Exhibit 2.1

 

PURCHASE AND SALE AGREEMENT

 

 

BETWEEN

 

 

SUMMER INFANT (USA), INC.

AS SELLER

 

AND

 

FAITH REALTY II, LLC

AS PURCHASER

 

 

DATED

 

MARCH 24, 2009

 

 

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (“Agreement”) dated                             this    day of March, 2009, is made by and between Summer Infant (USA), Inc., a Rhode Island corporation (“Seller”) having a principal mailing address at 1275 Park East Drive, Woonsocket, Rhode Island 02895, and Faith Realty II, LLC, a Rhode Island limited liability company (the “Purchaser”), or its nominee, having a principal mailing address at 10 Hannah Drive, Cumberland, Rhode Island 02864.

 

1.                                        CONVEYANCE .        Seller agrees to sell and convey to Purchaser and Purchaser agrees to purchase from Seller, fee simple interest to the real estate located in the County of Providence, in the City of Woonsocket, State of Rhode Island, commonly known as 1275 Park East Drive, Woonsocket, Rhode Island, and more particularly described in Exhibit A attached hereto and made a part hereof, together with (a) all rights, easements and appurtenances belonging or appertaining thereto, (b) all right, title and interest of Seller in and to any and all roads, streets, alleys or public and private rights of way, bounding such property and (c) all buildings, improvements and  fixtures attached to the real estate (collectively the “Property”).

 

2.                                        PURCHASE PRICE .                                   The purchase price is Four Million Fifty Two Thousand Five Hundred and 00/100 Dollars ($4,052,500.00) (the “Purchase Price”).

 

3.                                        SURVEY; TITLE INSURANCE .

 

(a)                                   Purchaser will, at Purchaser’s sole cost and expense, obtain a preliminary title report for the Property (“Title Report”). Purchaser may also obtain, at Purchaser’s sole cost and expense, a survey of the Property (“Survey”). If the Title Report or Survey discloses any matter, other than those matter set forth on Exhibit B, attached hereto (collectively the “Existing Encumbrances”), which needs to be released or removed in order for good and marketable title to the Property to be conveyed to Purchaser in accordance with the provisions of this Agreement  (other than release or satisfaction of any mortgage or security interest granted by the Seller with respect to the Property, which Seller agrees to release or satisfy at the Closing) or any encroachment or other matter unacceptable to Purchaser’s title company or lender, then within twenty (20) business days  following the execution date of this Agreement, TIME BEING OF THE ESSENCE, Purchaser will notify Seller in writing of such matter (a “Title/Survey Objection”). The failure of Purchaser to give notice to Seller within twenty (20) business days following the execution date of this Agreement of any matter (other than those which arise after the 20 business day period and could not have been determined by searching applicable public records within the 20 business day period) to which Purchaser has objection shall constitute an irrevocable waiver of Purchaser’s right to raise such matters as a Title/Survey Objection. Upon receipt of a timely notice of a Title/Survey Objection, Seller will undertake such steps as Seller, acting in good faith, deems reasonable under the circumstance either (i) to cause such Title/Survey Objection to be released or satisfied or (ii) to induce the title insurance company which issued the Title Report to issue a title policy to Purchaser without the Title/Survey Objection, it being understood that Seller shall have no obligation whatsoever to expend any sum or undertake any actual or potential liability in excess of $5,000.00 in connection therewith. If at the Closing, any Title/Survey Objection has not been released or removed despite Seller’s good faith efforts as aforesaid, then Purchaser shall have the option to either, (i) terminate this

 

 

Agreement forthwith (in which event the Deposit shall be repaid to the Purchaser), or (ii) accept title to the Property subject to the Title/Survey Objections without any change in the Purchase Price;

 

(b)                                   Seller will convey the Property by Warranty Deed (the “Deed”), the form of which is attached hereto as Exhibit C . Notwithstanding the foregoing, Seller shall be required to cure (i) all existing monetary liens and (ii) any and all encumbrances created by Seller after the 20 business day period referred to in subsection (a) above, at Seller’s sole cost and expense.  Seller’s failure to cure such defects shall be a default by Seller hereunder. For purposes hereof, “Permitted Exceptions” shall be defined as (i) the lien of any real estate taxes which are not yet due and payable, (ii) easements, restrictions, reservations, liens and encumbrances of record, if any, (iii) building and use restrictions of record, (iv) any charges or installments for municipal improvements not assessed and due and payable as of the date of this Agreement, (v) and such other matters as Purchaser shall specifically approve in writing prior to the Closing and (vi) the Existing Exceptions.

 

4.                                        INSPECTION PERIOD AND CONDITIONS PRECEDENT .

 

(a)                                   Prior to Closing, Purchaser, personally or through its authorized agents or representatives, shall be entitled, at Purchaser’s sole cost and expense, to enter upon the Property at all reasonable times, upon prior notice to the Broker, in order to perform such investigations as Purchaser shall deem necessary, including, without limitation, soil tests and environmental audits. Purchaser shall coordinate all access to the Property through Joseph Driscoll (“Seller Representative”) and shall provide to the Seller Representative the identity of the parties accessing the Property, the purpose for such access and the nature of the tests and/or inspections to be performed. Purchaser will promptly repair and restore any damage or injury to the Property caused by such investigations. Purchaser shall not permit any liens or encumbrances to arise against the Property in connection with or as a result of such inspections, studies or investigations.  Purchaser shall indemnify, defend and hold Seller and the Property harmless of and from any and all losses, liabilities, costs, expenses (including without limitation reasonable attorneys’ fees and costs of court), damages, liens, claims (including without limitation mechanics’ or materialmen’s liens or claims of liens), actions and causes of action arising from or relating to Purchaser’s (or Purchaser’s agents, employees or representatives) entering upon the Property to test, study, investigate or inspect the Property, whether pursuant to this Section 4 (a) or otherwise.  The provisions of this Section 4(a) shall survive the delivery of the Deed and the consummation of the transactions contemplated by this Agreement.

 

(b)                                  Purchaser shall have twenty (20) business days from the date of the execution of this Agreement (the “Inspection Period”), within which to make all reviews, inspections, audits, or investigations desired by Purchaser, including, without limitation, the following:

 

i.                                           Structural and mechanical inspections of the Property;

 

ii.                                        Environmental Site Assessment;

 

 

iii.                                     such other inspections and customary due diligence matters with respect to the Property that the Purchaser desires to perform including a determination that the Property is properly zoned for Purchaser’s intended  use; and

 

iv.                                    Any feasibility study that Purchase may desire to perform in order to confirm, at Purchaser’s sole determination, that the Property is suitable for Purchaser’s intended use of the Property.

 

If the results of any inspection or test conducted at the Property is not satisfactory to the Purchaser, then the Purchaser must notify the Seller, in writing, the reasons for such dissatisfaction, within the Inspection Period, TIME BEING OF THE ESSENCE. The failure of Purchaser to give notice to Seller within the Inspection Period of any reason for said dissatisfaction resulting from such tests or inspections shall constitute an irrevocable waiver of this contingency. Upon receipt of a timely notice from Purchaser of such dissatisfaction, Seller will undertake such steps as Seller, acting in good faith, deems reasonable under the circumstance to cause such dissatisfaction to be remedied, it being understood that Seller shall have no obligation whatsoever to expend any sum or undertake any actual or potential liability in excess of $5,000.00 in connection therewith. If at the Closing, any such reason for dissatisfaction has not been remedied despite Seller’s good faith efforts as aforesaid, then the Purchaser shall have the option of either (i) terminating this Agreement forthwith (in which event the Deposit shall be returned to the Purchaser), or (ii) accepting the Property subject to such reasons for dissatisfaction, without any reduction in the Purchase Price.

 

Except as otherwise set forth in this Agreement or in the Deed, the Property is being sold to the Purchaser “AS IS”, “WHERE IS” and “WITH ALL FAULTS”. The Purchaser acknowledges that it has the right to conduct whatever inspections it deems necessary and that the Seller is not making any representations, warranties or covenants of any kind, express or implied, unless specifically stated in this Agreement, including, without limitation, all zoning, land use and environmental laws, ordinances, and regulations.

 

5.                                        INTENTIONALLY DELETED.

 

6.                                        SALE AND LEASE BACK.                                               The obligations of the Seller and the Purchaser hereto are conditioned upon the parties, at the Closing, entering into a lease of the Property, pursuant to which the Purchaser will lease the Property back to the Seller, on a net, net, net basis, for a term of seven (7) years and on such other terms and conditions, including the base monthly rent, as set forth in said lease. The lease shall be substantially in the form of Exhibit D , attached hereto and incorporated herein (the “Lease”).

 

7.                                        EMINENT DOMAIN; DAMAGE .                   If prior to Closing all or any part of the Property is condemned or appropriated by public authority or any party exercising the right of eminent domain, or is threatened thereby, or if the buildings and improvements on the Property are destroyed or materially damaged by fire, windstorm, explosion or other casualty, Seller will give Purchaser written notice thereof and Purchaser may, at its option: (1) terminate this

 

 

Agreement and Purchaser shall be entitled to the return of the Deposit and the parties shall be released from further liability; or (2) elect to proceed under this Agreement and, at Purchaser’s discretion, either (a) the Purchase Price shall be reduced by, or (b) Purchaser may take an assignment of, the amount of Seller’s award and/or insurance proceeds to which Seller is entitled to receive.

 

8.                                        INSURANCE; RISK OF LOSS .

 

(a)                                   Insurance.                                         Except as set forth in Section 4 (a), until the Closing and recording of the Deed, Seller shall bear the risk of loss and shall maintain Fire and Extended Coverage Insurance on the building and other structures located on the Property in such amount as presently insured.

 

(b)                                  Loss.                    Except as set forth in Section 4 (a) or for any loss or damaged caused by the Purchaser or its agents, which loss or damage shall be the Purchaser’s obligation to repair or replace, if the Property or any portion thereof is damaged or destroyed prior to the Closing or if the Property or any portion thereof is taken by exercise of eminent domain during such period, Purchaser may elect either: (i) to terminate this Agreement and any and all obligations to purchase the Property, by written notice to Seller, or (ii) to consummate the purchase of the property, with an abatement of the purchase price in the amount of the insurance proceeds received by the Seller to replacement or repair the damage or destruction.

 

(c)                                   Notification of Damage .                   Seller shall notify Purchaser in writing promptly upon the occurrence of any damage, destruction, taking or threat of taking with respect tot he Property.

 

9.                                        CLOSING .

 

(a)                                   Time .                                                                    Closing (herein so called) shall take place at one o’clock (1:00) p.m. (EST) on March  24, 2009, at the law offices of Poore & Rosenbaum LLP, 30 Exchange Terrace, Providence, RI 02903 or at such or time and place as the parties agree.

 

(b)                                  Documents from Seller .                      Seller shall, at Seller’s sole cost and expense, deliver at Closing the following executed documents in form and content acceptable to Purchaser:

 

(i)                                      Deed .                  A Rhode Island statutory form Warranty Deed, conveying good, and marketable fee simple title subject only to the Permitted Exceptions.

 

(ii)                                   Affidavits .                                        such affidavits as Purchaser or its Title Company may reasonable require.

 

(iii)                                Closing Statement .                                             Two (2) signed copies of a closing statement approved by Purchaser and Seller.

 

 

(iv)                               Authority .                                         Such evidence or documents as may be reasonably required by Purchaser or the Title Company evidencing the status and capacity of Seller and the authority of the person or persons who are executing the various documents on behalf of Seller in connection with the sale of the Property, including, but not limited to, a good standing certificate from the Secretary of State in which the Property is located, and a good standing certificate from the Rhode Island Division of Taxation and corporate resolutions, if applicable.

 

(v)                                  Lease .                                                               Two (2) signed originals of the Lease

 

(vi)                               Other Documents .                                                Such other documents required by this Agreement and/or which Purchaser or the Title Company may reasonably require.

 

(c)                                   Documents from Purchaser .                                              Purchaser shall deliver at the Closing the following executed documents:

 

(i)                                      Closing Statement .                                             Two (2) signed copies of a closing statement approved by Seller and Purchaser.

 

(ii)                                   Authority .                                         To the extent that Purchaser takes title to the Property in the name of a Nominee, then such evidence or documents as may be reasonably required by Seller or the Title Company evidencing the status and capacity of Nominee and the authority of the person or persons who are executing the various documents on behalf of Nominee in connection with the acquisition of the Property, including, but not limited to, a good standing certificate from the Secretary of State in which the Property is located and corporate resolutions, if applicable.

 

(iii)                                Lease.                                                               Two (2) signed originals of the Lease

 

(d)                                  Payment .                                                The Purchase Price, subject to any applicable adjustments, or credits provided hereunder (including, without limitation, pro ration of real estate taxes or closing costs) shall be paid in cash, by wire transferred funds or by any other means as may be acceptable to both parties.

 

(e)                                   Real Estate Taxes .                                                 Seller shall pay all taxes, general and special, and all special assessments against the Property which have accrued and are a lien on the Property and are due and payable prior to the Closing Date and Purchaser shall assume all of such taxes and assessments, and installments of unpaid special assessments (exclusive of rebates and penalties) becoming due and payable and accruing thereafter. Real Estate taxes for the then current fiscal year shall be apportioned as follows: if the taxes are paid by Seller for a period going beyond the date of delivery of the Deed, that portion shall be added to the Purchase Price payable by Purchaser; if taxes are unpaid for any portion of the fiscal year preceding the delivery of the Deed, that portion shall be subtracted from the Purchase Price and the obligation to pay such taxes assumed by the Purchaser. If the amount of such tax or assessment to be prorated cannot then be ascertained, pro ration shall be computed on the amount thereof for the preceding year,

 

 

with a reapportionment upon receipt of the tax bill for the current year. The provisions of this paragraph shall survive the Closing and delivery of the Deed.

 

(f)                                     Brokers .                                     Seller and Purchaser represent and warrant to each other that neither party had any dealings with any real estate brokers, finders or agents and no commissions or fees are payable in connection with this Agreement.  Seller agrees to indemnify, defend (with counsel selected by Purchaser) and hold Purchaser, and Purchaser’s nominees, successors and assigns harmless from any and all claims, costs, commissions, fees or damages by any person or firm claiming to have negotiated, instituted or brought about this Agreement due to contact with Seller.  Purchaser agrees to indemnify, defend, with counsel selected by Seller, and hold Seller and Seller’s nominees, successors and assigns harmless from any and all claims, costs, commissions, fees or damages by any person or firm claiming to have negotiated, instituted or brought about this Agreement due to contact with Purchaser.  The provisions of this Section 9(f) shall survive the delivery of the Deed and the consummation of the transactions contemplated by this Agreement

 

10.                                  PLANS, SURVEY AND BLUEPRINTS .                              Copies of all blueprints and other plans of the building/Property which the Seller may have in its possession will be provided to Purchaser within ten (10) business days from the execution of this Agreement.  The provisions of this Section 10 shall survive the delivery of the Deed and the consummation of the transactions contemplated by this Agreement

 

11.                                  POSSESSION .              The proposed transaction contemplates a lease to the Seller and continued occupancy of the Property by the Seller. Except for the Seller, its properties and possessions, possession of the Property will be free from all tenancies, parties in possession and occupants at the Closing.

 

12.                                  NOTICE .                                               All notices, demands, or other communications of any type given, or required to be given, pursuant to this Agreement shall be in writing and shall be delivered to the person to whom the notice is directed, either in person with a receipt requested therefore, or sent by a recognized overnight service for next day delivery or by United States certified mail, return receipt requested, postage prepaid to the addresses as follows:

 

If to Seller:

 

Summer Infant (USA), Inc.

1275 Park East Drive

Woonsocket, Rhode Island 02895

Attn: Joseph Driscoll

 

with a copy to:

 

Greenberg Truarig, LLP

One International Place, 20 th  Floor

Boston, MA. 02110

Attn: John Bello, Esquire

 

 

If to Purchaser:

 

Faith Realty II, LLC

10 Hannah Drive

Cumberland, Rhode Island 02864

Attn: Jason Macari

 

with copy to:

 

Poore & Rosenbaum LLP

30 Exchange Terrace

Providence, RI 20903

Attn: Steven Rosenbaum, Esquire

 

Any notice given by personal delivery, overnight delivery or courier delivery service will be deemed effective when received.  Any notice given by United States Mail will be deemed effective on the third (3rd) business day following deposit in the United States mail, postage prepaid, registered or certified mail, return receipt requested, addressed as set forth above.  Any notice that may be given by either party in connection with this Agreement may be given by such party’s attorney.

 

13.                                  REPRESENTATIONS AND WARRANTIES OF SELLER .                          To induce the Purchaser to execute, deliver and perform this Agreement, Seller represents and warrants to Purchaser on the date hereof, which representations and warranties shall be true and correct as of the Closing Date:

 

(a)                                   Title .                      Seller owns the Property in fee simple, free of any liens, claims or encumbrances other than the Permitted Exceptions.

 

(b)                                  Authorization .                 Seller has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by Seller pursuant hereto, and all required action and approvals therefore have been fully taken and obtained. The individuals signing this Agreement and all other documents executed or to be executed pursuant hereto on behalf of Seller are and shall be duly authorized to sign the same on Seller’s behalf and to bind Seller thereto.

 

(c)                                   Litigation .                                           There are no claims, causes of action or other litigation or proceedings pending or, to the best of Seller’s knowledge, threatened in respect to the ownership, operation or environmental conditions of the Property or any part thereof including disputes with mortgagees, governmental authorities, utility companies, contractors, adjoining land owners or suppliers of good or services).

 

 

(d)                                  Conflicts.                                              Neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated herein will violate any provision of any organizational document of seller or any law, rule, regulation, writ, judgment, injunction, decree, determination, award, or other order of any court, government or governmental agency or instrumentality, domestic or foreign, or conflict with or result in nay breach of any of the terms of or constitute a default under or result in the creation or imposition of any mortgage, pledge lien, security interest or other charge or encumbrance of any nature pursuant to the terms of any contract or agreement to which the Seller is a party or by which the Seller or the Property is bound.

 

(e)                                   Lease Back.                                  Seller will be duly authorized and will have full capacity, right, power and authority to enter into, to execute and deliver at the Closing the Lease.

 

Seller is making no other representations or warranties, express or implied, of any nature whatsoever with respect to the Property, except the warranties of title specifically set forth in the Deed.

 

14.                                  REPRESENTATIONS AND WARRANTIES OF PURCHASER .                                             Purchaser represents and warrants to Seller on the date hereof which representations and warranties shall be true and correct as of the Closing Date:

 

(a)                                   Authorization .                    The Purchaser has full capacity, right, power and authority to execute, deliver and perform this Agreement and to purchase the Property from Seller. All documents to be executed by each Purchaser pursuant hereto, and all required action and approvals therefore have been fully taken and obtained and this Agreement is legally binding on the Purchaser.

 

15.                                  REMEDIES ON DEFAULT .

 

(a)                                   Seller’s Defaults; Purchaser’s Remedies .                           In the event that Seller shall be in default hereunder, Purchaser may, as its sole option and exclusive remedy for such default, deliver a written notice to Seller stating with particularity the alleged default of Seller and the action required by Seller to cure such default, and stating Purchaser’s intent to terminate this Agreement if the default is not cured, whereupon Seller shall have five (5) business days after receipt of such notice in which to cure the alleged default to Purchaser’s reasonable satisfaction (and the Closing Date shall be delayed, if necessary, until the end of such five (5) business day period).  In the event such default is not cured within such five (5) business day period, then Purchaser may proceed to terminate this Agreement.

 

(b)                                  Purchaser’s Default; Seller’s Remedies .                                 In the event Purchaser shall be in default hereunder, Seller may deliver a written notice to Purchaser stating with particularity the alleged default of Purchaser and the action required by Purchaser to cure such default, and stating Seller’s intent to terminate this Agreement if the default is not cured, whereupon Purchaser shall have five (5) business days after receipt of such notice in which to cure the alleged default to Seller’s reasonable satisfaction (and the Closing Date shall be delayed, if necessary, until the end of such five (5) business day period).  In the event such default is not

 

 

cured within such five (5) business day period, then Seller may terminate this Agreement by written notice delivered to Purchaser.

 

16.                                  TITLE IN THE NAME OF A NOMINEE .                             The Purchaser shall have the right to take title to the Property in the name of a nominee, provided, however, that Jason Macari, shall have a controlling and majority interest in, over and to all ownership classes of such nominee. The nominee shall provide such reasonable evidence as may be required by the Seller to evidence compliance with the provisions hereof.

 

17.                                  MISCELLANEOUS .                                    No term or condition of this Agreement will be deemed to have been waived or amended unless expressed in writing, and the waiver of any condition or the breach of any term will not be a waiver of any subsequent breach of the same or any other term or condition.  This Agreement constitutes the entire agreement of the parties which incorporates and supersedes all prior written and oral understandings.  This Agreement shall be binding upon, and inure to the benefit of, the parties, their heirs, executors, personal representatives, nominees, successors or assigns.

 

18.                                  COUNTERPARTS .                                        This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all such counterparts taken together shall be deemed to constitute one and the same instrument.

 

19.                                  SELLER’S OBLIGATIONS .

 

(a)                                   Documentary Stamps .                            Seller shall be responsible to pay any documentary stamps and/or transfer taxes incurred or required in connection with the sale of Property as contemplated herein.

 

(b)                                  Non-Resident Withholding Tax . If the Seller is not a resident of the State of Rhode Island or will not be a resident at the time of the Closing, the Purchaser must withhold six percent (6%) of the total payment to the Seller (nine percent (9%) if the Seller is a corporation), in accordance with R.I.G.L. Section 44-30-71.3, as same may be amended from time to time, and pay such amount to the Division of Taxation as a non-resident withholding tax.  In order to have such tax based on gain rather than net proceeds of sale, Seller must submit an election form to the Division of Taxation at least twenty (20) days prior to closing.  Seller agrees to pay the entire amount of such tax found to be due at or after the closing, whether or not such tax was correctly calculated at the closing.  This shall survive the transfer of title to the Property.

 

(c)                                   Foreign Investment in Real Property Tax Act (“FIRPTA”) . The Seller represents that the Seller is not a foreign person or foreign corporation as defined in FIRPTA and, accordingly, that the Purchaser will not be required to comply with the withholding requirements of FIRPTA at the closing.

 

(d)                                  Survey Cost Reimbursement .  At Closing Seller shall reimburse Purchaser for the cost to prepare an ALTA survey of the Property.

 

 

20.                                  PURCHASER INFORMATION .

 

(a)                                   Ordinances . Purchasers of Real Estate in the State of Rhode Island are legally obligated to comply with all local real estate ordinances, including but not limited to ordinances on the number of unrelated persons who may legally reside in a dwelling, as well, as ordinances on the number of dwelling units permitted under the local zoning ordinances.

 

(b)                                  Radon Gas . RADON HAS BEEN DETERMINED TO EXIST IN THE STATE OF RHODE ISLAND. TESTING FOR THE PRESENCE OF RADON IN RESIDENTIAL REAL ESTATE PRIOR TO PURCHASE IS ADVISABLE.

 

(c)                                   Lead Contamination . Every Purchaser of residential real estate built prior to 1978 is hereby notified that such properties may have lead exposures that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced I.Q., behavioral problems, and impaired memory. The Seller of such property is required to provide the Purchaser with a copy of any lead inspection report in the Seller’s possession and notify the Purchaser of any known lead poisoning problem. Environmental lead inspection is recommended prior to purchase.

 

(d)                                  Restrictions or Legislative/Governmental Action . Purchaser is responsible for investigating whether there are any restrictions or legislative/governmental actions, present or proposed, which affect or would affect the use of the Property and Purchaser acknowledges that it has not relied on any advise or representations by Seller, Listing Agent or any other real estate representatives in this transaction with regard to same.

 

(e)                                   Water System .  Private water supply (well).  Purchaser understands that this property, is or may be served by a private water supply (well) which may be susceptible to contamination and potentially harmful to health.  If a public water supply is not available, the private water supply should be tested for coliforms, nitrates, and chlorides.  Periodic testing is recommended.

 

(f)                                     Wetlands . The location of coastal wetlands, bay fresh water wetlands, ponds, marshes, river banks or swamps, and the associated buffer areas may impact future property development.  Seller must disclose to the Purchaser any such determinations on all or part of the land made by the appropriate governing body.  Purchaser is advised to seek professional assistance in investigating these potential locations.

 

21.                                  RELATIONSHIP .                                                 Nothing contained in this Agreement shall be deemed or construed by the parties or by any third person to create a relationship of principal and agent or a partnership or a joint venture between Purchaser and Seller or between either or both of them and any third party.

 

22.                                  SEVERABILITY .    Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and whenever there is any conflict between any provision herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no legal right to contract, the latter shall prevail, but the provision of this

 

 

Agreement affected shall be limited only to the extent necessary to bring it within the requirements of such statute, law, ordinance or regulation.

 

23.                                  CHOICE OF LAW .                                         This Agreement, and the interpretation and enforcement thereof, shall be governed by the laws of the State where the Property is located.

 

24.                                  CAPTIONS, NUMBER AND GENDER .                               The captions appearing at the commencement of the sections and subsections hereof are descriptive only and for convenience in reference.  Should there be any conflict between such caption and the section or subsection at the head of which it appears, the section or subsection and not such caption shall control and govern the construction of this Agreement.  Unless the context otherwise requires, singular nouns and pronouns used in this Agreement are to be construed as including the plural thereof.  For convenience and brevity, masculine pronouns are used herein in their generic sense as a reference to all persons, without regard to sex.

 

25.                                  MERGER .                                          The acceptance of the Deed by Purchaser shall be deemed to be a full performance and discharge of every agreement and obligation of Seller herein contained and expressed, except such as are, by the terms hereof, to survive, or to be performed after, the delivery of said Deed.

 

26.                                  FURTHER ASSURANCES .                                              Seller agrees that it will, at any time and from time to time after the Closing Date, upon request of Purchaser, do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged or delivered, all such further acts, deeds, assignments, conveyances, and assurances as may reasonably be required for the better conveying, transferring, assigning, assuring and confirming the Property to Purchaser.  The provisions of this Section 26 shall survive the delivery of the Deed and the consummation of the transactions contemplated by this Agreement

 

IN WITNESS WHEREOF , the Seller and Purchaser have caused this Agreement to be executed under seal as of the date first above written.

 

 

PURCHASER:	SELLER:
Faith Realty II, LLC	Summer Infant (USA), Inc.

 

 

By:	/s/ Jason Macari				By:	/s/ Joseph Driscoll
	Jason Macari, Member
Date:		3/24/09			Name:		Joseph Driscoll
					Title:		CFO
					Date:		3/24/09

 

 

EXHIBIT “A”

 

Legal Description

 

That certain tract or parcel of land, with all buildings and improvements thereon, situated on the easterly and southerly side of Park East Drive (extension), in the City of Woonsocket, County of Providence, State of Rhode Island, bounded and described as follows:

 

Beginning at a Rhode Island highway bound oil the southerly sideline of said Park East Drive (Extension), said point being twenty-eight and 00/100 (28.00) feet left and opposite Station 85+ 16.66 on State Highway Plat #2386;

 

Thence S35° 42’ 33” W a distance- of one hundred forty and 00/100 (140.00) feet to an angle point;

 

Thence S51° 51’ 53” W a distance of one hundred ninety-six and 44/100 (196.44) feet to an angle

 

Thence S40° 21’ 03” W a distance of one hundred thirty-three and 48/100 (133.48) feet to an angle point;

 

Thence S36° 12’ 39” W a distance of forty-nine and 34/100 (49.34) feet to a corner;

 

Thence N54° 17’ 27” W a distance of two hundred thirty-two and 38/100 (232.38) feet to an angle point;

 

Thence S86° 27’ 52” W a distance of one hundred seventy and 92/100 (170.92) feet to the easterly line of Park Fast Drive;

 

Thence northerly bearing easterly along the arc of a curve having a radius of three-hundred twenty-two and 00/100 (322.00) feet, an arc length of three hundred eighty-nine and 13/100 389.13) feet, a chord bearing of N50° 49’ 35”E and a chord distance of three hundred sixty-five Byrd 88/100 (365.88) feet to a Rhode Island highway bound twenty-eight (28.00) feet left and opposite station 89+51.85;

 

Thence N85° 26’ 47”E continuing along the southerly sideline of Park East Drive, a distance of three hundred three, and 32/100 (303.32) feet to a Rhode Island highway bound twenty-eight (28.00) feet left and opposite Station 86+48.53;

 

Thence easterly bearing southerly along the arc of a curve having a radius of five hundred seventy-two and 00/100 (572.00) feet, an arc length of one hundred twenty-five and 39/100 (125.39) feet, a chord bearing of S88° 16’ 25”E and a chord distance of one hundred twenty-five and 14/100 (125-14) feet to the point and place of beginning.

 

Said parcel is further designated as Map D7, D8 Lot 59-16 on plan entitled “ADMINISTRATIVE SUBDIVISION PLAN MAP D7, D8 LOT 59-16 SITUATED ON: PARK EAST DRIVE (EXTENSION) WOONSOCKET, RHODE ISLAND SCALE: 1” = 40’ DATE: OCTOBER 2004  REVISED:  NOVEMBER, 2004 REVISED: JANUARY, 2005, FEBRUARY, 2005 PREPARED FOR: FAITH REALTY, LLC. 6 BLACKSTONE VALLEY PLACE SUITE 206A, LINCOLN, R.I. 02865   PREPARED BY: CROSSMAN ENGINEERING, INC. 151 Centerville Road Warwick, Rhode ISLAND 02886 (the “Subdivision Plan”), which Subdivision Plan, is recorded at Plan Book 22, Page 59 of Woonsocket Land Evidence Records.

 

 

EXHIBIT B

 

Existing Encumbrances

 

Restrictions at Book 1083, Page 577.

 

Notice of taking to State of Rhode Island at Book 962, Page 101, regarding taking at Book 961, Pages 336 and shown on RIDOT Highway Plan 2386 and recorded at Plan Book 21, Pages 1-30.

 

Blackstone Valley Electric and Tennessee Gas easements at Plan Book 20, Page 8.

 

Conditions described on Plan Book 21, Page 39.

 

Rights of others in and to brooks or streams crossing through or on locus.

 

Deed of easements to Redevelopment Agency of Woonsocket recorded at Book 1417, Page 192.

 

Subdivision Plan recorded at Plan Book 22, Page 59.

 

RIDEM Insignificant Alteration Permit recorded at Book 1474, Page 58, revised June 1, 2006 at Book 1547, Page 165.

 

Zoning Decision recorded at Book 1473, Page 198.

 

Easement to Narragansett Electric recorded at Book 1609, Page 319 .

 

 

EXHIBIT C

 

Deed

 

 

WARRANTY DEED

 

SUMMER INFANT (USA), INC., a Rhode Island corporation (“ Grantor ”) with a mailing address of 1275 Park East Drive, Woonsocket, Rhode Island 02895

 

for Four Million Fifty-Two Thousand Five Hundred and 00/100 Dollars ($4,052,500.00) paid, grants to

 

FAITH REALTY II, LLC, a Rhode Island limited liability company with a mailing address of 10 Hannah Drive, Cumberland, Rhode Island 02864

WITH WARRANTY COVENANTS

 

That certain tract or parcel of land, together with the buildings and improvements thereon, situated in Woonsocket, Rhode Island, and more fully described on Exhibit A attached hereto and by this reference incorporated herein.

 

Being the same premises conveyed to Summer Infant (USA), Inc. (successor by merger with Summer Infant, Inc.) by deed dated March 1, 2007 and recorded in Book 1637 at Page 162 in the Land Evidence Records of the City of Woonsocket, Rhode Island on March 6, 2007.

 

Subject to restrictions, easements, covenants and all other matters of record.

 

Subject to taxes assessed December 31, 2008, not yet due and payable.

 

The transfer is such that no withholding is required under Section 44-30-71.3 of the Rhode Island General Laws of 1956, as amended, as Grantor is a Rhode Island corporation as evidenced by affidavit.

 

[Remainder of Page Left Intentionally Blank]

 

 

WITNESS MY HAND THIS      DAY OF MARCH, 2009.

 

 

	Summer Infant (USA), Inc
	By:
	Name:
	Title:

 

 

STATE OF RHODE ISLAND

 

Providence, ss.                                                                                                                                                                                                                                                                March     , 2009

 

 

Then personally appeared the above-named                            the                            of Summer Infant (USA), Inc., known to me to be the person described in and who executed the foregoing instrument in such capacity and acknowledged the same to be his free act and deed and the free act and deed of Summer Infant (USA), Inc.

 

	Notary Public
	My commission expires:

 

 

Property Address:

 

1275 Park East Drive

Woonsocket, Rhode Island 02895

Plat 59 Lot 16

 

 

EXHIBIT A

 

Legal Description

 

That certain tract or parcel of land, with all buildings and improvements thereon, situated on the easterly and southerly side of Park East Drive (extension), in the City of Woonsocket, County of Providence, State of Rhode Island, bounded and described as follows:

 

Beginning at a Rhode Island highway bound oil the southerly sideline of said Park East Drive (Extension), said point being twenty-eight and 00/100 (28.00) feet left and opposite Station 85+ 16.66 on State Highway Plat #2386;

 

Thence S35° 42’ 33” W a distance- of one hundred forty and 00/100 (140.00) feet to an angle point;

 

Thence S51° 51’ 53” W a distance of one hundred ninety-six and 44/100 (196.44) feet to an angle

 

Thence S40° 21’ 03” W a distance of one hundred thirty-three and 48/100 (133.48) feet to an angle point;

 

Thence S36° 12’ 39” W a distance of forty-nine and 34/100 (49.34) feet to a corner;

 

Thence N54° 17’ 27” W a distance of two hundred thirty-two and 38/100 (232.38) feet to an angle point;

 

Thence S86° 27’ 52” W a distance of one hundred seventy and 92/100 (170.92) feet to the easterly line of Park Fast Drive;

 

Thence northerly bearing easterly along the arc of a curve having a radius of three-hundred twenty-two and 00/100 (322.00) feet, an arc length of three hundred eighty-nine and 13/100 389.13) feet, a chord bearing of N50° 49’ 35”E and a chord distance of three hundred sixty-five Byrd 88/100 (365.88) feet to a Rhode Island highway bound twenty-eight (28.00) feet left and opposite station 89+51.85;

 

Thence N85° 26’ 47”E continuing along the southerly sideline of Park East Drive, a distance of three hundred three, and 32/100 (303.32) feet to a Rhode Island highway bound twenty-eight (28.00) feet left and opposite Station 86+48.53;

 

Thence easterly bearing southerly along the arc of a curve having a radius of five hundred seventy-two and 00/100 (572.00) feet, an arc length of one hundred twenty-five and 39/100 (125.39) feet, a chord bearing of S88° 16’ 25”E and a chord distance of one hundred twenty-five and 14/100 (125-14) feet to the point and place of beginning.

 

Said parcel is further designated as Map D7, D8 Lot 59-16 on plan entitled “ADMINISTRATIVE SUBDIVISION PLAN MAP D7, D8 LOT 59-16 SITUATED ON: PARK EAST DRIVE (EXTENSION) WOONSOCKET, RHODE ISLAND SCALE: 1” = 40’ DATE: OCTOBER 2004  REVISED:  NOVEMBER, 2004 REVISED: JANUARY, 2005, FEBRUARY, 2005 PREPARED FOR: FAITH REALTY, LLC. 6 BLACKSTONE VALLEY PLACE SUITE 206A, LINCOLN, R.I. 02865   PREPARED BY: CROSSMAN ENGINEERING, INC. 151 Centerville Road Warwick, Rhode ISLAND 02886 (the “Subdivision Plan”), which Subdivision Plan, is recorded at Plan Book 22, Page 59 of Woonsocket Land Evidence Records.

 

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EXHIBIT D

 

Lease

 

 

LEASE

 

 

OF PREMISES AT 1275 PARK EAST DRIVE

 

 

WOONSOCKET, RHODE ISLAND

 

 

FROM

 

 

FAITH REALTY II, LLC,

A RHODE ISLAND LIMITED LIABILITY COMPANY

 

 

TO

 

 

SUMMER INFANT (USA), INC.,

A RHODE ISLAND CORPORATION

 

ii

 

SUMMARY OF BASIC TERMS

 

LEASE

 

OF PREMISES AT 1275 PARK EAST DRIVE,

WOONSOCKET, RHODE ISLAND

 

TO

 

 

SUMMER INFANT (USA), INC.,

A RHODE ISLAND CORPORATION

 

 

DATED AS OF MARCH 24, 2009

 

The following is a summary of certain basic terms of this Lease which is intended for the convenience and reference of the parties.  Capitalized terms used, but not defined, in this Summary of Basic Terms, have their defined meanings in this Lease.  In addition, some of the following items or terms are incorporated into this Lease by reference to the item or term or to this Summary of Basic Terms.

 

1.                                        Landlord :  Faith Realty II, LLC, a Rhode Island limited liability company.

 

2.                                        Tenant :  Summer Infant (USA), Inc., a Rhode Island corporation.

 

3A.                              Premises :  All of the leasable space in the Building.

 

3B.                                Landlord’s Property :  The Land with the Building and any other improvements now or hereafter thereon, commonly known as 1275 Park East Drive, Woonsocket, Rhode Island, as described on Exhibit A .

 

3C.                                Leasable Square Footage of the Premises :  approximately 52,000 square feet.

 

4.                                        Tenant Improvements Work :  Tenant shall perform the Tenant Improvements Work as provided in Section 3.1 .

 

5A.                              Lease Term :  From the Commencement Date (March 24, 2009) until the last day of the seventh Lease Year March 31, 2016), subject to extension in accordance with Section 2.4(b) .

 

5B.                                Commencement Date :  March 24, 2009.

 

5C.                                Rent Commencement Date :  April 1, 2009.

 

 

5D.                               Right of Extension :  Tenant shall have the right to extend the Lease Term for one term of five years in accordance with Section 2.4(b) .

 

6.                                        Permitted Use :  Subject to applicable Legal Requirements, the Premises may be used only for manufacturing, warehouse and general office purposes and other lawful purposes ancillary thereto.

 

7.                                        Security Deposit :  $32,000.00, in the form of cash.

 

8.                                        Tenant’s Parking Allocation :  All of the parking spaces in the Parking Area, subject to Landlord’s right to use parking spaces in the Parking Areas in connection with the management and operation of Landlord’s Property.

 

9.                                        Base Rent :  Base Rent for the Initial Term shall be as follows:

 

PERIOD		ANNUAL RATE			MONTHLY RATE			PSF RATE
Rent Commencement Date through seventh Lease Year (April 1, 2009 – March 31, 2016)		$	390,000.00		$	32,500.00		$	7.50
First two (2) Lease Years of the Extension Term (if Tenant elects to exercise such extension) (April 1, 2016 – March 31, 2018)		$	429,000.00		$	35,750.00		$	8.25
Last three (3) Lease Years of the Extension Term (if Tenant elects to exercise such extension) (April 1, 2018 – March 31, 2021)		$	468,000.00		$	39,000.00		$	9.00

 

10.                                  Tenant’s Electricity Costs :  Tenant shall directly pay its actual costs for electricity services provided to the Premises for lights and plugs (“ Tenant’s Electricity Costs ”), as provided in Section 4.6 .

 

11.                                  Heat and Utilities : To be obtained by Tenant at Tenant’s sole cost and expense (including water and sewer charges).

 

12.                                  First Payment :  First month’s Base Rent in the amount of $32,500.00, plus the Security Deposit, shall be paid upon execution of this Lease.

 

13.                                  Broker :  None.

 

iv

 

14A.                        Tenant’s Address for Notices, Telephone Number, Fax Number and Taxpayer Identification No.:

 

Summer Infant (USA), Inc.

1275 Park East Drive

Woonsocket, Rhode Island

Attn: Joseph Driscoll, CFO

Telephone: (401) 671-6922;  Fax: (401) 671-6051

 

With copies to:

 

Greenberg Traurig, LLP

One International Place – 20 th  Floor

Boston, MA 02110

Attn: John M. Bello, Esq.

Telephone: (617) 310-6285; Fax: (617) 897-0985

 

Tenant F.I.D.# 20-8641043

 

14B.                          Landlord’s Address for Notices:

 

Faith Realty II, LLC

10 Hannah Drive

Cumberland, Rhode Island 02864

Attn: Jason Macari

Telephone: (401) 671-6563;  Fax:  (401) 671-6563

 

with a copy to:

 

Poore & Rosenbaum LLP

30 Exchange Terrace

Providence, RI 20903

Attn: Steven Rosenbaum, Esquire

Telephone: (401) 831-2600; Fax: (401) 831-2220

 

v

 

LEASE

 

THIS LEASE (this “Lease”), made as of the 1 st  day of February, 2009, between Faith Realty II, LLC, a Rhode Island limited liability company and Summer Infant (USA), Inc., a Rhode Island corporation, is as follows:

 

W I T N E S S E T H :

 

ARTICLE I

CERTAIN DEFINITIONS

 

In addition to the words and terms defined elsewhere in this Lease, the following words and terms shall have in this Lease the meanings set forth in this Article I (whether or not underscored):

 

“ Bankruptcy Laws ” means any existing or future bankruptcy, insolvency, reorganization, dissolution, liquidation or arrangement or readjustment of debt law or any similar existing or future law of any applicable jurisdiction, or any laws amendatory thereof or supplemental thereto, including, without limitation, the United States Bankruptcy Code of 1978, as amended (11 U.S.C. Section 101 et seq .), as any or all of the foregoing may be amended or supplemented from time to time.

 

“ Base Rent ” has the meaning set forth in Item 9 of the Summary of Basic Terms.

 

“ Broker ” has the meaning set forth in Item 13 of the Summary of Basic Terms.

 

“ Building ” means the building located on the Land.

 

“ Business Days ” means Monday through Friday, except holidays.  The term “holiday” shall mean (a) the federal day of celebration of the following holidays:  New Year’s Day, President’s Day, Memorial Day, July 4 th , Labor Day, Thanksgiving and Christmas and (b) the Friday after Thanksgiving.

 

“ Commencement Date ” has the meaning set forth in Item 5B of the Summary of Basic Terms.

 

“ Environmental Law ” means the Comprehensive Environmental Response, Compensation, and Liability Act (“ CERCLA ”), 42 U.S.C. §9601 et seq. , the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. , the Hazardous Materials Transportation Act, 49 U.S.C. §1802 et seq. , the Toxic Substances Control Act, 15 U.S.C. §2601 et seq. , the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq. , the Clean Water Act, 33 U.S.C. §1321 et seq. , the Clean Air Act, 42 U.S.C. §7401 et seq. , all regulations promulgated thereunder, and any other federal, state, county, municipal, local or other statute, law, ordinance or regulation (including any state or local board of health rules, regulation, or code), which may

 

1

 

relate to the protection of human health or the environment, all as may be from time to time amended or modified.

 

“ Event of Default ” has the meaning set forth in Section 12.1 .

 

“ Extension Term ” means the period beginning at the end of the Initial Term and extending through the end of the twelfth (12 th ) Lease Year.

 

“ Hazardous Materials” or “Hazardous Substances” means, at any time, (a) any “hazardous substance” as defined in §101(14) of CERCLA (42 U.S.C. §9601(14)) or regulations promulgated thereunder; (b) any “solid waste,” “hazardous waste” or “infectious waste,” as such terms are defined in any Environmental Law at such time; (c) asbestos, urea-formaldehyde, polychlorinated biphenyls (“PCBs”), bio-medical materials or waste, nuclear fuel or material, chemical waste, radioactive material, explosives, known carcinogens, petroleum products and by-products and other dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials or substances which may be hazardous to human health or the environment and which are listed or identified in, or regulated by, any Environmental Law; and (d) any additional substances or materials which are classified or considered to be hazardous or toxic under any Environmental Law.

 

“ Initial Term ” means the period beginning on the Commencement Date and extending through the end of the seventh (7 th ) Lease Year.

 

“ Insurance Costs ” includes the cost of insuring Landlord’s Property, including without limitation the Building and all other improvements now or hereafter situated thereon, and all operations conducted in connection therewith, with such policies, coverages and companies and in such limits as may be reasonably required by Landlord (and/or which may be required by Landlord’s lenders), including, but not limited to, fire insurance with extended or with all-risk coverage, comprehensive public liability insurance covering personal injury, deaths and property damage with a personal injury endorsement covering false arrest, detention or imprisonment, malicious prosecution, libel and slander, and wrongful entry or eviction, rent loss or business interruption insurance, plate glass insurance, contractual liability insurance, boiler insurance and fidelity bonds, all such insurance to be with coverages and in amounts and with deductibles consistent with insurance maintained by landlords of properties of comparable type and character in the Providence, Rhode Island area.

 

“ Invitees ” means employees, workers, visitors, guests, customers, suppliers, agents, contractors, representatives, licensees and other invitees.

 

“ Land ” means the land located at 1275 Park East Drive, Woonsocket, Rhode Island more particularly described in Exhibit A .

 

“ Landlord ” has the meaning set forth in Item 1 of the Summary of Basic Terms.

 

“ Landlord’s Property ” has the meaning set forth in Item 3B of the Summary of Basic Terms.

 

2

 

“ Lease Term ” means the Initial Term, and, if Tenant timely and properly exercises its right to extend pursuant to Section 2.4(b) , the Extension Term.

 

“ Lease Year ” means the 12 month period beginning on the Rent Commencement Date and on each anniversary of the Rent Commencement Date throughout the Lease Term.

 

“ Legal Requirements ” means all applicable laws, statutes, rules, regulations and requirements of governmental authorities, including, but not limited to, zoning laws and building codes.

 

“ Operating Costs ” means all costs, expenses and disbursements of every kind and nature (except Taxes and Insurance Costs) necessary or required  in connection with operating, managing, maintaining, repairing or replacing Landlord’s Property or elements thereof, in the same condition and repair as the Landlord’s Property is at the Commencement Date or may be put in during the Term hereof.  Operating Costs shall include, by way of illustration, but not be limited to:  all charges incurred in connection with the maintenance and repair obligations with respect to Landlord’s Property including the HVAC, electrical, mechanical and plumbing systems; all charges incurred  to provide utility services to Landlord’s Property; all costs related to removal of snow and ice; all costs of pest and vermin control; all costs of providing, maintaining and repairing paving, curbs, walkways, landscaping, planters, roofs, walls, drainage, utility lines, security systems and other equipment; all costs of painting the exterior of the Building; all costs of repaving, resurfacing, and restriping the Parking Area and drives; all costs of lighting, cleaning, maintaining and repairing the Outside Areas; all costs of licenses, permits and inspection fees; all legal, accounting, inspection and consulting fees; all costs of wages, salaries and benefits of operating personnel hired by Tenant, including welfare, retirement, vacations and other compensation and fringe benefits and payroll taxes.  Operating Costs shall also include any costs for alterations to the Landlord’s Property required or necessary to comply with changes in laws or Legal Requirements. Operating Costs shall not include (i) replacement of the structural component parts of the Building, roof, walls and floor unless such replacement is caused by the negligent acts, actions or omissions of the Tenant, its employees, agents, representatives or invitees, in which case such replacement costs shall be borne by the Tenant or (ii) legal, accounting, inspection and consulting fees incurred by Landlord in administering this Lease; provided; however, Landlord shall be entitled to reimbursement for reasonable legal fees incurred in successfully enforcing the terms of this Lease.

 

“ Outside Areas ” means all areas of Landlord’s Property located outside of the Building.

 

“ Parking Area ” means those portions of Landlord’s Property which may be used for parking as depicted on the Site Plan.

 

“ Permitted Use ” has the meaning set forth in Item 6 of the Summary of Basic Terms.

 

“ Person ” means any individual, partnership, joint venture, trust, limited liability company, business trust, joint stock company, unincorporated association, corporation, institution or other entity, including any governmental authority.

 

3

 

“ Premises ” has the meaning set forth in Item 3A of the Summary of Basic Terms.

 

“ Rent Commencement Date ” has the meaning set forth in Item 5C of the Summary of Basic Terms.

 

“ Rooftop Equipment ” means a satellite dish, antenna, related communications equipment and supplemental HVAC equipment installed on the roof of the Building by or for Tenant for use in Tenant’s business.

 

“ Security Deposit ” has the meaning set forth in Item 7 of the Summary of Basic Terms.

 

“ Summary of Basic Terms ” means the Summary of Basic Terms which is affixed to this Lease.

 

“ Tax Fiscal Year ” shall mean July 1 through June 30 next following, or such other tax period as may be established by law for the payment of Taxes.

 

“ Taxes ” shall mean (a) all taxes, assessments, betterments, water or sewer entrance fees and charges including general, special, ordinary and extraordinary, environmental, or any other charges (including charges for the use of municipal services if billed separately from other taxes), levied, assessed or imposed at any time by any governmental authority upon or against the Land, the Building, or the fixtures, signs and other improvements thereon then comprising Landlord’s Property and (b) all reasonable attorneys’ fees appraisal fees and other fees, charges and costs incurred in connection with any proceedings related to the amount of Taxes, the tax classification and/or the assessed value of Landlord’s Property.  This definition of Taxes is based upon the present system of real estate taxation in the State of Rhode; if taxes upon rentals or any other basis shall be substituted, in whole or in part, for the present ad valorem real estate taxes, the term “Taxes” shall be deemed changed to the extent to which there is such a substitution for the present ad valorem real estate taxes.

 

“ Tenant ” has the meaning set forth in Item 2 of the Summary of Basic Terms.

 

“ Tenant Affiliate ” means any Person which controls, is controlled by, or is under common control with, Tenant, or is a successor to Tenant (or the acquirer of the assets of Tenant) by merger, consolidation or sale of substantially all of the assets of Tenant.  For purposes of this definition, “control” of a Person means the power, direct or indirect, to vote more than 50% of the securities (or other ownership interests) having voting power for the election of directors or managers (in the case of a limited liability company) of the Person.

 

“ Tenant Improvements Costs ” means all costs of designing and performing the Tenant Improvements Work, all costs of telephone and data cabling for the Premises.

 

“ Tenant Improvements Plans ” means the plans and specifications for the Tenant Improvements Work, to be prepared and adopted as provided in Section 3.1(a) , as the same may be modified from time to time pursuant to the terms of this Lease.

 

4

 

“ Tenant Improvements Work ” means the work to be performed by Tenant pursuant to the Tenant Improvements Plans.

 

“ Tenant’s Electricity Costs ” has the meaning set forth in Item 10 of the Summary of Basic Terms.

 

ARTICLE II

LEASE OF PREMISES

 

Section 2.1  Lease of the Premises .  Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, on and subject to the terms and conditions of this Lease, and subject to and with the benefits of all zoning ordinances and easements, covenants, conditions, restrictions and other matters of record applicable or appurtenant to the Land.  Throughout the Lease Term, Tenant shall have the exclusive right to use all closed circuit television systems, elevators, lobbies, hallways, corridors, stairwells and mechanical systems, utilities and loading docks serving the Premises and all other ancillary facilities.  This Lease is effective as of the date of this Lease, and Tenant may commence occupancy of the Premises on the Commencement Date, however, rental payments due hereunder shall commence on the Rent Commencement Date.  From and after the Commencement Date, Tenant shall have 24 hour access to the Premises, the Outside Areas and the Parking Areas, subject to the terms of this Lease.

 

Section 2.2  Outside Areas .  The Premises are leased with the benefit of the exclusive right to use the Outside Areas for purposes consistent with the Permitted Use and in accordance with Legal Requirements.

 

Section 2.3  Parking .  Without limiting the generality of Section 2.2 , Tenant’s Invitees shall have the right to park passenger automobiles in the Parking Area.

 

Section 2.4  Lease Term; Extension Option .

 

(a)                                   The Lease Term shall commence at 12:01 a.m. on the Commencement Date and shall end at 11:59 p.m. on the last day of the seventh (7 th ) Lease Year.

 

(b)                                  Provided an Event of Default does not then exist, Tenant shall have the right to extend the Lease Term for one (1) period of five (5) years by giving Landlord written notice specifying such extension, which notice must be received by Landlord not earlier than twelve (12) months, nor later than six (6) months, prior to the expiration of the Initial Term.  If such extension becomes effective, the Lease Term shall be automatically extended upon the same terms and conditions as were applicable to the Initial Term, except that (i) Base Rent for the Extension Term shall be the amount set forth for the applicable periods set forth in Item 9 of the Summary of Basic Terms, and (ii) there shall be no further right to extend or renew the Lease Term beyond the Extension Term.

 

5

 

Section 2.5  Security Deposit .

 

(a)                                   Simultaneously with the execution and delivery of this Lease, Tenant shall deliver to Landlord the Security Deposit in cash or immediately available funds.

 

(b)                                  The Security Deposit is security for the faithful performance and observance by Tenant of the terms and conditions of this Lease and is not an advance payment of rent.  If an Event of Default occurs, Landlord may use, apply or retain all or any part of the Security Deposit to the extent required for payment of any Base Rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of the occurrence of an Event of Default, including, but not limited to, any damage or deficiency accrued before or after summary proceedings or other re-entry by Landlord, including the costs of such proceeding or re-entry and further including, without limitation, reasonable attorneys’ fees.  If an Event of Default occurs, Landlord shall have the right to apply the Security Deposit, or any part thereof, as aforesaid, without additional notice and without prejudice to any other remedy or remedies which Landlord may have, or Landlord may pursue any other such remedy or remedies in lieu of applying the Security Deposit or any part thereof.  No interest shall be payable on the Security Deposit and Landlord shall have the right to commingle the Security Deposit with other funds of Landlord.  If Landlord applies the Security Deposit in whole or in part, Tenant shall immediately upon demand pay to Landlord the amount so applied to restore the Security Deposit to its original amount.  In the event of a sale or other transfer of Landlord’s Property, or leasing of Landlord’s Property subject to Tenant’s tenancy hereunder, Landlord shall transfer the Security Deposit then remaining to the vendee or lessee, in which event Landlord shall thereupon be released from all liability for the return of such Security Deposit to Tenant; and Tenant shall look solely to the new landlord for the return of the Security Deposit then remaining.  The holder of any mortgage on Landlord’s Property shall not be responsible to Tenant for the Security Deposit or its application or return unless the Security Deposit shall actually have been received by such holder.  Tenant shall not assign or encumber or attempt to assign or encumber the Security Deposit, and Landlord shall not be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

Section 2.6  Intentionally Deleted .

 

Section 2.7  Lease Amendment .  If, pursuant to Sections 8.1 or 11.1 or any other provision of this Lease, there results a change in any of the terms or amounts in the Summary of Basic Terms then in effect, Landlord and Tenant will promptly execute a written amendment of the Summary of Basic Terms, substituting the changed terms and recomputed amounts in lieu of each of the applicable terms and amounts then in effect which have been changed.  As of the effective date of the amendment of the Summary of Basic Terms, the changed terms (and recomputed amounts) will be effective for all purposes of this Lease, and the amended and restated Summary of Basic Terms will be a part of, and incorporated into, this Lease.

 

6

 

ARTICLE III

WORK; SIGNS

 

Section 3.1  Tenant Improvements Work .  Tenant shall design and perform the Tenant Improvements Work, and the Tenant Improvements Costs shall be borne by Tenant.

 

(a)                                   Tenant Improvements Plans .  Tenant shall prepare or cause to be prepared, and shall submit to Landlord for review and approval the Tenant Improvements Plans.  Within ten (10) Business Days after receipt of the Tenant Improvements Plans, Landlord shall, by written notice to Tenant, approve or disapprove the Tenant Improvements Plans, and if Landlord fails to respond within such ten (10) Business Day period, Landlord will be deemed to have disapproved the Tenant Improvements Plans.  Landlord will not unreasonably disapprove proposed Tenant Improvements Plans, provided, however, it shall not be unreasonable for the Landlord to withhold its consent and/or disapprove plans that may, in the Landlord’s reasonable discretion have a material adverse effect on the value of the Landlord’s Property.  In any disapproval of Tenant Improvements Plans, Landlord shall specify in reasonable detail the respects in which the Tenant Improvements Plans are not satisfactory to Landlord and the changes which Landlord desires in order that the Tenant Improvements Plans will be satisfactory to Landlord.  After receiving any such notice of disapproval from Landlord with respect to the Tenant Improvements Plans, Tenant will revise the Tenant Improvements Plans as reasonably requested by Landlord and will resubmit the revised Tenant Improvements Plans to Landlord for review and approval in accordance with the procedures set forth above.  After approval of the Tenant Improvements Plans by Landlord, Tenant may make changes to the Tenant Improvements Plans only with the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; provided that if such changes are minor in nature and do not affect the structural elements or mechanical systems of the Building, Landlord’s approval shall not be required.  Upon approval of the Tenant Improvements Plans, a list identifying the approved Tenant Improvements Plans shall be attached as Exhibit B to this Lease.  Tenant shall be fully responsible for compliance of the Tenant Improvements Plans with all Legal Requirements and for assuring that the Tenant Improvements Plans provide for Tenant Improvements Work that will comply with all Legal Requirements and will satisfy Tenant’s requirements.  Landlord’s approval of the Tenant Improvements Plans shall not constitute a certification, representation or warranty by Landlord that the Tenant Improvements Plans are adequate, complete or in compliance with Legal Requirements.

 

(b)                                  Performance of Tenant Improvements Work .  Tenant shall perform the Tenant Improvements Work diligently and continuously, in a good and workmanlike manner, in accordance with the Tenant Improvements Plans, and in compliance with all Legal Requirements.  The contractor(s) performing the Tenant Improvements Work shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed and if Landlord does not respond within five (5) Business Days of receiving notice of Tenant’s contractor selection, then such contractor shall be deemed to be approved by Landlord. If the amount of work to be performed exceeds $250,000 Landlord may require that such contractor shall provide a performance and payment bond covering the work to be performed by such contractor. Landlord may, at Landlord’s cost, conduct such inspections of the Tenant Improvements Work as Landlord, in its sole discretion, determines.  All such

 

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inspections and reviews are for the sole benefit of Landlord, and Landlord shall have no liability or obligation to Tenant or any other Person with respect to the Tenant Improvements Work.

 

Section 3.2  Delivery .  At such time that this Lease becomes binding on Landlord as provided in Section 13.10 , Landlord shall deliver the Premises to Tenant for the purpose of planning and performing the Tenant Improvements Work in the same condition that is in on the date hereof.

 

Section 3.3  Intentionally Deleted .

 

Section 3.4  Intentionally Deleted .

 

Section 3.5  Signs .  Tenant shall have the right, subject to Legal Requirements, to erect signs identifying Tenant on the exterior façade of the Building and monument signs identifying Tenant at the entrance to Landlord’s Property.  Except for the exterior signs permitted pursuant to the above provisions of this Section, Tenant shall not erect any signs which are visible from the exterior of the Building.  Tenant shall not erect signs except in compliance with all Legal Requirements.  Tenant shall be solely responsible for confirming that any proposed sign is in compliance with all Legal Requirements.  All costs of obtaining permits and approvals, creating, installing, illuminating, maintaining, repairing, and/or replacing Tenant’s exterior signs shall be paid by Tenant.  Tenant shall maintain its exterior signs in good repair and condition.  At the end of the Lease Term or earlier termination of this Lease, Tenant shall promptly remove Tenant’s signs and restore all damage related to the installation, existence and/or removal of such signs.

 

ARTICLE IV

BASE RENT; TENANT’S COSTS

 

Section 4.1  Base Rent .

 

(a)                                   Tenant shall pay Base Rent to Landlord for the Initial Term and the Extension Term (if the Tenant elects to extend the Lease Term beyond the Initial Term) the amounts set forth in Item 9 of the Summary of Basic Terms.

 

(b)                                  Base Rent for each Lease Year shall be payable in equal monthly installments and shall be paid without offset for any reason, in advance, on the first day of each calendar month during the Lease Term commencing on the Rent Commencement Date.  If the Rent Commencement Date is not on the first day of a calendar month, Tenant shall pay, on or before the Rent Commencement Date, a proportionate part of the Base Rent for the month in which the Rent Commencement Date occurs based upon the annual Base Rent applicable to the first Lease Year, divided by three hundred sixty (360) and then multiplied by the number of days in such month (including the Rent Commencement Date) included in the Lease Term.  Base Rent shall be paid by an “electronic funds transfer” system arranged by and among Tenant, Tenant’s bank and Landlord, or in such other manner as Landlord shall from time to time designate in writing.  The parties acknowledge and agree that the obligations owing by Tenant under this Section 4.1 are rent reserved under this Lease, for all purposes hereunder, and are rent reserved

 

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within the meaning of Section 502(b)(6) of the Bankruptcy Code or any successor provision thereto.

 

Section 4.2  Intentionally Deleted .

 

Section 4.3  Taxes .

 

(a)                                   Tenant shall pay all Taxes during the Initial Term and the Extension Term, if any, which relate to the period during which the Tenant occupied the Landlord’s Property prior to or when the same shall become due and payable and shall provide Landlord with evidence of such payment.

 

(b)                                  If the Commencement Date is not on July 1, or the expiration or termination of this Lease is not on June 30, Tenant’s obligation in respect of Taxes shall be prorated.  If the final tax bill for the Tax Fiscal Year in which such expiration or termination of this Lease occurs, then within thirty (30) days after the receipt of the tax bill for such Tax Fiscal Year, Landlord and Tenant shall make appropriate adjustments of estimated payments.

 

(c)                                   Without limiting the generality of the foregoing, Tenant shall pay all rent and personal property taxes attributable to its signs or any other personal property including but not limited to its trade fixtures, the existing or any future floor coverings, wall treatments and light fixtures in the Premises.

 

Section 4.4  Insurance Costs .  Tenant shall pay to all Insurance Costs during the Initial Term and the Extension Term, if any, which relate to the period during which the Tenant occupied the Landlord’s Property prior to or when the same become due and payable and shall provide Landlord with evidence of such payments.

 

Section 4.5  Operating Costs .  Tenant shall pay all Operating Costs during the Initial Term and the Extension Term, if any, which relate to the period during which the Tenant occupied the Landlord’s Property.

 

Section 4.6  Payment for Electricity .  Electric service for lights and plugs in the Premises shall be separately metered, and Tenant shall pay Tenant’s Electricity Costs directly to the utility provider as due and payable.

 

Section 4.7 Intentionally Deleted .

 

ARTICLE V

USE OF PREMISES

 

Section 5.1  Permitted Use .  Tenant shall use and occupy the Premises only for the Permitted Use.

 

Section 5.2  Restrictions on Use .  Tenant shall use the Landlord’s Property in a careful, safe and proper manner, shall not commit or suffer any waste on or about Landlord’s Property,

 

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