Exhibit 10.26
LEASE TERMINATION
AGREEMENT
This Lease
Termination Agreement (the "Agreement") is made by and between
Pizzagalli Properties, LLC, (the "Landlord"), Cloverleaf
Properties, Inc., Blodgett Holdings, Inc. (“Blodgett”),
and The Middleby Corporation ("Middleby") as of the date on which
Middleby, Blodgett, and the Landlord have executed this Agreement
(the “Effective Date”).
Background
A. The Landlord and Cloverleaf Properties, Inc.
(the “Tenant”), Blodgett and Middleby’s
subsidiary or affiliate, have previously entered into a certain
Lease by and between Pizzagalli Property Company (predecessor in
interest to Landlord) and Cloverleaf Properties, Inc., dated
December 11, 1989, as amended by a First Amendment, also dated
December 11, 1989, and by a Second Amendment, dated April 16, 1993
(as amended, the “Lease”).
B.
Pursuant to the Lease, Cloverleaf
Properties, Inc., leased certain land and buildings premises
located at 116 Blodgett Road and 19 Harbor Road in Shelburne,
Vermont (the “Premises”).
C.
Middleby and Blodgett wish to
terminate the Lease, and have arranged for the sale of the Premises
by the Landlord to Field House, LLC (“Field
House”).
D.
The Landlord is willing to
terminate the Lease on certain agreed terms and conditions provided
that the termination occurs simultaneously with the sale of the
Premises to Field House in accordance with the terms and conditions
of a certain Purchase and Sale Agreement by and between the
Landlord and Field House, dated November 10, 2004 (the “Field
House Agreement”).
Agreement
NOW, THEREFORE,
in consideration of the foregoing background, and the mutual
covenants and promises set forth in this Agreement, the parties
hereby agree as follows.
1.
Defined
Terms. Except as
otherwise specifically defined in this Agreement, all capitalized
terms shall have the meanings set forth in the Lease.
2.
Agreement to
Terminate . Subject
to the terms and conditions of this Agreement, the Landlord, the
Tenant, Blodgett, and Middleby agree to terminate the Lease as of
the date of the Closing (as defined below). The termination of the
Lease will be effective upon the execution and delivery at Closing
of a Certificate of Lease Termination by the Landlord and the
Tenant, substantially in the form of Exhibit A attached hereto.
Upon the termination of the Lease, the Tenant shall give, grant,
and surrender to the Landlord all of the Tenant’s right,
title and interest in and to the Lease and the Premises, and the
Landlord hereby agrees to accept such surrender as of the date of
Closing subject to the requirements of this Agreement. Upon
the termination of the Lease, the Tenant shall be released
from further liability to the Landlord pursuant to the Lease,
except for: (i) liabilities accruing prior to the effective date of
termination; (ii) obligations and liabilities that shall survive
the termination pursuant to Section 12 below; and (iii) liabilities
and obligations pursuant to this Agreement.
3.
Termination
Fee . In
consideration of the Landlord’s termination of the Lease and
partial release of Blodgett and the Tenant from future liability
pursuant to the Lease, Middleby shall pay a Termination Fee to the
Landlord of Three Million, Three Hundred Seventy Five Thousand
Dollars ($3,375,000.00), payable as follows:
a. Six Hundred Thousand Dollars ($600,000.00) in
immediately available funds by wire transfer or by cashiers or
certified check at the Closing; and
b. the balance of Two Million, Seven Hundred
Seventy Five Thousand Dollars ($2,775,000.00) in the form of a
promissory note of Middleby to the Landlord substantially in the
form of Exhibit B, attached hereto, executed and delivered by
Middleby at the Closing (the “Note”).
The Termination
Fee shall be reduced by all rental payments made by Middleby or the
Tenant pursuant to the Lease attributable to the portion of the
Lease term subsequent to March 31, 2004. For purposes of this
Section 3, “rental payments” shall include only the
basic monthly rental due and payable pursuant to the Lease, and not
other sums paid or payable pursuant to the Lease for other items
such as property taxes, operating costs, insurance, utilities, and
comparable expenses. This reduction in the Termination Fee shall be
deducted from the original principal amount of the Note and shall
not reduce the amount of the cash payment at Closing.
4.
Letter of
Credit . At the
Closing, Middleby shall cause to be delivered to the Landlord a
letter of credit in the original principal amount of Two Million,
One Hundred Twenty Five Thousand Dollars ($2,125,000.00)],
substantially in the form of Exhibit C, attached hereto, issued by
Bank of America, N.A. (the “Letter of Credit”). The
amount of the Letter of Credit may be reduced from time to time by
Middleby (with the written consent of the Landlord, which consent
shall not be unreasonably withheld or delayed) to reflect the
reductions in the Note balance resulting from scheduled and
unscheduled payments on the Note by Middleby. The Letter of Credit
shall be for a term of not less than one (1) year, shall allow for
automatic one year extensions of the term and shall contain an
agreement by Bank of America, N.A., to notify the Landlord at least
forty-five (45) days prior to any election by it not to extend the
term of the Letter of Credit. If the term of the Letter of Credit
expires prior to the date forty-five (45) days after the maturity
date of the Note, Middleby shall provide a replacement Letter of
Credit not less than fifteen (15) days prior to the expiration of
the then current Letter of Credit. In the event of the occurrence
and continuation of any event of default by Middleby under the
Note, or if the Letter of Credit is not renewed at least fifteen
(15) days prior to any date of termination, the Landlord shall have
the right, if any such event of default is continuing, to
immediately draw on the Letter of Credit for the outstanding
principal balance, any accrued interest, and any other amounts due
pursuant to the Note; provided, however, that Landlord shall not
have the right to draw on the Letter of Credit during the first
year of the term of the Note, except for a default based on
Middleby’s failure to provide a replacement Letter of Credit.
Landlord shall have the right to draw on the Letter of Credit for
an event of default that has occurred and is continuing during the
first year of the term of the Note provided that (i) the draw
occurs after the first year of the term of the Note and (ii) such
event of default is continuing at the time of such draw.
5.
Closing
. The Closing of the termination of
the Lease (the "Closing") shall take place at 3:00 p.m. on November
10, 2004, at the offices of the Landlord in South Burlington,
Vermont, unless the parties agree to an earlier date and time. It
is the intention of the parties that the Closing shall occur
simultaneously with the closing on the sale of the Premises to
Field House pursuant to the Field House Agreement, as described in
Section 7(c) below.
6.
Conditions to Middleby's
Obligations .
Middleby
