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EXHIBIT 10.34
STOCK PURCHASE AGREEMENT
BY AND AMONG
PERFORMANCE MANAGEMENT INC.,
XXXXXXX TIRE GROUP, INC.,
AS SOLE SHAREHOLDER OF
WINSTON TIRE COMPANY,
WINSTON TIRE COMPANY
AND
XXXXXXX XXXXXX XXXXXX
DATED MAY 4, 2001
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................1
1.1. Definitions..................................................................................1
1.2. Terms Defined Elsewhere......................................................................5
ARTICLE II AGREEMENT OF PURCHASE AND SALE........................................................................6
2.1. Agreement to Sell and Purchase...............................................................6
2.2. Purchase Price...............................................................................6
ARTICLE III CLOSING..............................................................................................8
3.1. Closing......................................................................................8
3.2. Deliveries by Seller at the Closing..........................................................8
3.3. Deliveries by Buyer at the Closing...........................................................8
3.4. Form of Documents and Instruments............................................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER AND The COMPANY..............................................9
4.1. Corporate Organization of the Company........................................................9
4.2. Capitalization of the Company................................................................9
4.3. Subsidiaries.................................................................................9
4.4. Title.......................................................................................10
4.5. Due Authorization...........................................................................10
4.6. No Conflict.................................................................................10
4.7. Financial Statements........................................................................10
4.8. Material Contracts..........................................................................10
4.9. Intellectual Property.......................................................................11
4.10. Litigation and Proceedings..................................................................11
4.11. Employee Benefit Plans......................................................................11
4.12. Employee Matters............................................................................11
4.13. Legal Compliance............................................................................12
4.14. Environmental Matters.......................................................................12
4.15. Taxes.......................................................................................12
4.16. Licenses, Permits and Authorizations........................................................13
4.17. Insurance...................................................................................13
4.18. Brokers' Fees...............................................................................13
4.19. Lease Abstract..............................................................................13
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER................................................................13
5.1. Corporate Organization......................................................................13
5.2. Due Authorization...........................................................................13
5.3. No Conflict.................................................................................14
5.4. Litigation and Proceedings..................................................................14
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5.5. Financial Ability...........................................................................15
5.6. Solvency....................................................................................15
5.7. Brokers' Fees...............................................................................15
5.8. No Additional Representations; Disclaimer Regarding Estimates and Projections...............15
5.9. No Knowledge of Misrepresentations or Omissions.............................................16
5.10. Investment Representations..................................................................16
5.11 Qualification to Make Section 338(h)(10) Election...........................................16
ARTICLE VI COVENANTS OF SELLER..................................................................................16
6.1. Conduct of Business.........................................................................16
6.2. Inspection..................................................................................17
ARTICLE VII COVENANTS OF BUYER..................................................................................18
7.1. Governmental Authorities....................................................................18
7.2. Indemnification and Insurance...............................................................18
7.3. Inspection..................................................................................18
ARTICLE VIII JOINT COVENANTS.....................................................................................19
8.1. Support of Transaction......................................................................19
8.2. Further Assurances..........................................................................19
8.3 Company Benefit Plans.......................................................................19
8.4 Transfers Against Accounts Payable..........................................................19
8.5 Non-Core Stores.............................................................................20
ARTICLE IX TAX MATTERS..........................................................................................21
9.1. Tax Returns and Payments....................................................................21
9.2. Section 338(h)(10) Election.................................................................22
ARTICLE X CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING.............................................23
10.1. Conditions to Each Party's Obligations......................................................23
10.2. Conditions to Buyer's Obligations...........................................................23
10.3. Conditions to Seller's Obligations..........................................................24
ARTICLE XI INDEMNIFICATION......................................................................................25
11.1. Indemnification for Certain Breaches by the Seller..........................................25
11.2. Indemnification Threshold, Limit and Time Limitations.......................................27
11.3. Losses......................................................................................27
11.4. Defense of Claims...........................................................................27
11.5. Exclusive Remedy............................................................................28
11.6. Limitation on Recourse......................................................................28
11.7. Multiple Breaches from Same Facts...........................................................28
11.8. Access to Information.......................................................................28
ARTICLE XII MISCELLANEOUS.......................................................................................29
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12.1. Termination.................................................................................29
12.2. Non-Compete.................................................................................30
12.3. Modifications, Waiver of Rights.............................................................30
12.4. Notices.....................................................................................30
12.5. Counterparts................................................................................31
12.6. Expenses....................................................................................31
12.7. Binding Effect; Assignment..................................................................31
12.8. Entire Agreement............................................................................31
12.9. Governing Law...............................................................................31
12.10. Severability................................................................................32
12.11. Obligation of the Parties...................................................................32
12.12. Headings....................................................................................32
12.13. Dispute Resolution, Consent to Jurisdiction.................................................32
12.14. Disclosure Generally........................................................................32
12.15. Specific Performance........................................................................33
12.16. No Third Party Beneficiaries................................................................33
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LIST OF EXHIBITS
Exhibit A 2001 Operating Budget
Exhibit B [Intentionally Omitted]
Exhibit C Guaranty
Exhibit D Company Financial Statement
Exhibit E Lease Abstract
LIST OF SCHEDULES
Schedule 4.3 Subsidiaries
Schedule 4.6 Conflicts
Schedule 4.8 Material Contracts
Schedule 4.10 Litigation and Proceedings
Schedule 4.11 Employee Benefit Plans
Schedule 4.12 Employee Matters
Schedule 4.13 Legal Compliance
Schedule 4.14 Environmental Matters
Schedule 4.15 Tax Matters
Schedule 4.16 Licenses, Permits and Authorizations
Schedule 4.17 Insurance
Schedule 6.1 Conduct of Business
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
May 4, 2001 by and among Performance Management Inc., a Louisiana corporation
("Buyer"), Xxxxxxx Tire Group, Inc., a Delaware corporation ("Seller") and the
sole shareholder of Winston Tire Company, a California corporation (the
"Company"), the Company and Xxxxxxx Xxxxxx Xxxxxx.
RECITALS
WHEREAS, the Company owns and operates a retail tire business located
and currently operating in California and Arizona;
WHEREAS, Seller owns 181,942 shares (the "Shares") of common stock, par
value $0.10 per share, of the Company (the "Common Stock"), which Shares
constitute all of the issued and outstanding capital stock of the Company; and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, all of the Shares, all on the terms and subject to the conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto covenant and agree
as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. In this Agreement, the following terms have the
meanings specified or referred to in this Section 1.1 which shall be equally
applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by or is under
common control with such Person.
"Benefit Arrangement" means any material benefit arrangement
covering any current or former employee, consultant or agent of the Company and
the beneficiaries of any of them, that is not an Employee Benefit Plan,
including, without limitation, (i) each employment agreement, (ii) each
arrangement providing for insurance coverage or workers' compensation benefits,
(iii) each incentive bonus or deferred bonus arrangement, (iv) each arrangement
providing termination allowance or payments, severance, continuation pay,
indemnification or similar benefits, (v) each deferred compensation plan and
(vi) each compensation policy and practice maintained by the Company or any
Subsidiary of the Company.
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"Benefit Plan" means an Employee Benefit Plan or Benefit
Arrangement.
"Business" means the operation by the Company of its retail
tire business located in California at or through the stores designated as
"core" stores in the third column of the lease abstract attached hereto as
Exhibit E.
"Buyer" means Performance Management Inc., a Louisiana
corporation.
"Change in Control" means (A) any event, transaction or series
of related transactions the result of which is that Xxxxxxx Xxxxxx Xxxxxx or his
Affiliates cease to beneficially own at least 80% of the voting power associated
with the capital stock or other voting securities of the Company or (B) any sale
of all or substantially all of the assets of the Company.
"Closing Date" means the date two business days following the
date on which all conditions set forth in Article X shall have been satisfied or
waived, or such other date and time agreed to by Seller and Buyer.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Winston Tire Company, a California
corporation.
"Consolidated Return" means (i) any federal consolidated
income tax return that includes the Company and (ii) any state or local returns
that are required to be filed with respect to the Company and any Affiliate on a
consolidated, combined or unitary basis and that include corporations in
addition to the Company and its directly owned Subsidiaries.
"Court Order" means any judgment, order, award or decree of
any foreign, federal, state, local or other court or tribunal and any award in
any arbitration proceeding.
"Employee Benefit Plan" means any employee benefit plan, as
defined in Section 3(3) of ERISA, that is sponsored or contributed to by the
Company or its Affiliates covering employees or former employees of the Business
or any Non-Core Store.
"Employee Pension Benefit Plan" means any employee pension
benefit plan, as defined in Section 3(2) of ERISA, and subject to Title IV of
ERISA.
"Environmental Laws" means, collectively, all applicable
foreign, U.S. federal, state or local laws, statutes, ordinances, rules,
regulations, codes or common law relating to health, safety, pollution or
protection of the environment, as in effect as of the date hereof (including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Resource Conservation and Recovery Act, as
amended and the Clean Air Act, as amended).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
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"Governmental Body" means any foreign, federal, state, local
or other governmental authority, instrumentality or regulatory body.
"Governmental Order" means any judgment, order, decree,
prohibition, proclamation or other legally valid and enforceable direction or
command of, by or from any Governmental Body.
"Hazardous Materials" means each and every element, compound,
chemical mixture, contaminant, pollutant, material, waste or other substance
which is defined, determined or identified as hazardous or toxic under
Environmental Laws or the release of which is prohibited under any Environmental
Law. Without limiting the generality of the foregoing, the term will include (a)
"hazardous substances" as defined in the Comprehensive Environmental Response,
Compensation, and Liability Act, (b) "extremely hazardous substances" as defined
in Title III of the United States Superfund Amendments and Reauthorization Act,
each as amended, and regulations promulgated thereunder, (c) "hazardous waste"
as defined in the United States Resource Conservation and Recovery Act of 1976,
as amended, and regulations promulgated thereunder, (d) "hazardous materials" as
defined in the United States Hazardous Materials Transportation Act, as amended,
and regulations promulgated thereunder and (e) "chemical substance or mixture"
as defined in the United States Toxic Substances Control Act, as amended, and
regulations promulgated thereunder.
"Inter-Company Indebtedness" means any amounts owed by the
Company to Seller at or prior to the Closing.
"IRS" means the Internal Revenue Service of the United States.
"Joint Defense and Conflict Waiver Agreement" means a joint
defense and conflict waiver agreement among Seller, Buyer and the Company in
form and substance mutually acceptable to Buyer and Seller.
"Lease Expenses" means solely those amounts payable by the
Company with respect to the Non-Core Stores for (a) rent under leases in effect
on the Closing Date for the Non-Core Stores, (b) property tax on the Non-Core
Stores, (c) common area maintenance fees required to be paid pursuant to leases
in effect on the Closing Date for the Non-Core Stores; provided, however, that
Lease Expenses do not include any amounts paid or payable by the Company as
penalties or extraordinary fees, costs or expenses, including, without
limitation, late payment fees, charges or assessments attributable to actions or
omissions of Buyer or the Company from and after the Closing.
"Lease Liabilities" means any amounts actually paid by the
Company during any specified period for any Lease Expenses in excess of Lease
Revenues for that period.
"Lease Revenues" means any amounts paid or assets transferred
to the Company or any of its Affiliates with respect to any lease on any
Non-Core Store or any rights appurtenant to the property, including, without
limitation, (a) rents and other amounts paid in connection with any sale,
assignment, sub-lease or other transaction relating to any lease on any Non-Core
Store, and (b) any and all proceeds from the lease, sale or other conveyance of
any fixtures, machinery, equipment or other personal property located at or used
in connection with any Non-Core Store,
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(c) any other revenue derived from the use or occupation of the property and (d)
any amounts refunded to the Company upon or after the termination or expiration
of any lease on the Non-Core Stores, including, without limitation, deposits or
other refundable items.
"Lease Surplus" means any amounts actually paid to the Company
during any period as Lease Revenues that are in excess of Lease Expenses for
that period.
"Lien" means any encumbrance, claim, charge, security
interest, mortgage, pledge, easement, conditional sale or other title retention
agreement.
"License Agreement" means a license agreement between Seller
and the Company in form and substance mutually acceptable to Buyer and Seller.
"Material Adverse Effect" means, (a) with respect to Buyer,
any circumstance, change or effect that, individually or when taken together
with all other such circumstances, changes or effects, is materially adverse to
the business or financial condition of Buyer and its Subsidiaries taken as a
whole, (b) with respect to Seller or the Company, any circumstance, change or
effect that, individually or when taken together with all other such
circumstances, changes or effects, is materially adverse to the Business taken
as a whole and (c) with respect to Xxxxxxx Xxxxxx Xxxxxx, any circumstance,
change or effect that, individually or when taken together with all other such
circumstances, changes or effects, is materially adverse to the financial
condition of Xx. Xxxxxx taken as a whole; provided, however, that the foregoing
definition excludes the effects of changes that are (A) generally applicable to
(i) the industries and markets in which the Business operates, (ii) the United
States economy or securities markets, or (iii) the world economy or
international securities markets or (B) generally in line with the Company's
2001 Operating Budget attached hereto as Exhibit A with respect to the Business;
provided, however, that a failure to meet such 2001 Operating Budget will not be
deemed to be a Material Adverse Effect with respect to the Company.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 3(37) and 4001(a)(3) of ERISA.
"Multiple Employer Plan" means any Employee Benefit Plan
sponsored by more than one employer, within the meaning of Sections 4063 or 4064
of ERISA or Section 413(c) of the Code.
"Non-Core Stores" means the 44 Company stores designated as
"non-core" stores in the third column of the lease abstract attached hereto as
Exhibit E.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or Governmental Body.
"Post-Closing Period" means any Taxable period that begins
after the Closing Date.
"Pre-Closing Period" means any Taxable period that ends on or
before the Closing Date.
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"Prohibited Transaction" means a transaction that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA, respectively.
"Seller" means Xxxxxxx Tire Group, Inc., a Delaware
corporation.
"Straddle Period" means any Taxable period that begins before
and ends after the Closing Date.
"Subsidiary" means, with respect to any Person, a corporation
or other entity of which 50% or more of the voting power or value of the equity
securities or equity interests is owned, directly or indirectly, by such Person.
"Supply Agreement" means the supply and distribution agreement
between Seller and the Company in form and substance mutually acceptable to
Buyer and Seller.
"Tax" means all federal, state, local and foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs, duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, irrespective of whether imposed directly or indirectly, as a
successor or transferee liability, as a joint or several liability pursuant to
Section 1.1502-6 of the Treasury Regulations or comparable or similar provisions
of state, local or foreign law, or whether by reason of any tax sharing, tax
reimbursement or tax indemnification agreement, or by reason of a tax treaty.
"Taxes" and "Taxable" shall have the correlative meanings.
"Tax Return" means any return, declaration, report, statement,
information statement and other document required to be filed with respect to
Taxes.
1.2. Terms Defined Elsewhere. The following is a list of additional
terms used in this Agreement and a reference to the Section hereof in which such
term is defined:
Term Section
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Aggregate Purchase Price Section 2.2(a)
Claim Section 11.4
Claim Notice Section 11.4
Closing Section 3.1
Closing Inventory Statement Section 2.2(c)
Xxxxxxx Claim Section 11.1(c)
Common Stock Recitals
Company Financial Statement Section 4.7
Deposit Section 2.2(a)
GAAP Section 2.2(c)(i)
Governmental Permits Section 4.16
Guaranty Section 2.2(b)
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Term Section
---- -------
Indemnified Litigation Section 11.1(c)
Independent Accountant Section 2.2(c)
Inspection Rights Section 11.1(d)(iv)
Intellectual Property Section 4.9
Losses Section 11.1(a)
Material Contracts Section 4.8
Monthly Report Section 11.1(d)(ii)
Note Section 2.2(b)
Xxxx Claim Section 11.1(c)
Securities Act Section 5.10
Section 338(h)(10) Election Section 9.2(a)
Shares Recitals
Xxxxx Claim Section 11.1(c)
Tax Records Section 9.1(d)
ARTICLE II
AGREEMENT OF PURCHASE AND SALE
2.1. Agreement to Sell and Purchase. Upon the terms and subject to the
conditions set forth in this Agreement, Seller agrees to sell, assign, transfer,
convey and deliver to Buyer free and clear of all Liens, and Buyer agrees to
purchase, acquire and accept from Seller, the Shares.
2.2. Purchase Price.
(a) Generally. Upon the terms and subject to the conditions
set forth herein, in consideration for the purchase of the Shares, Buyer shall
pay to Seller an aggregate purchase price of $11,300,000.00, subject to
adjustment as set forth in Section 2.2(c) below (as so adjusted, the "Aggregate
Purchase Price"). Seller acknowledges receipt as of April 19, 2001 of a
$250,000.00 good faith deposit from Buyer (the "Deposit"), which such Deposit
shall be applied on the Closing Date to the amount due to Seller from Buyer
pursuant to Section 2.2. Seller agrees to return the Deposit to Buyer within
three business days upon termination of this Agreement by either Buyer or Seller
pursuant to Section 12.1(a)(i), (ii), (iii) and (iv). The Deposit shall be
retained by Seller in the case of a termination of this Agreement by Seller
pursuant to Section 12.1(a)(v).
(b) Payment. On the Closing Date, Buyer will pay to Seller an
amount equal to $8,500,000.00 in the form of the Deposit and the balance by wire
transfer of immediately available funds to one or more accounts which have been
specified by Seller at least one day before the Closing and Buyer will issue to
Seller a promissory note in the amount of $2,800,000.00 due and payable 12
months after the Closing Date in form and substance mutually satisfactory to
Buyer and Seller (the "Note"). The Note shall be personally guaranteed by
Xxxxxxx Xxxxxx Xxxxxx pursuant to a personal guaranty in the form attached
hereto as Exhibit C (the "Guaranty").
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(c) Post-Closing Purchase Price Adjustment.
(i) Within 45 days after the Closing Date, Seller
shall cause Xxxxxx Xxxxxxxx LLC to audit the tire inventory of the
Company as of the Closing Date (the "Closing Inventory Statement"), in
accordance with United States generally accepted accounting principles
("GAAP") consistently applied with such principles used in connection
with the Company's financial statements for the fiscal year ended
December 30, 2000. The cost of such audit shall be borne equally by
Seller and Buyer.
(ii) Seller and Buyer shall cooperate with one
another and with Xxxxxx Xxxxxxxx LLC in the delivery of the Closing
Inventory Statement. Each of Seller, Buyer and their respective
representatives shall have the right to review the others' work papers
or records of the Company used or prepared in connection with the
preparation of such Closing Inventory Statement, and shall, if
requested, make available such work papers or records and direct Xxxxxx
Xxxxxxxx LLC and any other representatives to allow Seller, Buyer, or
their respective representatives to review any and all work papers or
records of Xxxxxx Xxxxxxxx LLC or such other representatives, that were
used in connection with the preparation of such Closing Inventory
Statement and which are not proprietary work papers or records of
Xxxxxx Xxxxxxxx LLC or such other representatives, as the case may be.
In addition to and not in limitation of the foregoing, from and after
the Closing Seller shall be entitled to have its representatives
observe and participate in any physical tire inventory undertaken by
any Person for the purpose of producing the Closing Inventory Statement
or resolving any dispute associated therewith.
(iii) If the total value of the Company's tire
inventory, net of reserves, and as determined in accordance with GAAP,
as of the Closing Date, as set forth on the Closing Inventory
Statement, is more than $7,000,000.00, then the Aggregate Purchase
Price will be adjusted up, dollar for dollar, to reflect such excess.
If the total value of the Company's tire inventory, net of reserves,
and as determined in accordance with GAAP, as of the Closing Date, as
set forth on the Closing Inventory Statement, is less than
$7,000,000.00, then the Aggregate Purchase Price will be adjusted down,
dollar for dollar, to reflect such shortfall.
(iv) If the Aggregate Purchase Price, as adjusted
pursuant to clause (iii) above, is more than $11,300,000.00, then
within 30 days after the later of (X) the date of delivery of the
Closing Inventory Statement and (Y) the date on which any dispute
referred to in clause (v) is resolved, Buyer shall pay in cash the
difference between such Aggregate Purchase Price and $11,300,000.00 to
Seller. If the Aggregate Purchase Price, as adjusted pursuant to clause
(iii) above, is less than $11,300,000.00, then within 30 days after the
later of (X) the date of delivery of the Closing Inventory Statement
and (Y) the date on which any dispute referred to in clause (v) is
resolved, the principal amount of the Note shall be reduced by the
difference between such adjusted Aggregate Purchase Price and
$11,300,000.00.
(v) Each of Seller and Buyer shall have the right to
dispute any amounts shown on the Closing Inventory Statement by giving
written notice to the other within 15 days after receipt of such
statement, which notice shall specify in reasonable
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detail the nature and extent of such disagreement. If Seller and Buyer
have not resolved the dispute within 15 days after delivery of notice
of the dispute, the dispute shall promptly be submitted to another "big
five" accounting firm (the "Independent Accountant") reasonably
acceptable to Seller and Buyer. The Independent Accountant promptly
shall commence its analysis of the Closing Inventory Statement and the
facts and supporting documents from which the Closing Inventory
Statement was derived and shall deliver a written report of its
conclusions to Seller and Buyer as promptly as practicable, but in no
event later than 30 days after the date the dispute was submitted to
the Independent Accountant. The decision of the Independent Accountant
shall be binding on the parties hereto. The cost of the Independent
Accountant shall be shared equally by Seller and Buyer.
ARTICLE III
CLOSING
3.1. Closing. The closing of the transactions contemplated herein (the
"Closing") shall commence at 10:00 a.m. Pacific Time on the Closing Date at the
offices of Xxxxxx, Xxxx & Xxxxxxxx, LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX
00000, unless the parties hereto otherwise mutually agree.
3.2. Deliveries by Seller at the Closing. At the Closing, Seller shall
issue and deliver to Buyer:
(a) certificates evidencing the Shares, duly endorsed for
transfer to Buyer;
(b) a counterpart of a cross-receipt acknowledging receipt of
$8,500,000.00 of the Aggregate Purchase Price;
(c) the certificate and other documents described in Section
10.2;
(d) the License Agreement;
(e) the Supply Agreement;
(f) this Agreement (unless previously executed and delivered);
and
(g) the Joint Defense and Conflict Waiver Agreement.
3.3. Deliveries by Buyer at the Closing. At the Closing, Buyer shall
deliver to Seller:
(a) $8,500,000.00 in same day funds as provided in Section
2.2;
(b) a counterpart of a cross-receipt acknowledging receipt of
the Shares;
(c) the certificate and other documents described in Section
10.3;
(d) the Guaranty;
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(e) the License Agreement;
(f) the Supply Agreement;
(g) the Note;
(h) this Agreement (unless previously executed and delivered);
and
(i) the Joint Defense and Conflict Waiver Agreement.
3.4. Form of Documents and Instruments. All of the documents and
instruments delivered at the Closing shall be in form and substance, and shall
be executed and delivered in a manner, reasonably satisfactory to the parties'
respective counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SELLER AND The COMPANY
Seller represents and warrants to Buyer, as of the date of this
Agreement and as of the Closing, as follows:
4.1. Corporate Organization of the Company. The Company is duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of California, and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as it is now being conducted. The Company is duly licensed or qualified and in
good standing as a foreign corporation in each jurisdiction in which the
ownership of its property or the nature of the business conducted by it requires
it to be so licensed or qualified, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on the Company.
4.2. Capitalization of the Company.
(a) The authorized capital stock of the Company consists of
1,000,000 shares of Common Stock, of which 181,942 shares of Common Stock are
issued and outstanding and constitute the Shares. The Shares have been duly
authorized and validly issued and are fully paid, non-assessable and free of
preemptive rights.
(b) The Company has not granted any outstanding options,
warrants, rights or other securities convertible into or exchangeable or
exercisable for shares of Common Stock or any other commitments or agreements
providing for the issuance of additional shares, the sale of treasury shares, or
for the repurchase or redemption of shares of the Company's capital stock. The
Company is not a party to any agreement which obligates the Company to issue,
purchase, redeem or otherwise acquire any of its capital stock.
4.3. Subsidiaries. Except as disclosed on Schedule 4.3, the Company has
no Subsidiaries.
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4.4. Title. Seller is the sole owner of record and beneficial owner of
the Shares. The Shares are free and clear of all Liens. Seller has the full and
unrestricted right, power and authority to sell and transfer such Shares to
Buyer. Upon delivery of the Shares to Buyer and payment by Buyer to Seller of
the consideration therefor, Buyer will acquire good and marketable title to and
complete ownership of such Shares, free and clear of all Liens.
4.5. Due Authorization. Seller has all requisite corporate power and
authority to execute and deliver this Agreement and to perform all obligations
to be performed by it hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the board of directors of Seller and no other
corporate action on its part is necessary to authorize this Agreement and the
consummation by Seller of the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity.
4.6. No Conflict. Except as disclosed on Schedule 4.6, the execution
and delivery of this Agreement by Seller and the consummation of the
transactions contemplated hereby do not and will not: (a) violate any provision
of, or result in the breach of any applicable law, rule or regulation of any
Governmental Body, (b) contravene or conflict with the Certificate or Articles
of Incorporation, Bylaws or other organizational documents, as applicable, of
Seller or the Company, (c) violate any provision of, or result in the breach of
any agreement, indenture or other instrument to which Seller or the Company is a
party or by which Seller or the Company is bound, (d) violate any provision of,
or result in the breach of, any Court Order applicable to Seller or the Company
or (e) result in the creation of any Lien upon any of the properties or assets
of the Company; in each case, except for any conflict, violation, breach or
other event the occurrence or existence of which would not, individually or in
the aggregate, be reasonably likely to result in a Material Adverse Effect on
the Company or materially and adversely effect the ability of Seller to enter
into and perform its obligations under this Agreement.
4.7. Financial Statements. The unaudited financial statement of the
Company dated December 30, 2000 attached hereto as Exhibit D (the "Company
Financial Statement") (a) is correct and complete in all material respects and
fairly presents the financial position of the Company as at the date thereof,
and (b) has been prepared in conformity with GAAP applied on a basis consistent
with prior periods.
4.8. Material Contracts. Schedule 4.8 discloses all material contracts
described in clauses (a) through and including (f) below to which the Company is
a party ("Material Contracts"). True, correct and complete copies of such
Material Contracts have been made available to Buyer.
(a) Purchase and supply agreements which obligate the Company
to pay an amount in excess of $100,000.00 in any twelve-month period beginning
after December 30, 2000;
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(b) Each note, debenture, other evidence of indebtedness,
guaranty, loan, credit or financing agreement or instrument or other contract
for money borrowed, including any agreement or commitment for future loans,
credit or financing entered into by the Company;
(c) Each lease, rental or occupancy agreement (other than
operating store leases, rental or occupancy agreements), license, installment
and conditional sale agreement, and other contract affecting the ownership of,
leasing of, title to, use of, or any leasehold or other interest in, any real or
personal property, in each case involving aggregate payments in excess of
$100,000.00;
(d) Each material licensing agreement or other agreement with
respect to patents, trademarks, copyrights, or other Intellectual Property of
the Company;
(e) Each joint venture agreement, partnership agreement or
limited liability company agreement; and
(f) Each agreement that commits the Company to make capital
expenditures after the date hereof in an amount in excess of $100,000.00.
4.9. Intellectual Property. Other than as set forth on Schedule 4.9,
the Company and Seller do not hereby transfer to Buyer (and the parties
acknowledge and agree that the Company does not own or retain after the Closing)
any rights to any material patents, registered trademarks, service marks, trade
names, domain names, registered copyrights or mask works, or applications for
any of the foregoing (collectively, "Intellectual Property").
4.10. Litigation and Proceedings. Except as disclosed on Schedule 4.10,
there are no lawsuits, actions, claims or other proceedings at law or in equity
before any court or Governmental Body pending or, to the knowledge of Seller,
threatened against the Company that are reasonably likely to have a Material
Adverse Effect on the Company.
4.11. Employee Benefit Plans. Schedule 4.11 discloses all Benefit Plans
of the Company. With respect to each such Benefit Plan, the Company has made
available to Buyer copies of (i) all governing instruments and related
agreements, including, a written description of any Benefit Plan not set forth
in writing, (ii) the two most recently filed Federal Form 5500 series and
accountant's opinion, if applicable, for each Employee Benefit Plan, (iii) the
most recent IRS determination letter obtained with respect to each Benefit Plan
intended to be qualified under Section 401(a) of the Code or exempt under
Section 501(a) of the Code and (iv) the most recently prepared financial
statements of with respect to each Benefit Plan.
4.12. Employee Matters. The Company is not party to any collective
bargaining agreements. There is no labor organizing activity pending or, to the
Company's knowledge, threatened with respect to the Company. Schedule 4.12
discloses all written employment or severance agreements to which the Company is
a party with respect to any employee or former employee whose compensation or
benefits during the year ended December 31, 2000 exceeded $100,000.00 and which
may not be terminated at will, or by giving notice of 90 days or less, without
cost or penalty. Except as set forth on Schedule 4.12, no employee of the
Company has been granted the right to continued employment by the Company or to
any material compensation following termination of employment with the Company.
Except as set forth on
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Schedule 4.12, the Company is not aware that any officer or key employee intends
to terminate their employment with the Company. Seller has made available to
Buyer true, correct and complete copies of each such agreement, as amended to
date.
4.13. Legal Compliance. Except with respect to (i) matters disclosed on
Schedule 4.13, and (ii) compliance with Environmental Laws (as to which certain
representations and warranties are made pursuant to Section 4.14), the Company
is in material compliance with all laws (including rules and regulations
thereunder) of federal, state, local and foreign governments (and all agencies
thereof) applicable thereto, except where such instances of noncompliance are
not reasonably likely to have a Material Adverse Effect on the Company.
4.14. Environmental Matters. Except as disclosed on Schedule 4.14, to
the knowledge of Seller, (i) the Company is in compliance with all Environmental
Laws, except where any such instance of non-compliance would not be reasonably
likely to have a Material Adverse Effect on the Company and (ii) the Company has
no liability under any Environmental Law which would have a Material Adverse
Effect on the Company. Except as disclosed on Schedule 4.14, the Company has not
received written notice of, and to the knowledge of Seller, is not the subject
of, any actions, causes of action, claims, investigations, demands or notices by
any Person alleging liability under or non-compliance with any Environmental Law
which would, individually or in the aggregate have a Material Adverse Effect on
the Company.
4.15. Taxes. Except as set forth on Schedule 4.15:
(a) All material Tax Returns required to be filed by or on
behalf of the Company have been duly and timely filed with the appropriate
taxing authorities (after giving effect to any valid extensions of time in which
to make such filings) and all amounts shown on such Tax Returns (including
interest and penalties) as due from the Company have been fully and timely paid.
(b) The Company has complied in all material respects with all
applicable Laws relating to the withholding of Taxes and has duly and timely
withheld from employee salaries, wages and other compensation and have paid over
to the appropriate taxing authorities all material amounts required to be so
withheld and paid over for all periods under all applicable Laws.
(c) All material deficiencies asserted or assessments made as
a result of any examinations by any taxing authority of Tax Returns of or
covering the Company have been fully paid and there are no other audits or
investigations relating to any Tax Returns by any taxing authority in progress,
nor have Seller or the Company received any written notice from any taxing
authority that it intends to conduct such an audit or investigation. No
extensions or waivers of statutes of limitations with respect to the Company's
Tax Returns has been given by or requested from the Company. No claim has been
made by any taxing authority in any jurisdiction where the Company does not file
Tax Returns that it is or may be subject to Tax by that jurisdiction.
(d) Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.
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(e) The Company joins in the filing of a federal Consolidated
Return with Seller, and the Company has not been a member of an affiliated group
of corporations filing Consolidated Returns for any taxable period, other than a
group the common parent of which is Seller.
(f) There are no Liens for Taxes (other than for current taxes
not yet due and payable) upon the assets of the Company.
4.16. Licenses, Permits and Authorizations. Except as disclosed on
Schedule 4.16 and except for any non-compliance the existence of which would
not, individually or in the aggregate, be reasonably likely to result in a
Material Adverse Effect on the Company, to Seller's knowledge, the Company has
not violated or infringed, and is not in violation or infringement of, any
applicable material license, franchise and other permit of, or with, any
Governmental Body, whether foreign, federal, state or local, which are held by
the Company ("Governmental Permits").
4.17. Insurance. Schedule 4.17 sets forth a true and complete list of
all material insurance policies in force with respect to the Company. True,
correct and complete copies of such insurance policies have been made available
to Buyer.
4.18. Brokers' Fees. No broker, finder, investment banker or other
Person is entitled to any brokerage fee, finders' fee or other commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by Seller or any of its Affiliates, other than Xxxxxxxx Xxxxx
Xxxxxx & Xxxxx, whose fees and expenses will be paid by Seller in accordance
with Seller's agreement with such firm.
4.19 Lease Abstract. To Seller's knowledge, the lease abstract dated as
of May 3, 2001 and attached hereto as Exhibit E is true, complete and correct in
all material respects.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller, as of the date of this
Agreement and as of the Closing, as follows:
5.1. Corporate Organization. Buyer is duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Louisiana and has all requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as it is now being conducted.
Buyer is duly licensed or qualified and in good standing as a foreign
corporation in each jurisdiction in which the ownership of its property or the
nature of the business conducted by it requires it to be so licensed or
qualified, except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on Buyer or would not affect the ability of Buyer
to enter into this Agreement or consummate the transactions contemplated hereby.
5.2. Due Authorization. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and each other agreement or
instrument to be executed by Buyer and delivered by Buyer at the Closing
pursuant to Section 3.3 and to perform all
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obligations to be performed by it hereunder and thereunder. The execution and
delivery of this Agreement, such other agreements and instruments and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and approved by the board of directors of Buyer and no other
corporate action on its part is necessary to authorize this Agreement, such
other agreements and instruments or the consummation by Buyer of the
transactions contemplated hereby. All corporate action on the part of Buyer, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of, and the performance of all obligations of Buyer under, the Note
has been taken or will be taken prior to Closing. This Agreement, the other
documents and instruments delivered pursuant to Section 3.3 (including, but not
limited to, the Note) have been duly and validly executed and delivered by Buyer
and constitute legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity. The Guaranty has been duly and
validly executed by Mr. Xxxxxxx Xxxxxx Xxxxxx and constitutes the legal, valid
and binding obligations of Xx. Xxxxxx, enforceable against Xx. Xxxxxx in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity.
5.3. No Conflict. The execution and delivery of this Agreement and the
Note by Buyer and the consummation of the transactions contemplated hereby and
thereby do not and will not: (a) violate any provision of, or result in the
breach of any applicable law, rule or regulation of any Governmental Body, (b)
contravene or conflict with the organizational documents of Buyer, (c) violate
any provision of, or result in the breach of any agreement, indenture or other
instrument to which Buyer is a party or by which Buyer is bound, (d) violate any
provision of, or result in the breach of any Court Order applicable to Buyer or
(e) result in the creation of any Lien upon any of the properties or assets of
Buyer; except for any conflict, violation, breach or other event the occurrence
or existence of which would not, individually or in the aggregate, be reasonably
likely to result in a Material Adverse Effect on Buyer or materially and
adversely effect the ability of Buyer to enter into and perform its obligations
under this Agreement. The execution and delivery of the Guaranty by Xx. Xxxxxx
does not and will not: (i) violate any provision of, or result in the breach of
any applicable law, rule or regulation of any Governmental Body, (ii) violate
any provision of, or result in the breach of any agreement, indenture or other
instrument to which Xx. Xxxxxx is a party or by which Xx. Xxxxxx is bound, (iii)
violate any provision of, or result in the breach of any Court Order applicable
to Xx. Xxxxxx or (iv) result in the creation of any Lien upon any of the
properties or assets of Xx. Xxxxxx; except for any conflict, violation, breach
or other event the occurrence or existence of which would not, individually or
in the aggregate, be reasonably likely to result in a Material Adverse Effect on
Xx. Xxxxxx or materially and adversely effect the ability of Xx. Xxxxxx to enter
into and perform its obligations under the Guaranty.
5.4. Litigation and Proceedings. There are no lawsuits, actions, claims
or other proceedings at law or in equity or investigations, before or by any
court or Governmental Body or before any arbitrator pending or, to the knowledge
of Buyer, threatened against Buyer that are reasonably likely to have a Material
Adverse Effect on Buyer or could reasonably be expected to adversely affect the
ability of Buyer to enter into and perform its obligations under this
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Agreement and the Note. There is no Court Order or any open injunction binding
upon Buyer which is reasonably likely to result in a Material Adverse Effect on
Buyer or could reasonably be expected to materially and adversely affect the
ability of Buyer to enter into and perform its obligations under this Agreement
and the Note.
5.5. Financial Ability. Buyer and its Affiliates have the financial
resources necessary to consummate the transactions contemplated by this
Agreement and to perform their respective obligations under the Note and the
Guaranty, including, without limitation, the ability to pay the Aggregate
Purchase Price. Buyer possesses the financial resources and necessary expertise
to enable it to maintain and develop the Business.
5.6. Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement, Buyer and the Company will be able to pay their
debts as they become due and will own property which has a fair saleable value
greater than the amounts required to pay their respective debts (including a
reasonable estimate of the amount of all contingent liabilities). Immediately
after giving effect to the transactions contemplated by this Agreement, Buyer
and the Company will have adequate capital to carry on their respective
businesses. No transfer of property is being made and no obligation is being
incurred in connection with the transactions contemplated by this Agreement with
the intent to hinder, delay or defraud either present or future creditors of
Buyer or the Company.
5.7. Brokers' Fees. No broker, finder, investment banker or other
Person is entitled to any brokerage fee, finder's fee or other commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by Buyer or any of its Affiliates.
5.8. No Additional Representations; Disclaimer Regarding Estimates and
Projections.
(a) Buyer acknowledges that none of Seller or the Company,
their Affiliates or any other Person acting on behalf of Seller or the Company
(i) has made any representation or warranty, express or implied, including any
implied representation or warranty as to the condition, merchantability,
suitability or fitness for a particular purpose of any of the assets used in the
Business or any Non-Core Store or held by the Company or (ii) has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Business or any Non-Core Store,
Seller, the Company or any of their Affiliates, in each case except as expressly
set forth in this Agreement or as and to the extent required by this Agreement
to be disclosed on the Schedules hereto. Buyer further agrees that none of
Seller or the Company, or any other Person acting on behalf of Seller or the
Company, will have or be subject to any liability, except as specifically set
forth in this Agreement, to Buyer or any other Person resulting from the
distribution to Buyer, for Buyer's use, of any such information, including any
information memorandum distributed by Xxxxxxxx Xxxxx Xxxxxx & Xxxxx, and any
information, document, or material made available to Buyer in certain "data
rooms," management presentations or any other form in expectation of the
transactions contemplated by this Agreement.
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(b) In connection with Buyer's investigation of the Company,
Buyer has received certain projections, including projected statements of
operating revenues and income from operations of the Business and the Company
for the fiscal years ending December 31, 1999, December 31, 2000 and December
31, 2001 and certain business plan information for such fiscal year and
succeeding fiscal years. Buyer acknowledges that there are uncertainties
inherent in attempting to make such estimates, projections and other forecasts
and plans, that Buyer is familiar with such uncertainties and that Buyer is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and plans so
furnished to it (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts). Accordingly, neither Seller nor the
Company makes any representation or warranty with respect to such estimates,
projections and other forecasts and plans (including the reasonableness of the
assumptions underlying such estimates, projections and forecasts).
5.9 No Knowledge of Misrepresentations or Omissions. Buyer has no
actual knowledge that the representations and warranties of Seller contained in
this Agreement and disclosed on the Schedules attached hereto are not true and
correct in all material respects, and Buyer has no actual knowledge of any
material errors in, or material omissions from, the Schedules to this Agreement.
5.10 Investment Representations. Buyer is acquiring the Shares for
investment solely for its own account and not with a view to, or for resale in
connection with, any distribution thereof and is aware that Seller is relying
upon the bona fide nature of the investment intent of Buyer as expressed herein.
Buyer further understands that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and have not been
qualified under applicable state securities laws and that any subsequent
disposition thereof must be registered under the Securities Act and qualified
under applicable state securities laws or be exempt from such registration or
qualification. Buyer is aware that no market may exist for the resale of the
Shares. Buyer has the ability to bear the economic risks of investment in the
Shares including a complete loss of the investment.
5.11 Qualification to Make Section 338(h)(10) Election. Buyer is
qualified to make the Section 338(h)(10) Election.
ARTICLE VI
COVENANTS OF SELLER
6.1. Conduct of Business. From the date hereof through the Closing,
Seller shall cause the Company to operate the Business in the ordinary course
and substantially in accordance with past practice and will use its reasonable
efforts not to take any action inconsistent with this Agreement. Without
limiting the generality of the foregoing, unless consented to by Buyer in
writing (which consent shall not be unreasonably withheld), the Company shall
not:
(a) change or amend the Articles of Incorporation, Bylaws or
other organizational documents of the Company except as otherwise required by
law;
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(b) sell, assign, transfer, convey, lease or otherwise dispose
of any material assets or properties except in the ordinary course of business,
provided, however, that (i) Seller may cause the Company to sell, transfer,
convey, lease or dispose of all or substantially all of the accounts receivable
and Intellectual Property of the Company to Seller to be applied against the
Inter-Company Indebtedness (and Buyer hereby agrees, acknowledges and consents
to the foregoing transfers and such application against the Inter-Company
Indebtedness) and (ii) Seller may continue its normal cash management procedures
until the Closing;
(c) (i) except as disclosed on Schedule 6.1(c), or otherwise
required by law or consistent with past practices or existing agreements, take
any action with respect to the grant of any severance or termination pay (other
than pursuant to policies or agreements of the Company in effect on the date
hereof) which will become due and payable on or after the Closing, (ii) make any
change in the key management structure of the Company including, without
limitation, the hiring of additional officers or the termination of existing
officers, other than in the ordinary course of business, or (iii) except in the
ordinary course of business, adopt, enter into or amend any employee benefit
plan;
(d) acquire by merger or consolidation with, or merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any material assets or the business of any corporation, partnership,
association or other business organization or division thereof;
(e) make any material loans or advances to any Person, except
for expenses incurred in the ordinary course of business;
(f) make any material income tax election;
(g) grant any increase in the compensation of employees of the
Company, except for increases in the compensation of employees which do not in
the aggregate exceed $100,000.00;
(h) enter into any commitment to make any capital expenditure
in excess of $50,000.00; or
(i) enter into any agreement, or otherwise become obligated,
to do any action prohibited hereunder.
6.2. Inspection. Subject to confidentiality obligations and similar
restrictions that may be applicable to information furnished to the Company by
third parties that may be in the Company's possession from time to time, Seller
shall cause the Company to allow Buyer and its accountants, counsel and other
representatives reasonable access, during normal business hours, to all of the
properties, books, contracts, commitments, tax returns and records of the
Business and appropriate officers and employees of the Company, and shall
furnish such representatives with all financial and operating data and other
information concerning the affairs of the Company as they may reasonably
request; provided, however, that nothing herein shall require the Company or its
Affiliates to disclose any information to Buyer if such disclosure (a) would
cause significant competitive harm to such disclosing party or its Affiliates if
the transactions contemplated by this Agreement are not consummated or (b) would
be in violation of applicable laws or regulations of any Governmental Body.
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ARTICLE VII
COVENANTS OF BUYER
7.1. Governmental Authorities. Buyer shall exercise commercially
reasonable efforts to prevent the entry of any Governmental Order which would
prohibit, make unlawful or delay the consummation of the transactions
contemplated by this Agreement, in any claim, action, suit, audit, assessment,
arbitration or inquiry, or any proceeding or investigation by or before any
Governmental Body, in each case brought by any Person.
7.2. Indemnification and Insurance.
(a) From and after the Closing, Buyer agrees that it will
cause the Company to, and the Company agrees that it will, continue to indemnify
and hold harmless each present and former director and officer of the Company
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring on or prior to the Closing, whether asserted or claimed
prior to, on or after the Closing, to the fullest extent that the Company would
have been permitted under California law and its Articles of Incorporation,
Bylaws or other organizational documents in effect on the date hereof to
indemnify such person (including the advancing of expenses as incurred to the
fullest extent permitted under applicable law); provided, however, that the
person to whom such expenses are advanced must provide undertaking to the
Company (as appropriate) to repay such advances if it is ultimately determined
by a court of competent jurisdiction (which determination shall have become
final) that such person is not entitled to indemnification.
(b) Buyer will not take, and will not fail to take, any action
that could cause or result in the termination of any directors and officers
liability insurance policy in effect as of the Closing Date providing coverage
with respect to any individual who at any time served or serves as a director or
officer of the Company prior to the stated maturity of such policy.
7.3. Inspection. Subject to confidentiality obligations and similar
restrictions that may be applicable to information furnished to the Company by
third parties that may be in the Company's possession from time to time, from
and after the Closing Date, Buyer shall provide, Buyer shall cause the Company
to provide, and the Company hereby agrees to provide, Seller and its
accountants, counsel and other representatives, reasonable access during normal
business hours, to all of the properties, books, contracts, commitments, tax
returns and records of the Business and the Non-Core Stores and appropriate
officers and employees of the Company, and shall furnish Seller and such
accountants, counsel and other representatives with all financial and operating
data and other information concerning the pre-Closing operations of the Company
and the Non-Core Stores as they may reasonably request.
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ARTICLE VIII
JOINT COVENANTS
8.1. Support of Transaction. Seller and Buyer shall each:
(a) use their respective reasonable best efforts to assemble,
prepare and file any information (and, as needed, to amend and supplement such
information) as may be reasonably necessary to obtain as promptly as practicable
all governmental and regulatory consents required to be obtained in connection
with the transactions contemplated hereby;
(b) use their respective reasonable best efforts to obtain all
material consents and approvals of third parties (including customers) that any
of Buyer, Seller or their respective Affiliates are required to obtain in order
to consummate the transactions contemplated hereby and in the documents and
instruments executed and delivered in connection with this Agreement;
(c) take such other action as may reasonably be necessary or
as another party may reasonably request to satisfy the conditions of Article X
or otherwise to comply with this Agreement; and
(d) provide the other party and such other party's employees,
officers, accountants, lawyers, financial advisors and other representatives
with access to its personnel, properties, business and records under all
reasonable circumstances to the extent reasonably required for any legitimate
business purpose.
8.2. Further Assurances. From time to time, as and when requested by
any party hereto and at such requesting party's expense, any other party shall
execute and deliver, or cause to be executed and delivered, all such documents
and instruments and shall take, or cause to be taken, all such further or other
actions as the requesting party may reasonably deem necessary or desirable to
evidence and effectuate the transactions contemplated by this Agreement. Without
limiting the foregoing, as and when requested by Seller, Buyer shall, and shall
cause the Company to, and the Company hereby agrees to, assist Seller in the
collection of the accounts receivable of the Company transferred to Seller on or
before the Closing pursuant to Section 8.4.
8.3 Company Benefit Plans. The parties understand and agree that the
Company maintains certain Benefit Plans on behalf of its own employees and will
continue to maintain such plans after the Closing, subject to the Company's or
Buyer's right to cause the modification or termination of any such plan
consistent with its terms and subject to compliance with applicable law.
8.4 Transfers Against Inter-Company Indebtedness. Without limiting any
of Seller's rights pursuant to Section 6.1(b) and in partial payment of the
Inter-Company Indebtedness, the parties acknowledge and agree that on or prior
to the Closing Date (i) the Company shall transfer, assign and convey any and
all Intellectual Property rights of the Company to Seller that are not
specifically set forth on Schedule 4.9 and (ii) the Company shall transfer,
assign and convey any and all accounts receivable of the Company to Seller, in
each case to be applied as partial payment against the Inter-Company
Indebtedness. Each of Buyer and Xxxxxxx Xxxxxx Xxxxxx, in his individual
capacity, hereby covenants and agrees to execute and deliver any and all
documents and instruments, and to take all such further actions, as Seller
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may from time to time request or as may be necessary to legally and validly
accomplish such transfers under applicable law. Each of Buyer and Xxxxxxx Xxxxxx
Xxxxxx further agrees to cause any cash amounts remaining in any of the
Company's bank accounts at the time of the Closing to be segregated and held in
trust by the Company for the benefit of Seller and to be transferred as promptly
as reasonably practicable (but in no event later than five days after the
Closing Date) to Seller or to a bank account designated by Seller.
8.5 Non-Core Stores. Buyer and the Company hereby agree that Seller and
its authorized representatives shall have the exclusive right to assume and
control any and all negotiations and transactions for the sale, lease,
sub-lease, transfer, conveyance, pre-payment or termination of any lease on any
Non-Core Store. In addition to their respective obligations under Section 8.2
above, Buyer and the Company hereby agree to execute and deliver, or cause to be
executed and delivered, all such documents and instruments (including, without
limitation, powers of attorney) and to take, or cause to be taken, all such
further or other actions (including, without limitation, obtaining any requisite
board of director or shareholder or landlord consents or approvals) as may be
necessary or desirable to consummate or expedite the negotiation or consummation
of any of the transactions contemplated by the foregoing sentence. Buyer and the
Seller further covenant and agree not to take any action that could delay,
jeopardize or compromise Seller's and its authorized representatives' ability to
negotiate and consummate the transactions contemplated by this Section 8.5. The
Company shall, and Buyer shall cause the Company to, comply in all respects with
the terms and conditions of the leases on the Non-Core Stores and the Company
shall not negotiate, enter into or commit to enter into any amendment,
modification or extension of any lease on any Non-Core Store except to the
extent any such negotiations, agreements or commitments are related to
transactions arranged by Seller or its authorized representatives as
contemplated by this Section 8.5. The Company shall, and Buyer shall cause the
Company to, maintain insurance policies in amounts and with the types of
coverage required under each lease on any Non-Core Store where such insurance
coverage is required by the terms of any such lease.
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ARTICLE IX
TAX MATTERS
9.1. Tax Returns and Payments.
(a) Seller shall be responsible for the preparation and filing
of (i) all Consolidated Returns required to be filed with respect to the Company
prior to the Closing Date, (ii) all Consolidated Returns that include the
Company with respect to Pre-Closing Periods and Straddle Periods and all other
tax returns for Pre-Closing Periods. Seller shall be responsible for the payment
of all Taxes shown to be due on such returns for all Pre-Closing Periods. In the
case of payments with respect to Straddle Periods, the portions of such Tax
related to the Pre-Closing Period shall be the amount payable as if the Straddle
Period ended as of the close of business on the Closing Date; the balance of
payments will be related to the Post-Closing Period. Any refunds related to
Pre-Closing Periods shall belong to Seller and, if received by Buyer or the
Company after Closing, shall be held in trust for Seller and promptly remitted
to Seller, but in no event later than two business days after receipt.
(b) Buyer and the Company shall be responsible for the
preparation and filing of all other Tax Returns with respect to the Company, and
for the payment of all Taxes with respect to such returns.
(c) To the extent permitted by law, Seller and Buyer shall use
their best efforts to cause any Taxable period to close on the Closing Date.
(d) Seller and Buyer shall cooperate in good faith in (i)
preparing and filing all Tax Returns, (ii) maintaining and making available to
each other all records necessary in connection with Taxes and (iii) resolving
all disputes and audits with respect to Taxes. Buyer and Seller recognize that
each may need access, from time to time after the Closing Date, to certain
accounting and tax records and information held by the other, including all
computerized books and records and any such information stored on any other form
of media ("Tax Records"). Therefore, Buyer, Seller and the Company agree (x) to
retain and maintain Tax Records relating to the Company for a period of 10 years
after the Closing Date, (y) to allow each other and their agents and
representatives, at times and dates mutually acceptable to the applicable
parties, to inspect, review and make copies of such Tax Records and to make
available the appropriate personnel with knowledge of such Tax Records to help
answer questions, such activities to be conducted during normal business hours
and with the requesting party paying out of pocket expenses only and (z) to
offer the other parties such records before destroying such records. The Company
and its personnel shall provide information to Seller necessary for preparation
of all Tax Returns required to be prepared or filed by Seller, in a manner
consistent with prior practice.
(e) Buyer shall pay any stock transfer taxes due as a result
of the sale of the Shares.
(f) Seller shall cause the provisions of any Tax sharing
agreement to which the Company is a party to be terminated on or before the
Closing Date.
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(g) Seller shall have the sole and exclusive authority to file
amended Consolidated Returns for any Pre-Closing Periods and Straddle Periods
and to control any Tax audits, disputes, administrative or judicial proceedings
or settlements with respect to such Consolidated Returns. Any refunds with
respect to such Tax Returns shall be the property of Seller. Buyer and the
Company shall have the sole and exclusive authority to file any other amended
Tax Returns and to control any other Tax audits, disputes, administrative or
judicial proceedings or settlements with respect to the Company.
(h) Unless (i) required by applicable law or (ii) with Buyer's
consent (which consent shall not be unreasonably withheld) Seller shall not file
an amended Tax Return or enter into a settlement that will materially increase
the Taxes payable by the Company in Post-Closing Periods. Unless (x) required by
applicable law or (y) with Seller's consent (which consent shall not be
unreasonably withheld) Buyer or Company shall not file an amended Tax Return or
enter into a settlement that will materially increase any Taxes payable by
Seller.
(i) All Tax Returns and elections relating to the Company
shall be prepared and filed in a manner consistent with prior practice unless a
change in law or regulations requires otherwise.
9.2. Section 338(h)(10) Election.
(a) Buyer and Seller shall make an election under Section
338(h)(10) of the Code and the Treasury Regulations promulgated thereunder and
any corresponding or similar elections under state, local or foreign tax law
(collectively, the "Section 338(h)(10) Election") with respect to the purchase
and sale of the Shares hereunder. Buyer and Seller shall cooperate and file all
Tax Returns and statements, forms and schedules in connection therewith in a
manner consistent with the Section 338(h)(10) Election and shall take no
position contrary thereto unless required to do so by applicable Tax laws.
(b) As soon as practicable after the Closing Date, Buyer shall
deliver to Seller Buyer's proposed calculation of the allocation of the
Aggregate Purchase Price among the assets of the Company in accordance with the
principles of the Treasury Regulations under Section 338 of the Code. Seller
shall have the right to review and approve (which approval shall not be
unreasonably withheld) such allocation for 60 days following receipt thereof.
Seller and Buyer shall attempt in good faith mutually to resolve any
disagreements regarding such allocation.
(c) Any assets distributed to Seller by the Company as a part
of this stock sale shall be treated as made as part of the deemed liquidation
provided for in Treasury Regulation 1.338(h)(10)-1(T).
(d) To the extent permitted by state or local tax Laws, the
principles and procedures of this Section 9.2 shall also apply with respect to a
Section 338(h)(10) Election or equivalent or comparable provision under state or
local law, including an election under Section 338(g) of the Code or equivalent
or comparable provision under state or local Law. Seller and Buyer shall make or
cause to be made any election similar to a Section 338(h)(10) Election that is
optional under any state or local law so as to treat the sale of the Shares
contemplated herein as a sale of assets for state and local income Tax purposes.
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ARTICLE X
CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING
10.1. Conditions to Each Party's Obligations. The respective
obligations of each party to consummate the transactions contemplated hereby on
the Closing Date are subject to the satisfaction or written waiver of each of
the following conditions on or prior to the Closing Date:
(a) License Agreement. Buyer and the Company shall have
entered into the License Agreement.
(b) Supply Agreement. Buyer and the Company shall have entered
into the Supply Agreement.
(c) No Governmental or Other Proceedings or Litigation. There
shall be no injunction or Court Order restraining consummation of the
transactions contemplated hereunder and there shall be no pending or threatened
action or proceeding by or before a court or Governmental Body brought by or on
behalf of any Governmental Body seeking to restrain or invalidate all or any
portion of the transactions contemplated hereunder, and there shall not have
been adopted any law or regulation making all or any portion of the transactions
contemplated hereunder illegal.
(d) Joint Defense and Conflict Waiver Agreement. Buyer and
Seller shall have entered into the Joint Defense and Conflict Waiver Agreement.
10.2. Conditions to Buyer's Obligations. The obligation of Buyer to
consummate the transactions contemplated hereby on the Closing Date is subject
to the satisfaction or written waiver of each of the following conditions on or
prior to the Closing Date:
(a) Covenants, Representations and Warranties. Seller shall
have performed in all material respects all agreements and complied in all
material respects with all covenants contained in this Agreement to be performed
and complied with by it prior to or on the Closing Date. The representations and
warranties of Seller set forth in this Agreement shall be accurate in all
material respects, on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date except for any changes resulting
from activities or transactions which may have taken place after the date hereof
and which are permitted or contemplated by the Agreement or which have been
entered into in the ordinary course of business and except to the extent that
such representations and warranties are expressly made as of another specified
date and, as to such representations, the same shall be true as of such
specified date.
(b) Officer's Certificates. Buyer shall have received an
officer's certificate, executed by an officer of Seller, dated as of the Closing
Date, evidencing compliance with each of the conditions set forth in this
Article X within Seller's control.
(c) Form of Documents and Instruments. Buyer, Seller and the
Company shall have agreed upon the form and substance of the Note, the Supply
Agreement, the License Agreement and the Joint Defense and Conflict Waiver
Agreement.
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(d) Cancellation of Inter-Company Indebtedness. The
Inter-Company Indebtedness shall be deemed to have been satisfied as of the
Closing.
10.3. Conditions to Seller's Obligations. The obligation of Seller to
consummate the transactions contemplated hereby on the Closing Date is subject
to the satisfaction or written waiver of each of the following conditions on or
prior to the Closing Date:
(a) Covenants, Representations and Warranties. Buyer shall
have performed in all material respects all agreements and complied in all
material respects with all covenants contained in this Agreement to be performed
and complied with by it on or prior to the Closing Date. The representations and
warranties of Buyer set forth in this Agreement shall be accurate in all
material respects, on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date except for any changes resulting
from activities or transactions which may have taken place after the date hereof
and which are permitted or contemplated by this Agreement or which have been
entered into in the ordinary course of business and except to the extent that
such representations and warranties are expressly made as of another specified
date and, as to such representations, the same shall be true as of such
specified date.
(b) Officer's Certificate. Seller shall have received an
officer's certificate executed by an officer of Buyer, dated as of the Closing
Date, evidencing compliance with each of the conditions set forth in this
Article X within Buyer's control.
(c) Debt Holder Consents. Seller shall have obtained any
required consents to the transactions contemplated by this Agreement, the
License Agreement and the Supply Agreement from the holders of its indebtedness.
(d) Note. Seller shall have received the Note executed by
Buyer.
(e) Guaranty. Seller shall have received the Guaranty executed
by Xxxxxxx Xxxxxx Xxxxxx.
(f) Board Approval. The board of directors of Seller shall
have approved this Agreement, each agreement attached as an Exhibit hereto and
the transactions consummated hereby and thereby.
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ARTICLE XI
INDEMNIFICATION
11.1. Indemnification.
(a) Breaches of Representations, Warranties, etc. by Seller.
Seller shall indemnify and hold harmless Buyer and its Affiliates, directors,
officers, advisors, agents and employees to the fullest extent lawful, from and
against any and all demands, losses, damages, penalties, claims, liabilities,
obligations, actions, causes of action and reasonable expenses (including
without limitation, costs of investigating, preparing or defending any such
claim or action and reasonable legal fees and expenses) (collectively,
"Losses"), arising by reason of, or resulting from, any breach of any warranty,
representation, covenant or agreement of Seller contained in this Agreement or
in any certificate delivered pursuant thereto. To the extent that any claim for
damages is made under Section 4.15, the claim shall be reduced by the present
value of any future benefit to Buyer.
(b) Breaches of Representations, Warranties, etc. by Buyer.
Buyer shall indemnify and hold harmless Seller and its Affiliates, directors,
officers, advisors, agents and employees to the fullest extent lawful, from and
against any and all Losses arising by reason of or resulting from, any breach of
any warranty, representation, covenant or agreement of Buyer contained in this
Agreement or in any certificate delivered pursuant thereto.
(c) Indemnified Litigation. Seller shall indemnify, defend and
hold the Company harmless with respect to any Losses incurred or suffered as a
result of (i) the Xxxxxxxx Xxxxxxx, et al. x. Xxxxxxx Tire Company case filed in
California Xxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xx. 00XX00000, on December 20, 2000,
and removed on February 16, 2001 to United States District Court for the Central
District of California, Southern Division, No. SACV 01-216 AHS (EEx) (the
"Xxxxxxx Claim") and (ii) the Xxxxxx Xxxx, et al. x. Xxxxxxx Tire Company case,
filed in California Superior Court, Los Angeles County, No. BC 28753 on April
24, 2000 (the "Xxxx Claim"). In addition, Seller and Buyer each shall pay, or
cause to be paid, 50% of all costs of defending (including reasonable attorneys'
fee) plus 50% of the total amount of any Losses incurred or suffered to be
incurred as a result of the Xxxxx Xxxxx x. Xxxxxxx Tire Company, et al. case,
filed in California Superior Court, Fresno County, No. 599525-3 (the "Xxxxx
Claim," and, together with the Xxxxxxx Claim and the Xxxx Claim, the
"Indemnified Litigation"); provided, however, that Buyer shall not be required
to pay more than an aggregate of $75,000.00 of the combined costs of defending
and any Losses incurred or suffered to be incurred in connection with the Xxxxx
Claim. Seller shall have the right to assume and conduct the defense of the
Xxxxxxx Claim and the Xxxx Claim and Buyer shall have the right to assume and
conduct the defense of the Xxxxx Claim. Seller may settle the Xxxxxxx Claim or
the Xxxx Claim without the consent of Buyer or the Company to the extent that
such settlement involves solely monetary payments or actions that do not impose
any conditions or obligations on Buyer or the Company. Buyer shall conduct the
defense of the Xxxxx Claim in a commercially reasonable manner. Buyer and the
Company shall not be authorized to settle the Xxxxx Claim without the consent of
Seller (which consent shall not be unreasonably withheld). Buyer and the Company
shall cooperate, and shall use their respective best efforts to cause their
employees, representatives and other Persons within their control to cooperate,
in all respects with Seller in litigating or settling the Indemnified Litigation
and each of Buyer and the Company agrees to implement, or cause to be
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implemented, any changes or modifications in the Company's business policies,
procedures or practices required in connection with any settlement or Court
Order relating to the Indemnified Litigation.
(d) Indemnified Lease Liabilities.
(i) Seller shall indemnify the Company for any Lease
Liabilities relating to the Non-Core Stores and Buyer and the Company
shall indemnify Seller for any Lease Surplus relating to the Non-Core
Stores, in each case in accordance with the terms and subject to the
conditions set forth in this Section 11.1(d).
(ii) The aggregate amount of Lease Liabilities or
Lease Surplus, as the case may be, shall be calculated by the Company
on a monthly basis and a written report (the "Monthly Report") of such
calculation (showing in reasonable detail the calculations used to
derive the result) will be provided to Seller within five business days
after the end of each calendar month during which Buyer, the Company or
their respective Affiliates has any obligations under any lease on any
Non-Core Store. The Monthly Report will be certified by a duly elected
and authorized officer of Buyer as being true, complete and correct in
all material respects.
(iii) Within ten business days after the end of each
calendar month, Seller shall pay to Buyer or its designee the full
amount of any Lease Liabilities for the preceding calendar month and
Buyer shall pay to Seller or its designee the full amount of any Lease
Surplus for the preceding calendar month, as the case may be.
(iv) Seller and its authorized representatives shall
have the right to audit and inspect the books and records of the
Company (including, without limitation, financial records, bank reports
and statements) and Buyer and the Company agree to provide Seller and
its authorized representatives access during normal business hours to
their respective books, records contracts, tax returns and tax records
and to any officers, employees and other Persons controlled by Buyer or
the Company for the purpose of verifying any information set forth in
any Monthly Statement and any other purpose reasonably related to
determining the amount of Lease Liabilities or Lease Surplus for any
period (collectively, the "Inspection Rights"). Buyer and the Company
agree to execute and deliver any documents and instruments and to take
such further actions as Seller may request in order to permit Seller
and its authorized representatives to fully exercise the foregoing
Inspection Rights.
(v) The parties acknowledge and agree that the mutual
indemnification obligations provided in this Section 11.1(d) shall
automatically terminate and be of no further force and effect (A) if
the Company materially breaches any lease on any Non-Core Store or if
any of Buyer, the Company or Xxxxxxx Xxxxxx Xxxxxx breaches any
material obligation owed to Seller hereunder or (B) immediately upon
any Change in Control.
(vi) Any disputes regarding the Monthly Reports shall
be resolved in accordance with the dispute resolution proceedings set
forth in Section 12.13.
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11.2. Indemnification Threshold, Limit and Time Limitations.
(a) The indemnification obligations of Seller set forth in
Section 11.1 (other than those indemnification obligations set forth in Section
11.1(d)) will be triggered only if the aggregate amount of Losses indemnifiable
pursuant to this Agreement exceeds, in the aggregate, $200,000.00, in which case
Seller shall be liable for all Losses in excess of the first $200,000.00 of
Losses. The total amount of all Losses indemnifiable by Seller pursuant to this
Agreement shall not exceed, in the aggregate, $1,000,000.00; provided, however,
that in the event Buyer or the Company breaches any of their respective
obligations pursuant to Section 11.1(c), in addition to any other remedies for
such breach that Seller may have, the $1,000,000.00 aggregate dollar limitation
provided for in this sentence automatically and without any further action of
any party shall be reduced to $500,000.00.
(b) The indemnification obligations set forth in Section 11.1
shall survive the Closing for a period of two years following the Closing Date;
provided, however, that the representations in Section 4.15 shall survive the
Closing for a period equal to the statute of limitations applicable thereto.
11.3. Losses. The amount of any Losses shall be calculated (a) net of
any reserves, liability accruals or other provisions for such Losses on the
Company's balance sheet, (b) net of any insurance proceeds paid or payable with
respect thereto and (c) after the effect of any tax benefits realizable in
connection therewith.
11.4. Defense of Claims. If a claim for Losses (a "Claim") is to be
made by an indemnified party, such indemnified party shall give written notice
(a "Claim Notice") to the indemnifying party as soon as practicable after such
indemnified party becomes aware of any fact, condition or event which may give
rise to Losses for which indemnification may be sought under this Article XI. If
any lawsuit or enforcement action is filed against any indemnified party with
respect to a matter subject to indemnity hereunder, a Claim Notice shall be
given to the indemnifying party as promptly as practicable (and in any event
within 15 calendar days after the service of the citation or summons). The
failure of any indemnified party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
indemnifying party demonstrates actual damage caused by such failure. After
receipt of a Claim Notice, then the indemnifying party shall be entitled, if it
so elects, (a) to take control of the defense and investigation of such lawsuit
or action, (b) to employ and engage attorneys of its own choice to handle and
defend the same, at the indemnifying party's cost, risk and expense and (c) to
compromise or settle such claim, which compromise or settlement shall be made
only with the written consent of the indemnified party (which consent shall not
be unreasonably withheld). The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; and the indemnified party may, at its own cost, participate
in the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall also cooperate with each other in any
notifications to insurers. If the indemnifying party fails to assume the defense
of such claim within 15 calendar days after receipt of the Claim Notice, the
indemnified party against which such claim has been asserted will (upon
delivering notice to such effect to the indemnifying party) have the right to
undertake the defense, compromise or settlement of such claim and the
indemnifying party shall have the
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right to participate therein at its own cost; provided, however, that such claim
shall not be compromised or settled without the written consent of the
indemnifying party (which consent shall not be unreasonably withheld). In the
event the indemnified party assumes the defense of the claim, the indemnified
party will keep the indemnifying party reasonably informed of the progress of
any such defense, compromise or settlement. Notwithstanding the foregoing, the
indemnifying party shall not be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for any and all indemnified
parties (which firm shall be designated in writing by such indemnified party or
parties) in connection with any one such action or proceeding arising out of the
same general allegations or circumstances.
11.5. Exclusive Remedy. From and after the Closing, the parties' rights
to indemnification pursuant to this Article XI shall be the sole and exclusive
remedy available to the parties with respect to any matter arising under or in
connection with this Agreement or the transactions contemplated hereby;
provided, however, that such exclusive remedy limitation shall not apply to
breaches or alleged breaches of the License or the Supply Agreement.
11.6. Limitation on Recourse. No party shall be liable to any other
party hereto for any punitive or consequential incidental damages (including
loss of revenue or income, business interruption, cost of capital or loss of
business reputation or opportunity) relating to any claim under this Agreement.
No claim for the recovery of Losses based upon breach of any representation,
warranty, covenant or agreement may be asserted by any indemnified party against
any indemnifying party if the indemnified party had knowledge of such breach on
or before the Closing Date.
11.7. Multiple Breaches from Same Facts. For the avoidance of doubt, it
is agreed that if there is a breach of more than one representation or warranty
on account of the same facts or circumstances, such breach shall give rise to
full single indemnification but shall not give rise to indemnification more than
once on account thereof.
11.8 Access to Information. From and after the Closing, Buyer and the
Company will give Seller and its authorized representatives reasonable access
during normal business hours to all employees, stores, offices, warehouses and
other facilities, to all books and records and all personnel files of current or
former employees of the Company as Seller may reasonably require to defend
against, and will cause its officers to furnish Seller with such financial and
operating data and other information with respect to the business and properties
of the Company as Seller may from time to time reasonably request in connection
with, the Indemnified Litigation. Furthermore, Buyer will cause its attorneys,
consultants and advisers to provide any information required by Seller in
connection with the Indemnified Litigation. The Company shall furnish to Seller
within one business day following receipt thereof any notices, complaints,
briefs, replies or other documents to the Indemnified Litigation.
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ARTICLE XII
MISCELLANEOUS
12.1. Termination.
(a) This Agreement shall terminate on the earliest to occur of
any of the following events:
(i) the mutual written agreement of Buyer and Seller;
(ii) by written notice of Buyer if Goodyear Tire &
Rubber Company, through no fault of Buyer, fails to provide the
$8,250,000.00 in cash consideration to be delivered by Buyer as a
portion of the Aggregate Purchase Price to be delivered by Buyer to
Seller at the Closing;
(iii) by written notice of Buyer to Seller if the
Closing shall not have occurred, through no fault of Buyer, prior to
the close of business on May 15, 2001;
(iv) by written notice of Buyer to Seller, if Seller
shall have materially breached any of its representations, warranties
or agreements contained in this Agreement and Seller shall have failed
to cure such breach within 10 days following written notification
thereof by Buyer; or
(v) by written notice of Seller to Buyer, if (A)
Buyer shall have materially breached any of its representations,
warranties or agreements contained in this Agreement and Buyer shall
have failed to cure such breach within 10 days following notification
thereof by Seller or (B) if the Closing shall not have occurred,
through no fault of Seller, prior to the close of business on May 15,
2001.
Notwithstanding the foregoing, with respect to the termination rights set forth
in the foregoing clause (iv) and clause (v), the parties expressly acknowledge
and agree that if Seller or Buyer, as the case may be, fails to consummate the
transactions contemplated hereby after satisfaction or valid waiver of all
conditions to such party's obligations, the party failing to consummate such
transaction shall not be entitled to any right to cure any such breach.
(b) In the event of termination of this Agreement:
(i) if requested, each party will promptly redeliver
all confidential information of any other party relating to the
transactions contemplated hereby, whether so obtained before or after
the execution hereof to the party furnishing the same.
(ii) except for Section 12.6, Section 12.8, Section
12.9 and Section 12.13 and Seller's right to retain the Deposit in the
event that Seller terminates this Agreement pursuant to Section
12.1(a)(v) as referenced in Section 2.2, this Agreement shall become
void and of no further force and effect and no party hereto shall have
any liability or further obligation to any other party relating to the
transactions contemplated hereby; provided, however, that no such
termination shall relieve any party from liability for a prior breach
of this Agreement.
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(iii) pursuant to Section 12.1(a)(ii), Buyer and
Seller shall promptly provide joint written notice to the escrow agent
holding the Deposit to release the Deposit to a bank account designated
by Buyer as promptly as reasonably practicable.
12.2 Non-Compete. For a period of two years from the Closing Date,
Seller agrees not to own, manage, operate, or control any entity physically
located in the State of California that competes against the Company in the
retail tire industry in the State of California; provided, however, that,
notwithstanding the foregoing, Seller shall be entitled to continue to operate
its Economy Import Shops stores in the State of California, even if such stores
compete against the Company in the retail tire industry in the State of
California.
12.3. Modifications, Waiver of Rights. Any amendment, change or
modification of this Agreement shall be void unless in writing and signed by
Buyer and Seller. No failure or delay by any party hereto in exercising any
right, power or privilege hereunder (and no course of dealing between or among
any of the parties) shall operate as a waiver of any such right, power or
privilege. No waiver of any default on any one occasion shall constitute a
waiver of any subsequent or other default. No single or partial exercise of any
such right, power or privilege shall preclude the further or full exercise
thereof.
12.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made upon receipt when personally delivered, delivered by courier
service, by cable, by telecopy, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties hereto as follows:
Buyer:
Performance Management Inc.
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx Xxxxxx
Tel No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx, LLP
0000 X. Xxxxxxxx Xxxx.
Xxxxx X
Xxxxxx, Xxxxxxxxxx 00000
Attention: J. Xxxxx Xxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
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Seller:
Xxxxxxx Tire Group, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxxx Xxxxxxx
Executive Vice President and General Counsel
Tel No.: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
or to such other address as to any party hereto as such party shall designate by
like notice to the other parties hereto. Any such communication shall bear the
date on which it is delivered or deposited in the mail. The address and
facsimile information provided for above may be changed by giving notice in the
manner provided by this Section 12.4.
12.5. Counterparts. This Agreement may be executed by facsimile
signature and in several counterparts, each of which shall be deemed an original
but all of which counterparts collectively shall constitute one instrument.
12.6. Expenses. Each of the parties hereto will bear all costs,
charges and expenses incurred by such party in connection with this Agreement
and the consummation of the transactions contemplated herein, including
attorneys' fees incurred in connection with the negotiation and preparation of
this Agreement.
12.7. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of Buyer and Seller and their respective
representatives, successors and permitted assigns, in accordance with the terms
hereof. This Agreement shall not be assignable by any party without the prior
written consent of the other parties hereto.
12.8. Entire Agreement. This Agreement and the other agreements
referred to herein and the Confidentiality Agreement constitute the entire
agreement between the parties hereto with respect to their respective subject
matter and supersede all prior or contemporaneous agreements, representations,
warranties, statements, promises, information, arrangements and understandings,
whether oral or written, express or implied, with respect to such subject
matter. Without limiting the foregoing, this Agreement shall supersede the
Agreement in Principle dated as of April 10, 2001, which Agreement shall be
terminated as of the date hereof and be of no further force and effect.
12.9. Governing Law. This Agreement and its validity, construction,
enforcement and interpretation shall be governed by and construed in accordance
with the substantive laws of the
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State of California without giving effect to any choice or conflict of law
provision or rule (whether of the State of California or any other
jurisdiction).
12.10. Severability. If any provision of this Agreement is deemed or
held to be illegal, invalid or unenforceable, this Agreement shall be considered
divisible and inoperative as to such provision solely to the extent it is deemed
to be illegal, invalid or unenforceable, and in all other respects this
Agreement shall remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal, invalid or
unenforceable, a provision that is legal, valid and enforceable and is as
similar as possible to such illegal, invalid or unenforceable provision shall be
deemed added hereto automatically. Further, should any provision contained in
this Agreement ever be reformed or rewritten by any judicial body of competent
jurisdiction, such provision as so reformed or rewritten shall be binding upon
all parties hereto.
12.11. Obligation of the Parties. This Agreement represents an
obligation only of the signatory parties. The representations, warranties,
covenants and agreements included in this Agreement shall be obligations of such
entities only, shall be satisfied only from the assets of such entity, and shall
not be satisfied from the assets of the shareholders or Affiliates of the
signatory parties.
12.12. Headings. Headings of the Articles and Sections of this
Agreement, the Table of Contents, the Lists of Exhibits and Schedules and the
index of defined terms are for convenience of the parties only, and shall be
given no substantive or interpretive effect.
12.13. Dispute Resolution, Consent to Jurisdiction. EACH OF THE
PARTIES TO THIS AGREEMENT AGREES TO BE BOUND BY THE PROVISIONS SET FORTH IN
ANNEX A TO THIS AGREEMENT. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA SITTING IN CHARLOTTE
FOR PURPOSES OF ALL LEGAL PROCEEDINGS WHICH ARE NOT GOVERNED BY ANNEX A AND
WHICH ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND EACH OF THE PARTIES HERETO AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING RELATED THERETO EXCEPT IN SUCH COURT. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
12.14. Disclosure Generally. If and to the extent any information
required to be furnished in any Schedule is contained in this Agreement or
disclosed on any Schedule attached hereto, such information shall be deemed to
be included in all Schedules in which the information is required to be included
to the extent such disclosure is reasonably apparent on its face. The inclusion
of any information in any provision of this Agreement or any instrument or
document executed by Seller or the Company in connection with this Agreement or
in any Schedule attached hereto shall not be deemed to be an admission or
acknowledgment by Seller
32
38
or the Company, in and of itself, that such information is required by the terms
hereof to be disclosed or is material to or outside the ordinary course of the
business of the Company.
12.15. Specific Performance. The parties hereto acknowledge and agree
that irreparable damage that could not be adequately compensated for by monetary
damages alone would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity, without the necessity of demonstrating the
inadequacy of monetary damages.
12.16. No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns, and nothing herein, whether express or
implied, is intended to or shall confer upon any other person, any legal or
equitable right, benefit or remedy of any nature whatsoever, under or by reason
of this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
33
39
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first above written.
BUYER
-----
PERFORMANCE MANAGEMENT INC.,
a Louisiana corporation
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx Xxxxxx
----------------------------------
Title: Secretary Treasurer
----------------------------------
SELLER
------
XXXXXXX TIRE GROUP, INC.,
a Delaware corporation
By: /s/ J. Xxxxxxx Xxxxxxx
----------------------------------
Name: J. Xxxxxxx Xxxxxxx
----------------------------------
Title: Executive Vice President
----------------------------------
COMPANY
-------
WINSTON TIRE COMPANY,
a California corporation
By: /s/ J. Xxxxxxx Xxxxxxx
----------------------------------
Name: J. Xxxxxxx Xxxxxxx
----------------------------------
Title: Vice President
----------------------------------
/s/ Xxxxxxx Xxxxxx Xxxxxx
-----------------------------------------
34
40
ANNEX A
TO STOCK PURCHASE AGREEMENT
DISPUTE RESOLUTION PROCEDURE
1. Scope of Arbitration. The parties to the Stock Purchase Agreement
dated as of May 4, 2001 by and among Performance Management Inc., a Louisiana
corporation, Xxxxxxx Tire Group, Inc., a Delaware corporation and the sole
shareholder of Winston Tire Company, a California corporation, the Company and
Xxxxxxx Xxxxxx Xxxxxx will submit to final and binding arbitration as the sole
and exclusive remedy for all claims for damages arising out of, involving, or
relating to (a) the Stock Purchase Agreement, (b) the documents and instruments
executed and delivered in connection with the Stock Purchase Agreement and (c)
the events giving rise to the Stock Purchase Agreement, including any and all
non-contractual claims for damages related to the Stock Purchase Agreement or
the events giving rise to it (including claims for fraudulent inducement of
contract). Notwithstanding the foregoing, the dispute resolution procedure set
forth in this Annex A does not apply to claims for injunctive or other equitable
relief pursuant to the express terms of the Stock Purchase Agreement or any
other agreement entered into in connection with the Stock Purchase Agreement.
2. Notice of Dispute. Any party shall give the other parties written
notice of the existence and nature of any dispute proposed to be arbitrated
pursuant to this Annex A (the "Written Notice"). Such Written Notice must be
served on the other parties as described below. The party serving Written Notice
shall be referred to as the "Claiming Party." The party to whom the claims are
directed shall be referred to as the "Responding Party."
3. Appointment of Arbitrators. Each party shall appoint one person to
serve as an arbitrator within seven days of receipt of the Written Notice. The
two arbitrators thus appointed shall within seven days of their appointment
together select a third arbitrator with such knowledge and expertise as
necessary to serve as chairman of the panel of arbitrators, and this person
shall serve as chairman. The three arbitrators shall determine all matters,
including, but not limited to, the panel's final decision with respect to the
claims presented in the arbitration, by majority vote. If the two arbitrators
selected by the parties are unable to agree upon the appointment of the third
arbitrator within seven days of their appointment, both shall give written
notice of such failure to agree to the parties, and if the parties fail to agree
upon the selection of such third arbitrator within five days thereafter, such
third arbitrator shall be appointed from, and pursuant to the rules for
commercial arbitration of, the American Arbitration Association. Prior to
appointment, each arbitrator shall agree to conduct such arbitration in strict
accordance with the terms of this Annex A.
4. Initial Meeting of the Arbitrators. Within seven days of the
selection of the third arbitrator, the arbitrators shall conduct an initial
meeting with the parties (the "Initial Meeting"). All meetings between the
arbitrators, or between the arbitrators and the parties, including, but not
limited to, the Initial Meeting, may be conducted by telephone, with the
exception of any arbitration hearing at which evidence is presented. At the
Initial Meeting, the parties and the arbitrators shall agree upon a schedule for
the arbitration proceedings, with dates no later than the deadlines provided in
Section 7 below. The statement of claim, the response to the statement
A-1
41
of claim and counterclaims (if any), and the response to the counterclaims (if
any) (collectively, the "Pleadings") shall be submitted to each arbitrator on
the date they are served, unless service occurs prior to appointment of all
three arbitrators. If service of any of the Pleadings occurs prior to the
appointment of any of the arbitrators, copies of any such Pleadings shall be
submitted to such arbitrator promptly after such arbitrator's appointment.
5. Conduct of the Arbitration. No more than eleven months shall pass
between the selection of the third arbitrator and the release of a decision by
the arbitration panel. Any arbitration held pursuant to this Annex A shall take
place in New York City, New York. The law of the State of New York shall supply
the substantive law of the arbitration proceedings, and any claims or
counterclaims alleged pursuant to federal law shall be adjudicated as if pled in
a federal court in New York. All proceedings, including discovery, depositions,
and the arbitration hearings shall be governed by the Federal Rules of Civil
Procedure and the Civil Rules of the United States District Court for the
Southern District of New York, unless such rules conflict with the provisions of
this Annex A, in which case the provisions of this Annex A control.
6. Motions. The parties may make applications to the panel of
arbitrators regarding issues of discovery, procedure and privilege. Any such
motions shall be made to and resolved by the arbitrators as soon as practicable.
No party shall be permitted to file any motions for dismissal of claims
(including dismissal based upon failure to join an indispensable party), or for
summary judgment, concerning the claims or counterclaims asserted in any
arbitration under this Annex A.
7. Schedule of Arbitration Proceedings. At the Initial Meeting, the
parties and the arbitrators shall agree to a schedule that conforms with the
following deadlines:
Event Deadline Not Later Than
--------------------------------------------------------------------------------
Service of a statement of
claim by the Claiming Party Seven days after service of the Written Notice
Service of response to
the statement of claim and
counterclaims (if any) by
the Responding Party 14 days after receipt of the statement of claim
Service of response to
counterclaims (if any) by
the Claiming Party Seven days after receipt of counterclaims (if any)
Commencement of
document discovery One day after service of response to the statement
of claim
Commencement of
deposition discovery 75 days after service of the statement of claim
Completion of all discovery 200 days after service of the statement of claim
A-2
42
Commencement of
the arbitration hearing 28 days after completion of discovery
Issuance of a decision by
the arbitrators 14 days after receipt of the last hearing
transcript by the arbitrators. All sessions of the
arbitration hearings shall be promptly transcribed
and transcripts shall be promptly provided to the
parties and the arbitrators
8. Decision Binding on the Parties. Unless the parties agree otherwise
in writing, the arbitrators' decision shall become binding on the parties at
such time as the decision is confirmed by order of the Superior Court of any
applicable jurisdiction. The parties hereby irrevocably and unconditionally
submit to the jurisdiction of any such court for any and all proceedings
relating to such confirmation. Any award ordered shall be paid within 10 days of
confirmation of the arbitrators' decision.
9. Cost of Arbitration Proceeding. In the event that the arbitrators
determine that no party is entitled to indemnification by any other party, then
(a) each party shall pay its own expenses, including attorney's fees, fees paid
to experts, fees for obtaining transcripts, expenses of witnesses called solely
by that party, and all fees charged by the arbitrator appointed by such party
and (b) the parties shall each pay fifty percent of all remaining expenses of
the arbitration proceeding.
10. Extensions of Time. The parties may jointly agree, in writing, to
extend any of the deadlines set forth in Section 7 above.
11. Service of Documents. Any process, notice, memorandum, motion,
demand, or other paper or communication, or application to the panel of
arbitrators shall be deemed to have been sufficiently served or submitted if (a)
personally delivered, or (b) sent by a nationally recognized overnight courier
service.
A-3
43
EXHIBIT A
Winston Tire
Statement of Income
2001 Operating Plan
($000's)
ACTUAL
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Net Sales 12,815 10,918 10,600 10,800 11,140 11,340 11,540 12,240 12,640 11,840 10,240 10,140 136,253
Cost of Sales 7,701 6,490 6,545 6,450 6,615 6,715 6,785 7,165 7,455 6,980 5,985 5,920 80,806
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Gross Profit 5,114 4,428 4,055 4,350 4,525 4,625 4,755 5,075 5,185 4,860 4,255 4,220 55,447
% to sales 39.9% 40.6% 38.3% 40.3% 40.6% 40.8% 41.2% 41.5% 41.0% 41.0% 41.6% 41.6% 40.7%
Operating Expenses:
Salaries and Wages 2,737 2,519 2,247 2,179 2,211 2,236 2,267 2,345 2,384 2,259 1,985 1,945 27,314
Occupancy & Vehicles 1,935 1,724 1,856 2,161 2,031 1,632 1,478 1,509 1,529 1,440 1,397 1,483 20,174
Advertising 258 408 562 391 391 391 391 392 392 259 207 44 4,086
Depreciation and
Amortization 401 239 471 481 494 500 505 524 535 513 470 467 5,600
Net Service Charges -- -- -- -- -- -- -- -- -- -- -- -- --
Other 1,052 1,296 1,021 874 870 879 816 843 847 816 746 722 10,782
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total operating expenses 6,383 6,186 6,157 6,086 5,997 5,637 5,457 5,612 5,687 5,287 4,805 4,662 67,958
Operating Income (1,269) (1,758) (2,102) (1,736) (1,472) (1,012) (702) (537) (502) (427) (550) (442) (12,511)
Interest Expense (15) (15) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (80)
Other Income (Expense) 1 -- 129 77 (555) (212) -- -- -- -- -- (609) (1,169)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Pre-Tax Income (1,283) (1,773) (1,978) (1,664) (2,032) (1,229) (707) (542) (507) (432) (555) (1,056) (13,760)
Income Taxes (514) (487) (543) (457) (558) (337) (194) (149) (139) (119) (153) (290) (3,940)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Net Income (Loss) (769) (1,286) (1,435) (1,207) (1,474) (892) (513) (393) (368) (313) (402) (766) (9,820)
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== =======
EBITDA (868) (1,519) (1,631) (1,255) (978) (512) (197) (13) 33 86 (80) 25 (6,911)
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== =======
44
EXHIBIT C
PERSONAL GUARANTY, dated as of May 15, 2001, by
Xxxxxxx Xxxxxx Xxxxxx, in favor of
Xxxxxxx Tire Company, Inc. ("Guaranty").
-----------------------------------------------
1. I, Xxxxxxx Xxxxxx Xxxxxx residing in Lafayette, Louisiana, with a
mailing address at X.X. Xxx 00000, Xxxxxxxxx, Xxxxxxxxx 00000-0000
("Guarantor"), do hereby unconditionally and irrevocably personally guaranty the
prompt payment and performance when due of (a) all obligations of Performance
Management Inc., a Louisiana corporation ("Borrower"), under a Promissory Note
(the "Note") by and between Borrower and Xxxxxxx Tire Group, Inc., a Delaware
corporation ("Lender") dated May 15, 2001 and (b) all amounts owed by Borrower
or its affiliates to Lender resulting from any extension of credit by Lender to
Borrower or its affiliates ("Credit Arrangements"). A copy of the Note is
attached hereto as Exhibit A, and made a part hereof by this reference.
2. Guarantor agrees that its obligations hereunder are an unconditional
and absolute guaranty of payment and performance of Borrower's obligations under
the Note and with respect to any Credit Arrangements, irrespective of any
waiver, consent or granting of any indulgence by Lender with respect to any
provision of the Note or any Credit Arrangements, irrespective of whether Lender
shall have instituted any suit, action or proceeding or exhausted its remedies
under the Note or with respect to any Credit Arrangements or taken any steps to
enforce any rights against Borrower, Guarantor or against any other person to
compel any such performance or to collect all or part of any obligations
thereunder.
3. Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of bankruptcy of Borrower, protest,
notice of default in the payment of any sum payable by Borrower, notice of any
other default, breach or non-performance of any agreement, covenant or
obligation of Borrower, and notice and all demands whatsoever with respect to
the obligations hereunder. Guarantor expressly waives notice from Lender of its
acceptance of and reliance on this Guaranty. Guarantor agrees to pay all
reasonable costs, expenses and fees, including, without limitation, all
reasonable attorneys fees, costs and expenses, which may be incurred by Lender
in enforcing or attempting to enforce this Guaranty following any default on the
part of Guarantor hereunder, whether the same shall be enforced by suit or
otherwise.
4. No amendment, release or modification of the provisions of this
Guaranty shall be established by conduct, custom or course of dealing, but
solely by an instrument in writing duly executed by the parties hereto. Lender
shall have the full right, without any notice to or consent from Guarantor, from
time to time and at any time, and without affecting, impairing or discharging,
in whole or in part, the liability of Guarantor hereunder: (a) to make any
change, amendment or modification whatsoever to or of any term or condition of
the Note or any Credit Arrangements; (b) to extend, in whole or in part, by
renewal or otherwise, and on one or more occasions, any term or condition of the
Note or any Credit Arrangements; (c) to assign this Guaranty to any assignee of
the Note (it being understood that this Guaranty shall be deemed to
45
have been duly assigned to a person or entity when the Note is duly assigned to
such person or entity), or (d) to assign, settle, compromise, release,
surrender, modify or impair, and to enforce and exercise, or fail or refuse to
enforce or exercise, any claims, rights or remedies of any kind or nature
against Borrower.
5. Lender shall be under no obligation to proceed against Borrower
before proceeding against Guarantor. All rights of Lender hereunder or otherwise
arising under any documents executed in connection with or as security for the
amounts owed under the Note or with respect to any Credit Arrangements are
separate and cumulative and may be pursued separately, successively or
concurrently, or not pursued, without affecting or limiting any other right of
Lender and without affecting or impairing the liability of such Guarantor.
6. Guarantor waives, to the extent permitted by law, the benefit of
Sections 2819, 2845, 2848 and 2850 of the California Civil Code. In addition to
and without limiting the generality of the foregoing, Guarantor hereby
specifically waives the benefits of N.C. Gen. Stat. ss. 26-7 through 26-9,
inclusive. Guarantor shall not be discharged, released or exonerated, in any
way, from its absolute and unconditional liabilities hereunder, even though any
rights or defenses which Guarantor may have against Borrower, Lender or others
may be destroyed, diminished or otherwise affected, by: (a) any declaration by
Lender of a default in respect of any of the obligations under the Note, any
Credit Arrangements or this Guaranty; (b) the exercise by Lender of any rights
or remedies against Borrower or any other person; or (c) the failure of Lender
to exercise any rights or remedies against Borrower or any other person.
7. Until all obligations under the Note, any Credit Arrangements and
this Guaranty have been performed in full, discharged or validly released,
Guarantor shall not have any right to subrogation, and Guarantor waives any
right to enforce any remedy which Lender now has or hereafter may have against
Borrower. Guarantor waives any right to plead or assert any election of
remedies. Guarantor shall not be discharged, released or exonerated, in any way,
from its absolute, unconditional, and independent liabilities hereunder, whether
by the voluntary or involuntary participation by Borrower in any settlement or
composition for the benefit of Borrower's creditors, whether in liquidation,
readjustment, receivership, bankruptcy or otherwise. This Guaranty shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the amounts due under the Note or with
respect to any Credit Arrangements is rescinded or must otherwise be restored or
returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Borrower, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO ITS CONFLICTS OR CHOICE OF
LAW PRINCIPLES. EACH OF GUARANTOR AND LENDER HEREBY WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION UNDER THIS GUARANTY OR ANY ACTION ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH
ACTION OR ACTIONS.
46
IN WITNESS WHEREOF, this Guaranty is entered into this 15th, day of May
2001.
GUARANTOR
----------------------------------------
Xxxxxxx Xxxxxx Xxxxxx
WITNESS:
-----------------------------------
Signature
-----------------------------------
Print Name
47
Exhibit A to Personal Guaranty
Promissory Note
48
EXHIBIT A
$2,800,000.00 May 15, 2001
PROMISSORY NOTE, dated as of May 15, 2001, by
Performance Management Inc., a Louisiana corporation,
in favor of Xxxxxxx Tire Group, Inc., a Delaware corporation.
-------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned, Performance Management Inc., a
Louisiana corporation (the "Borrower"), hereby promises to pay to the order of
Xxxxxxx Tire Group, Inc., a Delaware corporation, (the "Lender"), the principal
sum of $2,800,000.00 together with interest from the date hereof on the unpaid
principal balance of this promissory note (this "Note") at the rate of 7% per
annum, calculated on the basis of a 360 day year for actual days elapsed (the
"Base Rate"). This Note is personally guaranteed by Mr. Xxxxxxx Xxxxxx Xxxxxx
pursuant to that certain Personal Guaranty dated as of May 15, 2001 (the
"Personal Guaranty").
The outstanding principal balance of this Note, together with all
accrued and unpaid interest, shall be due and payable in full on May 15, 2002.
This Note may be prepaid in whole or in part at any time or from time to time at
the option of the Borrower without any penalty whatsoever. All prepayments shall
be first applied to accrued interest on the date of such prepayment. The amount
of any prepayment in excess of the accrued interest on the date of such
prepayment shall be applied to reduce the principal balance due hereunder.
Each of the following events shall constitute an event of default (an
"Event of Default") under this Note:
(a) The Borrower shall fail to perform any of its obligations,
covenants and agreements set forth in this Note or in the Stock Purchase
Agreement dated as of May 4, 2001 by and among the Borrower, the Lender, Winston
Tire Company and Xxxxxxx Xxxxxx Xxxxxx, or any other material obligation owed to
the Lender; or
(b) The Borrower shall be or become insolvent, shall be unable to meet
the Borrower's debts as they mature, or shall file a voluntary petition in
bankruptcy or seeking reorganization or to effect a plan or other arrangement
with creditors, or shall file an answer or other pleading admitting, or shall
fail to deny or contest, the material allegations of an involuntary petition
filed against the Borrower pursuant to any act of Congress relating to
bankruptcy, arrangement or reorganization, or shall be adjudicated a bankrupt or
shall make an assignment for the benefit of creditors generally, or shall apply
for, consent to or acquiesce in the appointment of any receiver or trustee for
all or a substantial part of the Borrower's property or any such receiver or
trustee shall be appointed and shall not be discharged within thirty days after
the date of such appointment.
Upon the occurrence of one or more of the foregoing Events of Default,
unless such Event of Default shall have been expressly waived in writing by the
Lender, the entire unpaid principal balance of and accrued interest on this Note
shall at once become immediately due and payable at the option of and upon
written notice from the Lender. Upon such acceleration, the Lender may
immediately exercise any and all rights and remedies afforded by this Note, the
Personal Guaranty or applicable law.
The Borrower promises to pay all costs and expenses, including, but not
limited to, attorneys' fees and disbursements, incurred in the collection or
enforcement hereof.
Nothing contained in this Note or in any agreements between the
Borrower and the Lender shall be deemed to require the payment by the Borrower
of interest on the indebtedness evidenced by this Note in excess of the amount
which the Borrower may lawfully contract to charge under the usury laws of the
state of North Carolina or any other applicable jurisdiction (the "Maximum Legal
Rate"). All agreements between the
1
49
Borrower and the Lender deemed to pertain to this Note are expressly limited so
that in no contingency or event shall the amount paid or agreed to be paid to
the Borrower for the use, forbearance or detention of money to be loaned
hereunder exceed the Maximum Legal Rate. If, under any circumstance whatsoever,
the fulfillment of any obligation under this Note or any other agreement between
the Borrower and the Lender deemed to pertain to this Note shall involve
exceeding the Maximum Legal Rate, then the obligation to be fulfilled by the
Borrower shall be reduced by the minimum amount required so that such obligation
shall not exceed the Maximum Legal Rate, provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum Legal
Rate, Borrower shall continue to pay interest hereunder at the Maximum Legal
Rate until such time as the total interest received by Lender is equal to the
total interest which would have been received had the interest rate payable
hereunder been (but for operation of this paragraph) the Base Rate. Thereafter,
interest hereunder shall be paid at the Base Rate, unless and until the rate of
interest again exceeds the Maximum Legal Rate, and at that time this paragraph
shall again apply. This paragraph shall control every other provision of this
Note and all other agreements between the Borrower and the Lender deemed to
pertain to this Note.
The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of protest.
No failure to exercise and no delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof at the time in question or
any future time, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law.
The Borrower may not assign this Note.
This Note is negotiable and shall inure to the benefit of the Lender
and its successors and permitted assigns. Notwithstanding anything in this Note
to the contrary, the Lender may assign this Note to Fleet Capital Corporation,
as administrative agent for the lenders party from time to time, together with
the Lender and certain of the Lender's affiliates, to a senior secured credit
facility, as additional security for the Lender's obligations thereunder.
If any provision of this Note is deemed or held to be illegal, invalid
or unenforceable, this Note shall be considered divisible and inoperative as to
such provision solely to the extent it is deemed to be illegal, invalid or
unenforceable, and in all other respects this Note shall remain in full force
and effect.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NORTH CAROLINA. THE BORROWER AND, BY ACCEPTANCE HEREOF, THE
LENDER WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE OR ANY
ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHICH
PARTY INITIATES SUCH ACTION OR ACTIONS.
PERFORMANCE MANAGEMENT INC.,
a Louisiana corporation
By:
-----------------------------
Name: Xxxxxxx Xxxxxx Xxxxxx
Title: Secretary / Treasurer
2
50
WINSTON EXHIBIT D
BALANCE SHEET
30-DEC-00
ADJUSTING ENTRIES
30-DEC-00 DR CR TOTAL
ASSETS --------- -- -- -----
---------------------------------------
Cash (1,302) 2,164 862 - Other Current Assets 1347
Accounts Receivable (less allowance for
doubtful accounts of 589 2,864 1,012 132 3,744 Fixed assets 1347
Notes Receivable 7 7 To reclass land held for sale to current
investment
---------------------------------------
Volume Rebates receivable 2,116 2,116 -
Intercompany receivable - - -
---------------------------------------
Inventories, net 17,868 1,622 16,246 Cash 2,164
Deferred income taxes 2,517 800 3,317 Accounts payable 2,164
Other current assets 1,228 1,568 138 2,658 To reclass negative cash
-------- ------- ------- -------- ---------------------------------------
Total current assets 25,298 5,544 4,870 25,972
---------------------------------------
Property (at cost) 32,331 3,397 28,934 Loss on sale of Disc ops 1,200
Less: accumulated depreciation - property (12,422) (12,422) Current Deferred tax asset 800
-------- ------- ------- -------- Net assets of disc ops 2,000
Property, net 19,909 - 3,397 16,512 ---------------------------------------
---------------------------------------
Goodwill, net of accumulated amortization - - Accounts Payable 2,116
Other intangibles, net of accumulated amortization - Volume Rebates Receivable 2,116
Intercompany investment - - To reclass volume rebates to a/p
---------------------------------------
Deferred tax assets 68 68
Other assets 825 - 825
-------- ------- ------- --------
Total other assets 893 - - 893
TOTAL ASSETS 46,100 5,544 8,267 43,377
======== ======= ======= ========
51
WINSTON
BALANCE SHEET
30-DEC-00
30-DEC-00 ADJUSTING ENTRIESTOTAL
LIABILITIES AND EQUITY --------- DR CR -----
-- --
LIABILITIES
Accounts payable 869 2,116 2,164 917
Accrued liabilities 18,935 3,074 1,077 16,938
Intercompany payable 20,541 - 1,745 22,286
Current portion - long term debt (1) 13 13
-------- ------- ------- -------
Total current liabilities 40,358 5,190 4,986 40,154
--------------------------------------------------
Amortization Expense 1521
Long - term debt 2 270 1,521 1,253 Debt 1521
Deferred income taxes - - To record debt assumed in Tri Valley acquisition to
gw (and sub written off)
Other liabilities 4,235 21 4,256 --------------------------------------------------
-------- ------- ------- -------
Total liabilities 4,237 270 1,542 5,509 --------------------------------------------------
Debt 270
STOCKHOLDER'S EQUITY Other income 270
To record earned reduction based on purchases
--------------------------------------------------
Intercompany investment 47,271 - 47,271
Common Stock A - -
Common Stock B - -
Preferred Stock A - -
Preferred Stock B - -
Warrants - -
Additional Paid in Capital - -
Notes Receivable (officers) - -
Retained Earnings (45,766) 10,839 7,048 (49,557)
-------- ------- ------- --------
Total stockholders equity 1,505 10,839 7,048 (2,286)
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 46,100 16,299 13,576 43,377
======== ======= ======= ========
CHECK - -
3,791
52
WINSTON
INCOME STATEMENT
YEAR ENDED DECEMBER 30, 2000
QUARTER ENDED ADJUSTING ENTRIES
30-DEC-00 DR CR FINAL
--------- -- -- -----
----------------------------------------------
Net Sales 177,762 200 177,962 Depreciation 2,050
Intercompany sales, net of related discounts - - Professional fees 2,050
-------- ----- ----- -------- To reclass write-off of capitalized costs to
Total sales 177,762 177,962 depreciation
----------------------------------------------
Cost of Sales 108,531 3,422 540 111,413 Current Liabilities 85
-------- ----- ----- -------- SG&A 85
Total costs of sales 108,531 111,413 To correct over-accrual for legal expenses at
12/31/00
Gross Profit 69,231 66,549
Salaries and wages 38,908 1,571 37,337 Current Liabilities 100
Occupancy and vehicles 22,510 22,510 SG&A 100
Advertising 7,361 138 7,499 To reverse accrual due to client not having
Depreciation and amortization 39,249 3,571 42,820 support that service was performed in FY '00.
Other 23,713 763 4,246 20,230
-------- ----- ----- --------
Special and nonrecurring charges (697) (697)
--------
Total selling, general and administrative
before special charge 131,044 129,699 Other Current Assets 221
Other Income 221
Operating profit (61,813) (63,150) To eliminate 12/31/00 credit balance in
suspense account
Interest (expense) (211) 1 (210)
Interest income and net service charge income - - Current Liabilities -
Other income (expense) (223) 491 268 Other Income -
-------- ----- ----- -------- To eliminate 12/31/00 balance in Tire 1
reserve acct
Income before income taxes (62,247) (63,092)
Tax provision (benefit) (24,899) 1,745 - (23,154) Accounts Receivable 150
-------- ----- ----- --------
Loss on sale discontinued ops 1,200 (1,200)
SG&A 150
Net income before sale of disc ops (37,348) (41,138) To reduce bad debt reserve for current
======== ===== ===== ======== Michelin invoices
Retained earnings, beginning (8,419) (8,419)
-
--------
Retained earnings, ending (agrees with b/s) (45,767) (49,557) SG&A 164
======== ======== Current Liabilities 164
To properly state PQS deferred income at
Check (1) - 12/31/00
EBITDA (23,484) (20,759) SG&A 216
======== ======== Current Liabilties 216
To properly eliminate unidentified debit
balances in accrual
COS 1,300
SG&A 527
SG&A 527
SG&A 246
To properly record credit memos received from
Michelin for Tire Company #9 and DST system
Current Liabilities 441
------
SG&A 88
COS 529
To eliminate unsubstantiated accruals
Current Liabilities 153
SG&A 153
To eliminate unsubstantiated accrual
Current Liabilities 285
SG&A 9
COS 9
COS 2
SG&A 22
SG&A 9
Current Liabilities 7
Current Liabilities 169
Current Liabilities 58
To eliminate accruals recorded twice
53
SG&A 132
Accounts Receivable 132
To reserve for uncollectible accounts as a result of A/R
sample error projected to population
Current Liabilities 67
SG&A 67
To eliminate unsubstantiated balance in accrual account
Current Liabilities 101
SG&A 101
To eliminate unidentified accrual in sales tax payable account
Current Liabilities 50
Net Fixed Assets 50
To eliminate accrual for equipment not received or paid for
at 12/31/00
Current Liabilities 89
Salaries and wages 89
To properly reflect bonus accrual at 12/31/00
Current Liabilities 221
Other Liabilities 21
Sales 200
To properly state deferred BTSA revenue at 12/31/00
Bank draft (credit card receivable) (1030) -
Bad debt expense (8830) -
To properly reflect credit card receivables at 12/31/00
Current Liabilities 1,482
Salaries and wages 1,482
To properly reflect vacation liability at 12/31/00
COS 300
Current Liabilities 300
To accrue for free oil change liability at 12/31/00
Cost of sales
Inventory reserve - parts
Inventory reserve - tires
Cost of sales
Accounts Receivable 862
Cash 862
To properly reflect credit card receivables at 12/31/00
COS 200
SG&A 200
To properly state COGS and bad debt expense for FY '00.
Cash over/short expense (7810SG&A 252,705
Bad debt expense (8830) SG&A (252,705)
To properly reflect write-off of customer #90000
AA Audit Adjustments
S, G & A 163
Accrued Liabilities 163
To accrue for private lable warranty exposure
Co-op Income ADV 138
Co-op Receivable 138
To Properly state co-op receivable balance at 12/31/00
COS 337
Inventory 337
To reduce inventory value for the MAST 7% alliance program
COS 1,285
Inventory Reserve-parts 1,285
To adjust inventory parts reserve
Interest Expense 1
To plug RE variance
Intercompany Rec Corp -
Deferred Tax Benefit - Winston -
current Provision 23,920 corp
Noncurrent Deferred tax asset 20,621 corp
Current deferred tax asset 436 corp
Income tax payable 25,280 corp
Intercompany Winston 18,825 corp
Noncurrent Deferred tax asset 927 corp
Tax Provision 927 corp
Current deferred tax asset 2,000 corp
Noncurrent Deferred tax asset 2,000 corp
Winston Deferred tax provision 1,745
Intercompany payable corp 1745
54
EXHIBIT E
Winston Tire Company
Lease Abstract
Current As Of May 3, 2001
----------------------------------------------------------------------------------------------------------------------------------
Core/Non-core
Store Location Terminated/ Lease Begin Lease End Options Increase Dates
Assigned
----------------------------------------------------------------------------------------------------------------------------------
001 GLENDALE Core 3/16/1976 3/15/2011 2-5 YR OPT 3/16/2006
----------------------------------------------------------------------------------------------------------------------------------
003 INGLEWOOD Core 4/1/1986 3/31/2006 NONE 4/1/2001
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXX Core 2/4/1977 2/3/2002 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
006 PASADENA Core 6/1/1988 5/31/2008 2-5 YR OPT 6/01,06
----------------------------------------------------------------------------------------------------------------------------------
007 DOWNEY Core 6/22/1984 6/21/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
008 RIVERSIDE Core 10/1/1982 9/30/2002 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
010 VAN NUYS Core 2/4/1977 2/3/2002 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
012 BAKERSFIELD Core 10/26/1987 10/25/2002 2-6 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
015 MONTEBELLO Core 8/1/1977 7/31/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXXXXXXX Core 9/1/1976 8/31/2011 NONE 9/1/01,06
----------------------------------------------------------------------------------------------------------------------------------
019 LA CIENEGA Core 9/1/1991 8/31/2001 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
021 VENTURA Core 2/15/1984 2/14/2009 NONE 2/15/2004
----------------------------------------------------------------------------------------------------------------------------------
023 N. LONG BEACH Core 7/1/2000 6/30/2010 1-10 YR OPT 7/1/01,& YEARLY THEREAFTER
----------------------------------------------------------------------------------------------------------------------------------
028 BURBANK Core 9/28/1976 9/27/2011 NONE 10/1/01, 3% Annual Thereafter
----------------------------------------------------------------------------------------------------------------------------------
036 CLAIREMONT MESA Core 10/25/1990 10/24/2005 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
038 ALHAMBRA-BLDG. Core 2/1/1999 1/31/2009 1-5 YR OPT 2/1/2004
----------------------------------------------------------------------------------------------------------------------------------
ALHAMBRA-GROUND 5/1/1992 1/31/2004 2-5 YR OPT 12/31/2004
----------------------------------------------------------------------------------------------------------------------------------
039 GRANADA HILLS Core 5/16/1973 1/15/2008 NONE 1/16/2003
----------------------------------------------------------------------------------------------------------------------------------
040 CORONA Core 3/1/1974 2/28/2004 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
041 HUNTINGTON BEACH Core 12/1/1973 11/30/2003 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX Core 10/1/1973 9/30/2008 NONE 10/1/2003
----------------------------------------------------------------------------------------------------------------------------------
043 ORANGE Core 1/16/1999 1/15/2009 1-5 YR OPT 1/16/02,03,04,05,06,07,08
----------------------------------------------------------------------------------------------------------------------------------
044 WHITTIER Core 1/15/1975 1/14/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
045 VISALIA Core 5/1/1975 4/30/2005 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX Core 12/1/1981 11/30/2001 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
049 SEAL BEACH Core 1/1/1976 12/31/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXXX0-XXXX XX Core 12/1/1983 11/30/2003 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XX XXXXXXXXX Core 9/1/1976 8/31/2016 2-5 YR OPT 9/01,06,11
----------------------------------------------------------------------------------------------------------------------------------
055 SACRAMENTO Core 6/1/1989 5/31/2009 2-5 YR OPT 6/02,07
----------------------------------------------------------------------------------------------------------------------------------
056 SANTA FE SPRINGS Core 4/1/1977 3/31/2002 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
057 ESCONDIDO Core 6/1/1993 5/31/2003 2-5 YR OPT 6/1/2002
----------------------------------------------------------------------------------------------------------------------------------
060 NO. HOLLYWOOD Core 1/4/1977 1/3/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
061 XXXXXXXX Core 8/3/1982 8/2/2002 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
063 NEWHALL Core 12/1/1986 11/30/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
065 ANAHEIM Core 9/9/1977 9/8/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
066 SACRAMENTO-AUBURN Core 5/1/1978 5/1/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
067 TORRANCE - Bldg Core 6/25/1979 6/24/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
TORRANCE - Warehouse 3/15/1988 6/24/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
068 HOLLYWOOD Core 1/12/1978 1/11/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
070 FRESNO-BLACKSTONE Core 8/1/1977 7/31/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
073 MONROVIA Core 1/1/1978 12/31/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
075 LAGUNA HILLS Core 3/9/1979 3/7/2004 1-5 YR OPT 2% of gross sales
----------------------------------------------------------------------------------------------------------------------------------
076 RIALTO Core 5/1/1978 4/30/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
077 NORWALK Core 1/5/1979 12/31/2009 2-5 YR OPT 1/1/02,04,06,08 CPI
----------------------------------------------------------------------------------------------------------------------------------
078 MODESTO Core 1/2/1979 12/31/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
081 XXXXXXXX Core 2/5/1979 2/4/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX - XXXXXX XX. Core 11/1/1995 11/1/2010 2-5 YR OPT 11/1/2005
----------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXX - XXXXX XX. Core 2/26/1979 2/25/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
085 SAN XXXXXXXX Core 2/19/1979 2/18/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
086 SANTA XXXXX Core 9/1/1995 8/31/2010 2-5 YR OPT 9/1/2005
----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Store Location CPI Index Comments
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. City
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXXXXX XXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
006 PASADENA LA/Riverside
------------------------------------------------------------------------------------------------------
007 DOWNEY LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXX XXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXX XXXXXXXXXX Schedule 9/1/01 increase to $4,200
------------------------------------------------------------------------------------------------------
019 LA CIENEGA LA/Riverside Option Expires 6/30/01
------------------------------------------------------------------------------------------------------
021 VENTURA Schedule
------------------------------------------------------------------------------------------------------
023 N. LONG BEACH Schedule
------------------------------------------------------------------------------------------------------
028 BURBANK Schedule 10/1/01 increase to $4,000
------------------------------------------------------------------------------------------------------
036 CLAIREMONT MESA San Diego
------------------------------------------------------------------------------------------------------
038 ALHAMBRA-BLDG. 15% Fixed
------------------------------------------------------------------------------------------------------
ALHAMBRA-GROUND LA/Riverside
------------------------------------------------------------------------------------------------------
039 GRANADA HILLS LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
041 HUNTINGTON BEACH Schedule
------------------------------------------------------------------------------------------------------
000 XXXXX XXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
043 ORANGE Schedule
------------------------------------------------------------------------------------------------------
044 WHITTIER Schedule
------------------------------------------------------------------------------------------------------
045 VISALIA Schedule
------------------------------------------------------------------------------------------------------
000 XXXXX XXXX Schedule Option Expires 9/1/01
------------------------------------------------------------------------------------------------------
000 XXXX XXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX0-XXXX XX SF/Oakland
------------------------------------------------------------------------------------------------------
000 XX XXXXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXX XX XXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
060 NO. HOLLYWOOD LA/Riverside
------------------------------------------------------------------------------------------------------
061 XXXXXXXX LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
066 SACRAMENTO-AUBURN LA/Riverside
------------------------------------------------------------------------------------------------------
067 TORRANCE - Bldg LA/Riverside
------------------------------------------------------------------------------------------------------
TORRANCE - Warehouse LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXX-XXXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
073 MONROVIA LA/Riverside
------------------------------------------------------------------------------------------------------
075 LAGUNA HILLS LA/Riverside
------------------------------------------------------------------------------------------------------
076 RIALTO LA/Riverside
------------------------------------------------------------------------------------------------------
077 NORWALK U.S. City
------------------------------------------------------------------------------------------------------
078 MODESTO SF/Oakland
------------------------------------------------------------------------------------------------------
081 XXXXXXXX XX/Oakland
------------------------------------------------------------------------------------------------------
000 XXXXX - XXXXXX XX. X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXX XXXX - XXXXX XX. SF/Oakland
------------------------------------------------------------------------------------------------------
085 SAN XXXXXXXX LA/Riverside
------------------------------------------------------------------------------------------------------
086 SANTA XXXXX Schedule
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Store Location Mo Rent Cam Imp. Tax Imp. Sq. Ft. Bays CPI Cap R & M Roof RE Tax Ins
------------------------------------------------------------------------------------------------------------------------------------
001 GLENDALE $ 5,860.00 $0.00 $0.00 5,000 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
003 INGLEWOOD $ 3,900.00 $0.00 $0.00 5,000 5 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXX $ 3,139.08 $0.00 $0.00 3,500 8 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
006 PASADENA $ 5,736.88 $0.00 $0.00 5,500 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
007 DOWNEY $ 4,720.06 $0.00 $0.00 4,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
008 RIVERSIDE $ 5,272.96 $0.00 $0.00 6,000 8 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
010 VAN NUYS $ 3,226.67 $0.00 $0.00 3,400 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
012 BAKERSFIELD $ 4,546.70 $0.00 $0.00 7,000 8 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
015 MONTEBELLO $ 1,500.00 $0.00 $0.00 4,000 6 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXXXXXXX $ 3,328.14 $0.00 $0.00 4,500 6 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
019 LA CIENEGA $ 7,898.94 $0.00 $0.00 4,000 7 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
021 VENTURA $ 7,250.00 $0.00 $0.00 5,800 8 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 X. XXXX XXXXX $ 5,000.00 $0.00 $0.00 4,800 7 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
028 BURBANK $ 1,923.44 $0.00 $0.00 3,500 6 20% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXXXX XXXX $ 10,274.16 $1,144.41 $0.00 5,200 8 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
038 ALHAMBRA-BLDG. $ 5,179.00 $0.00 $0.00 3,500 6 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
ALHAMBRA-GROUND $ 2,251.78 $0.00 $0.00 3,500 0 NONE TEN N/A TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXXX $ 4,958.23 $0.00 $0.00 4,800 6 10% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
040 CORONA $ 4,183.42 $0.00 $0.00 4,500 6 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXXXX XXXXX $ 8,724.50 $0.00 $0.00 4,000 3 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX $ 4,175.05 $0.00 $0.00 3,800 3 15% TEN TEN LL TEN
------------------------------------------------------------------------------------------------------------------------------------
043 ORANGE $ 5,675.00 $0.00 $0.00 3,600 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
044 WHITTIER $ 3,500.00 $0.00 $0.00 3,800 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
045 VISALIA $ 4,750.00 $0.00 $0.00 3,800 4 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX $ 1,760.00 $0.00 $0.00 3,800 4 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
049 SEAL BEACH $ 2,691.72 $566.00 $0.00 3,800 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXXX0-XXXX XX $ 3,411.60 $0.00 $0.00 3,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XX XXXXXXXXX $ 2,758.11 $0.00 $0.00 3,500 6 20% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
055 SACRAMENTO $ 5,000.00 $0.00 $0.00 5,200 8 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XX XXXXXXX $ 3,073.60 $0.00 $0.00 3,600 4 20% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
057 ESCONDIDO $ 4,929.63 $0.00 $0.00 5,000 9 15% T/LL* LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
060 NO. HOLLYWOOD $ 3,144.02 $0.00 $0.00 4,000 6 12.5% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
061 XXXXXXXX $ 3,184.21 $0.00 $0.00 5,000 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
063 NEWHALL $ 6,120.00 $0.00 $0.00 7,200 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
065 ANAHEIM $ 2,620.86 $0.00 $0.00 3,800 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
066 SACRAMENTO-AUBURN $ 3,859.01 $0.00 $0.00 4,500 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXX - Xxxx $ 3,052.68 $0.00 $0.00 5,000 7 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
TORRANCE - Warehouse $ 3,527.40 $0.00 $0.00 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
068 HOLLYWOOD $ 2,960.11 $0.00 $0.00 4,000 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
070 FRESNO-BLACKSTONE $ 3,162.72 $0.00 $0.00 3,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
073 MONROVIA $ 2,185.96 $0.00 $0.00 4,300 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXX $ 4,717.84 $0.00 $0.00 3,800 5 N/A TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
076 RIALTO $ 3,139.71 $0.00 $0.00 3,800 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
077 NORWALK $ 5,300.00 $750.00 $0.00 3,800 4 6% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
078 MODESTO $ 3,895.75 $0.00 $0.00 4,200 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
081 XXXXXXXX $ 3,240.81 $0.00 $0.00 3,900 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX - XXXXXX XX. $ 4,245.38 $0.00 $0.00 3,900 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXX - XXXXX XX. $ 3,563.88 $0.00 $0.00 4,000 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
085 SAN XXXXXXXX $ 2,815.85 $0.00 $0.00 3,800 7 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
086 SANTA XXXXX $ 4,800.00 $0.00 $0.00 4,500 4 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
This Lease Abstract does not contain any information regarding
contingent liabilities or indemnification provisions. Please review each lease independently for such purposes.
1
55
----------------------------------------------------------------------------------------------------------------------------------
Core/Non-core
Store Location Terminated/ Lease Begin Lease End Options Increase Dates
Assigned
----------------------------------------------------------------------------------------------------------------------------------
091 INDIO Core 2/1/1992 1/31/2012 2-5 YR OPT 2/2002,2007
----------------------------------------------------------------------------------------------------------------------------------
093 FREMONT Core 2/1/1979 1/31/2004 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
094 BARSTOW Core 12/1/1979 11/30/2004 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
095 SAN XXXX-SAN XXXXXX Core 12/12/1980 12/11/2005 1-5 YR OPT 12/12/2000-Arbitration Underway
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
098 UPLAND Core 2/1/1980 1/31/2005 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
100 SAN BRUNO Core 9/1/1979 11/30/2004 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
104 REDWOOD CITY Core 2/1/1980 1/31/2005 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
105 XXXXXX Core 3/24/1981 3/22/2006 NONE 3/23/02,03,04,05
----------------------------------------------------------------------------------------------------------------------------------
107 MILPITAS Core 4/15/1981 4/14/2006 NONE 4/15/02,03,04,05
----------------------------------------------------------------------------------------------------------------------------------
112 SAN XXXX-MONTEREY Core 2/5/1982 2/4/2002 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
117 CONCORD Core 3/20/1984 3/15/2005 NONE 1/1/2002
----------------------------------------------------------------------------------------------------------------------------------
118 ORANGEVALE Core 3/16/1981 3/15/2006 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
119 HAYWARD-MISSION Core 10/1/1981 9/30/2004 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
120 LODI Core 1/1/1981 11/30/2005 2-5 YR OPT 12/1/01,02,03,04
----------------------------------------------------------------------------------------------------------------------------------
127 ENCINITAS Core 10/1/1991 9/30/2006 1-5 YR OPT 10/1/2001
----------------------------------------------------------------------------------------------------------------------------------
128 CALEXICO Core 2/22/1982 2/21/2002 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
137 TEMPLE CITY Core 3/15/1978 3/14/2003 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
138 WEST LOS ANGELES Core 9/1/1983 8/31/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
140 SAN DIEGO - GARNET Core 7/16/1984 7/16/2004 NONE 7/16/2002
----------------------------------------------------------------------------------------------------------------------------------
141 THOUSAND OAKS Core 12/29/1984 12/31/2004 1-5 YR OPT 1/1/2003
----------------------------------------------------------------------------------------------------------------------------------
142 EL CERRITO Core 9/1/1983 8/31/2003 NONE 9/1/2001
----------------------------------------------------------------------------------------------------------------------------------
143 XXXX CITY Core 4/1/1992 3/31/2003 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
146 RESEDA Core 3/26/1984 3/25/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
148 CITRUS HEIGHTS Core 9/1/1985 8/31/2005 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
154 PETALUMA Core 4/16/1985 4/30/2000* *MONTH TO MONTH NONE
----------------------------------------------------------------------------------------------------------------------------------
156 BREA Core 8/1/1984 7/31/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
158 CLOVIS Core 1/1/1985 12/31/2004 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX - Xxxx Core 1/12/1987 1/11/2012 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
XXXXXX VALLEY - Pkg Lot 9/15/1996 1/11/2012 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
163 CATHEDRAL CITY Core 8/13/1986 8/12/2001 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
164 POWAY Core 12/20/1985 12/19/2005 2-5 YR OPT 12/20/2003
----------------------------------------------------------------------------------------------------------------------------------
166 CLAREMONT Core 9/1/1986 8/31/2001 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
167 VISTA Core 12/22/1986 12/21/2003 2-3 YR OPT 12/22/2001
----------------------------------------------------------------------------------------------------------------------------------
170 LAKE ELSINORE Core 11/3/1988 12/31/2003 2-5 YR OPT 11/3/2003
----------------------------------------------------------------------------------------------------------------------------------
171 BAKERSFIELD Core 11/8/1988 12/31/2007 2-5 YR OPT 11/1/2003,2006
----------------------------------------------------------------------------------------------------------------------------------
174 HESPERIA Core 4/3/1989 4/2/2004 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
175 PERRIS Core 3/9/1991 3/8/2006 2-5 YR OPT Mar-03
----------------------------------------------------------------------------------------------------------------------------------
177 SACRAMENTO -WATT Core 2/10/1989 2/8/2004 1-5 YR OPT 7/9/2001
----------------------------------------------------------------------------------------------------------------------------------
179 SAN DIEGO - MIDWAY DR. Core 4/17/1989 4/17/2002 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX Core 10/1/1989 9/30/2004 1-5 YR OPT 10/1/2002
----------------------------------------------------------------------------------------------------------------------------------
182 PALMDALE Core 4/11/1990 4/10/2005 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
183 STOCKTON Core 8/18/1990 8/31/2005 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
189 FRESNO Core 1/30/1992 1/29/2007 1-5 YR OPT 1/30/2004
----------------------------------------------------------------------------------------------------------------------------------
191 CHINO HILLS Core 3/25/1992 3/30/2002 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
192 MISSION GORGE Core 12/1/1990 3/31/2006 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
196 LAKE FOREST Core 9/4/1992 8/31/2008 1-5 YR OPT 9/1/2003
----------------------------------------------------------------------------------------------------------------------------------
197 ELK GROVE - Existing Store Core 1/25/1993 1/24/2008 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
ELK GROVE - Addition 4/15/1997 7/14/2003 1-4 YR 6 MO 9 DAYS NONE
----------------------------------------------------------------------------------------------------------------------------------
199 ROCKLIN Core 7/22/1993 7/21/2008 2-5 YR OPT 7/22/2003
----------------------------------------------------------------------------------------------------------------------------------
200 SUNNYVALE Core 4/15/1992 4/14/2002 2-5 YR OPT 4/15/2001
----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Store Location CPI Index Comments
------------------------------------------------------------------------------------------------------
091 INDIO NONE
------------------------------------------------------------------------------------------------------
093 FREMONT SF/Oakland
------------------------------------------------------------------------------------------------------
000 XXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
095 SAN XXXX-SAN XXXXXX SF/Oakland Arbitration to Determine Fair-
------------------------------------------------------------------------------------------------------
Market Value. Min of $6,840
------------------------------------------------------------------------------------------------------
098 UPLAND LA/Riverside
------------------------------------------------------------------------------------------------------
100 SAN BRUNO SF/Oakland
------------------------------------------------------------------------------------------------------
104 REDWOOD CITY SF/Oakland
------------------------------------------------------------------------------------------------------
105 XXXXXX Schedule
------------------------------------------------------------------------------------------------------
107 MILPITAS Schedule
------------------------------------------------------------------------------------------------------
000 XXX XXXX-XXXXXXXX Schedule
------------------------------------------------------------------------------------------------------
117 CONCORD SF/Oakland
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXX X.X. City
------------------------------------------------------------------------------------------------------
119 HAYWARD-MISSION Schedule
------------------------------------------------------------------------------------------------------
120 LODI Schedule
------------------------------------------------------------------------------------------------------
127 ENCINITAS LA/Riverside
------------------------------------------------------------------------------------------------------
128 CALEXICO San Diego
------------------------------------------------------------------------------------------------------
137 TEMPLE CITY LA/Riverside
------------------------------------------------------------------------------------------------------
138 WEST LOS ANGELES LA/Riverside
------------------------------------------------------------------------------------------------------
140 SAN DIEGO - GARNET San Diego
------------------------------------------------------------------------------------------------------
000 XXXXXXXX XXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
142 EL CERRITO SF/Oakland
------------------------------------------------------------------------------------------------------
000 XXXX XXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
146 RESEDA LA/Riverside
------------------------------------------------------------------------------------------------------
148 CITRUS HEIGHTS SF/Oakland
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
158 CLOVIS U.S. City
------------------------------------------------------------------------------------------------------
162 XXXXXX VALLEY - Bldg LA/Riverside
------------------------------------------------------------------------------------------------------
XXXXXX VALLEY - Pkg Lot LA/Riverside
------------------------------------------------------------------------------------------------------
163 CATHEDRAL CITY LA/Riverside Option Expires 5/12/01
------------------------------------------------------------------------------------------------------
000 XXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
166 CLAREMONT LA/Riverside Option Expires 6/30/01
------------------------------------------------------------------------------------------------------
000 XXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXX XXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
177 SACRAMENTO -WATT SF/Oakland
------------------------------------------------------------------------------------------------------
179 SAN DIEGO - MIDWAY DR. LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXX XXXX LA/Riverside
------------------------------------------------------------------------------------------------------
182 PALMDALE LA/Riverside
------------------------------------------------------------------------------------------------------
183 STOCKTON SF/Oakland
------------------------------------------------------------------------------------------------------
000 XXXXXX X.X. City
------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
192 MISSION GORGE LA/Riverside
------------------------------------------------------------------------------------------------------
196 LAKE FOREST Schedule
------------------------------------------------------------------------------------------------------
000 XXX XXXXX - Existing Store U.S. City
------------------------------------------------------------------------------------------------------
ELK GROVE - Addition Schedule
------------------------------------------------------------------------------------------------------
000 XXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
200 SUNNYVALE SF/Oakland
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Store Location Mo Rent Cam Imp. Tax Imp. Sq. Ft. Bays CPI Cap R & M Roof RE Tax Ins
------------------------------------------------------------------------------------------------------------------------------------
091 INDIO $ 4,836.30 $0.00 $0.00 4,400 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
093 FREMONT $ 2,723.91 $0.00 $0.00 3,500 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX $ 1,574.09 $0.00 $0.00 3,200 7 20% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
095 SAN XXXX-SAN XXXXXX $ 3,156.27 $0.00 $0.00 3,800 4 28% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
098 UPLAND $ 3,390.47 $0.00 $0.00 3,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXX $ 2,041.96 $0.00 $0.00 3,500 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
104 REDWOOD CITY $ 2,907.37 $0.00 $0.00 3,500 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
105 XXXXXX $ 3,240.00 $0.00 $0.00 3,900 6 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
107 MILPITAS $ 4,900.00 $0.00 $0.00 4,400 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
112 SAN XXXX-MONTEREY $ 4,256.00 $0.00 $0.00 4,000 7 NONE TEN LL LL LL
------------------------------------------------------------------------------------------------------------------------------------
117 CONCORD $ 4,748.87 $974.40 $0.00 4,500 6 5% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
118 ORANGEVALE $ 5,000.00 $0.00 $0.00 4,500 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
119 HAYWARD-MISSION $ 6,700.00 $0.00 $0.00 4,400 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
120 LODI $ 4,372.05 $0.00 $0.00 4,000 5 2.75% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
127 ENCINITAS $ 8,564.89 $1,668.00 $0.00 5,032 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
128 CALEXICO $ 3,636.05 $0.00 $0.00 3,900 4 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXX $ 1,975.59 $0.00 $0.00 3,900 4 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
138 WEST LOS ANGELES $ 6,158.95 $1,295.00 $0.00 4,000 6 4% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
140 SAN DIEGO - GARNET $ 5,254.25 $0.00 $0.00 4,000 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
141 THOUSAND OAKS $ 8,454.40 $0.00 $0.00 5,000 6 21% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
142 EL CERRITO $ 3,150.00 $0.00 $0.00 4,000 5 9% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
143 XXXX CITY $ 4,429.71 $0.00 $0.00 5,000 5 15% TEN LL L/T* TEN
------------------------------------------------------------------------------------------------------------------------------------
146 RESEDA $ 2,905.74 $0.00 $0.00 4,000 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
148 CITRUS HEIGHTS $ 5,248.53 $0.00 $0.00 4,500 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
154 PETALUMA $ 8,868.00 $964.69 $0.00 5,500 4 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
156 BREA $ 3,100.50 $0.00 $0.00 3,900 4 20% TEN TEN LL L/T*
------------------------------------------------------------------------------------------------------------------------------------
158 CLOVIS $ 5,468.38 $693.03 $248.22 5,500 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX - Xxxx $ 5,600.00 $0.00 $0.00 4,800 5 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
XXXXXX VALLEY - Pkg Lot $ 500.00 $0.00 $0.00 19,800 0 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
163 CATHEDRAL CITY $ 5,243.39 $0.00 $0.00 4,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
164 POWAY $ 4,816.84 $0.00 $0.00 4,200 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
166 CLAREMONT $ 5,500.00 $115.00 $0.00 4,500 5 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
167 VISTA $ 8,661.04 $1,728.00 $0.00 6,000 7 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXX XXXXXXXX $ 7,345.42 $1,248.00 $0.00 5,200 7 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
171 BAKERSFIELD $ 6,226.12 $800.00 $0.00 5,200 8 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
174 HESPERIA $ 6,251.45 $0.00 $0.00 5,200 8 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
175 PERRIS $ 7,185.24 $1,380.40 $0.00 4,760 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
177 SACRAMENTO -WATT $ 5,199.79 $663.48 $0.00 5,200 8 12.5% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
179 SAN DIEGO - MIDWAY DR. $ 8,091.00 $1,665.00 $0.00 6,250 6 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX $ 7,622.47 $457.46 $0.00 6,000 6 18% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
182 PALMDALE $ 6,190.14 $0.00 $0.00 5,200 4 15% LL/T* LL TEN** TEN
------------------------------------------------------------------------------------------------------------------------------------
183 STOCKTON $ 7,167.22 $471.93 $0.00 5,200 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
189 FRESNO $ 7,581.72 $0.00 $0.00 5,200 8 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX $ 7,252.67 $813.00 $0.00 4,799 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
192 MISSION GORGE $ 7,750.83 $0.00 $0.00 5,160 6 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXX XXXXXX $ 9,437.40 $2,973.00 $0.00 6,420 6 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
197 ELK GROVE - Existing Store $ 5,683.50 $0.00 $0.00 4,400 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
ELK GROVE - Addition $ 3,500.00 $0.00 $0.00 2,480 0 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
199 ROCKLIN $ 5,764.02 $0.00 $0.00 4,500 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
200 SUNNYVALE $ 7,485.76 $111.00 $0.00 4,360 6 NONE TEN LL* TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
This Lease Abstract does not contain any information regarding
contingent liabilities or indemnification provisions. Please review each lease independently for such purposes.
2
56
----------------------------------------------------------------------------------------------------------------------------------
Core/Non-core
Store Location Terminated/ Lease Begin Lease End Options Increase Dates
Assigned
----------------------------------------------------------------------------------------------------------------------------------
201 YUCCA VALLEY Core 6/5/1994 6/4/2004 2-5 YR OPT Jun-03
----------------------------------------------------------------------------------------------------------------------------------
202 CORONA Core 3/19/1994 4/1/2009 2-5 YR OPT 3/2003,2006
----------------------------------------------------------------------------------------------------------------------------------
203 MODESTO Core 5/23/1994 5/23/2009 2-5 YR OPT 5/03,06
----------------------------------------------------------------------------------------------------------------------------------
209 MANTECA Core 9/30/1995 9/29/2010 2-5 YR OPT 9/30/2005
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX Core 3/1/1996 7/31/2004 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
SCOTTS VALLEY - ADDITION 9/1/1999 8/31/2004 1-5 YR OPT 9/1/01,02,03
----------------------------------------------------------------------------------------------------------------------------------
218 BANNING Core 11/23/1996 11/22/2011 2-5 YR OPT 11/23/2001,06
----------------------------------------------------------------------------------------------------------------------------------
219 SHINGLE SPRINGS Core 11/15/1995 10/31/2005 1-5 YR OPT 11/1/2000
----------------------------------------------------------------------------------------------------------------------------------
222 GILROY Core 1/16/1998 1/15/2018 2-5 YR OPT 01/16/03,08,13
----------------------------------------------------------------------------------------------------------------------------------
223 CANYON COUNTRY Core 3/15/1998 6/30/2004 5-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
229 LONG BEACH TOWNE CENTER Core 5/7/1999 5/31/2014 2-5 YR OPT 5/7/2004,09
----------------------------------------------------------------------------------------------------------------------------------
231 BUENA PARK Core 8/1/1998 10/30/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
233 NATIONAL CITY Core 3/1/1999 4/30/2009 2-5 YR OPT 3/1/2004
----------------------------------------------------------------------------------------------------------------------------------
240 CAMARILLO Core 2/5/1998 2/4/2006 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXX Core 2/1/1990 1/31/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
246 SANTA XXXXX Core 1/1/1990 12/31/2001 1-3, 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
247 OLYMPIC Core 2/1/1990 8/31/2002 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
248 TORRANCE Core 1/1/1979 12/31/2003 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
249 PASADENA Core 5/1/1994 4/30/2004 1-5 YR OPT 11/1/2001
----------------------------------------------------------------------------------------------------------------------------------
252 TEMECULA Core 11/3/2000 12/1/2010 2-5 YR OPT 11/3/2005
----------------------------------------------------------------------------------------------------------------------------------
255 PLEASANTON Core 1/1/2000 12/31/2014 2-5 YR OPT 1/1/2005,10
----------------------------------------------------------------------------------------------------------------------------------
257 REDLANDS Core 9/7/1999 9/6/2014 1-5 YR OPT 9/7/2004, 09
----------------------------------------------------------------------------------------------------------------------------------
259 EL CENTRO Core 1/26/2000 1/25/2015 2-5 YR OPT 7/10/02,1/10/05,7/10/07
----------------------------------------------------------------------------------------------------------------------------------
279 CITY OF INDUSTRY Core 5/23/1997 5/22/2007 2-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
280 SAN DIEGO / LA JOLLA Core 8/1/1996 8/15/2003 2-5 YR OPT Percentage Rent - Yearly
----------------------------------------------------------------------------------------------------------------------------------
281 REDONDO BEACH Core 7/1/1995 6/30/2003 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
284 FONTANA Core 1/10/2005 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
285 XXXXXXX Core 6/1/2000 6/1/2010 2-5 YR OPT 6/1/02,04,06,08
----------------------------------------------------------------------------------------------------------------------------------
286 CHULA VISTA Core 1/1/2000 12/31/2014 NONE 1/1/01 Yearly thereafter
----------------------------------------------------------------------------------------------------------------------------------
287 DIAMOND BAR Core 12/30/2005 NONE Percentage Rent - Yearly
----------------------------------------------------------------------------------------------------------------------------------
289 AZUSA Core 6/28/1995 5/31/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
290 SPRING VALLEY Core 8/1/1996 7/30/2001 NONE Percentage Rent - Yearly
----------------------------------------------------------------------------------------------------------------------------------
291 CHINO Core 7/1/1995 12/31/2001 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
292 XXXXX XXXXX Core 10/1/1995 9/30/2002 7-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XX XXXXX / XXXXXXX XXX. Core 12/1/1996 11/30/2006 NONE 12/1/01,6/1/04
----------------------------------------------------------------------------------------------------------------------------------
301 BAKERSFIELD Core 9/13/2000 9/12/2015 2-5 YR OPT 9/13/05, 10
----------------------------------------------------------------------------------------------------------------------------------
303 DANVILLE Core 3/27/2000 12/1/2009 NONE NONE
----------------------------------------------------------------------------------------------------------------------------------
900 CORP. OFFICE & TRAINING CTR. Core 1/1/2001 12/31/2005 1-5 YR OPT NONE
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXX Assigned LEASE ASSIGNED 4/10/01
----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX Assigned LEASE ASSIGNED 4/10/01
----------------------------------------------------------------------------------------------------------------------------------
037 SANTA XXXXXX Assigned LEASE ASSIGNED 4/6/01
----------------------------------------------------------------------------------------------------------------------------------
046 WEST COVINA Assigned LEASE ASSIGNED 4/4/01
----------------------------------------------------------------------------------------------------------------------------------
062 RANCHO XXXXXXX Assigned LEASE ASSIGNED 5/2/01
----------------------------------------------------------------------------------------------------------------------------------
079 SANTA XXXXXXX Assigned LEASE ASSIGNED 4/3/01
----------------------------------------------------------------------------------------------------------------------------------
087 VICTORVILLE Assigned LEASE ASSIGNED 4/24/01
----------------------------------------------------------------------------------------------------------------------------------
124 REDLANDS Assigned LEASE ASSIGNED 4/20/01
----------------------------------------------------------------------------------------------------------------------------------
133 RIVERSIDE Assigned LEASE ASSIGNED 4/25/01
----------------------------------------------------------------------------------------------------------------------------------
147 HEMET Assigned LEASE ASSIGNED 4/4/01
----------------------------------------------------------------------------------------------------------------------------------
165 XXXXX XXXXX Assigned LEASE ASSIGNED JULY 2000
----------------------------------------------------------------------------------------------------------------------------------
184 DESERT HOT SPRINGS Assigned LEASE ASSIGNED 4/10/01
----------------------------------------------------------------------------------------------------------------------------------
186 PALM SPRINGS Assigned LEASE ASSIGNED JANUARY 2000
----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Store Location CPI Index Comments
------------------------------------------------------------------------------------------------------
201 YUCCA VALLEY LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
203 MODESTO U.S. City
------------------------------------------------------------------------------------------------------
209 MANTECA U.S. City
------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX Schedule
------------------------------------------------------------------------------------------------------
SCOTTS VALLEY - ADDITION Schedule
------------------------------------------------------------------------------------------------------
218 BANNING U.S. City
------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
223 CANYON COUNTRY Schedule
------------------------------------------------------------------------------------------------------
000 XXXX XXXXX XXXXX XXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXXX XXXX XXXX
------------------------------------------------------------------------------------------------------
233 NATIONAL CITY LA/Riverside
------------------------------------------------------------------------------------------------------
240 CAMARILLO 2% Increase
------------------------------------------------------------------------------------------------------
000 XXX XXXX Schedule
------------------------------------------------------------------------------------------------------
246 SANTA XXXXX SF/Oakland
------------------------------------------------------------------------------------------------------
247 OLYMPIC NONE
------------------------------------------------------------------------------------------------------
248 TORRANCE NONE
------------------------------------------------------------------------------------------------------
249 PASADENA LA/Riverside
------------------------------------------------------------------------------------------------------
252 TEMECULA LA/Riverside
------------------------------------------------------------------------------------------------------
255 PLEASANTON LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XX XXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
279 CITY OF INDUSTRY Fair Market
------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XX XXXXX X/X
------------------------------------------------------------------------------------------------------
281 REDONDO BEACH Schedule
------------------------------------------------------------------------------------------------------
284 FONTANA N/A
------------------------------------------------------------------------------------------------------
000 XXXXXXX XX/Xxxxxxxxx
------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX Schedule
------------------------------------------------------------------------------------------------------
287 DIAMOND BAR N/A
------------------------------------------------------------------------------------------------------
289 AZUSA N/A Month-To-Month Pending Goodyear Renewal
------------------------------------------------------------------------------------------------------
290 SPRING VALLEY N/A Month-To-Month Pending Goodyear Renewal
------------------------------------------------------------------------------------------------------
291 CHINO N/A
------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX X/X
------------------------------------------------------------------------------------------------------
000 XX XXXXX / XXXXXXX XXX. Schedule
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXXX X.X. City
------------------------------------------------------------------------------------------------------
303 DANVILLE Schedule
------------------------------------------------------------------------------------------------------
900 CORP. OFFICE & TRAINING CTR. N/A
------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXX
------------------------------------------------------------------------------------------------------
000 XXXXX XXXX
------------------------------------------------------------------------------------------------------
037 SANTA XXXXXX
------------------------------------------------------------------------------------------------------
046 WEST COVINA
------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------
079 SANTA XXXXXXX
------------------------------------------------------------------------------------------------------
087 VICTORVILLE
------------------------------------------------------------------------------------------------------
124 REDLANDS
------------------------------------------------------------------------------------------------------
133 RIVERSIDE
------------------------------------------------------------------------------------------------------
147 HEMET
------------------------------------------------------------------------------------------------------
165 XXXXX XXXXX
------------------------------------------------------------------------------------------------------
184 DESERT HOT SPRINGS
------------------------------------------------------------------------------------------------------
000 XXXX XXXXXXX
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Store Location Mo Rent Cam Imp. Tax Imp. Sq. Ft. Bays CPI Cap R & M Roof RE Tax Ins
------------------------------------------------------------------------------------------------------------------------------------
201 YUCCA VALLEY $ 5,179.57 $0.00 $0.00 4,400 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
202 CORONA $ 5,332.72 $1,174.54 $0.00 4,400 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
203 MODESTO $ 6,271.44 $0.00 $0.00 4,400 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
209 MANTECA $ 5,102.10 $0.00 $0.00 4,400 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX $ 3,994.00 $684.94 $572.08 3,780 7 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
SCOTTS VALLEY - ADDITION $ 1,575.00 $275.00 $176.00 1,000 0 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
218 BANNING $ 3,777.43 $0.00 $0.00 7,392 5 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXXXXX $ 3,400.00 $0.00 $0.00 4,800 5 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
222 GILROY $ 8,299.20 $0.00 $0.00 4,400 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
223 CANYON COUNTRY $ 6,345.00 $225.00 $190.00 5,280 6 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXX XXXXX XXXXX CENTER $ 8,020.83 $2,759.25 $0.00 4,400 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX $ 6,643.00 $1,230.10 $0.00 8,304 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
233 NATIONAL CITY $ 5,375.00 $1,305.00 $0.00 4,300 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
240 CAMARILLO $ 5,499.55 $0.00 $0.00 4,725 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
242 SAN XXXX $ 13,010.23 $0.00 $0.00 9,900 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX $ 7,972.26 $0.00 $0.00 5,265 3% TEN LL LL TEN
------------------------------------------------------------------------------------------------------------------------------------
247 OLYMPIC $ 6,000.00 $0.00 $500.00 6,000 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
248 TORRANCE $ 7,418.80 $0.00 $0.00 4,364 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
249 PASADENA $ 6,006.81 $0.00 $0.00 7,500 12.5% TEN LL* TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
252 TEMECULA $ 10,593.37 $616.10 $575.00 5,800 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
255 PLEASANTON $ 9,826.92 $0.00 $0.00 5,310 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
257 REDLANDS $ 8,931.74 $1,454.40 $0.00 5,653 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XX XXXXXX $ 9,140.63 $1,228.67 $0.00 5,310 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
279 CITY OF INDUSTRY $ 11,000.00 $965.00 $0.00 5,554 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
280 SAN DIEGO / LA JOLLA $ 5,520.00 $552.82 $300.00 5,623 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
281 REDONDO BEACH $ 11,184.00 $2,025.00 $0.00 8,141 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
284 FONTANA $ 3,675.24 $80.75 $460.00 8,693 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
285 XXXXXXX $ 8,200.00 $0.00 $0.00 7,066 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX $ 8,788.15 $0.00 $0.00 7,986 TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
287 DIAMOND BAR $ 2,246.40 $57.46 $421.00 7,066 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
289 AZUSA $ 6,000.00 $148.60 $452.23 8,632 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXX $ 2,339.56 $123.40 $300.00 3,743 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
291 CHINO $ 3,000.00 $191.87 $50.00 6,000 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
292 XXXXX XXXXX $ 8,551.04 $439.82 $820.00 8,714 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XX XXXXX / XXXXXXX XXX. $ 6,228.00 $148.28 $360.00 4,347 TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
301 BAKERSFIELD $ 9,625.00 $470.00 $0.00 7,802 10 2-5% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
303 DANVILLE $ 8,815.57 $0.00 $0.00 TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
900 CORP. OFFICE & TRAINING CTR $ 38,342.50 $1,205.00 $0.00 24,500 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXX
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXX
------------------------------------------------------------------------------------------------------------------------------------
037 SANTA XXXXXX
------------------------------------------------------------------------------------------------------------------------------------
046 WEST COVINA
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
079 SANTA XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
087 VICTORVILLE
------------------------------------------------------------------------------------------------------------------------------------
124 REDLANDS
------------------------------------------------------------------------------------------------------------------------------------
133 RIVERSIDE
------------------------------------------------------------------------------------------------------------------------------------
147 HEMET
------------------------------------------------------------------------------------------------------------------------------------
165 XXXXX XXXXX
------------------------------------------------------------------------------------------------------------------------------------
184 DESERT HOT SPRINGS
------------------------------------------------------------------------------------------------------------------------------------
186 PALM SPRINGS
------------------------------------------------------------------------------------------------------------------------------------
This Lease Abstract does not contain any information regarding
contingent liabilities or indemnification provisions. Please review each lease independently for such purposes.
3
57
----------------------------------------------------------------------------------------------------------------------------------
Core/Non-core
Store Location Terminated/ Lease Begin Lease End Options Increase Dates
Assigned
----------------------------------------------------------------------------------------------------------------------------------
198 COLTON Assigned LEASE ASSIGNED 4/5/01
-----------------------------------------------------------------------------------------------------------------------------------
206 FAIRFIELD Assigned LEASE ASSIGNED 4/10/01
-----------------------------------------------------------------------------------------------------------------------------------
208 TULARE Assigned LEASE ASSIGNED 4/3/01
-----------------------------------------------------------------------------------------------------------------------------------
211 KINGMAN Assigned LEASE ASSIGNED 4/11/01
-----------------------------------------------------------------------------------------------------------------------------------
212 BULLHEAD Assigned LEASE ASSIGNED 4/11/01
-----------------------------------------------------------------------------------------------------------------------------------
213 LAKE HAVASU Assigned LEASE ASSIGNED 4/12/01
-----------------------------------------------------------------------------------------------------------------------------------
220 SAN XXXX XXXXXX Assigned LEASE ASSIGNED 4/13/01
-----------------------------------------------------------------------------------------------------------------------------------
221 VACAVILLE Assigned LEASE ASSIGNED 4/3/01
-----------------------------------------------------------------------------------------------------------------------------------
226 LONG BEACH Assigned LEASE ASSIGNED 4/3/01
-----------------------------------------------------------------------------------------------------------------------------------
230 ALISO VIEJO Assigned LEASE ASSIGNED 4/24/01
-----------------------------------------------------------------------------------------------------------------------------------
238 FILMORE Assigned LEASE ASSIGNED 4/10/01
-----------------------------------------------------------------------------------------------------------------------------------
239 VISALIA Assigned LEASE ASSIGNED 4/24/01
-----------------------------------------------------------------------------------------------------------------------------------
260 TEMPE Assigned LEASE ASSIGNED 3/22/01
-----------------------------------------------------------------------------------------------------------------------------------
265 MESA, AZ. Assigned LEASE ASSIGNED 3/6/01
-----------------------------------------------------------------------------------------------------------------------------------
266 PHOENIX / XXXXXX XX. Assigned LEASE ASSIGNED 3/22/01
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXXXX XXXX. Assigned LEASE ASSIGNED 3/22/01
-----------------------------------------------------------------------------------------------------------------------------------
268 PHOENIX / CACTUS RD. Assigned LEASE ASSIGNED 3/6/01
-----------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXXXX XX. Assigned LEASE ASSIGNED 5/1/01
-----------------------------------------------------------------------------------------------------------------------------------
294 SAN DIEGO / BROADWAY Assigned LEASE ASSIGNED 5/1/01
-----------------------------------------------------------------------------------------------------------------------------------
002 EL MONTE Non-Core 7/13/1987 7/12/2002 3-5 YR&1-4 YR-11 MO. NONE
-----------------------------------------------------------------------------------------------------------------------------------
005 FULLERTON Non-Core 2/4/1977 2/3/2002 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
022 LAWNDALE Non-Core 1/1/1977 12/31/2001 1-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
LAWNDALE - Addt'l Space Non-Core 10/1/1991 12/31/2007 1-5 YR OPT 10/03,06
-----------------------------------------------------------------------------------------------------------------------------------
029 EAST SAN DIEGO Non-Core 12/1/1995 11/30/2001 1-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
033 ANAHEIM Non-Core 3/15/1993 3/14/2003 1-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
052 XXXXXX CITY Non-Core 1/1/1977 12/31/2001 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
101 FONTANA Non-Core 12/1/1979 10/31/2004 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
134 BERKELEY Non-Core 9/20/1982 9/19/2002 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
000 X. XXXXX-XXXXXXX XX. Non-Core 4/4/1983 4/3/2003 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
145 BELLFLOWER Non-Core 11/1/1983 10/31/2003 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
155 NAPA Non-Core 1/10/1986 1/9/2006 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
172 GLENDORA Non-Core 9/13/1988 9/30/2003 1-5 YR OPT 9/13/2001
-----------------------------------------------------------------------------------------------------------------------------------
173 SAN MARCOS Non-Core 6/15/1988 12/31/2004 1-5 YR OPT 6/1/2001
-----------------------------------------------------------------------------------------------------------------------------------
176 SANTEE Non-Core 10/6/1989 10/5/2004 2-5 YR OPT 10/01/01
-----------------------------------------------------------------------------------------------------------------------------------
178 OCEANSIDE Non-Core 8/24/1989 8/23/2009 2-5 YR OPT 8/24/2004
-----------------------------------------------------------------------------------------------------------------------------------
187 CYPRESS Non-Core 7/19/1990 7/31/2005 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
193 WESTMINSTER Non-Core 8/1/1991 7/31/2004 2-5 YR OPT 8/3/2000
-----------------------------------------------------------------------------------------------------------------------------------
195 MERCED Non-Core 10/25/1994 10/24/2009 2-5 YR OPT 10/25/2004
-----------------------------------------------------------------------------------------------------------------------------------
205 MADERA Non-Core 2/1/1994 1/31/2009 2-5 YR OPT 1/03,06
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX Non-Core 8/26/1995 8/25/2010 2-5 YR OPT 8/1/2605
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX -Ground Non-Core 8/26/1995 8/25/2010 2-5 YR OPT 08/01,03,05
-----------------------------------------------------------------------------------------------------------------------------------
210 BLYTHE Non-Core 6/26/1995 7/1/2005 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
214 YUBA CITY Non-Core 11/5/1996 11/4/2011 2-5 YR OPT 11/5/01,06
-----------------------------------------------------------------------------------------------------------------------------------
216 GARDENA Non-Core 1/10/2000 12/31/2012 2-5 YR OPT 7/10/02,1/10/05,7/10/07
-----------------------------------------------------------------------------------------------------------------------------------
224 SANTA XXX / BRISTOL Non-Core 7/27/1998 7/31/2008 3-5 YR OPT 7/27/2003
-----------------------------------------------------------------------------------------------------------------------------------
227 OROVILLE Non-Core 8/18/1997 8/17/2012 2-5 YR OPT 8/18/2002,07
-----------------------------------------------------------------------------------------------------------------------------------
000 X.X. / XXXXXXXXX XXXX. Non-Core 5/1/1998 4/30/2008 3-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
232 SANTA XXX Non-Core 11/1/1998 10/30/2006 1-5 YR OPT % RENT YRLY -01/00,01
-----------------------------------------------------------------------------------------------------------------------------------
235 XXXXXXXX Non-Core 1/8/1979 1/7/2003 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
236 XXXXXXX Non-Core 2/5/1979 2/4/2003 NONE TENANT PAYS RENT DIRECT TO LL
-----------------------------------------------------------------------------------------------------------------------------------
237 PORTERVILLE Non-Core 2/1/1998 1/31/2003 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Store Location CPI Index Comments
------------------------------------------------------------------------------------------------------
198 COLTON
------------------------------------------------------------------------------------------------------
206 FAIRFIELD
------------------------------------------------------------------------------------------------------
208 TULARE
------------------------------------------------------------------------------------------------------
211 KINGMAN
------------------------------------------------------------------------------------------------------
212 BULLHEAD
------------------------------------------------------------------------------------------------------
213 LAKE HAVASU
------------------------------------------------------------------------------------------------------
220 SAN XXXX XXXXXX
------------------------------------------------------------------------------------------------------
221 VACAVILLE
------------------------------------------------------------------------------------------------------
226 LONG BEACH
------------------------------------------------------------------------------------------------------
230 ALISO VIEJO
------------------------------------------------------------------------------------------------------
238 FILMORE
------------------------------------------------------------------------------------------------------
239 VISALIA
------------------------------------------------------------------------------------------------------
260 TEMPE
------------------------------------------------------------------------------------------------------
265 MESA, AZ.
------------------------------------------------------------------------------------------------------
266 PHOENIX / XXXXXX XX.
------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXXXX XXXX.
------------------------------------------------------------------------------------------------------
268 PHOENIX / CACTUS RD.
------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXXXX XX.
------------------------------------------------------------------------------------------------------
294 SAN DIEGO / BROADWAY
------------------------------------------------------------------------------------------------------
002 EL MONTE LA/Riverside To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX X.X. City Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
LAWNDALE - Addt'l Space U.S. City To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
029 EAST SAN DIEGO LA/Riverside Option Expires 5/30/01
------------------------------------------------------------------------------------------------------
033 ANAHEIM LA/Riverside To Be Assigned/Terminated
------------------------------------------------------------------------------------------------------
052 XXXXXX CITY LA/Riverside
------------------------------------------------------------------------------------------------------
101 FONTANA LA/Riverside
------------------------------------------------------------------------------------------------------
000 XXXXXXXX XX/Xxxxxxxxx Subleased
------------------------------------------------------------------------------------------------------
000 X. XXXXX-XXXXXXX XX. X.X. Xxxx Subleased
------------------------------------------------------------------------------------------------------
145 BELLFLOWER LA/Riverside To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
155 NAPA SF/Oakland Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
173 SAN MARCOS LA/Riverside To Be Assigned
------------------------------------------------------------------------------------------------------
176 SANTEE U.S. City To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
187 CYPRESS LA/Riverside To Be Assigned
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXXX X.X. City Subleased
------------------------------------------------------------------------------------------------------
195 MERCED U.S. City To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
205 MADERA U.S. City To Be Assigned
------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX -Ground SF/Oakland To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXX X.X. Xxxx
------------------------------------------------------------------------------------------------------
000 XXXX XXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
216 GARDENA LA/Riverside To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
224 SANTA XXX / BRISTOL LA/Riverside To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
000 X.X. / XXXXXXXXX XXXX. NONE Subleased
------------------------------------------------------------------------------------------------------
232 SANTA XXX NONE To Be Assigned
------------------------------------------------------------------------------------------------------
235 XXXXXXXX LA/Riverside Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXX XX/Xxxxxxxxx Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXXXXX X.X. Xxxx To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Store Location Mo Rent Cam Imp. Tax Imp. Sq. Ft. Bays CPI Cap R & M Roof RE Tax Ins
------------------------------------------------------------------------------------------------------------------------------------
198 COLTON
------------------------------------------------------------------------------------------------------------------------------------
206 FAIRFIELD
------------------------------------------------------------------------------------------------------------------------------------
208 TULARE
------------------------------------------------------------------------------------------------------------------------------------
211 KINGMAN
------------------------------------------------------------------------------------------------------------------------------------
212 BULLHEAD
------------------------------------------------------------------------------------------------------------------------------------
213 LAKE HAVASU
------------------------------------------------------------------------------------------------------------------------------------
220 SAN XXXX XXXXXX
------------------------------------------------------------------------------------------------------------------------------------
221 VACAVILLE
------------------------------------------------------------------------------------------------------------------------------------
226 LONG BEACH
------------------------------------------------------------------------------------------------------------------------------------
230 ALISO VIEJO
------------------------------------------------------------------------------------------------------------------------------------
238 FILMORE
------------------------------------------------------------------------------------------------------------------------------------
239 VISALIA
------------------------------------------------------------------------------------------------------------------------------------
260 TEMPE
------------------------------------------------------------------------------------------------------------------------------------
265 MESA, AZ.
------------------------------------------------------------------------------------------------------------------------------------
266 PHOENIX / XXXXXX XX.
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXXXX XXXX.
------------------------------------------------------------------------------------------------------------------------------------
268 PHOENIX / CACTUS RD.
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXXXX XX.
------------------------------------------------------------------------------------------------------------------------------------
294 SAN DIEGO / BROADWAY
------------------------------------------------------------------------------------------------------------------------------------
002 EL MONTE $ 5,164.20 $0.00 $0.00 4,800 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
005 FULLERTON $ 3,094.56 $0.00 $0.00 4,000 4 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
022 LAWNDALE $ 2,329.62 $0.00 $0.00 3,000 3 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
LAWNDALE - Addt'l Space $ 2,152.78 $0.00 $0.00 1,200 3 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
029 EAST SAN DIEGO $ 4,200.00 $0.00 $0.00 5,000 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
033 ANAHEIM $ - $0.00 $0.00 4,970 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
052 XXXXXX CITY $ 6,554.46 $0.00 $0.00 4,400 4 12% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
101 FONTANA $ 5,280.36 $862.67 $0.00 5,000 8 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
134 BERKELEY $ 4,981.27 $0.00 $0.00 4,000 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 X. XXXXX-XXXXXXX XX. $ 5,515.97 $475.00 $0.00 3,900 5 25% TEN LL TEN L/T*
------------------------------------------------------------------------------------------------------------------------------------
145 BELLFLOWER $ 2,861.24 $0.00 $0.00 3,800 5 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
155 NAPA $ 5,663.12 $0.00 $0.00 3,900 20% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
172 GLENDORA $ 5,000.00 $0.00 $0.00 5,200 8 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
173 SAN MARCOS $ 6,500.00 $666.17 $0.00 5,000 6 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
176 SANTEE $ 7,513.30 $1,378.00 $0.00 5,200 8 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
178 OCEANSIDE $ 7,142.81 $1,083.00 $0.00 5,000 6 25% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
187 CYPRESS $ 8,225.00 $940.00 $0.00 4,700 7 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
193 WESTMINSTER $ 5,233.11 $0.00 $0.00 4,000 5 30% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
195 MERCED $ 5,770.68 $0.00 $0.00 4,400 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
205 MADERA $ 5,192.18 $0.00 $0.00 4,400 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX $ 5,928.81 $0.00 $0.00 4,400 6 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX XXXX -Ground $ 163.00 $0.00 $0.00 3,863 0 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
210 BLYTHE $ 3,728.34 $150.00 $0.00 4,400 6 20% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
214 YUBA CITY $ 4,778.00 $0.00 $0.00 4,400 6 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
216 GARDENA $ 4,000.00 $0.00 $0.00 5,030 5 25% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
224 SANTA XXX / BRISTOL $ 6,585.50 $2,640.33 $0.00 8,550 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXX $ 4,400.00 $0.00 $0.00 4,400 15% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 X.X. / XXXXXXXXX XXXX. $ 5,200.00 $0.00 $0.00 4,500 5 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
232 SANTA XXX $ 4,878.00 $0.00 $271.11 4,878 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
235 XXXXXXXX $ 3,587.71 $0.00 $0.00 2,750 5 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
236 XXXXXXX $ - $0.00 $0.00 4,000 5 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
237 PORTERVILLE $ 1,950.00 $76.00 $230.00 5,030 8-10% TEN LL TEN * TEN
------------------------------------------------------------------------------------------------------------------------------------
This Lease Abstract does not contain any information regarding
contingent liabilities or indemnification provisions. Please review each lease independently for such purposes.
4
58
----------------------------------------------------------------------------------------------------------------------------------
Core/Non-core
Store Location Terminated/ Lease Begin Lease End Options Increase Dates
Assigned
----------------------------------------------------------------------------------------------------------------------------------
243 MILPITAS Non-Core 3/1/1992 2/28/2002 4-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
250 ANAHEIM Non-Core 3/1/1991 8/31/2002 NONE NONE
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXX. RANCH Non-Core 9/1/2000 8/30/2015 2-5 YR OPT 9/1/05,10
-----------------------------------------------------------------------------------------------------------------------------------
256 LIVERMORE TRAINING CENTER Non-Core 1/1/1999 12/31/2001 1-3 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
261 PHOENIX / CAMELBACK RD. Non-Core 5/1/1967 4/30/2015 2-5 YR OPT 5/1/2002,07,12
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXX XX. Non-Core 4/1/1993 3/31/2003 NONE 4% OF Gross Sales Qtrly.
-----------------------------------------------------------------------------------------------------------------------------------
263 GLENDALE, AZ. Non-Core 12/8/1995 12/7/2015 2-5 YR OPT 12/8/05,10
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / 00XX XXX. Non-Core 8/8/1994 8/7/2009 2-5 YR OPT NONE
-----------------------------------------------------------------------------------------------------------------------------------
270 SCOTTSDALE Non-Core 11/16/1998 5/18/2019 2-5 YR OPT 11/16/03,08,13
-----------------------------------------------------------------------------------------------------------------------------------
272 DUBLIN Non-Core 1/21/2000 1/20/2015 2-5 YR OPT 1/21/05,10
-----------------------------------------------------------------------------------------------------------------------------------
278 LOS GATOS Non-Core 10/20/1999 4/2/2011 NONE Yearly on 11/1
-----------------------------------------------------------------------------------------------------------------------------------
282 SAN DIEGO / CONVOY Non-Core 9/1/1998 8/31/2013 NONE 9/1/2003, 2008
-----------------------------------------------------------------------------------------------------------------------------------
283 ANAHEIM / LA PALMA Non-Core 8/1/1995 10/31/2004 NONE Percentage Rent - Yearly
-----------------------------------------------------------------------------------------------------------------------------------
302 SAN XXXXX Non-Core 3/27/2000 3/31/2005 1-5 YR OPT 4/1/2001 Yearly thereafter
-----------------------------------------------------------------------------------------------------------------------------------
014 SAN XXXXX - Closed Terminated LEASE TERMINATED 1/1/00
-----------------------------------------------------------------------------------------------------------------------------------
018 WAREHOUSE SOUTHERN Terminated LEASE TERMINATED 12/31/00
-----------------------------------------------------------------------------------------------------------------------------------
025 SANTA XXX Terminated LEASE TERMINATED 11/30/00
-----------------------------------------------------------------------------------------------------------------------------------
027 LANCASTER Terminated LEASE TERMINATED 5/31/01
-----------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX Terminated LEASE TERMINATED 4/14/01
-----------------------------------------------------------------------------------------------------------------------------------
031 AZUSA - Closed Terminated LEASE TERMINATED 12/1/00
-----------------------------------------------------------------------------------------------------------------------------------
034 EL CAJON Terminated LEASE TERMINATED 3/13/01
-----------------------------------------------------------------------------------------------------------------------------------
035 ONTARIO Terminated LEASE TERMINATED 7/23/00
-----------------------------------------------------------------------------------------------------------------------------------
048 TARZANA Terminated LEASE TERMINATED 2/28/01
-----------------------------------------------------------------------------------------------------------------------------------
048 TARZANA-Parking Lot Terminated LEASE TERMINATED 2/28/01
-----------------------------------------------------------------------------------------------------------------------------------
050 SIMI VALLEY Terminated LEASE TERMINATED 4/30/01
-----------------------------------------------------------------------------------------------------------------------------------
051 L. A.-SO. MAIN Terminated LEASE TERMINATED 1/31/00
-----------------------------------------------------------------------------------------------------------------------------------
090 SAN XXXX-HILLSDALE Terminated LEASE TERMNATED 3/31/00
-----------------------------------------------------------------------------------------------------------------------------------
099 EL CENTRO Terminated LEASE TERMINATED 1/1/00
-----------------------------------------------------------------------------------------------------------------------------------
106 RENO Terminated LEASE TERMINATED 1/31/01
-----------------------------------------------------------------------------------------------------------------------------------
151 SANTA XXXX Terminated LEASE TERMINATED 4/15/01
-----------------------------------------------------------------------------------------------------------------------------------
185 CAMARILLO Terminated LEASE TERMINATED MARCH 2000
-----------------------------------------------------------------------------------------------------------------------------------
188 TEMECULA Terminated LEASE TERMINATED 12/31/00
-----------------------------------------------------------------------------------------------------------------------------------
217 RENO Terminated LEASE TERMINATED 7/1/00
-----------------------------------------------------------------------------------------------------------------------------------
225 NW BAKERSFIELD Terminated LEASE TERMINATED 10/13/00
-----------------------------------------------------------------------------------------------------------------------------------
234 OXNARD Terminated LEASE TERMINATED 12/28/00
-----------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXX XXX. Terminated LEASE TERMINATED 12/31/00
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
TOTALS
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Store Location CPI Index Comments
------------------------------------------------------------------------------------------------------
243 MILPITAS SF/Oakland To Be Assigned/Subleased
------------------------------------------------------------------------------------------------------
250 ANAHEIM NONE To Be Assigned/Terminated
------------------------------------------------------------------------------------------------------
000 XXXXXX XXX. XXXXX X.X. Xxxx To Be Assigned
------------------------------------------------------------------------------------------------------
256 LIVERMORE TRAINING CENTER Schedule Subleased
------------------------------------------------------------------------------------------------------
261 PHOENIX / CAMELBACK RD. Schedule To Be Assigned
------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXX XX. N/A Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXXX, XX. Schedule Subleased
------------------------------------------------------------------------------------------------------
000 XXXXXXX / 00XX XXX. Schedule To Be Assigned
------------------------------------------------------------------------------------------------------
270 SCOTTSDALE Schedule Subleased
------------------------------------------------------------------------------------------------------
272 DUBLIN U.S. City To Be Assigned
------------------------------------------------------------------------------------------------------
278 LOS GATOS SF/Oakland To Be Assigned
------------------------------------------------------------------------------------------------------
282 SAN DIEGO / CONVOY Schedule To Be Assigned
------------------------------------------------------------------------------------------------------
283 ANAHEIM / LA PALMA N/A To Be Assigned
------------------------------------------------------------------------------------------------------
302 SAN RAMON SF/Oakland Terminated by Winston
------------------------------------------------------------------------------------------------------
014 SAN XXXXX - Closed
------------------------------------------------------------------------------------------------------
018 WAREHOUSE SOUTHERN
------------------------------------------------------------------------------------------------------
025 SANTA XXX
------------------------------------------------------------------------------------------------------
027 LANCASTER
------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX
------------------------------------------------------------------------------------------------------
031 AZUSA - Closed
------------------------------------------------------------------------------------------------------
034 EL CAJON
------------------------------------------------------------------------------------------------------
035 ONTARIO
------------------------------------------------------------------------------------------------------
048 TARZANA
------------------------------------------------------------------------------------------------------
048 TARZANA-Parking Lot
------------------------------------------------------------------------------------------------------
050 SIMI VALLEY
------------------------------------------------------------------------------------------------------
051 L. A.-SO. MAIN
------------------------------------------------------------------------------------------------------
000 XXX XXXX-XXXXXXXXX
------------------------------------------------------------------------------------------------------
099 EL CENTRO
------------------------------------------------------------------------------------------------------
106 RENO
------------------------------------------------------------------------------------------------------
151 SANTA XXXX
------------------------------------------------------------------------------------------------------
185 CAMARILLO
------------------------------------------------------------------------------------------------------
188 TEMECULA
------------------------------------------------------------------------------------------------------
217 RENO
------------------------------------------------------------------------------------------------------
225 NW BAKERSFIELD
------------------------------------------------------------------------------------------------------
234 OXNARD
------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXX XXX.
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
TOTALS
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Store Location Mo Rent Cam Imp. Tax Imp. Sq. Ft. Bays CPI Cap R & M Roof RE Tax Ins
------------------------------------------------------------------------------------------------------------------------------------
243 MILPITAS $ 6,051.18 $733.86 $0.00 5,400 3-7% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
250 ANAHEIM $ 6,479.00 $951.25 $0.00 6,200 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXX XXX. RANCH $ 8,020.83 $696.00 $330.00 4,400 15% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
256 LIVERMORE TRAINING CENTER $ 1,354.00 $176.72 $0.00 1,504 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXXXXX XX. $ 6,000.00 $121.00 $600.00 7,628 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / XXXXXX XX. $ 2,246.20 $0.00 $0.00 6,800 NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXXX, XX. $ 4,830.00 $94.59 $425.00 5,500 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXXXX / 00XX XXX. $ 7,500.00 $1,527.45 $216.66 20,000 NONE TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
270 SCOTTSDALE $ 10,265.41 $0.00 $0.00 12% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
272 DUBLIN $ 20,427.25 $0.00 $0.00 17,626 13% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
278 LOS GATOS $ 14,182.46 $0.00 $0.00 4,700 8% TEN TEN TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
282 SAN DIEGO / CONVOY $ 5,000.00 $0.00 $0.00 5030+ NONE TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
283 ANAHEIM / LA PALMA $ 4,900.00 $117.00 $309.00 7,000 TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
302 SAN XXXXX $ - $0.00 $0.00 10 2-5% TEN LL TEN TEN
------------------------------------------------------------------------------------------------------------------------------------
014 SAN XXXXX - Closed
------------------------------------------------------------------------------------------------------------------------------------
018 WAREHOUSE SOUTHERN
------------------------------------------------------------------------------------------------------------------------------------
025 SANTA XXX
------------------------------------------------------------------------------------------------------------------------------------
027 LANCASTER
------------------------------------------------------------------------------------------------------------------------------------
000 XXXXX XXXXX
------------------------------------------------------------------------------------------------------------------------------------
031 AZUSA - Closed
------------------------------------------------------------------------------------------------------------------------------------
034 EL CAJON
------------------------------------------------------------------------------------------------------------------------------------
035 ONTARIO
------------------------------------------------------------------------------------------------------------------------------------
048 TARZANA $ -
------------------------------------------------------------------------------------------------------------------------------------
048 TARZANA-Parking Lot $ -
------------------------------------------------------------------------------------------------------------------------------------
050 SIMI VALLEY
------------------------------------------------------------------------------------------------------------------------------------
051 L. A.-SO. MAIN
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXX-XXXXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
099 EL CENTRO
------------------------------------------------------------------------------------------------------------------------------------
106 RENO
------------------------------------------------------------------------------------------------------------------------------------
151 SANTA XXXX
------------------------------------------------------------------------------------------------------------------------------------
185 CAMARILLO
------------------------------------------------------------------------------------------------------------------------------------
188 TEMECULA
------------------------------------------------------------------------------------------------------------------------------------
217 RENO
------------------------------------------------------------------------------------------------------------------------------------
225 NW BAKERSFIELD
------------------------------------------------------------------------------------------------------------------------------------
234 OXNARD
------------------------------------------------------------------------------------------------------------------------------------
000 XXX XXXXX / XXXXX XXX.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTALS $1,005,314.57 $50,531.84 $7,806.30
------------------------------------------------------------------------------------------------------------------------------------
This Lease Abstract does not contain any information regarding
contingent liabilities or indemnification provisions. Please review each lease independently for such purposes.
5
