 085 05 07 BABY PRODUCTS BABY WIPES & CLOTH 085 05 08 BABY PRODUCTS MISC. BABY 085 05 20 BABY NEEDS NON-HBA CLOTHING-EXCEPT PANTS 085 05 21 BABY NEEDS NON-HBA PANTS 085 05 22 BABY NEEDS NON-HBA FEEDING IMPLEMENTS TEETHERS & PACIF 085 05 23 BABY NEEDS NON-HBA MEDICAL ITEMS 085 05 24 BABY NEEDS NON-HBA BATH AND PERSONAL CARE 085 05 25 BABY NEEDS NON-HBA TOYS 085 05 29 BABY NEEDS NON-HBA MISCL 085 06 00 FIRST AID PRODUCTS 085 06 01 FIRST AID PRODUCTS PLASTIC STRIPS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 085 06 02 FIRST AID PRODUCTS TAPE BANDAGE GUAZE DRESSING 085 06 03 FIRST AID PRODUCTS COTTON BALLS 085 06 04 FIRST AID PRODUCTS COTTON SWABS 085 06 05 FIRST AID PRODUCTS PETROLEUM JELLY 085 06 06 FIRST AID PRODUCTS FIRST AID LIQUID CREAMS ANTISEPTI 085 06 07 FIRST AID PRODUCTS SUPPOSITORIES & OINTMENTS 085 06 08 FIRST AID - WRAPS/BRACES 085 07 00 SKIN PREPARATIONS 085 07 01 SKIN PREPARATIONS ACNE MEDICATIONS 085 07. 02 SKIN PREPARATIONS MEDICATED/SPECIAL SOAPS 085 07 03 SKIN PREPARATIONS FACE CREAMS & LOTIONS 085 07 04 SKIN PREPARATIONS HAND LOTIONS & CREAMS 085 07 05 SKIN PREPARATIONS BATH OILS & BEADS 085 07 06 SKIN PREPARATIONS TALC & DUSTING POWDERS 085 07 07 SKIN PREPARATIONS COLOGNES & PERFUMES 085 07 08 SKIN PREPARATIONS MISC SKIN PREPARATIONS 085 07 09 SKIN PREPARATIONS NAIL POLISH REMOVERS 085 07 10 SKIN PREPARATIONS-FACIAL SCRUBS, FRESHENERS ETC. 085 08 00 EYE & EAR PREPARATIONS 085 08 01 EYE DROPS & LOTIONS 085 08 02 CONTACT LENS PREPARATIONS 085 08 03 EAR ITEMS 085 08 04 READING GLASSES/ACCESSORIES 085 09 00 ANTACIDS & LAXATIVES 085 09 01 LIQUID ANTACIDS 085 09 02 ANTACID TABLETS 085 09 03 POWDER & GRANULE ANTACIDS 085 09 04 PILL TABLET & GRANULE LAXATIVES 085 09 05 LIQUID LAXATIVES 085 09 06 SUPPOSITORIES & ENEMAS 085 09 07 MISC ANTACIDS & LAXATIVES 085 10 00 COUGH & COLD REMEDIES 085 10 01 LIQUID COUGH & COLD MEDICINES 085 10 02 NASAL SPRAY-NOSE DROPS 085 10 03 THROAT LOZENGES 085 10 04 COLD TABLETS 085 10 05 DECONGESTANT TABLETS & CAPSULES 085 10 06 SINUS TABLETS & CAPSULES 085 10 07 BRONCHIAL SPRAYS & TABLETS 085 10 08 ALLERGY TABLETS & CAPSULES 085 10 09 MISC COUGH & COLD 085 11 00 ANALGESICS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 085 11 01 ASPIRIN TABLETS 085 11 02 ASPIRIN CAPSULES 085 11 03 NON ASPIRIN TABLETS 085 11 04 NON ASPIRIN CAPSULES 085 11 05 ARTHRITIS STRENGTH TABLETS & CAPSULES 085 11 06 SLEEP AIDS (DOWNERS) 085 11 07 NON SLEEP AIDS (UPPERS) 085 11 08 EXTERNAL ANALGESICS (BEN GAY, ABSORBINE JR, ETC) 085 11 09 MENSTRUAL ANALGESICS (PAMPRIN, MIDOL, ETC) 085 11 99 MISC ANALGESICS 085 12 00 VITAMINS 085 12 01 PRIVATE LABEL NATURAL 085 12 02 NATIONAL BRAND NATURAL 085 12 03 NATIONAL BRAND MULTIPLES 085 12 04 PRIVATE LABEL MULTIPLES 085 12 05 VITAMIN/DIETARY SUPPLEMENTS - ALL 085 13 00 FEMININE HYGIENE PRODUCTS 085 13 01 FEMININE HYGIENE PRODUCTS TAMPONS 085 13 02 FEMININE HYGIENE PRODUCTS SANITARY NAPKINS 085 13 03 FEMININE HYGIENE PRODUCTS SANITARY BELTS 085 13 04 FEMININE HYGIENE PRODUCTS FEMININE DEODORANTS 085 13 05 FEMININE HYGIENE PRODUCTS DOUCHE POWDERS & LIQUIDS 085 13 06 FEMININE HYGIENE PRODUCTS MISC 085 13 07 FEMININE HYGIENE PRODUCTS, PANTY LINERS 085 14 00 FOOT PRODUCTS 085 14 01 FOOT PRODUCTS DR. SCHOLLS 085 14 02 FOOT PRODUCTS, OTHERS 085 15 00 DIET AIDS - SUPPLEMENTS & BARS 085 15 01 DIET AIDS - SUPPLEMENTS & BARS - ALL 085 16 00 BIRTH CONTROL DEVICES 085 16 01 BIRTH CONTROL DEVICES, ALL 085 17 00 HOME HEALTH & SUPPLIES 085 17 01 HOME HEALTH & SUPPLIES, ALL 085 18 00 DIABETIC SUPPLIES 085 18 01 DIABETIC SUPPLIES, ALL 085 19 00 HEALTH APPLIANCES 085 19 01 HEALTH APPLIANCES, ALL 085 20 00 INCONTINENTS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 085 20 01 INCONTINENTS, ALL 085 70 00 HEALTH CARE 8 BEAUTY CARE (GREENHOUSE) 085 70 01 HEALTH CARE 085 70 02 BEAUTY CARE 085 80 00 SEASONAL & PROMOTIONAL H.B.A. 085 80 01 SUNTAN CREAMS, LOTIONS, SPRAYS 085 80 02 SUNGLASSES 085 90 00 WAREHOUSE BUYS GEN MDSE & H.B.A. 085 90 01 WAREHOUSE BUYS GEN MDSE & H.B.A. 085 99 00 MISCELLANEOUS H.B.A. 085 99 01 MISCELLANEOUS ALL 085 99 02 GENERAL MERCHANDISE PREPACK/ HBA PREPACK 085 99 03 HBC TEST 085 99 04 GM TEST 085 99 05 TRAIL SIZE 086 00 00 HAIR CARE & COSMETICS 086 03 00 HAIR CARE 086 03 01 HAIR CARE CURLERS & ROLLERS 086 03 02 HAIR CARE PINS & CLIPS 086 03 03 HAIR CARE NETS, PAPERS, TAPES, ACCOUTREMENTS 086 03 04 HAIR CARE COMBS 086 03 05 HAIR CARE BRUSHES 086 03 06 HAIR CARE BARRETTES 086 03 07 HAIR CARE HEADBANDS, PONYTAIL HOLDERS, ETC 086 03 08 HAIR CARE CAPS-SHOWER, SLUMBER, RAIN 086 03 09 HAIR IMPLEMENTS, TWEEZERS, OTHER TOOLS 086 03 99 MIRRORS 086 04 00 COSMETICS 086 04 01 MAYBELLINE EYE COSMETICS 086 04 02 MAYBELLINE LIPSTICKS, ETC 086 04 03 MAYBELLINE ROUGES, POWDERS, ETC 086 04 04 MAYBELLINE NAIL POLISHES 086 04 05 MAX FACTOR EYE COSMETICS 086 04 06 MAX FACTOR LIPSTICKS, ETC 086 04 07 MAX FACTOR ROUGE, POWDER, ETC 086 04 08 MAX FACTOR NAIL POLISHES 086 04 09 ANDREA EYE COSMETICS 086 04 10 ANDREA NAIL POLISHES 086 04 11 COVER GIRL EYE COSMETICS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 086 04 12 COVER GIRL LIPSTICKS, ETC 086 04 13 COVER GIRL ROUGES, POWDERS, ETC 086 04 14 COVER GIRL NAIL POLISHES 086 04 15 BONNE BELL EYE COSMETICS 086 04 16 BONNE BELL LIPSTICKS, ECT 086 04 17 BONNE BELL ROUGE, POWDERS, ECT 086 04 18 AZIZA EYE COSMETICS 086 04 19 AZIZA ROUGE, POWDERS, ECT 086 04 20 ALMAY EYE COSMETICS 086 04 21 ALMAY LIPSTICKS, ETC 086 04 22 ALMAY ROUGES, POWDERS, ETC 086 04 23 ALMAY NAIL POLISHES, ETC 086 04 28 CUTEX LIPSTICKS, ETC 086 04 29 CUTEX EYE COSMETICS 086 04 30 CUTEX NAIL POLISHES, ETC 086 04 37 POSNER LIPSTICKS, ALL 086 04 38 POSNER NAIL POLISHES, ETC 086 04 40 HONEY & SPICE LIPSTICKS 086 04 44 L'OREAL EYE COSMETICS 086 04 45 L'OREAL LIPSTICKS, ETC 086 04 46 L'OREAL ROUGES, POWDERS, ETC 086 04 47 L'OREAL NAIL POLISHES, ETC 086 04 51 QUENCHER LIPSTICKS, ETC 086 04 53 QUENCHER NAIL POLISHES, ETC 086 04 54 REVLON EYE COSMETICS 086 04 55 REVLON LIPSTICKS, ETC 086 04 56 REVLON ROUGES, POWDERS, ETC 086 04 57 REVLON NAIL POLISHES, ETC 086 04 61 SALLY HANSEN EYE COSMETICS 086 04 62 SALLY HANSEN LIPSTICKS, ETC 086 04 63 SALLY HANSEN ROUGE, POWDERS, ETC 086 04 64 SALLY HANSEN NAIL POLISH, ETC 086 04 66 ARTMATIC EYE COSMETICS 086 04 67 ARTMATIC LIPSTICKS, ETC 086 04 68 ARTMATIC ROUGE, POWDERS, ETC 086 04 69 ARTMATIC NAIL POLISHES, ETC 086 04 70 FLAME GLO EYE COSMETICS 086 04 71 FLAME GLO LIPSTICKS, ETC 086 04 72 FLAME GLO ROUGES, POWDERS, ETC 086 04 76 HAZEL BISHOP EYE COSMETICS 086 04 77 HAZEL BISHOP LIPSTICKS, ETC 086 04 78 HAZEL BISHOP ROUGES, POWDERS ETC 086 04 79 HAZEL BISHOP NAIL POLISHES, ETC 086 04 80 WET N WILD EYE COSMETICS 086 04 81 WET N WILD LIPSTICKS, ETC 086 04 82 WET N WILD ROUGES, PWDERS, ETC 086 04 83 WET N WILD NAIL POLISHES, ETC CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 086 04 87 CORN SILK ROUGES, POWDERS, ETC 086 04 92 ULTRA SHEEN ROUGES, POWDERS ETC. 086 04 99 COSMETICS, OTHERS 087 00 00 HOSIERY 087 01 00 PRIVATE LABEL ASSTD PREPACKS 087 01 01 PRIVATE LABEL ASSTD PREPACKS, ALL 087 05 00 P/L THRIFTIES HOSIERY 087 05 01 THRIFTIES PANTY HOSE 087 05 02 THRIFTIES KNEE HIGH 087 06 00 P/L FASHION HOSIERY 087 06 01 P/L FASHION PANTY HOSE 087 06 02 P/L FASHION KNEE HIGHS 087 07 00 P/L DELUXE HOSIERY 087 07 03 DANCERS KNEE HIGH STOCKINGS 087 07 04 DANCERS SHEER TO WAIST P/H 087 07 06 DANCERS DELUXE P/H 087 07 07 DANCERS SHEER SUPPORT P/H 087 07 08 DANCERS CLASSIC EX LARGE P/H 087 07 09 DANCERS REAL P/H 087 07 10 DANCERS TRIM TOP P/H 087 07 11 ULTRA SHEER P/H 087 07 99 PRIVATE LABEL FIXTURES 087 08 00 NO NONSENSE - HOSIERY 087 08 01 NO NONSENSE - REGULAR 087 08 02 NO NONSENSE - SHEER TO WAIST 087 08 03 NO NONSENSE - KNEE HIGH 087 08 04 NO NONSENSE - CONTROL TOP 087 08 05 NO NONSENSE - LIGHT SUPPORT 087 08 06 NO NONSENSE - SHEER & SILKY 087 08 07 NO NONSENSE - FASHION COLORS 087 08 08 NO NONSENSE 2PACKS- 087 08 99 NO NONSENSE - RACKS 087 09 00 L`EGGS HOSIERY 087 09 01 L`EGGS REGULAR 087 09 02 L`EGGS SHEER ENERGY 087 09 03 L`EGGS SHEER ELEGANCE 087 09 04 L`EGGS KNEE HIGHS 087 09 05 L`EGGS CONTROL TOP 087 09 06 L`EGGS ACTIVE SUPPORT CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 087 09 99 L`EGGS PREPACKS 087 99 00 HOSIERY, MISCELLANEOUS 087 99 01 AFRO-TIQUE HOSIERY 087 99 99 HOSIERY, MISCELLANEOUS 088 00 00 MISC GENERAL MERCHANDISE 088 01 00 FILM FLASH 088 01 01 NEGATIVE FILM 088 01 02 POSITIVE FILM 088 01 03 INSTANT FILM 088 01 10 PHOTO FINISHING 088 01 11 ENLARGING 088 01 20 CAMERAS 088 01 50 FLASH 088 01 99 FILM FLASH, MISC 088 02 00 BLANK VIDEO TAPES 088 02 01 VHS-REGULAR 088 02 02 VHS-HI GRADE 088 02 03 VHS-PREMIUM GRADE 088 02 04 BETA-HI GRADE 088 02 05 BETA-REGULAR 088 02 09 CLEANING KITS 088 02 98 TAPE LIBRARIES 088 02 99 VIDEO TAPE PREPACKS 088 03 00 VIDEO RENTALS 088 04 00 BLANK AUDIO TAPES 088 04 01 LOW NOISE/NORMAL BIAS (GOOD) 088 04 02 NORMAL BIAS (BETTER) 088 04 03 NORMAL BIAS (BEST) 088 04 04 HIGH BIAS (PREMIUM) 088 04 09 CLEANING KITS 088 04 98 AUDIO LIBRARY/CARRY CASES 088 05 00 PRE-RECORDED AUDIO CASSETTE TAPES 088 05 01 PRE-RECORDED AUDIO CASSETTE TAPES, ALL TITLES 088 10 00 MISC GENERAL MERCHANDISE TOYS, GAMES, OTHERS 088 10 01 MISC GENERAL MERCHANDISE TOYS 088 10 10 MISC GENERAL MERCHANDISE GAMES 088 10 99 MISC GENERAL MERCHANDISE, OTHERS 088 15 00 GENERAL MERCHANDISE SOUVENIRS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 088 15 01 GENERAL MERCHANDISE SOUVENIRS, ALL 088 20 00 SEWING NOTIONS 088 20 10 SEWING NOTIONS ALL 088 50 00 CIGARETTE LIGHTERS 088 50 01 CIGARETTE LIGHTERS, DISPOSABLE 088 60 00 CANDLES & ACCESSORIES 088 60 01 COLUMNS 088 60 02 VOTIVES 088 60 03 TAPERS 088 60 04 FEDERALS 088 60 05 SPIRALS 088 60 06 COUNTY PEGS 088 60 07 SPECIALTIES 088 60 08 HOUSEHOLD 088 60 97 VOTIVE CUPS 088 60 98 HOLDERS 088 60 99 MISCELLANEOUS 088 70 00 SEASONAL 088 70 01 FURNITURE 088 90 00 CONTINUITIES 088 90 01 NEWCOR KNIFE, CONTINUITY 088 90 02 COVINGTON STONEWARE, CONTINUITY 088 90 03 PLAYFOLD, CONTINUITY 088 90 04 READERS DIGEST, CONTINUITY 088 90 05 ENCYCLOPEDIA 088 90 06 SESAME STREET 088 90 07 PALMER COOKWARE 088 90 08 FRESH FLOWERS DINNERWARE 088 90 09 FRONT END PEG H.B.C. 089 00 00 CLEANING AIDS 089 01 00 STICK GOODS & REFILLS 089 01 01 BROOMS 089 01 02 SPONGE MOPS 089 01 03 SPONGE MOPS REFILLS 089 01 04 COTTON MOPS (DECK MOPS) 089 01 05 COTTON MOPS (DECK MOPS) REFILLS 089 01 06 DUST MOPS 089 01 07 DUST MOPS REFILLS 089 01 08 WAX APPLICATORS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 089 01 09 WAX APPLICATORS REFILLS 089 01 99 STICK GOODS & REFILLS, MISC. 089 10 00 BRUSHES 089 10 01 BOWL BRUSHES 089 10 02 BODY BRUSHES 089 10 03 HAND/NAIL BRUSHES 089 10 04 KITCHEN BRUSHES 089 10 06 DUST PAN BRUSHES 089 10 08 SCRUB BRUSHES 089 10 10 CLOTHES BRUSHES, DELINTERS 089 20 00 DISH/DUST CLOTHS, VAC BAGS, GLOVES 089 20 03 DISH, DUST, ALL PURPOSE CLOTHS 089 20 04 GLOVES, RUBBER 089 20 05 GLOVES, WORK 089 20 06 DUST PANS 089 20 07 VACUUM BAGS, BELTS, FRESHNERS ETC. 089 20 08 30 QT STEP BKT ALM 28581 089 20 09 11 QT NT/TIDY BKT AL 29631 089 30 00 CLOTHESPINS, CLOTHESLINE, MOTHBALLS 089 30 01 CLOTHESPINS 089 30 02 CLOTHESLINE 089 30 03 MOTHBALLS 089 30 04 CLOSET 089 99 00 MISC DEODORIZERS 089 99 01 TOILET BOWL DEODORIZERS 090 00 00 MAGAZINES, BOOKS, NEWSPAPERS 090 01 00 MAGAZINES, FAMILY CIRCLE 090 01 01 MAGAZINES, FAMILY CIRCLE, REGULAR ISSUES 090 01 02 MAGAZINES, FAMILY CIRCLE, SPECIAL ISSUES 090 02 00 MAGAZINES, WOMAN'S DAY 090 02 01 MAGAZINES, WOMAN'S DAY, REGULAR ISSUES 090 02 02 MAGAZINES, WOMAN'S DAY, SPECIAL ISSUES 090 03 00 MAGAZINES/COMIC BOOKS 090 03 01 MAGAZINES, ALL 090 03 02 COMIC BOOKS, ALL 090 05 00 HARDCOVER BOOK-BESTSELLER 090 05 01 HARDCOVER BOOKS-BESTSELLER CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 090 10 00 PAPERBACK & HARDCOVER BOOKS (SUPERMART) 090 10 01 HARDCOVER BOOK, NEW RELEASE 090 10 02 PAPERBACK-MASS MARKET & TRADE PAPERBACK 090 10 03 PAPERBACK PROMO 090 10 04 HARDCOVER BOOK PROMO 090 10 05 HARDCOVER BOOK-BESTSELLER 090 10 06 PAPERBACK BOOK-BESTSELLER 090 10 07 PAPERBACK BOOKS, MISCELLANEOUS 090 20 00 HARDCOVER & PAPERBACK BOOKS (SHER) 090 20 01 PAPERBACK 090 20 02 PROMOTIONAL BOOKS 090 20 03 CHILDREN AND TRADE BOOKS 090 20 04 COLORING AND ACTIVITY BOOKS 090 20 05 NEW YORK TIMES BEST SELLERS HARDCOVER 090 20 06 PAPERBACK BEST SELLERS 090 20 09 FORMER BEST SELLERS 090 20 99 MISCELLANEOUS 090 50 00 NEWSPAPERS 090 50 01 NEWSPAPERS, ALL 090 60 00 MAPS 090 60 01 MAPS, ALL 091 00 00 PET SUPPLIES 091 01 00 DOG SUPPLIES 091 01 01 FLEA COLLARS 091 01 02 CHEMICALS 091 01 03 RAWHIDE CHEWABLES 091 01 04 TOYS (RUBBER, LATEX) 091 01 05 GROOMING AIDS 091 01 06 COLLARS, CHAINS 091 01 07 LEADS, LEASHES 091 01 08 TIE OUT CHAINS 091 01 09 FEEDING DISHES 091 01 10 PRESSED GELATIN (RAWHIDE) CHEWABLES 091 01 11 TREATS & EDIBLES 091 01 99 MISC DOG PET SUPPLIES 091 02 00 CAT SUPPLIES 091 02 01 CHEMICALS, FLEA COLLARS 091 02 02 TOYS 091 02 03 COLLARS (EXCEPT FLEA) 091 02 04 SNACKS, TREATS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 091 02 05 PANS, LINERS, SCOOPS, ETC 091 03 00 BIRD SUPPLIES 091 03 01 FOOD 091 03 02 BIRD TOYS & ACCESSORIES 091 03 03 CAGE SUPPLIES 091 04 00 FISH SUPPLIES 091 04 01 FOOD 091 04 99 FISH SUPPLIES, OTHERS 091 05 00 HAMSTER/GERBIL SUPPLIES 091 05 01 FOOD 091 05 03 CAGE SUPPLIES, LITTER, ETC 091 10 00 PET SUPPLIES, MISC 091 10 99 PET SUPPLIES-MISC 092 00 00 HOUSEWARES 092 01 00 BAKEWARE 092 01 01 FOIL BAKEWARE 092 01 99 FOIL, MISC 092 02 00 BAKEWARE/COOKWARE 092 02 01 COOKWARE ALUMINUM 092 02 02 COOKWARE COATED 092 02 03 BAKEWARE COATED 092 02 04 COOKWARE MICROWAVE 092 02 05 BAKEWARE/GLASS 092 02 06 BAKEWARE TIN 092 02 08 BAKEWARE ALUMINUM 092 02 10 BOXED COOKWARE/ACCESSORIES 092 02 99 COOKWARE/BAKEWARE, MISC 092 03 00 COOKING UTENSILS 092 03 01 COOKING TOOLS 092 03 02 COOKING GADGETS 092 03 99 COOKING UTENSILS, MISC 092 06 00 GADGETS 092 06 01 GADGETS CAN OPENER 092 06 02 GADGETS BOTTLE OPENER 092 06 03 GADGETS PEELERS 092 06 04 GADGETS CHEESE IMPLEMENTS 092 06 05 GADGETS MEASURING CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 092 06 06 GADGETS GRATERS 092 06 07 GADGETS TIMERS 092 06 08 GADGETS SPATULAS 092 06 09 GADGETS WHISKS 092 06 10 GADGETS THERMOMETERS 092 06 11 GADGETS FUNNELS 092 06 12 GADGETS CUTTING/SERVING BOARDS 092 06 13 GADGETS TEA ITEMS 092 06 14 GADGETS STEAMERS 092 06 15 GADGETS BAKING ITEMS 092 06 16 GADGETS MAGNETS 092 06 99 GADGETS MISC 092 07 00 KITCHEN ACCESSORIES 092 07 01 K/A SINK ITEMS 092 07 02 K/A RANGE ITEMS 092 07 03 K/A CABINET ITEMS 092 07 04 KITCHEN ACCESSORIES, SHELF PAPER & LINERS 092 07 99 KITCHEN ACCESSORIES MISC 092 09 00 STORAGE CONTAINERS 092 09 01 STORAGE CONTAINERS DRY 092 09 02 STORAGE CONTAINERS FREEZER 092 09 03 STORAGE CONTAINERS REFRIGERATOR 092 09 04 STORAGE CONTAINERS ICE TRAYS 092 09 05 STORAGE CONTAINERS PITCHERS, WATER BOTTLES 092 09 06 STORAGE CONTAINERS HOT COLD 092 09 99 STORAGE CONTAINERS MISC 092 10 00 COFFEE FILTERS, SUPPLIES 092 10 03 COFFEE FILTERS, STAR 092 10 04 COFFEE FILTERS, MR. COFFEE 092 10 05 COFFEE FILTERS, MELITTA 092 10 06 COFFEE FILTERS, PRIVATE LABEL 092 10 07 COFFEE POT CLEANERS 092 10 08 COFFEE POTS 092 10 09 TEA POTS 092 10 10 THERMOS 092 10 11 COFFEE MUGS 092 10 12 OTHER MUGS 092 10 99 COFFEE SUPPLIES MISC 092 15 00 SMALL ELECTRICAL APPLIANCES 092 15 01 SMALL ELECTRICAL APPLIANCES, ALL 092 50 00 MISC SEASONAL GEN MDSE 092 50 01 MISC SEASONAL BARBECUE GRILLS CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 092 50 02 MISC SEASONAL, COOLERS, CHESTS, ETC. 092 50 99 MISC SEASONAL, OTHERS 092 60 00 HARDWARE/TOOLS 092 60 01 HARDWARE, ALL 092 60 02 TOOLS, ALL 092 90 00 BATHROOM ACCESSORIES 092 90 01 BATHROOM ACCESSORIES WASTE 092 90 02 BATHROOM ACCESSORIES LAUNDRY 092 90 99 BATHROOM ACCESSORIES MISC 092 99 00 MISCELLANEOUS 092 99 01 MISCELLANEOUS OVEN MITTENS, POT HOLDERS 092 99 02 MISCELLANEOUS CLIP STRIP PROGRAM 092 99 11 MISCELLANEOUS CANDLES, TABLE/EMERG, STERNO 092 99 21 MISCELLANEOUS STRING (TWINE IN 0930503) 092 99 31 MISCELLANEOUS ASH TRAYS 092 99 99 MISCELLANEOUS, OTHERS 093 00 00 STATIONERY 093 02 00 WRITING IMPLEMENTS 093 02 01 WRITING IMPLEMENTS PENS 093 02 02 WRITING IMPLEMENTS PENCILS 093 02 03 WRITING IMPLEMENTS MARKERS 093 02 04 WRITING IMPLEMENTS CRAYONS 095 02 05 WRITING IMPLEMENTS CHALK 093 02 99 WRITING KITS, PENCILS BOXES 093 03 00 SCHOOL SUPPLIES 093 03 01 SCHOOL SUPPLIES FILLER PAPER 093 03 02 SCHOOL SUPPLIES WIRE BOUND NOTEBOOKS 093 03 03 SCHOOL SUPPLIES LOOSELEAF BINDERS, ETC 093 03 04 SCHOOL SUPPLIES TABLETS 093 03 99 SCHOOL SUPPLIES, OTHERS 093 04 00 HOME AND OFFICE SUPPLIES 093 04 01 HOME AND OFFICE SUPPLIES SUNDRIES 093 04 02 HOME AND OFFICE SUPPLIES SCRATCH/MEMO PADS, TABLETS 093 04 03 HOME AND OFFICE SUPPLIES ENVELOPES 093 04 04 TYPING & CARBON PAPER 093 04 99 HOME AND OFFICE SUPPLIES MISC DESK, ACCOUTREMENTS 093 05 00 TAPES, GLUES, ADHESIVES, TWINE 093 05 01 TGAT - TAPES CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 093 05 02 TGAT - GLUE, ETC 093 05 03 TGAT - TWINE 093 20 00 ARTIST SUPPLIES 093 20 01 SKETCH PADS, DRAWING TABLETS, ETC 093 20 02 BROWSE, PENS, PENCILS 093 20 03 PAINTS, INKS 093 20 99 MISCELLANEOUS 093 30 00 CHILDRENS ITEMS 093 30 01 CONSTRUCTION PAPER 093 30 02 LEARNING CENTER CHILDRENS TOYS, GAMES, CARDS, ETC 093 30 03 LEARNING CENTER CHILDRENS BOOKS 093 30 99 MISCELLANEOUS 093 50 00 PLAYING CARDS 093 50 01 PLAYING CARDS, ALL TYPES 093 99 00 STATIONERY MISCELLANEOUS 093 99 01 STATIONERY MISCELLANEOUS 094 00 00 BATTERIES, ELECTRICAL, SHOE CARE 094 01 00 BATTERIES, FLASHLIGHTS, BULBS 094 01 01 BATTERIES, DURACELL ALKALINE 094 01 02 BATTERIES, ENERGIZER ALKALINE 094 01 03 BATTERIES, RAYOVAC ALKALINE 094 01 04 BATTERIES, KODAK 094 01 05 BATTERIES, PRIVATE LABEL 094 01 08 BATTERIES, CONDUCTOR 094 01 11 BATTERIES, HEAVY DUTY 094 01 21 BATTERIES, GENERAL PURPOSE 094 01 31 FLASHLIGHT 094 01 80 MARKUP SHIPPERS 3% 094 01 81 MARKUP SHIPPERS 5% 094 01 82 MARKUP SHIPPERS 10% 094 01 98 LIGHT BULBS 094 01 99 MISCELLANEOUS 094 02 00 ELECTRICAL EQUIPMENT 094 02 01 ELECTRICAL EQUIPMENT, ALL 094 02 02 TELEPHONE ACCESSORIES 094 03 00 ELECTRICAL EQUIPMENT RENTALS 094 03 01 ELECTRICAL EQUIPMENT RENTALS, ALL 094 50 00 SHOE BRUSHES, ACCESSORIES CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 094 50 01 SHOE BRUSHES, ACCESSORIES 094 51 00 SHOE LACES 094 51 01 SHOE LACES, DRESS 094 51 02 SHOE LACES, CASUAL 094 51 03 SHOE LACES, ATHLETIC 094 51 04 SHOE LACES, BOOT/WORK 094 51 05 SHOE LACES, SPECIALTY 094 51 99 SHOE LACES, RACKS W/MDSE 094 52 00 SHOE POLISHES 094 52 01 SHOE POLISHES, PASTE, CREAM, KITS, ETC. 094 52 02 SHOE POLISHES, LIQUID 094 52 03 SHOE POLISHES, AEROSOL 094 52 04 SHOE POLISHES, WATERPROOF ITEMS 094 99 00 SHOE CARE RACKS/FIXTURES(NO CHARGE) 094 99 01 SHOE CARE RACKS/FIXTURES(NO CHARGE) 095 00 00 GREETING CARDS, PARTY SUPPLIES 095 10 00 GREETING CARDS 095 10 01 GREETING CARDS, SINGLES 095 10 02 GREETING CARDS HOLIDAY SINGLES 095 10 03 GREETING CARDS HOLIDAY TRAYS 095 10 99 GREETING CARDS, OTHERS 095 11 00 GIFT WRAP, TRIM, ENCL.CARDS 095 11 01 GIFT WRAP, TRIM, ENCL.CARDS 095 50 00 PARTY SUPPLIES 095 50 01 PARTY SUPPLIES CAKE DECORATIONS 095 50 02 PARTY SUPPLIES BIRTHDAY CANDLES 095 50 03 PARTY SUPPLIES, OTHER CANDLES 095 50 08 PARTY SUPPLIES, MISC PAPER, TOYS, ETC 096 00 00 VIDEO RENTALS/SELL THROUGH 096 01 00 VIDEO EQUIPMENT RENTALS 096 01 01 VIDEO EQUIPMENT RENTALS, ALL 096 02 00 VIDEO TAPE RENTALS 096 02 01 VIDEO TAPE RENTALS, ALL 096 03 00 VIDEO SELL THROUGH CGX080 GU Category Code Listing RUN DATE 11/03/95 RCG080 - -GU CATEGORY CODE- DESCRIPTION MAJ INT MIN 096 03 01 VIDEO SELL THROUGH, ALL 096 03 02 PRE-VIEWED VIDEOS, ALL 097 00 00 SOFT GOODS 097 01 00 SOFT GOODS KITCHEN 097 01 01 SOFT GOODS KITCHEN TOWELS 097 01 02 SOFT GOODS KITCHEN DISH CLOTHS 097 01 04 SOFT GOODS KITCHEN POT HOLDERS 097 01 05 SOFT GOODS KITCHEN MITTS 097 01 10 SOFT GOODS KITCHEN ASSTD SET 097 01 12 SOFT GOODS PLACE MATS/TABLECLOTHS 097 01 99 SOFT GOODS, MISC 097 10 00 MENS UNDERWEAR 097 10 01 MENS BRIEF 097 10 02 MENS FASHION BRIEF 097 10 03 MENS A-SHIRT 097 10 04 MENS V-SHIRT 097 10 05 MENS T-SHIRT 097 10 99 MENS MISCELLANEOUS 097 11 00 BOYS UNDERWEAR 097 11 01 BOYS BRIEF 097 11 02 BOYS FASHION BRIEF 097 11 99 BOYS MISCELLANEOUS 097 12 00 GIRLS UNDERWEAR 097 12 01 GIRLS BRIEF 097 12 02 GIRLS FASHION BRIEF 097 12 99 GIRLS MISCELLANEOUS EXHIBIT D OPERATING EXPENSES AND OTHER COSTS * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. EXHIBIT E [Form of Notice to Vendors] TO: Grand Union Vendors FROM: ___________________ RE: Agreement with C&S Wholesale Grocers for Montgomery Facility DATED: January ___, 1996 - -------------------------------------------------------------------------------- Grand Union and C&S Wholesale Grocers, Inc. ("C&S") have entered into an agreement effective January 21, 1996 under which C&S will supply health and beauty care and general merchandise products to our Montgomery, New York distribution center. While this arrangement will not change the manner in which Grand Union does business with its vendors, please note that in purchasing merchandise on behalf of C&S under this arrangement, Grand Union will be acting as agent for C&S and C&S shall be the owner of title to the merchandise. Payments to vendors will continue to be made by Grand Union. Grand Union is not authorized to act as agent for C&S for any purpose other than the purchase of such merchandise. If you have any questions, please feel free to contact _______ at __________________. cc: C&S Wholesale Grocers, Inc. [Form of Notice to Bank Agent and Landlord] TO: _________________ FROM: _________________ RE: Agreement with C&S Wholesale Grocers for Montgomery Facility DATED: January ___, 1996 - -------------------------------------------------------------------------------- Grand Union has entered into an agreement with C&S Wholesale Grocers, Inc. ("C&S") effective January 21, 1996 pursuant to which C&S will supply health and beauty care and general merchandise to our Montgomery, New York distribution center. Such products will be acquired from vendors either by Grand Union acting as agent for C&S or by C&S directly. All such products to be held at the Montgomery facility will be owned by C&S and will not constitute property or inventory of Grand Union. Health and beauty care and general merchandise products that are presently owned by Grand Union and held at the Montgomery facility as of the effective date of the agreement, as well as other kinds of merchandise owned by Grand Union and held or to be held at such facility, will constitute Grand Union-owned inventory. If you have any questions, please contact _________ at _____________. cc: C&S Wholesale Grocers, Inc. EXHIBIT F CONSENT AND WAIVER THIS CONSENT AND WAIVER, dated the ______ day of _______________, 1996, is among MACK BRACKEN ROAD PROPERTIES LIMITED and MONTGOMERY '89 ASSOCIATES L.P., doing business as BRACKEN '89 JOINT VENTURE, with offices at c/o The Mack Company, 370 West Passaic Street, Rochelle Park, New Jersey 07662 ("Landlord"); THE GRAND UNION COMPANY, with offices at 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966 ("Tenant") and C&S WHOLESALE GROCERS, INC., with offices at Old Ferry Road, P.O. Box 821, Brattleboro, Vermont 05302 ("C&S"). WHEREAS, Tenant is the tenant under the following lease (together with any and all amendments thereto, the "Lease"): Lease between Landlord and Tenant dated September 29, 1989 with respect to land and improvements now or hereafter located thereon located at Bracken Road, Montgomery, New York (the "Leased Premises"); WHEREAS, C&S and Tenant have entered into a Supply and Operating Agreement dated as of January 21, 1996 (the "Supply Agreement") pursuant to which, during the "Grand Union Purchase Period" (as defined therein), Tenant purchases certain merchandise as the agent for C&S and receives delivery of such merchandise at the Leased Premises; WHEREAS, during the "C&S Purchase Period" (as defined in the Supply Agreement) C&S purchases certain merchandise and receives delivery of such merchandise at the Leased Premises; WHEREAS, at all times during the Grand Union Purchase Period and the C&S Purchase Period, C&S holds title to and is the owner of the merchandise purchased by Tenant in its capacity as agent for C&S, as well as merchandise purchased directly by C&S (all such merchandise being referred to in this Consent and Waiver as the "Merchandise"); WHEREAS, C&S and Tenant have requested Landlord to execute a Consent and Waiver with respect to certain aspects of such transactions and Landlord is prepared to do so on the terms and conditions set forth herein. NOW, THEREFORE, based on these premises and for good and valuable consideration, receipt of which is hereby acknowledged: 1. Landlord disclaims any title to or right in the Merchandise and subordinates to the interest of C&S any security interest, lien, encumbrance, attachment or other interest which Landlord may now or hereafter have or acquire in the Merchandise by statute, agreement or otherwise. 2. Landlord agrees that, on default of Tenant's obligations to C&S, C&S or its agents may remove the Merchandise from the Leased Premises and Landlord agrees that it will grant C&S or its agents the right of entry at all reasonable times and after reasonable notice, from time to time, to remove such property from the Leased Premises. In connection with such removal, however, C&S shall be required to use reasonable care, and to repair promptly any physical damage done to the Leased Premises caused by such removal. 3. Landlord agrees not to interfere with and to reasonably cooperate with C&S or its agents in the event of any foreclosure, assignment, taking of possession, sale (by auction or otherwise) or other enforcement by C&S of its rights as owner of the Merchandise and creditor of the Tenant, provided C&S and its agents shall use best efforts not to disrupt the ongoing business of other tenants or Landlord in the vicinity of the Leased Premises. 4. Landlord shall send to C&S expeditiously and concurrently with any default or termination notices sent to Tenant a copy of any such default or termination notice, and Landlord shall accept a cure of such default from C&S if C&S chooses to cure the default, as its option, on or before thirty days after the grace period provided for in the Lease. 5. Landlord and Tenant agree that they shall not materially alter or amend or and shall not cancel the Lease without C&S' prior written consent so long as C&S owns Merchandise located on or in the Leased Premises, which consent shall not be unreasonably withheld, delayed or conditioned. 6. Landlord acknowledges that true copies as executed of the Lease is annexed hereto and that, to Landlord's knowledge, Tenant is not now in default thereunder. 7. Landlord hereby consents to the assignment or subleasing to C&S of Tenant's rights, title and interest under the Lease. 8. This Consent and Waiver shall be binding upon the Landlord, Tenant, and C&S and shall inure to the benefit of Landlord and C&S, and their successors and assigns and transferees. IN WITNESS WHEREOF, Landlord, Tenent and C&S have hereby caused this Consent and Waiver to be executed under seal as of the date above first written. BRACKEN 89 JOINT VENTURE BY: MACK BRACKEN ROAD PROPERTIES LIMITED By: ----------------------------------------- Name: Title: BY: MONTGOMERY '89 ASSOCIATES L.P. By: HAMPSHIRE MANAGEMENT COMPANY, General Partner BY: ----------------------------------------- Name: Title: THE GRAND UNION COMPANY By: ----------------------------------------- Name: Title: C&S WHOLESALE GROCERS, INC. By: ----------------------------------------- Name: Title: EXHIBIT H January 18, 1996 To: Mr. J. Hinkel From: Jim O'Keefe Re: Slotting Information - Montgomery S & G Item count as of 11/95: Dept. 00 1473 items 422 Full Case 1051 S,T,U Dept. 01 1824 items 548 Quick Pick 298 Cigarettes 975 Full Case Dept. 02 7741 items 6583 Quick Pick 1161 Full Case Total Items: 11,038 2558 Full Case 7131 Quick Pick 298 Cigarettes 1051 S,T,U Quick Pick: 9011 slots 7131 items 1880 available slots Full Case: 3282 slots 2558 items 724 available slots Reserves: 13,570 total 4091 available Total Pick Slots Q.P. and F.C. 12,293 Available Pick Slots Q.P. and F.C. 2604 Exhibit J C&S Wholesale Grocers, Inc. Corporate Offices Old Ferry Road, P.O. Box 821 Brattleboro, Vermont 05302 (802) 257-4371 October 10, 1995 John Hinkel Corporate Vice President Distribution The Grand Union Company 201 Willowbrook Blvd. Wayne, N.J. 07470-0966 Dear John: Thanks for the time you and Jim O'Keefe spent with Duane and myself reviewing the Montgomery operation. Using Jack's proforma numbers and adding other expenses discussed, we should be able to agree on the methodology used in determining base operating cost in the near term and the future. Until the total effects of Penn Traffic's deletion have been completed, we both agree that it would be difficult to determine those base costs. We also agree that 90 days from the date you cease servicing Penn Traffic should be sufficient time to establish base operating expenses, after which we would meet again to review and agree upon any changes. Below you'll find a line by line review of the proforma a copy of which is enclosed. Montgomery Warehouse Expenses * Labor 1. Productive wages * Productivity using a 10 week average: * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. 3. Fringe Salaries Vacation Pay - Contractual for union employees - need Grand Union vacation policy and what are the entitlements for non-union employees. Holiday Pay - same as vacation pay Sick Pay - Same as vacation pay 4. Fringe Tax Payroll Tax - Per state and federal schedules * 5. Other Department Expense * 6. Administrative Salary * 7. Administrative Expense * Walter: Tony needs to review detail confirm numbers or revise based on required modifications. Also need to establish replacement and upgrade policy. 8. Occupation Expenses Building Repair and Maintenance Outside Jim O'Keefe has supplied agreements covering Landscaping/snowplowing - V.V. Landscaping Inc. Plumbing - Capitol Plumbing/Heating Electrician - Castleberry Electrical Services Fencing - B.J. Fencing Contractors Security - S.E.M. Security Systems, Inc. Sanitation - BFI Time Clocks - Simplex *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. HVAC - Mechanical Construction Corp. Elevator - Otis Cigarette Stamp Machine - Meyercord Copy Machines - Pitney Bowes - lease held in Wayne corporate account Equipment Repair Outside - included above in building room outside Parts/Materials - parts or materials purchased to make building and equipment repairs. 9. Occupation Expenses Heat, power, water - Should be the actual cost for each Security/Protection - SEM Security Systems Telephone - Telephone - should be what actual cost is each month Rubbish Removal - BFI monthly invoices Rent - Per lease agreement Real Estate tax - Per current base (local/school) and any increases Insurance Charge back - With comp - need to get workmen's compensation history * Fixed Insurance/Liability * improvements based on insurance carrier coverage requirements. Aerosols, Class I, Class II, flammables, etc. Depreciation/Amortization - * Please review the enclosed and I'll call you next week to discuss it's content or answer any questions you may have. Thanks again. Very truly yours, C & S WHOLESALE GROCERS, INC. Steve Albanese Vice President Distribution Projects SA/tw Encs. cc: Ron Wright Bill Hamlin Duane Wilkes Paul Moshovetis *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. CROWN CREDIT #A * ________________________________________________________________________ EQUIPMENT COUNT * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. #B August 28, 1995 To: Mr. J. Hinkel From: Jim O'Keefe Re: Crown Credit/Miscellaneous CROWN: We presently have an arrangement with Crown to provide service/maintenance known as a "Planned Maintenance Agreement." The arrangement works as follows: * MISCELLANEOUS: The items contained in this account are varied. Some examples are: * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. September 17, 1995 To: Mr. S. Albanese Mr. D. Wilks From: Jim O'Keefe Re: Meeting 9/13/95 Below and attached are some of the items requested at our meeting on the 13th of this month: Number of Purchase Orders Received/Trucks/Pieces * List of Major Contractors: * Copy of last telephone bills, utility bills are also attached. You'll note a small cellular bill as well. This is a backup to the main telephone line in the event the lines are cut or out of service when the building is alarmed. Also attached please find a list of equipment leases covering forklifts, batteries the yard horse and the cigarette stamping machines. These figures are based on a per month payment. cc: Mr. J. Hinkel *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. MONTGOMERY WHSE EXPENSES ACTUAL WITH PENN TRAFFIC * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. MONTGOMERY WHSE EXPENSES BUDGET GRAND UNION ONLY * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. EXHIBIT K SUBLEASE TERMS AND CONDITIONS LESSEE: C&S Wholesale Grocers, Inc. LOCATION: Montgomery, Orange County, New York Bracken Road SIZE AND TYPE 215,000 square feet plus 10,000 square foot mezzanine warehouse RENT: 2/21/96-9/28/99 $1,292,000.00 p.a. ($107,666.67 p.m.) 9/29/99-9/28/04 $1,428,260.00 p.a. ($119,021.67 p.m.) 9/29/04-9/28/09 $1,570,325.00 p.a. ($130,860.42 p.m.) COMMENCEMENT DATE: Date of Sublease Effective Date through 9/29/2009 RENEWAL OPTIONS: 4 AT 5 YEARS EACH OPTION RENT: First $1,659,793.00 p.a. $138,316.08 p.m. Second $1,825,772.00 p.a. $152,147.67 p.m. Third $2,008,350.00 p.a. $167,362.50 p.m. Fourth $2,209,185.00 p.a. $184,098.75 p.m. LAST DATE FOR NOTICE TO CANCEL OPTIONS: 18 months prior to expirarion of initial term or renewal term, as the case may be. CO-OCCUPANCY: Changes to take into account that Grand Union will be a co-occupant of a portion of the premises. This will include acknowledging that Tenant will not have exclusive possession and control, and that each party will have liability for the portions they do possess and control. CROSS-INDEMNITIES: A provision requiring Grand Union and C&S to each indemnify the other for the negligent and intentional misconduct of their own employees, subject to the allocation of responsibilities in the Agreement. SUBSIDIARY: A provision permitting C&S to sublease and or assign to a wholly-owned subsidiary, limited liability company or similar entity. The Sublease shall contain the following clauses and such additional clauses as is customary and usual for this type of transaction. It is intended that C&S will Sublease on substantially the same terms and conditions as are in the underlying lease, but subject to the provisions of the Agreement. THE DEMISED PREMISES The Demised Premises consists of a building of approximately 215,000 gross rentable square feet (which building is hereinafter called the "Building") previously erected thereon and approximately 12.066 acres of land, which the Tenant acknowledges that it has inspected and is fully familiar with its condition and is leasing the same in an "AS IS" condition. The Demised Premises hereinabove described constitutes a self-contained unit and nothing in this Lease shall impose upon the Landlord any obligation to provide any services for the benefit of the Tenant, including but not limited to water, gas, electricity, heat or janitorial, unless and to the extent expressly provided in this Lease. USE The Demised Premises may be used for any lawful use by the Tenant. The aforesaid permitted use does not permit the stacking of merchandise and/or materials against walls or columns, nor does it permit the hanging of equipment from (or otherwise loading) the roof or structural members of the Building except in accordance with the standards set forth with respect to good and sound engineering practices. Notwithstanding anything contained herein to the contrary, any damage or wear and tear to the walls, columns, roof or structural members of the Building arising out of or in connection with any of the activities described in this Section 5.02 shall not be deemed to be ordinary wear and tear and shall be repaired, restored and/or replaced by Tenant at its sole cost and expense. QUIET ENJOYMENT The Landlord covenants that if, and so long as, the Tenant pays the rent, and any additional rent as herein provided, and performs the covenants hereof, the Landlord shall do nothing to affect the Tenant's right to peaceably and quietly have, hold and enjoy the Demised Premises for the Term herein mentioned, subject to the provisions of this Lease. ADDITIONAL RENT, TAXES, ASSESSMENTS, WATER RATES, CHARGES, ETC. The Tenant shall pay, before any interest or penalties accrue thereon, all real estate taxes, water and sewer rates and charges and all other governmental charges imposed during the Term on the Demised Premises or on the rents, as such, payable to the Landlord hereunder, and on request shall exhibit to the Landlord receipted bills or other proof of payment. There shall be apportioned any tax or charge relating to the fiscal year in which the Term of this Lease terminates. The Tenant shall be responsible for any tax or charge relating to the fiscal year in which the Term of this commenced. The Tenant shall pay all assessments that may be imposed upon the Demised Premises by reason of any specific public improvement (including but not limited to assessments for street openings, grading, paving and sewer installations and improvements) except that \if by law any such special assessment is payable, or may, at the option of the taxpayer, be paid, in installments, the Tenant may, whether or not interest accrues on the unpaid balance thereof, pay the same and any accrued interest on any unpaid balance thereof in installments as each installment becomes due and payable, but in any event before any penalty or cost may be added thereto for nonpayment of any installment or interest. Any such benefit, assessment or installment thereof relating to a fiscal period in which the Term of this Lease begins or ends shall be apportioned. The Tenant shall not be required to pay any estate, inheritance, devolution, succession, transfer, legacy or gift tax charged against the Landlord or the estate or interest of the Landlord in the Demised Premises or upon the right of any person to succeed to the same or any part thereof by inheritance, succession, transfer or gift, nor any capital stock tax or corporate franchise tax incurred by the Landlord, nor any income tax upon or against the income of the Landlord (including any rental income derived by the Landlord from the Demised Premises). The Tenant, in its name or the Landlord's name shall have the right to contest, or review, by appropriate proceedings, in such manner as it may deem suitable, at its own expense, and without expense to the Landlord, any tax, assessment, water and sewer rents or charges, or other charges payable by the Tenant pursuant to this Lease, and upon the request of the Tenant, the Landlord will protest any tax, assessment, water or sewer rent or charge, or any other charge payable by the Tenant pursuant to this Lease, which shall be contested or reviewed by the Tenant. Any refund resulting from such contest or review shall be assigned to and belong to the Tenant and shall be paid to the Tenant promptly upon its receipt by the Landlord. If the refund relates to a tax year that is apportioned between the Landlord and the Tenant, the refund shall be apportioned between the Landlord and the Tenant. INSURANCE During the Term, Tenant shall maintain the following insurance, insuring the Landlord and ground lessor, if any, and any mortgagee(s), as their respective interests may appear: (A) Insurance against damage to the Building by all risks of direct physical loss (at Landlord's option to include earthquake and flood) with the policy to contain either the agreed amount endorsement or a replacement cost endorsement, in amounts sufficient to prevent the Landlord from becoming a co-insurer, but in no event less than one hundred (100%) percent of the Building's then replacement value. Policy to include a contingent liability endorsement and/or demolition and increased cost of construction endorsement in order for the Building to be constructed in accordance with all requirements and regulations which may be applicable at the time of loss or damage, of all governmental agencies having jurisdiction over the Building and construction of such Building. (B) If appropriate, boiler and machinery insurance coverage for all eligible objects, including pressure vessels and air conditioning equipment, with the electrical apparatus clause, with such limits as may be reasonably necessary to properly insure the values at risk in the Building. (C) Plate glass insurance. At the option of the Tenant, Tenant may elect to self-insure for plate glass. (D) The policies of insurance provided for herein shall be from a company rated in the A.M. Best Key Rating Guide with a policyholder's service rating of A+ and a financial rating of XV. The company shall be licensed by the State of New York and a certificate(s) evidencing the existence of such policy shall be delivered to the Landlord, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term. At least fifteen (15) days prior to the expiration or termination date of any policy, the Tenant shall deliver a renewal or replacement policy, or certificate(s) evidencing the existence thereof, to Landlord together with proof of the payment of the premium therefor. All insurance maintained pursuant to this Article may be effected by blanket insurance policies. The Tenant shall provide and keep in force, during the Term of this Lease, for the benefit of the Landlord and ground lessor, if any, comprehensive general liability insurance policies in standard form (containing the so-called "occurrence clause"), insuring the Landlord and Landlord's managing agent as an additional named insured with respect to ownership, operation, maintenance, use and control against liability for injury or damage to persons or property in or upon the Demised Premises during the Term of this Lease, which shall include a contractual liability endorsement. Said policies shall be written by insurance companies licensed to do business in the State of New York and shall cover the entire Demised Premises as well as any sidewalk in front of the same, and shall be in the minimum amount of Three Million and 00/100 ($3,000,000.00) Dollars. Tenant represents, said representation being specifically designed to induce the Landlord to execute this Lease, that Tenant's personal property, fixtures, betterments, improvements, goods and inventory at the Demised Premises and any other items which Tenant may bring to the Premises or which may be under Tenant's care, custody and control which may be subject to any claim for damages or destruction shall never exceed the amount of insurance which Tenant is required to carry pursuant to this Lease and for which Tenant shall name the Landlord as an additional named insured as its interest may appear. If at any time the value of the aforesaid exceeds the amount of such insurance, Tenant covenants to so notify Landlord and at the same time to immediately increase the amount of insurance required to be carried pursuant to Section 3.01 to an amount sufficient to cover the aforesaid to preclude any liability on Landlord's or Landlord's ground lessor's or mortgagee's part to Tenant. Should Tenant fail to do so, or fail to maintain insurance coverage adequate to cover the aforesaid, then Tenant shall not be in default hereunder unless Tenant makes a claim against Landlord for damages or destruction which would have been covered by insurance but for Tenant's failure to meet its obligations as set forth in this Article. Tenant shall indemnify and save Landlord harmless against and from all liabilities, claims, suits, fines, penalties, damages, losses, fees, costs and expenses (including reasonable attorneys' fees) which may be imposed upon, incurred by or asserted against Landlord by reason of: (A) Any work or thing done in, on or about the Demised Premises or any part thereof by or on behalf of Tenant; (B) Any use, occupation, condition, operation of the Demised Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway or space adjacent thereto or any occurrence on any of the same on the part of Tenant; (C) Any act or omission on the part of Tenant or any subtenant or any employees, licensees or invitees; (D) Any accident, injury (including death) or damage to any person or property occurring in, on or about the Demised Premises, or any part thereof or in, on or about any street, alley, sidewalk, curb, vault, passageway or space adjacent thereto alleged to have been caused by Tenant's acts or omissions; and (E) Any failure on the part of Tenant to perform or comply with any of the covenants, agreements, terms or conditions contained in this Lease, or recording of this Lease. The provisions of this Paragraph shall survive the expiration or earlier termination thereof for as long as any applicable statute of limitations. Providing, however, Tenant shall not be responsible for nor required to indemnify Landlord for any acts or omissions resulting in liability, fees, costs, etc., to Landlord arising from or in connection with Labor Services Agreement. All losses paid under the policy or policies carried pursuant to Section 8.01 shall be adjusted by the Landlord and Tenant and the proceeds thereof shall be payable to the Landlord, to be held in trust to be used for repair and restoration of the Demised Premises by the Tenant. If the proceeds of insurance are not sufficient to cover the cost of restoration as required by Tenant, then Tenant shall be responsible for the cost of any deficiency. Each insurance policy carried by Tenant and insuring the Demised Premises and its fixtures and contents against loss by fire, water and causes covered by standard extended coverage, shall be written in a manner so as to provide that the insurance company waive all rights of recovery by way of subrogation against Landlord in connection with any loss or damage covered by such policies, Neither party shall be liable to the other for any loss or damage caused by fire, water or any of the risks enumerated in standard extended coverage insurance, provided such insurance was obtainable at the time of such loss or damage. If such insurance policies are obtainable only by the payment of an additional premium charge, the same shall be obtained and such additional premium paid for by the Tenant. If the release of either Landlord or Tenant, as set forth in the third sentence of this Paragraph, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released but shall be deemed secondary to the latter's insurer. The Tenant shall also furnish insurance for such other hazards and in such amounts as the Landlord may reasonably require and as at the time are commonly insured against with respect to buildings similar in character, general location and use and occupancy to the Demised Premises in relative amounts normally carried with respect thereto. The Landlord reserves the right at any time and from time to time to require that the limits for any of the insurance required pursuant to Article VIII be increased to limits as at the time are reasonable with respect to Tenant's use and to buildings similar in character, general location and use and occupancy to the Demised Premises. Landlord shall maintain rent insurance against the loss of rent and additional rent for no less than one (1) year as provided herein, and Tenant shall reimburse Landlord for the entire cost of said rent insurance, promptly when billed, as additional rent. All policies required pursuant to this Article shall contain provision for thirty (30) days' written notice by registered mail to the Landlord of any change or cancellation of said policy. REPAIRS The Tenant shall keep the Demised Premises in good condition and repair, and shall redecorate, paint and renovate the Demised Premises as may be necessary to keep them in good condition and repair and good appearance. The Tenant shall keep the Demised Premises and all parts thereof in a clean and sanitary condition and free from trash, inflammable material and other objectionable matter. The Tenant shall keep the sidewalks and roadways forming part of the Demised Premises clean and free of obstructions, snow and ice. Throughout the Term of this Lease, the Tenant, at its sole cost and expense, will take good care of the Demised Premises and the sidewalks and curbs adjoining the Demised Premises and will keep the same in good order and condition and make all necessary repairs thereto, structural and nonstructural, interior and exterior, ordinary and extraordinary, foreseen and unforeseen. The Tenant shall replace, at the Tenant's expense, all glass in and on the Demised Premises which may become broken after the date of Tenant's occupancy. When used in this Article, the term "repairs" shall include all necessary replacements and renewals. All repairs made by Tenant shall be equal in quality and class to the original work. The Tenant shall quit and surrender the Demised Premises at the end of the Term in as good condition as the reasonable use thereof will permit and in compliance with the requirements stated herein and in a "broom-clean" condition, and shall, by way of example and not by way of limitation, clean and reseal all concrete floors. The Tenant shall not make any alterations, additions or improvements to the Demised Premises without the prior written consent of the Landlord, which Landlord shall not unreasonably withhold. In making its determination, Landlord shall consider, among other considerations, the standards set forth with respect to good and sound engineering practices. Notwithstanding the provisions of this Section 9.02, Landlord's prior written consent shall not be required for any alterations, additions or improvements which, in the aggregate, do not exceed the cost of Five Hundred Thousand and 00/100 ($500,000.00) Dollars per lease year, and which do not adversely affect any structural portion of the Building or any Building mechanical, electrical, HVAC, or plumbing system. All erections, alterations, additions and improvements, whether temporary or permanent in character, which may be made upon or to the Demised Premises either by the Landlord or the Tenant, except furniture or movable trade fixtures installed at the expense of the Tenant, shall be the property of the Landlord and shall remain upon and be surrendered with the Demised Premises as a part thereof at the expiration or sooner termination of this Lease, without compensation to the Tenant; or, in the alternative and at the direction of Landlord, Tenant shall remove all or so much of the property therefrom as directed or such property shall be conclusively deemed abandoned and may be removed by Landlord, and Tenant shall reimburse Landlord for the cost of such removal. Landlord may have any such property stored at Tenant's risk and expense. Landlord, at Landlord's option, may require as a condition of its consent, that Tenant remove, at the expiration or sooner termination of the Lease Term, any erections, alterations, additions or improvements made by Tenant, and restore the Demised Premises to a substantially similar condition to that in existence as of the commencement date of the Lease, and that the Tenant use contractors approved by Landlord. CASUALTY If the Demised Premises or the Building is damaged or destroyed by fire, explosion, the elements or otherwise during the Term so as to render the Demised Premises wholly untenantable or unfit for occupancy, or should the Demised Premises be so badly injured that the same cannot be repaired within one hundred eighty (180) days from the happening of such injury, then, and in such case, the Term hereby created shall, at the option of either the Landlord or the Tenant, terminate upon the giving of a notice of termination. If a notice of termination is given, the Term of this Lease shall terminate effective as of the date of such damage or destruction, and the Tenant shall immediately surrender the Demised Premises and all the Tenant's interest therein to the Landlord, and pay rent to the time of such damage or destruction, and the Landlord may re-enter and repossess the Demised Premises discharged from this Lease and may remove all parties therefrom. Should the Demised Premises be rendered untenantable and unfit for occupancy, but yet be repairable within one hundred eighty (180) days from the happening of said injury, the Landlord will make the proceeds of insurance available to Tenant so that Tenant may repair the Demised Premises with reasonable speed, and the rent shall not accrue after said injury and while repairs are being made, provided Landlord receives the proceeds of rent insurance, but shall recommence immediately after such repairs shall be completed. If the Demised Premises shall be so slightly injured as not to be rendered untenantable and unfit for occupancy, the Tenant shall repair the same with reasonable promptness and the rent accrued and accruing shall not cease or terminate. The Tenant shall immediately notify the Landlord in case of fire or other damage to the Demised Premises. Notwithstanding anything to the contrary in Section 10.01, neither the Landlord nor the Tenant shall have any option to terminate this Lease upon the happening of an injury referred to in Section 10.01 provided that the happening of such injury occurs at a time when the unexpired Term of this Lease is one (1) year or more. In such event, the Landlord shall make the proceeds of insurance available to the Tenant and the Tenant shall repair the Demised Premises, even to the extent of rebuilding the Building if necessary. The Tenant shall promptly enter and repair the Demised Premises with reasonable speed, making due allowance for conditions beyond the Tenant's control, including, but not limited to time lost in adjusting insurance claims and strikes, and the rent shall not accrue after such injury and while repairs are being made, provided Landlord receives the proceeds of rent insurance, but shall recommence immediately after said repairs shall be completed. Landlord shall have no obligation to repair or restore Tenant's improvements. Notwithstanding anything contained herein to the contrary, in the event the happening of an injury referred to in Section 10.01 occurs when the unexpired Term of this Lease is less than one (1) year and Landlord exercises its option to terminate this Lease, then and in that event, Tenant can negate Landlord's termination by exercising its option to renew in accordance with Article. Prior to the performance of any work by Tenant pursuant to the provisions of this Article, Tenant shall first submit plans and specifications to Landlord and Landlord shall have the right to review and approve said plans and specifications and to require modifications thereto. All work shall be performed by Tenant in accordance with good and sound engineering practices and in compliance with all laws, ordinances and regulations. Notwithstanding anything contained to the contrary in this Article, in the event the proceeds of insurance are not sufficient to cover the cost of restoration, the Tenant shall be responsible for the cost of any deficiency. CONDEMNATION Section 11.01. If, during the Term, twenty-five (25%) percent or more of the area of the Demised Premises shall be taken under any power of eminent domain or condemnation then, at the option of the Tenant, to be exercised in writing within thirty (30) days of the taking of title thereto, this Lease shall expire within thirty (30) days of the date of such notice and the rent herein reserved shall be apportioned as of said date. However, if the Tenant does not exercise the aforementioned option, or if the taking does not deprive the Tenant of at least twenty-five (25%) percent of the area of the Demised Premises, this Lease shall not expire but the rent shall be equitably apportioned. If the Landlord and the Tenant fail to agree upon an equitable apportionment, the rent for the Building, after such taking, shall be determined in accordance with the Commercial Rules of the American Arbitration Association, in the City of New York, New York, and the arbitrator shall be empowered to assess the costs and expenses of the proceedings as part of the determination. Pending such determination the Tenant shall pay, on account of the rent, such proportion of the rent reserved in this Lease as the total area of the Building after the taking bears to the total area of the Building before the taking, subject to adjustment in accordance with the arbitrator's award. If the Landlord can, after such taking, construct an addition to the remaining Building so as to restore all of the Building area and Building facilities theretofore taken, the Landlord shall, subject to the adequacy of the condemnation award and to the mortgagee making the same available to the Landlord, promptly construct such addition and restore such facilities so taken and upon the completion of such restoration, the full rent reserved by this Lease shall be reinstated, as of the date of such restoration, and, if the Tenant is able to occupy and use the Building, the proportionate rent shall be paid by the Tenant as herein provided, during the period between the taking and the restoration of the Building and facilities. No part of any award shall belong to the Tenant except that nothing contained herein is intended to affect or limit the Tenant's claim for fixtures or other improvements owned by Tenant provided the same does not diminish the Landlord's award. It is expressly understood and agreed that the provisions of this Article XI shall not be applicable to any condemnation or taking for governmental occupancy for a limited period of time. COMPLIANCE WITH LAWS, ETC. The Tenant shall not do or permit anything to be done in the Demised Premises which shall constitute a public nuisance or which will conflict with the regulations of the Fire Department or with any insurance policy upon said improvements or any part thereof. The Tenant shall, at its own expense, obtain all necessary environmental and operating permits and comply with all requirements of law and with all ordinance or orders, rules and regulations of any State, Municipal or other public authority affecting the Demised Premises and with all requirements of the Fire Insurance Exchange or similar body, and of any liability insurance company insuring the Landlord against liability for accidents in or connected with the Demised Premises including, but not limited to laws, ordinance, orders, rules and regulations which apply to the interior or exterior of the Demised Premises, the structural or nonstructural parts thereof, and to make all improvements and repairs required by such laws, ordinances, orders, rules and regulations, ordinary or extraordinary, foreseen or unforeseen. Tenant acknowledges the existence of environmental laws, rules and regulations now or hereafter enacted by any federal, state or municipal authority and Tenant agrees to comply therewith. Tenant agrees not to generate, store, manufacture, refine, transport, treat, dispose of, or otherwise permit to be present on or about the Demised Premises, any Hazardous Substances. As used herein, Hazardous Substances shall be defined as any "hazardous chemical", "hazardous substance" or similar term as defined in the Comprehensive Environmental Responsibility Compensation and Liability Act, as amended (42 U.S.C. 9601, ET SEQ.), any rules or regulations promulgated thereunder, or in any other applicable federal, state or local law, rule or regulation dealing with environmental protection. It is understood and agreed that the provisions contained in this Article shall be applicable notwithstanding the fact that any substance shall not be deemed to be a Hazardous Substance at the time of its use by the Tenant but shall thereafter be deemed to be a Hazardous Substance. Tenant agrees to indemnify and hold harmless the Landlord and each mortgagee of the Demised Premises from and against any and all liabilities, damages, claims, losses, judgments, causes of action, costs and expenses (including the reasonable fees and expenses of counsel) which may be incurred by the Landlord or any such mortgagee or threatened against the Landlord or such mortgagee, relating to or arising out of any breach by Tenant of the undertakings set forth in this Article, said indemnity to survive the Lease expiration or sooner termination. ASSIGNMENT AND SUBLEASE (A) The Tenant may assign this Lease and sublet the whole or any part of the Demised Premises, with the consent of the Landlord which consent shall not be unreasonably withheld subject to the following conditions: (1) A copy of the assignment or sublease shall be furnished to the Landlord. (2) The assignee shall assume by written instrument all of the obligations of this Lease, and a copy of such assumption agreement shall be furnished to the Landlord within ten (10) days of its execution. (3) The Tenant and each assignee shall be and remain liable for the observance of all of the covenants and provisions of this Lease, including but not limited to the payment of the rent reserved herein, through the entire Term of this Lease, as the same may be renewed, extended or otherwise modified. (4) The Tenant and any assignee shall promptly pay to Landlord one-half (1/2) of any net consideration received for any assignment or one-half (1/2) of the net rent, as and when received in excess of the rent required to be paid by Tenant for the area sublet, computed on the basis of an average square foot rent for the entire Building. As used herein, net consideration and/or net rent shall mean gross rent or gross consideration less any reasonable brokerage or tenant work paid by Tenant in connection with the assignment or sublet, said brokerage or tenant work to be amortized over the term of the assignment or sublet. (B) Notwithstanding anything herein contained, the Tenant may assign or sublet the whole or any part of the Demised Premises to an affiliated corporation, or to any corporation with which it shall be merged or which shall acquire the assets of the Tenant, all without notice to the Landlord. (C) In any event, the acceptance by the Landlord of any rent from the assignee, or of any of the subtenants, or the failure of the Landlord to insist upon a strict performance of any of the terms, conditions and covenants herein shall not release the Tenant herein, nor any assignee assuming this Lease, from any and all of the obligations herein during and for the entire Term of this Lease. (D) Notwithstanding anything herein contained, prior to any sublet of the whole or any portion of the Demised Premises or an assignment of the within Lease to any other party, other than sublets or assignments permitted by Subsection (B) hereof, the Tenant shall first offer, in writing, to surrender the Demised Premises to the Landlord, and the Landlord shall either accept or refuse to accept such surrender within ten (10) days after the receipt of such offer, failing which the offer shall automatically be deemed refused. In the event Landlord shall accept such surrender, the within tenant shall be released from any and all obligations hereunder. (E) The Landlord may require a payment to cover its handling charges for each request for consent to any sublet or assignment prior to its consideration of the same, which payment shall be equal to those charges, if any, assessed by Landlord's mortgagee. (F) The Tenant acknowledges that its sole remedy with respect to any assertion that the Landlord's failure to consent to any sublet or assignment is unreasonable shall be the remedy of specific performance and the Tenant shall have no other claim or cause of action against the Landlord as a result of the Landlord's actions in refusing to consent thereto. (G) Without limiting any of the provisions of Article XIV, if pursuant to the Federal Bankruptcy Code (or any similar Law hereafter enacted having the same general purpose), Tenant is permitted to assign this Lease, notwithstanding the restrictions contained in this Lease, adequate assurance of future performance by an assignee expressly permitted under such Code shall be deemed to mean the deposit of cash security in an amount equal to the sum of one (1) year's fixed rent plus an amount equal to the sum of all other charges due and payable by Tenant hereunder for the Calendar Year preceding the year in which such assignment is intended to become effective, which deposit shall be held by Landlord for the balance of the Term, without interest, as security for the full performance of all of Tenant's obligations under this Lease, to be held and applied in the manner specified for security in Section 22.02. (H) Except as specifically set forth above, no portion of the Demised Premises or of Tenant's interest in this Lease may be acquired by any other person or entity, whether by assignment, mortgage, sublease, transfer, operation of law or act of the Tenant, nor shall Tenant pledge its interest in this Lease or in any security deposit required hereunder. RENEWAL OPTIONS Tenant is hereby granted four (4) options to renew this Lease upon the following terms and conditions: (A) At the time of each renewal, the Tenant shall not be in default in accordance with the terms and provisions of this Lease, and shall be in possession of the Demised Premises pursuant to this Lease. (B) Each of the renewal options shall be deemed automatically exercised unless Tenant notifies Landlord to the contrary, in writing, at least eighteen (18) months before the expiration of the Term, or eighteen (18) months before the expiration of the preceding renewal term, as the case may be. (C) The renewal terms shall be for the term of five (5) years each, the first renewal term to commence at the expiration of the term of this Lease, the second renewal term to commence upon the expiration of the first renewal term, the third renewal term to commence upon the expiration of the second renewal term, and the fourth renewal term to commence upon the expiration of the third renewal term, and all of the terms and conditions of this Lease, other than the rent, shall apply during any such renewal terms. (D) The basic rent to be paid during the first renewal term shall be Eight Million Two Hundred Ninety-eight Thousand Nine Hundred Sixty-five and 00/100 ($8,298,965.00) Dollars; the basic rent to be paid during the second renewal term shall be Nine Million One Hundred Twenty-eight Thousand Eight Hundred Sixty and 00/100 ($9,128,860.00) Dollars; the basic rent to be paid during the third renewal term shall be Ten Million Forty-one Thousand Seven Hundred Fifty and 00/100 ($10,041,750.00) Dollars; and the basic rent to be paid during the fourth renewal term shall be Eleven Million Forty-five Thousand Nine Hundred Twenty-five and 00/100 ($11,045,925.00) Dollars. The basic rent during each of the renewal terms shall be payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and shall accrue at the following yearly and monthly rates: Renewal Term Yearly Rent Monthly Rent First (Years 21-25) $1,659,793.00 $138,316.08 Second (Years 26-30) $1,825,772.00 $152,147.67 Third (Years 31-35) $2,008,350.00 $167,362.50 Fourth (Years 36-40) $2,209,185.00 $184,098.75 The aforesaid monthly rents shall be payable in advance on the first day of each calendar month during the respective renewal term, except that a proportionately lesser sum may be paid for the first month of any of the renewal terms if said renewal term commences on a date other than the first of the month. Exhibit L * *Material omitted and filed separately with the SEC pursuant to a request for Confidential Treatment. -----END PRIVACY-ENHANCED MESSAGE-----