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Exhibit 10.4
LEASE AGREEMENT
by and between
HELLWEG GMBH & CO. VERMOGENSVERWALTUNGS KG,
a German limited partnership
registered with the commercial register
maintained at the local court of Dortmund under HRA 13391,
as LANDLORD
and
HELLWEG DIE PROFI-BAUMARKTE GMBH UND CO. KG,
a German limited partnership
registered with the commercial register
maintained at the local court of Dortmund under HRA 13582,
as TENANT
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<S> <C>
Premises: 1. Aschersleben, Germany
2. Berlin-Biesdorf, Germany
3. Berlin-WeiBensee, Germany
4. Blumberg, Germany
5. Bochum-Hofstede, Germany
6. Bonn-Beuel, Germany
7. Bonn-Duisdorf, Germany
8. Chemnitz II, Germany
9. Dahlwitz-Hoppegarten, Germany
10. Dortmund-Kley, Germany
11. Ennepetal, Germany
12. Essen-Altenessen, Germany
13. Essen-Borbeck, Germany
14. Essen-Kettwig, Germany
15. Falkensee, Germany
16. Gelsenkirchen, Germany
17. Geltow, Germany
18. Greiz, Germany
19. Gronau, Germany
20. Guben, Germany
21. Halberstadt, Germany
22. Halle, Germany
23. Hennigsdorf, Germany
24. Leipzig, Germany
25. Ludenscheid, Germany
26. Lutherstadt-Eisleben, Germany
27. Magdeburg Mittagstr., Germany
28. Magdeburg, Germany
29. Menden, Germany
30. Mettmann, Germany
31. Nordhausen, Germany
32. Paderborn, Germany
33. Potsdam, Germany
34. Quedlinburg, Germany
35. Steinfurt, Germany
36. Werl, Germany
37. Zwickau, Germany
Dated as of: February 28, 2007
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TABLE OF CONTENTS
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Page
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1. Demise of
Premises............................................. 2
2. Certain
Definitions............................................ 2
3. Title and Condition; Single Lease
Transaction.................. 10
4. Use of Leased Premises; Quiet
Enjoyment........................ 12
5.
Term...........................................................
13
6. Basic
Rent..................................................... 14
7. Additional
Rent................................................ 14
8. Net Lease:
Non-Terminability................................... 15
9. Payment of Impositions, VAT and
Expenses....................... 15
10. Compliance with Laws and Easement Agreements;
Environmental
Matters.....................................................
16
11. Intentionally
Deleted.......................................... 17
12. Maintenance and
Repair......................................... 17
13. Alterations, Improvements and
Expansions....................... 18
14. Permitted
Contests............................................. 19
15.
Indemnification................................................
19
16.
Insurance......................................................
19
17. Casualty and
Condemnation...................................... 21
18. Termination
Events............................................. 23
19.
Restoration....................................................
23
20. Intentionally
Omitted.......................................... 25
21. Assignment and Subletting: Prohibition against Leasehold
Financing...................................................
25
22. Events of
Default.............................................. 28
23. Remedies and Damages Upon
Default.............................. 30
24.
Notices........................................................
32
25. Intentionally
Omitted.......................................... 33
26.
Surrender......................................................
33
27. Operating
Covenants............................................ 33
28. Books and
Records.............................................. 34
29. Determination of
Value......................................... 34
30. Non-Recourse as to
Landlord.................................... 36
31.
Financing......................................................
36
32. Security
Deposit............................................... 36
33. Substitution and Exchange of
Premises.......................... 38
34. Provisions Related to the End of the Lease
Term................ 38
35. Right of First Offer to
Purchase............................... 39
36. Ground
Leases.................................................. 41
37. Post-Closing
Obligations....................................... 41
38.
Miscellaneous..................................................
41
EXHIBITS
Exhibit "A-1" - Premises List
Exhibit "A-2" - Legal Description of Real Property
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Allocated Costs
Exhibit "F" - Premises Percentage Allocation of Basic
Rent/Initial Annual Basic Rent
Exhibit "G" - Covenants
Exhibit "H" - Covenant Compliance Certificate
Exhibit "I" - Required Expansions
Exhibit "J" - Brands and Trade Related Marks
Exhibit "K" - List of Guarantors
Exhibit "L" - Post-Closing Obligations
</TABLE>
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LEASE AGREEMENT, made as of this 28th day of February, 2007,
between
HELLWEG GMBH & CO. VERMOGENSVERWALTUNGS KG, a German
limited
partnership registered with the commercial register maintained
at the
local court of Dortmund under HRA 13391 ("Landlord"), and
HELLWEG DIE
PROFI-BAUMARKTE GMBH UND CO. KG, a German limited
partnership
registered with the commercial register maintained at the local
court
of Dortmund under HRA 13582 ("Tenant"), both with an address
at
Borussiastrasse 112, 44149 Dortmund, Germany.
1. Demise of Premises.
Landlord hereby demises and lets to Tenant, and Tenant hereby
takes
and leases from Landlord, for the term and upon the provisions
hereinafter
specified, the following described property (hereinafter
referred to
collectively as the "Leased Premises" and individually as listed
on Exhibit
"A-1" hereto, each of which premises shall include: (a) the real
property
described in Exhibit "A-2" hereto (including the leasehold
interest of Landlord
in the Related Premises known as Berlin-Weissensee, Roelckestr.
108 and listed
as Number 26 in Exhibit "A-2"), together with the Appurtenances
(collectively,
the "Land"); (b) the buildings, structures and other
improvements now or
hereafter constructed ("fest verbunden") on the Land
(collectively, the
"Improvements"); and (c) the fixtures, machinery, equipment and
other property
described in Exhibit "B" hereto (collectively, the
"Fixtures").
2. Certain Definitions.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways,
curbs,
gores and vault spaces adjoining any of the Leased Premises
which Landlord in
its capacity as the owner of the Leased Premises is obligated by
a Permitted
Encumbrance or by Law to maintain, repair and/or restore.
"Affected Premises" shall mean the Affected Premises as
defined
in Paragraph 18.
"Affiliate" of any Person shall mean any Person which shall
(i)
control, (ii) be under the control of, or (iii) be under common
control with
such Person (the term "control" as used herein shall be deemed
to mean ownership
of more than 50% of the outstanding voting stock of a
corporation or other
majority equity and control interest if such Person is not a
corporation) and
the power to direct or cause the direction of the management or
policies of such
Person.
"Allocated Cost" of each of the Related Premises shall mean
the
amount set forth opposite each such Related Premises on Exhibit
"E" hereto.
"Alterations" shall mean all changes, additions, improvements
or
repairs to, all alterations, reconstructions, restorations,
renewals,
replacements or removals of and all substitutions or
replacements for any of the
Improvements or Fixtures, both interior and exterior, structural
and
non-structural, and ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land,
including (a)
easements over other lands granted by any Easement Agreement and
(b) any
streets, ways, alleys, vaults, gores or strips of land adjoining
the Land.
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"Assignment" shall mean any assignment of rents and leases
from
Landlord to a Lender which (a) encumbers any of the Leased
Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may
be amended,
supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in Paragraph
6.
"Basic Rent Payment Date" shall mean Basic Rent Payment Date
as
defined in Paragraph 6.
"Breached Maintenance Covenant" shall mean Breached
Maintenance
Covenant as defined in Paragraph 27(b).
"Business Day" shall mean Monday through Friday and any other
day
that banks in Germany are open for business.
"Cash Security Deposit" shall mean Cash Security Deposit as
defined in Paragraph 32.
"Casualty" ("Beschadigung") shall mean any damage to or
destruction of or which affects the Leased Premises or Adjoining
Property.
"Commencement Date" shall mean Commencement Date as defined
in
Paragraph 5.
"Competitor" shall mean a Person directly or through an
affiliate
or subsidiary whose primary business is the operation of "do it
yourself" home
improvement stores.
"Condemnation" shall mean any taking or damaging of all or a
portion of any of the Leased Premises by any authorized
governmental or other
public authority ("Enteignung").
"Condemnation Notice" shall mean notice or actual knowledge
of
the institution of any proceeding for Condemnation.
"Control" shall mean (A) acquiring, directly or indirectly,
more
than 50% of the voting stock, partnership interests, membership
interests or
other equitable and/or beneficial interests of Tenant or (B)
obtaining, directly
or indirectly, the power (whether or not exercised) to elect a
majority of the
directors of such Person or voting control of any partnership or
limited
liability company or other entity acting as its general partner
or managing
member (including through a merger or consolidation of such
Person with or into
any other Person).
"Control Transaction" shall mean Control Transaction as
defined
in Paragraph 21(m).
"Costs" of a Person or associated with a specified
transaction
shall mean all reasonable costs and expenses incurred by such
Person or
associated with such transaction, including without limitation,
attorneys' fees
and expenses, court costs, brokerage fees, escrow fees, title
insurance
premiums, mortgage commitment fees, mortgage points, recording
fees and transfer
taxes, as the circumstances require.
"Covenant Security Deposit" shall mean a Covenant Security
Deposit as defined in Paragraph 27.
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"Covenants" shall mean, collectively, the Maintenance
Covenant
and the Operating Covenants.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"DIY" shall mean do-it-yourself.
"DIY Business" shall mean do-it-yourself business.
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other
agreements listed as
Permitted Encumbrances or as may hereafter affect any Related
Premises.
"Environmental Law" shall mean (a) whenever enacted or
promulgated, any applicable federal, state, foreign and local
law, statute,
ordinance, rule, regulation, license, permit, authorization,
approval, consent,
court order, judgment, decree, injunction, code, requirement or
agreement with
any governmental entity, (i) relating to pollution (or the
cleanup thereof), or
the protection of air, water vapor, surface water, groundwater,
drinking water
supply, land (including land surface or subsurface), plant,
aquatic and animal
life from injury caused by a Hazardous Substance or (ii)
concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse,
treatment,
generation, discharge, transportation, processing, handling,
labeling,
production, disposal or remediation of any Hazardous Substance,
Hazardous
Condition or Hazardous Activity, in each case as amended and as
now or hereafter
in effect, and (b) any common law or equitable doctrine
(including, without
limitation, injunctive relief and tort doctrines such as
negligence, nuisance,
trespass and strict liability) that may impose liability or
obligations for
injuries or damages due to or threatened as a result of the
presence of,
exposure to, or ingestion of, any Hazardous Substance. The term
Environmental
Law includes inter alia, the Federal Emission Control Act
(Bundes-Immissionschutzgesetz "BImSchG"), the Federal Soil
Protection Act
(Bundesbodenschutzgesetz), the Federal Water Protection Act
(Wasserhaushaltsgesetz), the Federal Recycling and Pollution
Prevention Act
(Kreislaufwirtschafts- und Abfallgesetz), the German Civil Code,
each as amended
and as now or hereafter in effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct or
indirect
discharge, disposal, spillage, emission, escape, pumping,
pouring, injection,
leaching, release, seepage, filtration or transporting of any
Hazardous
Substance at, upon, under, onto or within any Related Premises,
or from any
Related Premises to the environment, in violation of any
Environmental Law or in
excess of any reportable quantity established under any
Environmental Law or
which is reasonably likely to result in any liability to
Landlord, Tenant or
Lender, any Federal, state or local government or any other
Person for the costs
of any removal or remedial action or natural resources damage or
for bodily
injury or property damage, (b) any deposit, storage, dumping,
placement or use
of any Hazardous Substance at, upon, under or within any Related
Premises or
which extends to any Adjoining Property in violation of any
Environmental Law or
in excess of any reportable quantity established under any
Environmental Law or
which is reasonably likely to result in any liability to any
Federal, state or
local government or to any other Person for the costs of any
removal or remedial
action or natural resources damage or for bodily injury or
property damage - for
the avoidance of doubt, the foregoing shall not include any
deposit, storage,
dumping, placement or use of any Hazardous Substance in the
ordinary course of
Tenant's business as long as the same are performed in
accordance with
applicable Law, (c) the abandonment or discarding of any
barrels, containers or
other receptacles containing any Hazardous Substances in
violation of any
Environmental Laws, (d) any activity, occurrence or condition
which is
reasonably likely to result in any liability, cost or expense to
Landlord or
Lender or any other owner or occupier of any Related Premises,
or which could
result in a
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creation of a lien on any Related Premises under any
Environmental Law, (e) any
violation of or noncompliance with any Environmental Law.
"Event of Default" shall mean an Event of Default as defined
in
Paragraph 22(a).
"Exchange" shall mean Exchange as defined in Paragraph 33.
"Exchange Premises" shall mean Exchange Premises as defined
in
Paragraph 33.
"Expansion" shall mean Expansion as defined in Paragraph
13(a).
"Expansion Holdback" shall mean the amount (a) of Eighteen
Million Five Hundred Thousand Euros (E18,500,000.00) which shall
be retained by
Landlord in an interest bearing account in Germany with interest
to accrue for
the benefit of Tenant and which shall be administered in
accordance with
Tenant's instructions (subject, however, to investment vehicles
approved by
Landlord) and (b) which shall be disbursed to Tenant as provided
in Paragraph
13(c).
"Expansion Premises" shall mean each of the Related Premises
listed in Exhibit "I".
"Fair Market Rental Value" shall mean the fair market rental
value of the Leased Premises for the relevant Renewal Term
determined in
accordance with the procedure specified in Paragraph 29.
"Fair Market Value" shall mean the Fair Market Value of the
Leased Premises as of the Relevant Date.
"Fair Market Value Date" shall mean the date when Fair
Market
Value or Fair Market Rental Value is determined in accordance
with Paragraph 29.
"Federal Funds" shall mean Euros or other immediately
available
funds which at the time of payment are legal tender for the
payment of public
and private debts in Germany.
"Fiscal Year" shall mean March 1 to February 28 or February
29,
as the case may be.
"Fixtures" shall mean the Fixtures as defined in Paragraph
1.
"GAAP" shall mean German generally accepted accounting
principles, consistently applied.
"German Civil Code" shall mean the German statutory law for
civil
matters titled "Buergerliches Gesetzbuch ("BGB")".
"GPI" shall mean GPI as defined in Exhibit "D" hereto.
"Ground Lease" shall mean each of (i) that certain ground
lease,
dated 4.4.91, 27.5.92, by and between Mrs. Rosa Jauert, as
lessor, and Landlord,
as lessee, with respect to the Blumberg Premises, (ii) that
certain ground
lease, dated 25.7.91, 4.1.96, 19.1.96, by and between Mrs. Ada
HauBer, as
lessor, and Landlord, as lessee, with respect to the
Bonn-Beuel
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Premises, (iii) that certain ground lease, dated 27.1.92, by and
between Mr.
Paul Dwersteg, as lessor, and Landlord, as lessee, with respect
to the Steinfurt
Premises, (iv) that certain ground lease, dated 31.8.89, 6.9.93,
15.10.93, by
and between Mr. Paul Dwersteg, as lessor, and Landlord, as
lessee, with respect
to the Steinfurt Premises, (v) that certain sublease, dated
24.5.85, by and
between Johannes Beese Immobilien GmbH & Co. KG, as
sublessor, and Landlord, as
sublessee, with respect to the Dortmund-Kley Premises, (vi) that
certain lease,
dated 17.7.93, 11.11.94, by and between Johannes Beese Stiftung,
as lessor, and
Landlord, as sublessee, with respect to the Dortmund-Kley
Premises, and (vii)
that certain authorization, dated February 28, 2007, by and
between Erwin Specht
Verwaltungs-GmbH, as lessor, and Landlord, as lessee, with
respect to the
Berlin-WeiBensee Premises.
"Ground Lease Basic Rent" shall mean rent as provided and
set
forth in the applicable Ground Lease.
"Ground Lease Obligations" shall mean all of the obligations
and
liabilities of the lessee under the applicable Ground Lease.
"Ground Lessor" shall mean the applicable lessor under the
applicable Ground Lease.
"Guarantor" shall collectively mean each of those Persons
listed
in Exhibit "K" hereto and any other Person who shall hereafter
execute a
guaranty in favor of Landlord guaranteeing the obligations of
Tenant under this
Lease.
"Guaranty" shall mean the Guaranty on First Demand (Garantie
auf
erstes Anfordern) dated as of the date hereof from Guarantor to
Landlord
guaranteeing the payment and performance by Tenant of all of
Tenant's
obligations under the Lease and any other Guaranty on First
Demand (Garantie auf
erstes Anfordern) entered into after the date hereof by a
Guarantor.
"Hazardous Activity" means any activity, process, procedure
or
undertaking which directly or indirectly (a) procures, generates
or creates any
Hazardous Substance; (b) causes or results in (or threatens to
cause or result
in) the release, seepage, spill, leak, flow, discharge or
emission of any
Hazardous Substance into the environment (including the air,
ground water,
watercourses or water systems), (c) involves the containment or
storage of any
Hazardous Substance; or (d) would cause any of the Leased
Premises or any
portion thereof to become a hazardous waste treatment,
recycling, reclamation,
processing, storage or disposal facility within the meaning of
any Environmental
Law.
"Hazardous Condition" means any condition which would support
any
claim or liability under any Environmental Law, including the
presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material,
product,
petroleum, petroleum product, derivative, compound or mixture,
mineral
(including asbestos), chemical, gas, medical waste, or other
pollutant, in each
case whether naturally occurring, man-made or the by-product of
any process,
that is toxic, harmful or hazardous or acutely hazardous to the
environment or
public health or safety or (ii) any substance supporting a claim
under any
Environmental Law, whether or not defined as hazardous as such
under any
Environmental Law. Hazardous Substances include, without
limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste,
petroleum or
petroleum-derived substances or waste, radon, radioactive
materials, asbestos,
asbestos containing materials, microbial matter (including but
not limited to
mold, mildew and other fungi or bacterial matter which
reproduces through the
release of spores or the splitting of cells), urea formaldehyde
foam insulation,
lead and polychlorinated biphenyls.
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"Impositions" shall mean the Impositions as defined in
Paragraph
9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph
15.
"Initial Security Deposit" shall mean Initial Security Deposit
as
defined in Paragraph 32.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Interest Purchase Agreement" shall mean that certain
Interest
Purchase Agreement dated 28 February, 2007 among HLWG TWO (GER)
LLC, Mr.
Reinhold Semer and Semer Unternehmensverwaltung GmbH & Co.
KG.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any German Law.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease
Year,
the period commencing on the Commencement Date and ending at
midnight on the
last day of the twelfth (12th) full consecutive calendar month
following the
month in which the Commencement Date occurred, and each
succeeding twelve (12)
month period during the Term.
"Leased Premises" shall mean the Leased Premises as defined
in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all
present
and mandatory future Laws (including but not limited to
Environmental Laws and
Laws relating to accessibility to, usability by, and
discrimination against,
disabled individuals) and all covenants, restrictions and
conditions now or
hereafter of record which may be applicable to Tenant or to any
of the Leased
Premises or any Related Premises, or to the use, manner of use,
occupancy,
possession, operation, maintenance, alteration, repair or
restoration of any of
the Leased Premises or any Related Premises, even if compliance
therewith
necessitates structural changes or improvements or results in
interference with
the use or enjoyment of any of the Leased Premises or any
Related Premises or
requires Tenant to carry insurance other than as required by
this Lease.
"Lender" shall mean any Person (and its respective successors
and
assigns) which may, on or after the date hereof, make a Loan to
Landlord or be
the holder of a Note.
"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and an Assignment
and evidenced by
a Note.
"Maintenance Covenant" shall mean the covenant described in
Section B of Exhibit "G" hereto.
"Monetary Obligations" shall mean Rent and all other sums
payable
by Tenant under this Lease to Landlord, to any third party on
behalf of Landlord
or to any Indemnitee.
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"Moody's" shall mean Moody's Investor Services, Inc.
"Mortgage" shall mean any mortgage from Landlord to a Lender
which (a) encumbers any of the Leased Premises and (b) secures
Landlord's
obligation to repay a Loan, as the same may be amended,
supplemented or
modified.
"Net Award" shall mean (a) the entire award payable to
Landlord
or Lender by reason of a Condemnation whether pursuant to a
judgment or by
agreement or otherwise, or (b) the entire proceeds of any
insurance required
under clauses (i), (ii) (to the extent payable to Landlord or
Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any
expenses incurred by
Landlord in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended,
supplemented or
modified.
"Operating Covenants" shall mean the covenants and
agreements
described in Section A of Exhibit "G" hereto.
"Parent" shall mean any Person which owns the shares of
Tenant.
"Partial Condemnation" shall mean any Condemnation which does
not
result in the total Condemnation of a Related Premises.
"Permitted Control Transaction" shall mean Permitted Control
Transaction as defined in Paragraph 21(m).
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and
other
encumbrances, other than any Mortgage or Assignment, listed on
Exhibit "C"
hereto (but such listing shall not be deemed to revive any such
encumbrances
that have expired or terminated or are otherwise invalid or
unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Pledge Agreements" shall mean the Share Pledge Agreements
from
HELLWEG Verwaltungsgesellschaft mbH in favor of Landlord and the
Interest Pledge
Agreement from HELLWEG GmbH & Co. Grundbesitz KG ("KG") in
favor of Landlord
which secure the obligations of KG under the Guaranty and any
other Share Pledge
Agreement or Interest Pledge Agreement entered into after the
date hereof which
secures the obligations of a Guarantor under the Guaranty.
"Premises Percentage Allocation" shall mean the percentage
allocated to each Related Premises in Exhibit "F" to this Lease
as the same may
be adjusted in accordance with the formula specified in Exhibit
"F".
"Prime Rate" shall mean the interest rate per annum as
published,
from time to time, in The Wall Street Journal as the "Prime
Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate
of interest
charged by any "large U.S. money center commercial banks" and
Landlord makes no
representations or warranties to that effect. In the event The
Wall Street
Journal ceases publication or ceases to publish the "Prime Rate"
as described
above, the Prime Rate shall be the average per annum discount
rate (the
"Discount Rate") on ninety-one (91) day bills ("Treasury Bills")
issued from
time to time by the United States Treasury at its most recent
auction, plus
three hundred (300) basis points. If no such 91-
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day Treasury Bills are then being issued, the Discount Rate
shall be the
discount rate on Treasury Bills then being issued for the period
of time closest
to ninety-one (91) days.
"Property Specific Default" shall mean a default by Tenant
which
is not the failure to pay a Monetary Obligation and which
relates solely to one
or more specific Related Premises (by way of example, an
Environmental Violation
which affects one or more specific Related Premises or the
failure to maintain
and repair one or more specific Related Premises).
"Related Premises" shall mean any one of the Premises listed
on
Exhibit "A-1".
"Relevant Date" shall mean (a) the date on which Fair Market
Value is determined for purposes of Paragraph 23(i) or (b) the
date on which
Fair Market Rental Value is determined for the Renewal Term.
"Remaining Premises" shall mean the Related Premises which
are
not Affected Premises under Paragraph 18.
"Renewal Term" shall mean Renewal Term as defined in Paragraph
5.
"Rent" shall mean, collectively, Basic Rent, Ground Lease
Basic
Rent and Additional Rent.
"Required Expansions" shall mean Required Expansions as
defined
in Paragraph 13(c).
"S&P" shall mean Standard and Poor's Corporation.
"Security Deposit" shall mean the Initial Security Deposit,
the
Covenant Security Deposit and/or the Cash Security Deposit, as
the context may
require.
"Shareholder" shall mean any Person which shall directly or
indirectly own or control five percent (5%) or more of (i) the
convertible debt
or (ii) the outstanding Voting Stock of a corporation or other
controlling
interest if such Person is not a corporation.
"Sister Company" shall mean any Person in the DIY Business and
in
which Tenant or Tenant Shareholder directly or indirectly holds
an ownership
interest.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"Subsidiary(ies)" of a Person means a corporation,
partnership,
limited liability company, or other entity in which that Person
directly or
indirectly owns or controls the shares of stock or other equity
interests having
ordinary voting power to elect a majority of the board of
directors (or appoint
other comparable managers) of such corporation, partnership,
limited liability
company, or other entity and which, if a member of the Tenant
Group or a Sister
Company, shall enter into a guaranty of this Lease substantially
in the form of
the Guaranty.
"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior
to the
expiration or prior termination of this Lease or which survive
such expiration
or termination by their own terms.
"Tenant Group" shall mean Tenant, each Guarantor and their
respective Subsidiaries if and for so long as each such Person
shall be part of
the same group for the
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<PAGE>
purpose of reporting financial positions and results on a
consolidated basis
except that HELLWEG GmbH & Co. Grundbesitz KG and
HELLWEG
Verwaltungsgesellschaft mbH shall at all times and for all
purposes be part of
the Tenant Group even if such entities do not report financial
positions and
results on a consolidated basis with other members of the Tenant
Group, but only
as long as they are required to be a Guarantor under this Lease.
For avoidance
of doubt, Tenant Group shall not include Landlord under any
circumstances for
any reason.
"Tenant Shareholder" shall mean Mr. Reinhold Semer, his
heirs,
executors and assigns.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Date" shall mean the Termination Date as defined
in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in
Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser
as
defined in Paragraph 21 (h).
"VAT" shall mean value added taxes which are required to be
paid
on the Rent.
"Voting Stock" shall mean shares of stock of a corporation
having
ordinary voting power to elect the board of directors or other
managers of such
corporation.
"Warrant and Participation Agreement" shall mean that
certain
Warrant and Participation Agreement of even date from Tenant to
affiliates of
Landlord.
"Warranties" shall mean Warranties as defined in Paragraph
3(d).
"Work" shall mean Work as defined in Paragraph 13(b).
3. Title and Condition; Single Lease Transaction.
(a) The Leased Premises are demised and let subject to (i)
the
rights of any Persons in possession of the Leased Premises, (ii)
the existing
state of title of any of the Leased Premises, including any
Permitted
Encumbrances, (iii) any state of facts which an accurate survey
or physical
inspection of the Leased Premises might show, (iv) all Legal
Requirements,
including any existing violation of any thereof, (v) the terms
and condition of
the Ground Lease, where applicable, and (vi) the condition of
the Leased
Premises as of the commencement of the Term, without
representation or warranty
by Landlord.
(b) LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL
TAKE
THE LEASED PREMISES AS IS. TENANT ACKNOWLEDGES THAT LANDLORD
(WHETHER ACTING AS
LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND
WILL NOT MAKE, NOR
SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EXPRESS
OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
INCLUDING ANY WARRANTY
OR REPRESENTATION AS TO (i) ITS FITNESS,
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<PAGE>
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE
QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY
DEFECT, LATENT OR
PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi)
COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY,
(xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv)
OPERATION, (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE, OR (xvi) COMPLIANCE OF THE
LEASED PREMISES
WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL RISKS INCIDENT
THERETO ARE TO BE
BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES
ARE OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES
HAVE BEEN
INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF
ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER
LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY
WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES,
ARISING PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT OR
ARISING OTHERWISE.
(c) Tenant acknowledges that (i) fee simple title (Eigentum)
to
the Leased Premises will be in Landlord after Landlord will have
been registered
as new owner in the land register and that Tenant will have only
the leasehold
right of possession and use of the Leased Premises, as provided
herein, (ii) the
Improvements conform to all material Legal Requirements and all
Insurance
Requirements, (iii) all easements necessary or appropriate for
the use or
operation of the Leased Premises have been obtained, (iv) all
contractors and
subcontractors who have performed work on or supplied materials
to the Leased
Premises have been fully paid, and all materials and supplies
have been fully
paid for, (v) the Improvements have been fully completed in all
material
respects in a workmanlike manner of first class quality, and
(vi) all Fixtures
necessary or appropriate for the use or operation of the Leased
Premises have
been installed and is presently fully operative in all material
respects.
(d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, in conjunction with Landlord, the right to
enforce all
assignable warranties, guaranties, indemnities, causes of action
and similar
rights (collectively "Warranties") which Landlord may have
against any
manufacturer, seller, engineer, contractor or builder in respect
of any of the
Leased Premises. Such assignment shall remain in effect until
the expiration or
earlier termination of this Lease (unless Tenant or its
affiliate or designee
acquires any of the Leased Premises, in which instance such
assignment shall
become permanent and irrevocable with respect to such Leased
Premises),
whereupon such assignment shall cease and all of the Warranties
shall
automatically revert to Landlord. Tenant shall use commercially
reasonable
efforts to enforce the Warranties in accordance with their
respective terms.
(e) LANDLORD AND TENANT AGREE THAT IT IS THEIR MUTUAL INTENT
TO
CREATE, AND THAT THIS LEASE CONSTITUTES, A SINGLE LEASE WITH
RESPECT TO EACH AND
EVERY PARCEL OF LAND, IMPROVEMENTS INCLUDED IN ANY AND ALL OF
THE LEASED
PREMISES (WHEREVER LOCATED), THAT THIS LEASE IS NOT INTENDED AND
SHALL NOT BE
CONSTRUED TO BE SEPARATE LEASES AND THAT ALL THE TERMS AND
CONDITIONS HEREOF
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF LANDLORD AND TENANT
WITH RESPECT
THERETO.
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<PAGE>
(f) TENANT EXPRESSLY ACKNOWLEDGES AND AGREES THAT,
NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 18 OR 37(o) HEREOF
OR ANY OTHER
PROVISION IN THIS LEASE TO THE CONTRARY, IT IS THE EXPRESS
INTENT OF LANDLORD
AND TENANT TO CREATE, AND THAT THIS LEASE CONSTITUTES, A SINGLE
LEASE WITH
RESPECT TO EACH AND EVERY PARCEL OF LAND, IMPROVEMENTS AND
FIXTURES INCLUDED IN
EACH AND ALL OF THE RELATED PREMISES (WHEREVER LOCATED) AND
SHALL NOT BE (OR BE
DEEMED TO BE) DIVISIBLE OR SEVERABLE INTO SEPARATE LEASES FOR
ANY PURPOSE
WHATSOEVER, AND TENANT HEREBY WAIVES ANY RIGHT TO CLAIM OR
ASSERT A CONTRARY
POSITION IN ANY ACTION OR PROCEEDING; IT BEING FURTHER
UNDERSTOOD AND AGREED BY
TENANT THAT THE ALLOCATIONS OF ALLOCATED COST AND PERCENTAGE
ALLOCATION OF BASIC
RENT AS SET FORTH ON EXHIBIT "E" AND EXHIBIT "F" HEREOF ARE
INCLUDED TO PROVIDE
A FORMULA FOR RENT ADJUSTMENT AND LEASE TERMINATION UNDER
CERTAIN CIRCUMSTANCES
AND AS AN ACCOMMODATION TO TENANT. ANY EVENT OF DEFAULT
HEREUNDER IN CONNECTION
WITH ANY RELATED PREMISES SHALL BE DEEMED TO BE AN EVENT OF
DEFAULT WITH RESPECT
TO THE ENTIRE LEASED PREMISES (WHEREVER LOCATED). THE FOREGOING
AGREEMENTS AND
WAIVERS BY TENANT IN THIS PARAGRAPH 3(f) ARE MADE AS A MATERIAL
INDUCEMENT TO
LANDLORD TO ENTER INTO THE TRANSACTION CONTEMPLATED BY THIS
LEASE AND THAT, BUT
FOR THE FOREGOING AGREEMENTS AND WAIVERS BY TENANT, LANDLORD
WOULD NOT
CONSUMMATE THIS LEASE TRANSACTION.
(g) Landlord and Tenant acknowledge that a lease agreement
with
McFit exists at the Magdeburg Mittagstr Premises and a lease
agreement with
Total for the operation of a petrol station exists at the
Berlin-Biesdorf
Premises. Tenant will use its best efforts to transfer these
existing lease
agreements into sub-lease agreements between Tenant and such
third parties. In
case either one or both of the third parties object to such
transfer, the
Landlord and Tenant undertake to deal with each other as if such
transfer to
sub-lease agreements would have been completed successfully,
i.e., Tenant shall
perform all obligations of landlord under these lease agreements
and shall
indemnify Landlord from and against all claims resulting from
such lease
agreements and Landlord shall assign its claims for payment of
the rent to
Tenant and instruct the third parties to pay the rent directly
to Tenant, as
long as no Event of Default exists.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for
retailing
and uses related thereto (such as offices, petrol stations). For
any other
purpose Tenant shall require the prior written consent of
Landlord which is not
to be unreasonably withheld. Tenant shall not use or occupy or
permit any of the
Leased Premises to be used or occupied, nor do or permit
anything to be done in
or on any of the Leased Premises, in a manner which would or
might (i) violate
any Law, Legal Requirement or Permitted Encumbrance, (ii) make
void or cause any
insurer to cancel any insurance required by this Lease, or make
it difficult or
impossible to obtain any such insurance at commercially
reasonable rates, (iii)
make void, cancel or cause to be cancelled or release any of the
Warranties,
(iv) cause structural injury to any of the Improvements, (v)
constitute a public
or private nuisance or waste or (vi) if applicable, conflict
with or violate the
terms and conditions of the Ground Lease.
(b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall quietly
hold, occupy and
enjoy the Leased Premises throughout the Term, without any
hindrance, ejection
or molestation by Landlord with respect to matters that arise
after the date
hereof, provided that Landlord and Ground Lessor or its
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<PAGE>
respective agents may enter upon and examine any of the Leased
Premises at such
reasonable times during normal business hours as Landlord may
select and upon at
least 48 hours prior notice to Tenant (except in the case of any
emergency, in
which event no notice shall be required) for the purpose of
inspecting the
Leased Premises, verifying compliance or non-compliance by
Tenant with its
obligations hereunder or under the Ground Lease, as applicable,
and the
existence or non-existence of an Event of Default or event which
with the
passage of time and/or notice would constitute an Event of
Default, showing the
Leased Premises to prospective Lenders and purchasers, making
any repairs and
taking such other action with respect to the Leased Premises as
is permitted by
any provision hereof or the Ground Lease.
(c) In no event shall any portion of the Leased Premises be
used
or occupied or permitted to be used or occupied for any of the
following
purposes: (i) any nightclub, bar or discotheque; (ii) any adult
bookstore or
video shop, nude or semi-nude or "adult" entertainment
establishment or any
lewd, obscene or pornographic purpose; (iii) any store in which
a material
portion of the inventory is not available for sale or rental to
children under
18 years of age because such inventory explicitly deals with,
relates to, or
depicts human sexuality, or in which any of the inventory
constitutes drug
paraphernalia, (iv) any dumping, disposing, incineration or
reduction of garbage
(exclusive of appropriately screened dumpsters and/or recycling
bins located in
the rear of any building and garbage disposal in the ordinary
course of
business); (v) any mortuary; (vi) any bankruptcy sale (unless
pursuant to a
court order) or auction house operation; (vii) any central
laundry or dry
cleaning plant or laundromat; (viii) any business whose primary
activity is
automobile, truck, trailer or RV repairs; (ix) any "flea
market", secondhand,
or, except in the ordinary course of business, surplus or other
"off-price" or
deep discount sales inside of the Improvements; (x) any gambling
or off-track
betting operation except for state licensed operations, or (xi)
any massage
parlor.
(d) Landlord agrees that its business operations shall be
limited
to the ownership, leasing, development, financing of the Leased
Premises and any
matters related thereto.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and
hold
the Leased Premises for an initial term (such term, as extended
or renewed in
accordance with the provisions hereof, being called the "Term")
commencing on
March 1, 2007 (the "Commencement Date") and ending on February
28, 2030 (the
"Expiration Date").
(b) Provided that if, on or prior to the Expiration Date
this
Lease shall not have been terminated pursuant to any provision
hereof, then on
the Expiration Date the Term shall be deemed to have been
automatically extended
for an additional period of seven (7) years (the "Renewal
Term"), unless Tenant
shall notify Landlord in writing at least twenty-four (24)
months prior to the
Expiration Date that Tenant is terminating this Lease as of the
Expiration Date.
Any extension of the Term shall be subject to all of the
provisions of this
Lease, as the same may be amended, supplemented or modified
(except that at the
end of the Renewal Term, Tenant shall not have the right to any
additional
Renewal Terms).
(c) If Tenant terminates this Lease pursuant to Paragraph
5(b)
prior to the Expiration Date, or if an Event of Default occurs,
then Landlord
shall have the right during the remainder of the Term then in
effect and, in any
event, Landlord shall have the right during the last year of the
Term, to (i)
advertise the availability of any of the Leased Premises for
sale or reletting
and to erect upon any of the Leased Premises signs indicating
such availability
(if customary in Germany in such circumstances) and (ii) show
any of the Leased
Premises to prospective purchasers or tenants or their agents at
such reasonable
times as Landlord may select with twenty-four (24) hours prior
notice.
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<PAGE>
(d) An extension of this Lease according to Section 545
German
Civil Code due to continued usage of the Leased Premises by
Tenant is
specifically excluded.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for
the
Leased Premises during the Term, the amounts determined in
accordance with
Exhibit "D" hereto ("Basic Rent"). Basic Rent shall be payable
in advance for
the next calendar month and shall be paid no later than the
third (3rd) Business
Day of each calendar month thereafter during the Term and shall
be payable as
set forth in said Exhibit "D". The first payment for the period
from and
including March 31, 2007 is payable on the Commencement Date.
The date that each
payment of Basic Rent is due is hereinafter referred to as a
"Basic Rent Payment
Date". Each such payment of Basic Rent shall include VAT on such
payment and
shall be made in Federal Funds on each Basic Rent Payment Date
to Landlord which
may instruct Tenant to wire Rent to a country other than the
country in which
the Leased Premises are located and/or to such one or more other
Persons,
pursuant to wire transfer instructions delivered to Tenant from
time to time
which may instruct Tenant to wire Rent to a country other than
the country in
which the Leased Premises are located at such addresses and in
such proportions
as Landlord may direct by thirty (30) days' prior written notice
to Tenant (in
which event Tenant shall give Landlord notice of each such
payment concurrent
with the making thereof).
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) all costs and expenses of Landlord and any other Persons
specifically referenced herein which are incurred in connection
or associated
with (A) the use, non-use, occupancy, possession, operation,
condition, design,
construction, maintenance, alteration, repair or restoration of
any of the
Leased Premises, (B) the prosecution, defense or settlement of
any litigation
involving or arising from any of the Leased Premises or this
Lease, (C) Costs of
Landlord's counsel and reasonable internal Costs of Landlord
incurred in
connection with any act undertaken by Landlord (or its counsel
if counsel is
customarily required in Germany for such matter) at the written
request of
Tenant, or any act of Landlord performed on behalf of Tenant
following an Event
of Default, including compliance with applicable Law, (D) all
costs and fees
associated with the wire transfers of Rent payments, (E) Costs
of Landlord
incurred in connection with the collection, payment and refunds
of VAT, if any,
(F) all Ground Lease Basic Rent, additional rent and other
charges payable by or
on behalf of the lessee under the terms of the Ground Lease, and
(G) any other
items specifically required to be paid by Tenant under this
Lease;
(ii) after the date all or any portion of any installment of
Basic Rent is due and not paid by the applicable Basic Rent
Payment Date and
after the date all or any portion of any installment of Ground
Lease Basic Rent
is due and not paid, an amount (the "Late Charge") equal to
three percent ( 3%)
of the amount of such unpaid installment or portion thereof to
reimburse
Landlord for its cost and inconvenience incurred as a result of
Tenant's
delinquency provided, however, that with respect to the first
late payment of
all or any portion of any installment of Basic Rent in any Lease
Year, the Late
Charge shall not be due and payable unless the Basic Rent has
not been paid
within five (5) business days' following the due date
thereof;
(iii) interest at the rate (the "Default Rate") of five
percent (5%) over the Prime Rate per annum on the following sums
until paid in
full: (A) all overdue installments of Basic Rent or Ground Lease
Basic Rent from
the respective due dates thereof, (B) all overdue amounts of
Additional Rent
relating to obligations which Landlord shall have paid on behalf
of Tenant, from
the date of payment thereof by Landlord, and (C) all other
overdue amounts of
Additional Rent, from the date when any such amount becomes
overdue.
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<PAGE>
(b) Tenant shall pay and discharge (i) any Additional Rent
referred to in Paragraph 7(a)(i) when the same shall become due,
provided that
amounts which are billed to Landlord or any third party, but not
to Tenant,
shall be paid within ten (10) Business Days after Landlord's
demand for payment
thereof, and (ii) any other Additional Rent, within ten (10)
Business Days after
Landlord's demand for payment thereof.
(c) To the extent that any Additional Rent is subject to VAT
under any applicable VAT provision, Tenant shall pay such VAT
imposed on the
Additional Rent amount at the applicable rate.
(d) In no event shall amounts payable under Paragraph
7(a)(ii)
and (iii) or elsewhere in this Lease exceed the maximum amount
permitted by
applicable Law.
8. Net Lease: Non-Terminability.
(a) Except as otherwise specifically provided in this Lease,
this
is a net lease and all Monetary Obligations shall be paid
without notice or
demand and without set-off except for amounts that are not
disputed by Landlord
or that have been confirmed in a non-appealable judgment,
counterclaim,
recoupment, abatement, suspension, deferment, diminution,
deduction, reduction
or defense (collectively, a "Set-Off").
(b) The obligations of Tenant hereunder shall be separate
and
independent covenants and agreements, all Monetary Obligations
shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay
amounts equal
thereto), and the obligations of Tenant hereunder shall continue
unaffected
unless the requirement to pay or perform the same shall have
been terminated
pursuant to an express provision of this Lease.
(c) Except as otherwise expressly provided herein, Tenant
shall
have no right and hereby waives all rights which it may have
under any Law
except for the rights under Section 314, 543 subsection 1 of the
German Civil
Code (i) to quit, terminate or surrender this Lease or any of
the Leased
Premises, or (ii) to any Set-Off of any Monetary Obligations
unless such amounts
claimed by the Tenant against the Landlord are not disputed by
Landlord or have
been confirmed in a non-appealable judgment.
9. Payment of Impositions, VAT and Expenses.
(a) Tenant shall, before interest or penalties are due
thereon,
pay and discharge all real estate taxes and assessments
(including real and
personal property, franchise, sales and rent taxes and all taxes
or assessments,
if any, for which the lessee is responsible under the Ground
Lease)
("Impositions") and VAT, if any that is due as a result of this
Lease or the
Interest and Share Purchase Agreement (the latter relating to
adjustments on the
input VAT (Vorsteuerabzug) for the purchase price (or any claim
by any taxing
authority with respect to any reclamation of any VAT previously
refunded, as
well as any interest or penalties imposed through VAT
adjustments made by taxing
authorities unless such reclamation, interest or penalties are
as a result of
Landlord engaging any business other than the ownership, leasing
and/or
development of the Leased Premises), all charges for any
easement or agreement
maintained for the benefit of any of the Leased Premises, all
assessments and
levies, all permit, inspection and license fees, all rents and
charges for
water, sewer, utility and communication services relating to any
of the Leased
Premises, including all costs and expenses listed in the Cost
Ordinance
("Betriebskostenverordnung") as well as costs and expenses for
running, cleaning
and maintenance of windows, window panes, fronts and exterior of
the building,
garage doors, technical admission systems, e.g. code card
systems or other
electronic systems, ventilation and air conditioning equipment,
elevators and
escalators, any interior or exterior pipes especially gas or
water pipes, leads,
wires, power circuits, ducts, taps, telephone and
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communication systems, heating systems, security systems, fire
detectors,
emergency power units, generators, air and water cleaning
filters, snow and ice
removal, street sweeping and street cleaning, roof maintenance
and repair,
costs, for administration and administrative personal, security
surveillance
measures, lighting of the building, labeling of the building by
exterior signs
and all other public charges whether of a like or different
nature, even if
unforeseen or extraordinary. If any Imposition may be paid in
installments
without interest or penalty, Tenant shall have the option to pay
such Imposition
in installments; in such event, Tenant shall be liable only for
those
installments which accrue or become due and payable during the
Term. Tenant
shall prepare and cause an agent of Tenant to file all tax
reports required by
governmental authorities which relate to the Impositions. Tenant
shall deliver
to Landlord (1) copies of all settlements and notices pertaining
to the
Impositions which may be issued by any governmental authority
within ten (10)
days after Tenant's receipt thereof, (2) receipts for payment of
all taxes
required to be paid by Tenant hereunder within thirty (30) days
after the due
date thereof and (3) receipts for payment of all other
Impositions within ten
(10) days after Landlord's request therefor.
(b) Tenant shall make all VAT payments arising from Tenant's
obligations under the Lease as and when due. Tenant will make
such VAT payments
directly to the applicable taxing authority if permitted by law
as and when due
on behalf of Landlord (but, if making such payments directly to
the applicable
taxing authority is not permitted by law, Tenant will make such
VAT payments to
an account designated by Landlord) and in connection therewith,
the preparation
and review or filing of any VAT returns shall be performed by
Tenant. If at any
time Landlord is not reasonably satisfied with the Tenant's
performance with
respect to the preparation and review and filing of any VAT
returns, Landlord
shall have the right to arrange for another Person to perform
such work at
Tenant's expense.
10. Compliance with Laws and Easement Agreements;
Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform to,
and
cause the Leased Premises and any other Person occupying any
part of the Leased
Premises to comply with and conform to, all Insurance
Requirements and Legal
Requirements (including all applicable Environmental Laws) and
the Ground Lease.
Tenant shall not at any time (i) cause, permit or suffer to
occur any
Environmental Violation or (ii) permit any sublessee, assignee
or other Person
occupying the Leased Premises under or through Tenant to cause,
permit or suffer
to occur any Environmental Violation and, at the request of
Landlord, Tenant
shall promptly remediate or undertake any other appropriate
response action to
correct any existing Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all times
promptly and faithfully abide by, discharge and perform all of
the covenants,
conditions and agreements contained in any Easement Agreement on
the part of
Landlord or the occupier to be kept and performed
thereunder.
(c) Upon prior written notice from Landlord, Tenant shall
permit
such persons as Landlord may designate ("Site Reviewers") to
visit the Leased
Premises during normal business hours and in a manner which does
not
unreasonably interfere with Tenant's operations and perform, as
agents of
Tenant, and to conduct environmental site investigations and
assessments ("Site
Assessments") on the Leased Premises in any of the following
circumstances: (i)
in connection with any sale, financing or refinancing of the
Leased Premises,
(ii) within the six month period prior to the expiration of the
Term, (iii) if
required by Lender or the terms of any credit facility to which
Landlord is
bound, (iv) if an Event of Default exists, or (v) at any other
time that, in the
opinion of Landlord or Lender, a reasonable basis exists to
believe that an
Environmental Violation or any condition that could reasonably
be expected to
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<PAGE>
result in any Environmental Violation exists. Such Site
Assessments may include
both above and below the ground testing for Environmental
Violations and such
other tests as may be necessary, in the opinion of the Site
Reviewers, to
conduct the Site Assessments. Tenant shall supply to the Site
Reviewers such
historical and operational information regarding the Leased
Premises as may be
reasonably requested by the Site Reviewers to facilitate the
Site Assessments,
and, upon reasonable notice to Tenant, shall make available for
meetings with
the Site Reviewers appropriate personnel of Tenant, if any,
having knowledge of
such matters. The costs of performing and reporting Site
Assessments under
clauses (iv) and (v) shall be paid by Tenant (unless, under
clause (v), no
Environmental Violation is found to exist); otherwise such costs
shall be paid
by Landlord.
(d) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation
which occurs or
is found to exist, Landlord shall have the right (but no
obligation) to take any
and all actions as Landlord shall deem necessary or advisable in
order to cure
such Environmental Violation.
(e) Tenant shall notify Landlord immediately after becoming
aware
of any Environmental Violation (or alleged Environmental
Violation) or
noncompliance with any of the covenants contained in this
Paragraph 10 and shall
forward to Landlord immediately upon receipt thereof copies of
all orders,
reports, notices, permits, applications or other communications
relating to any
such violation or noncompliance.
(f) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall
contain covenants
of the other party thereto which are identical to the covenants
contained in
Paragraph 10(a).
11. Intentionally Deleted.
12. Maintenance and Repair.
(a) Tenant shall at all times during the Term of this Lease
maintain ("instandhalten") each Related Premises and the
Adjoining Property in
as good repair and appearance and fit to be used for their
intended use in
accordance with the better of the practices generally recognized
as then
acceptable by other companies in its industry or observed by
Tenant with respect
to the other real properties owned or operated by it, and, in
the case of the
Fixtures, in as good mechanical condition as it was on the later
of the date
hereof or the date of its installation, except for ordinary wear
and tear.
Tenant shall take every other action necessary or appropriate
for the
preservation and safety of each Related Premises. Tenant shall
promptly make all
Alterations of every kind and nature, which may be required to
comply with the
foregoing requirements of this Paragraph 12(a). Landlord shall
not be required
to make any Alteration, whether foreseen or unforeseen, or to
maintain any
Related Premises or Adjoining Property in any way, and Tenant
hereby expressly
waives any right which may be provided for in any Law now or
hereafter in effect
to make Alterations at the expense of Landlord or to require
Landlord to make
Alterations. Any Alteration made by Tenant pursuant to this
Paragraph 12 shall
be made in conformity with the provisions of Paragraph 13.
(b) If any Improvements, now or hereafter constructed by the
Tenant, violate any rights of a third party or any mandatory
statutory
obligations, Tenant shall, promptly after receiving notice or
otherwise
acquiring knowledge thereof, either (A) obtain from all
necessary parties
waivers or settlements of all claims, liabilities and damages
resulting from
each such encroachment, violation, hindrance, obstruction or
impairment, whether
the same shall affect Landlord, Tenant or both, or (B) take such
action as shall
be necessary to remove all such encroachments, hindrances or
obstructions and to
end all such violations or impairments, including, if necessary,
making
Alterations.
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13. Alterations, Improvements and Expansions.
(a) Tenant shall have the right, without having obtained the
prior written consent of Landlord or Lender and provided that no
Event of
Default then exists, (i) to make non-structural ("nicht
statische") Alterations
or a series of related non-structural Alterations, and (ii) to
install its own
equipment and fixtures in the Improvements or accessions to its
own equipment
and fixtures and (iii) to construct lateral expansions (any such
expansion, an
"Expansion") to the Improvements provided that , so long as at
the time of
construction or installation of any such equipment or
Alterations or the
construction of any Expansion no Event of Default exists and the
value and
utility of the Leased Premises is not diminished thereby and,
with respect to
any Expansion, the structure of the applicable Improvements is
not adversely
affected. If Tenant desires to make structural ("statische")
Alterations to any
Related Premises or to construct any Expansion which would
impair the structure
of the Improvements, the prior written approval of Landlord
shall be required.
Tenant shall not construct upon the Land any additional
buildings without having
first obtained the prior written consent of Landlord. Landlord
shall have the
right to require Tenant to remove any Alterations except for
those Alterations
required by Law or for which Landlord has agreed in writing that
removal will
not be required or for which consent was not necessary or was
provided by
Landlord.
(b) If Tenant makes any Alterations or constructs any
Expansion
pursuant to this Paragraph 13 or makes any Alterations as
required by Paragraph
12 or 17 (such Alterations and Expansions being hereinafter
collectively
referred to as "Work"), then (i) the market value of the Leased
Premises shall
not be lessened by any such Work or its usefulness impaired,
(ii) all such Work
shall be performed by Tenant in a good and workmanlike manner,
(iii) all such
Work shall be expeditiously completed in compliance with the
Ground Lease and
all Legal Requirements, (iv) all such Work shall comply with the
requirements of
all insurance policies required to be maintained by Tenant
hereunder, (v) if any
such Work involves the replacement of Fixtures or parts thereto,
all replacement
Fixtures or parts shall have a value and useful life equal or
greater than the
value and useful life of the Fixtures being replaced immediately
prior to the
occurrence of the event which required its replacement (assuming
such replaced
Fixtures was then in the condition required by this Lease), (vi)
Tenant shall
procure and pay for all permits and licenses required in
connection with any
such Work, (vii) all such Work (except for Work involving
Tenant's equipment and
fixtures) shall be the property of Landlord and shall be subject
to this Lease,
and (viii) Tenant shall comply, to the extent requested by
Landlord or required
by this Lease, with the provisions of Paragraph 12(a) and, if
the Alterations
are structural or are an Expansion which is reasonably likely to
affect the
integrity of any structure, Paragraph 19(a), whether or not such
Work involves
restoration of any Related Premises.
(c) No later than the dates set forth in Exhibit "I" next to
each
Expansion Premises, Tenant shall complete the expansions
described in Exhibit
"I" hereto (the "Required Expansions") which Tenant shall
construct in
accordance with the requirements of this Paragraph 13. Landlord
hereby consents
to the construction of the Required Expansions. Upon completion
of each
Expansion Premises that is the subject of the Required
Expansions, which
completion shall be evidenced by (i) the issuance of a written
confirmation of
the architect supervising the construction that the Required
Expansions are
completed and the operations have commenced (Fertigstellung und
Inbetriebnahme),
and (ii) either (A) certificates of occupancy issued by the
applicable local
governmental authority, or (B)to the extent certificates of
occupancy have not
been issued, negative confirmations confirming that certificates
of occupancy
are not required with respect to the applicable Required
Expansion, or (C) a
statement from the local municipal authority stating that a
building permit
exists, there are no material defects with respect to the
applicable Required
Expansion, and the applicable local municipality has no
objection to the use of
the relevant Expansion Premises, Landlord shall, within ten
(10)
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<PAGE>
days following the delivery of such evidence, release to Tenant
the applicable
portion of the Expansion Holdback for the applicable completed
Required
Expansion.
(d) In case Tenant does not complete one or more of the
Required
Expansions within thirty six (36) months of the applicable dates
set forth in
Exhibit "I" due to any cause or causes which Tenant is not,
despite its best
efforts, able to prevent or overcome (which causes exclude the
unavailability of
money, unavailability of sources of financing, a shortage of
labor or materials,
or changes in market conditions), the total amount of Basic Rent
shall remain
unaffected except as expressly provided in (ii) in the
succeeding sentence. In
such event, Landlord shall have the right, at its sole and
exclusive option, to
either (i) pay the respective portion of the Expansion Holdback,
including
interest accrued thereon, to Tenant or (ii) (A) retain on
Landlord's behalf the
respective portion of the Expansion Holdback, excluding interest
accrued
thereon, without any further obligations hereunder to remit such
portion of the
Expansion Holdback to Tenant, (B) adjust the allocation of
Allocated Cost set
forth on Exhibit "E" attached hereto by subtracting the
respective portion of
the Expansion Holdback retained by Landlord from the Allocated
Cost for the
applicable Related Premises, and (C) adjust the allocation of
Percentage
Allocation of Basic Rent set forth on Exhibit "F" attached
hereto by subtracting
the product of 7.84% multiplied by the respective portion of the
Expansion
Holdback retained by Landlord from the Percentage Allocation of
Basic Rent for
the applicable Related Premises. Any calculations in connection
with the
foregoing shall be determined by Landlord and, absent manifest
error, shall be
conclusive upon both Landlord and Tenant.
14. Permitted Contests. Notwithstanding any other provision of
this
Lease, Tenant shall be permitted to contest any Imposition in
accordance with
applicable German law.
15. Indemnification.
(a) Tenant shall indemnify, defend, save and hold harmless
Landlord and all other Persons described in Paragraph 30 (each
an "Indemnitee")
from and against any and all liabilities and damages from
claims, actions,
suits, demands or judgments (unless arising from the gross
negligence or willful
misconduct of the Indemnitee seeking indemnification) brought in
the Courts of
Germany or the European Union, which arise from (i) any matter
pertaining to the
acquisition (or the negotiations leading thereto), ownership,
use, non-use,
occupancy, design, or construction of any of the Leased Premises
or Adjoining
Property, (ii) any casualty in any manner arising from any of
the Leased
Premises or Adjoining Property, whether or not Indemnitee has or
should have
knowledge or notice of any defect or condition causing or
contributing to said
casualty, (iii) any violation by Tenant of any provision of this
Lease or the
Ground Lease, any Legal Requirement or any Permitted Encumbrance
or (iv) any
alleged, threatened or actual Environmental Violation.
(b) The obligations of Tenant under this Paragraph 15 shall
survive any termination or expiration of this Lease.
16. Insurance.
(a) Tenant shall obtain, pay for and maintain (or cause to
be
obtained or paid for and maintained with respect to the
insurance required under
clause (a)(iv) below the following insurance on or in connection
with the Leased
Premises:
(i) Insurance against fire, lightning, explosion, falling
aircraft, storm/hail, power surge, damage to property following
burglary or
attempt thereof, flood (due to heavy rain falls, snow or from
running or still
water, such as rivers, lakes creeks), named natural hazards such
as subsidence,
snow load, extended perils, such as strike, malicious damage,
riots, vehicle
impact, smoke and sonic blast, debris removal, demolition,
clearance and fire
fighting
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<PAGE>
costs. Such policies and endorsements shall contain deductibles
of not more than
Twenty Thousand Euros (E20.000,00) per occurrence.
(ii) Commercial General Liability Insurance
(Betriebshaftpflicht) against claims for personal and bodily
injury, death or
property damage occurring on, in or as a result of the use of
the Leased
Premises, in an amount not less than Two Million Five Hundred
Thousand Euros
(E2.500.000,00) for injury or damage to persons, private risk
and the
environment and Fifty Thousand Euros (E50.000,00) for personal
property.
(iii) Business Income/Extra Expense Insurance
(Betriebsunterbrechungsversicherung) at limits sufficient to
cover 100% of the
period of indemnity not less than twelve (12) months from time
of loss,
including extended period of indemnity which provides that after
the physical
loss to the Improvements and Fixtures has been repaired, the
continued loss of
income will be insured until such income either returns to the
same level it was
at prior to the loss, or the expiration of six (6) months from
the date that the
applicable Related Premises are repaired or replaced and
operations are resumed,
whichever first occurs.
(iv) During any period in which substantial Alterations at
the Leased Premises are being undertaken or an Expansion is
being constructed,
builder's risk insurance (Bauwesenversicherung) covering the
total completed
value, including all hard and soft costs (which shall include
business
interruption coverage) with respect to the Improvements being
constructed,
altered or repaired (on a completed value, non-reporting basis),
replacement
cost of work performed and equipment, supplies and materials
furnished in
connection with such construction, alteration or repair of
Improvements or
Fixtures, together with such other endorsements as Landlord may
reasonably
require, and general liability, worker's compensation and
automobile liability
insurance with respect to the Improvements being constructed,
altered or
repaired.
(v) Such other insurance (or other or different terms with
respect to any insurance required pursuant to this Paragraph 16,
including
without limitation amounts of coverage, deductibles, form of
mortgagee clause,
insurer rating) on or in connection with any of the Leased
Premises as Landlord
or Lender may reasonably require and is normal and customary in
Germany for like
properties and enterprises of comparable size.
(b) The insurance required by Paragraph 16(a) shall be written
by
companies having an international reputation and of size and
creditworthiness
reasonably acceptable to Landlord and which are authorized to
write insurance
policies according to German law. The insurance policies shall
be for such terms
customarily provided to similar properties by German insurance
companies. If
said insurance or any part thereof shall expire, be withdrawn,
become void,
voidable, unreliable or unsafe for any reason, including a
breach of any
condition thereof by Tenant or the failure or impairment of the
capital of any
insurer, or if for any other reason whatsoever said insurance
shall become
reasonably unsatisfactory to Landlord, Tenant shall immediately
obtain new or
additional insurance reasonably satisfactory to Landlord.
(c) Each insurance policy referred to in Paragraph 16(a)
shall
stipulate Lender as beneficiary of the insurance
("Begunstigte/mitversicherte
Person") and as first loss payee for the insurance required
under clause (i) and
(iii) of Paragraph 16(a) and shall name Landlord as an
additional insured and as
second loss payee for the insurance required under clauses (i)
and (iii) of
Paragraph 16(a). Each policy required by any provision of
Paragraph 16(a) shall
provide that it may not be cancelled, substantially modified or
allowed to lapse
on any renewal date except after at least thirty (30) days'
prior written notice
to Landlord and Lender.
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<PAGE>
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace
each policy and
deliver to Landlord evidence of the payment of the full premium
therefor or
installment then due at least ten (10) days prior to the
expiration date of such
policy, and shall promptly deliver to Landlord all certified
copies of
certificates of insurance evidencing such coverages or, if
required by Lender,
certified copies of policies. All certificates of insurance
(including liability
coverage) provided to Landlord and Lender shall be in a form
acceptable to
Landlord and Lender.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding
any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may
be carried under a "blanket" policy or policies covering other
properties of
Tenant or under an "umbrella" policy or policies covering other
liabilities of
Tenant, as applicable; provided that such blanket or umbrella
policy or policies
otherwise comply with the provisions of this Paragraph 16, and
upon request,
Tenant shall provide to Landlord evidence necessary in order to
enable Landlord
to confirm that the required insurance is in full force and
effect.
(f) Tenant shall not carry separate insurance concurrent in
form
or contributing in the event of a Casualty with that required in
this Paragraph
16 unless (i) Landlord and Lender are included therein as
required under clause
(c) above, with loss payable as provided herein, and (ii) such
separate
insurance complies with the other provisions of this Paragraph
16. Tenant shall
immediately notify Landlord of such separate insurance and shall
deliver to
Landlord certified copies of any such policy.
(g) Each policy shall contain an effective waiver by the
carrier
against all claims for payment of insurance premiums against
Landlord and shall
contain a full waiver of subrogation against the Landlord.
(h) In the event that Landlord is required by Law to obtain
and
maintain all or portion of the insurance described in Paragraph
16(a), Tenant
shall pay the annual premiums for such policies within fifteen
(15) days
following receipt of an invoice from Landlord.
(i) The proceeds of any insurance required under Paragraph
16(a)
shall be payable as follows:
(i) proceeds payable under clauses (ii) of Paragraph 16(a)
and proceeds attributable to the general liability coverage of
Builder's Risk
insurance under clause (iv) of Paragraph 16(a) shall be payable
to the Person
entitled to receive such proceeds with Landlord and Lender being
named as
additional insureds on such policy; and
(ii) proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder's Risk
insurance (other
than its general liability coverage provisions) under clause
(iv) of Paragraph
16(a) shall be payable to Landlord or Lender (provided that
Lender acknowledges
in writing that it will disburse the Net Award pursuant to the
terms of this
Lease) and applied as set forth in Paragraph 17. Tenant shall
apply the Net
Award to restoration of the Leased Premises in accordance with
the applicable
provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty in excess of Two Hundred Thousand Euros
(E200.000,00) to any of the Related Premises occurs Tenant shall
give Landlord
immediate notice thereof. So long as no Event of Default exists
Tenant is hereby
authorized to adjust, collect and compromise all claims under
any of the
insurance policies required by
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<PAGE>
Paragraph 16(a) (except public liability insurance claims
payable to a Person
other than Tenant, Landlord or Lender) and to execute and
deliver on behalf of
Landlord all necessary proofs of loss, receipts, vouchers and
releases required
by the insurers and Landlord shall have the right to join with
Tenant therein.
Any final adjustment, settlement or compromise of any such claim
shall be
subject to the prior written approval of Landlord, not to be
unreasonably
withheld. If an Event of Default exists, Tenant shall not be
entitled to adjust,
collect or compromise any such claim or to participate with
Landlord in any
adjustment, collection and compromise of the Net Award payable
in connection
with a Casualty. Tenant agrees to sign or provide, as required
by the applicable
insurance company, upon the request of Landlord, all such proofs
of loss,
receipts, vouchers and releases. Each insurer is hereby
authorized and directed
to make payment under said policies, including return of
unearned premiums,
directly to Landlord or, if required by the Mortgage, to Lender
instead of to
Landlord and Tenant jointly. The rights of Landlord under this
Paragraph 17(a)
shall be extended to Lender if and to the extent that any
Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation
Notice,
shall notify Landlord thereof. So long as no Event of Default
exists and the
Condemnation is a Partial Condemnation, Tenant is authorized to
collect, settle
and compromise the amount of any Net Award and Landlord shall
have the right to
join with Tenant therein. If an Event of Default exists,
Landlord shall be
authorized to collect, settle and compromise the amount of any
Net Award and
Tenant shall not be entitled to participate with Landlord in any
Condemnation
proceeding or negotiations under threat thereof or to contest
the Condemnation
or the amount of the Net Award therefor. No agreement with any
condemnor in
settlement or under threat of any Condemnation shall be made by
Tenant without
the written consent of Landlord. Subject to the provisions of
this Paragraph
17(b), Tenant hereby irrevocably assigns to Landlord any award
or payment to
which Tenant is or may be entitled by reason of any
Condemnation, whether the
same shall be paid or payable for Tenant's leasehold interest
hereunder or
otherwise; but nothing in this Lease shall impair Tenant's right
to any award or
payment on account of Tenant's trade fixtures, equipment or
other tangible
property which is not part of the Fixtures, moving expenses or
loss of business,
if available, to the extent that and so long as (i) Tenant shall
have the right
to make, and does make, a separate claim therefor against the
condemnor and (ii)
such claim does not in any way reduce either the amount of the
award otherwise
payable to Landlord for the Condemnation of Landlord's fee
interest in the
Leased Premises or the amount of the award (if any) otherwise
payable for the
Condemnation of Tenant's leasehold interest hereunder. The
rights of Landlord
under this Paragraph 17(b) shall also be extended to Lender if
and to the extent
that any Mortgage so provides.
(c) If any Casualty (whether or not insured against) or
Partial
Condemnation shall occur to any Related Premises, this Lease
shall continue,
notwithstanding such event, there shall be no abatement or
reduction of any
Monetary Obligations and the Net Award shall be made available
to Tenant for
restoration. Promptly after such Casualty or Partial
Condemnation, Tenant, as
required in Paragraph 12(a), shall commence and diligently
continue to restore
the applicable Related Premises as nearly as possible to their
value, condition
and character immediately prior to such event (assuming such
Related Premises to
have been in the condition required by this Lease). So long as
no Event of
Default exists, any Net Award up to and including Tw
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