1011-00007 · Whitfield, Barr & Calloway LLP · Correspondence

lease-comments-letter-to-wbc.docx DOCUMENT Real Estate

5 / 12 ← → ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law

1285 Avenue of the Americas, 40th Floor New York, New York 10019

Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com

August 12, 2022

Via Email and First-Class Mail

Thomas R. Calloway, Esq., Partner Jennifer Pace, Esq., Associate Whitfield, Barr & Calloway LLP 1700 Market Street, Suite 3200 Philadelphia, PA 19103

Re: Lease of Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, New Jersey 08512 (Block 24, Lot 17.04, Township of Cranbury, Middlesex County)

Landlord: Stonebridge Industrial Realty Trust, LP Tenant: Meridian Consumer Brands LLC C&H Matter No.: 1011-00007

Dear Tom and Jennifer:

I. Transmittal of Tenant's First Markup

This firm represents Meridian Consumer Brands LLC ("MCB" or "Tenant") in connection with the above-referenced lease transaction. On behalf of MCB, we are pleased to transmit herewith the enclosed redline markup (the "Tenant's First Markup") of the draft Lease Agreement delivered by your firm on behalf of Stonebridge Industrial Realty Trust, LP ("Landlord" or "Stonebridge") on July 18, 2022 (the "Landlord's First Draft").

The Tenant's First Markup reflects tenant-favorable revisions to the Landlord's standard industrial lease form and incorporates the material terms and conditions set forth in the Letter of Intent dated June 22, 2022 (Reference No. LOI-2022-CCC-B4), as executed by Kevin Driscoll on behalf of MCB and Rebecca Hartwell on behalf of Stonebridge. Throughout the redline, we have endeavored to conform the lease language to the commercial understanding reflected in the LOI while also addressing various provisions in the Landlord's First Draft that depart from market-standard terms for comparable institutional-quality industrial lease transactions in the Central New Jersey submarket.

This letter is intended to summarize MCB's principal comments and identify the open business points that we believe will require further discussion between the parties and their respective counsel. We provide this summary to facilitate an efficient and organized review of the Tenant's First Markup. To the extent of any inconsistency between this summary letter and the redline itself, the redline shall be controlling.

We are mindful that the LOI contemplates execution of a definitive Lease Agreement by September 30, 2022, and MCB shares the mutual desire of both parties to maintain an expeditious negotiation timeline. In furtherance of that objective, we respectfully request that Landlord's counsel provide a response to this markup, or a revised draft of the Lease reflecting Landlord's comments, by no later than August 26, 2022. We believe this schedule will allow the parties sufficient time to resolve any remaining open points and achieve the targeted execution date.

The principal topics addressed in the Tenant's First Markup are summarized below.

II. Premises and Basic Lease Terms

The Tenant's First Markup confirms the following basic lease terms, which are consistent with the LOI:

• Premises: Approximately 285,000 square feet of warehouse and distribution space, together with approximately 12,500 square feet of finished office and mezzanine space, for a total of approximately 297,500 rentable square feet, located at Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, New Jersey 08512 (Block 24, Lot 17.04, Township of Cranbury, Middlesex County).

• Initial Term: Ten (10) years, commencing on the later of (a) the date of substantial completion of Landlord's Work (as defined in the Lease) or (b) January 1, 2023 (the "Target Commencement Date").

• Base Rent: Annual base rent of $1,200,000 during Lease Year 1, equating to approximately $4.03 per rentable square foot per annum, payable on a triple net (NNN) basis.

• Annual Escalation: Two and one-half percent (2.5%) per annum, compounding, applied commencing in Lease Year 2 and continuing through Lease Year 10.

• Estimated NNN Operating Expenses: $2.85 per rentable square foot per year (based on 2022 estimates). In connection with this estimate, MCB requests that Landlord provide confirmation of the actual 2021 operating expense reconciliation for Building 4, together with a detailed description of the projection methodology utilized by Landlord for calculating operating expense pass-throughs. This information is necessary for MCB to verify the reasonableness of the estimated operating expenses and to confirm the appropriate base year for expense stop and cap calculations, if applicable.

Additionally, MCB has revised the rentable area measurement and verification provisions in the Landlord's First Draft to include a mutual right of either party to remeasure the Premises using the Building Owners and Managers Association (BOMA) Z65.1-2017 standard within sixty (60) days following the Commencement Date. If such remeasurement results in a change to the rentable square footage of the Premises, the annual base rent and all other per-square-foot calculations under the Lease (including the TI Allowance, as discussed below) shall be adjusted proportionally. We believe this is a customary provision and provides certainty to both parties.

III. Rent Commencement and Free Rent Period

Consistent with the LOI, the Tenant's First Markup provides for a free rent period of four (4) months from the Commencement Date (Lease Months 1 through 4), during which Tenant shall pay its pro rata share of NNN operating expenses only and shall have no obligation to pay base rent.

MCB has made several important revisions to the free rent provisions in the Landlord's First Draft:

• Commencement Date Trigger. The Landlord's First Draft tied the free rent period to the Target Commencement Date (January 1, 2023) rather than the actual Commencement Date. MCB has revised this provision to clarify that the free rent period runs from the actual Commencement Date, so that if Landlord's Work is delayed beyond the Target Commencement Date, the free rent period shifts accordingly. This ensures that Tenant receives the full benefit of the negotiated free rent concession regardless of construction delays.

• Day-for-Day Penalty for Extended Delay. If Landlord's Work is not substantially completed within ninety (90) days after the Target Commencement Date (i.e., by April 1, 2023), MCB has inserted a provision entitling Tenant to one (1) additional day of free rent credit for each day of delay beyond such ninety (90)-day period. These additional free rent credits would be applied following the expiration of the initial four (4)-month free rent period.

• Termination Right for Prolonged Delay. If Landlord's Work is not substantially completed within one hundred eighty (180) days after the Target Commencement Date (i.e., by July 1, 2023), MCB shall have the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord. This termination right is essential to protect MCB against the risk of an indefinite delay in the delivery of the Premises, which would materially impair MCB's ability to plan and execute its supply chain operations.

IV. Landlord's Work — Scope and Timeline

The Tenant's First Markup confirms the agreed scope of Landlord's Work as set forth in the LOI, which includes the following:

(a) Installation of new LED lighting throughout the warehouse space;

(b) Upgrade of the fire suppression system to Early Suppression Fast Response (ESFR) sprinkler standards;

(d) Office refresh throughout the approximately 12,500 square feet of finished office and mezzanine space, including new carpet, paint, and ceiling tiles; and

(e) Installation of six (6) electric vehicle (EV) charging stations in the automobile parking area serving Building 4.

The estimated cost of Landlord's Work is $1,850,000, which is to be borne entirely by Landlord and shall not be deducted from or credited against the Tenant Improvement Allowance described in Section V below.

MCB's revisions require Landlord to deliver the Premises in a "warm vanilla shell" condition with all Landlord's Work completed in accordance with the construction standards and materials specifications set forth in the new Exhibit C (Landlord's Work) that we have prepared and appended to the Tenant's First Markup. Exhibit C includes, among other things, specific construction standards addressing ESFR sprinkler density per square foot, minimum LED lumens per square foot for the warehouse space, and detailed specifications for the dock leveler replacements. Exhibit C also includes a defined punchlist completion process requiring Landlord and Tenant to jointly prepare a punchlist within ten (10) business days of Landlord's notice of substantial completion, and requiring Landlord to complete all punchlist items within thirty (30) days thereafter.

In addition, MCB's revisions include the following requirements with respect to the timeline and execution of Landlord's Work:

• Landlord shall deliver a detailed construction schedule to Tenant within fifteen (15) days of the execution date of the Lease, with a guaranteed substantial completion date no later than one hundred twenty (120) days after the lease execution date.

• All Landlord's Work must be performed in compliance with all applicable federal, state, and local laws, codes, regulations, and ordinances, including without limitation the Township of Cranbury's building permit requirements and any conditions imposed by the Cranbury Township Planning Board or Zoning Board of Adjustment.

• Landlord shall provide Tenant with at least forty-eight (48) hours' prior written notice before performing any work that would limit or restrict Tenant's access to the Premises during the tenant improvement construction period, and Landlord shall use commercially reasonable efforts to coordinate the performance of Landlord's Work with Tenant's contractors to avoid interference with Tenant's simultaneous installation of its improvements, racking systems, and equipment.

V. Tenant Improvement Allowance

The Tenant's First Markup confirms the TI Allowance as set forth in the LOI:

TI Allowance: $15.00 per rentable square foot × 297,500 RSF = $4,462,500

MCB's revisions address the disbursement mechanics for the TI Allowance, which were inadequately specified in the Landlord's First Draft, as follows:

(a) Progress Payments. Landlord shall disburse the TI Allowance in monthly progress payments within thirty (30) days of Tenant's submission of draw requests, accompanied by conditional lien waivers from all contractors and subcontractors, architect's certificates of completion for the work covered by each draw, and copies of paid invoices or invoices due and payable.

(b) Offset Right. If Landlord fails to fund any conforming draw request within the thirty (30)-day period, Tenant shall have the right to offset the unpaid amount, together with interest thereon at the prime rate as published in The Wall Street Journal plus two percent (2%) per annum from the date payment was due, against the next installment(s) of base rent due under the Lease. This offset right is a critical protection for Tenant, as MCB will be incurring significant construction costs in reliance on the TI Allowance and cannot absorb the cash flow impact of delayed disbursements.

(c) Permitted Uses of Unused Allowance. Unused portions of the TI Allowance, up to a maximum of $5.00 per rentable square foot (i.e., up to $1,487,500), may be applied by Tenant toward the cost of cabling, racking, material handling equipment, and automation equipment installations. This flexibility is important to MCB's planned deployment of automated storage and retrieval systems within the warehouse space.

(d) Forfeiture of Unused Allowance. Any remaining unused TI Allowance not drawn by Tenant within eighteen (18) months following the Commencement Date shall be forfeited and shall no longer be available to Tenant.

Finally, the TI Allowance is subject to recalculation in the event the rentable square footage of the Premises changes prior to the Commencement Date as a result of final BOMA measurement or any building modification. Any such recalculation shall be on a per-square-foot basis, using the same $15.00 per rentable square foot rate.

VI. Security Deposit / Letter of Credit

The Tenant's First Markup reflects the following security deposit arrangements, consistent with the LOI:

• Amount: $300,000, equal to three (3) months of Lease Year 1 base rent at $100,000 per month.

• Form: Irrevocable standby letter of credit (the "LC"), to be issued by Harborview National Bank, N.A., or another nationally recognized banking institution reasonably acceptable to Landlord, with a minimum long-term credit rating of A- (or its equivalent) from a nationally recognized statistical rating organization (e.g., S&P Global Ratings, Moody's, or Fitch Ratings).

• Evergreen Provision. The LC shall be in evergreen form, with automatic annual renewals and a sixty (60)-day notice of non-renewal provision. If the LC issuer delivers a notice of non-renewal, Tenant shall have thirty (30) days to deliver a replacement LC from a qualifying issuer.

• Burn-Down Schedule. The face amount of the LC shall be reduced as follows, provided that no uncured Event of Default by Tenant exists at the time of each scheduled reduction:

MCB has revised the Landlord's First Draft to address several deficiencies in the LC draw and return provisions:

(a) Draw Rights. Landlord's right to draw on the LC is limited to amounts actually due and unpaid under the Lease after the expiration of all applicable notice and cure periods. The Landlord's First Draft would have permitted Landlord to draw on the LC upon the mere assertion of a default, without regard to whether notice had been given or cure periods had expired. This is commercially unreasonable and inconsistent with market practice.

(b) Return of LC. Landlord shall return the LC (or the applicable reduced LC then held by Landlord) to Tenant within sixty (60) days following the later of (i) the expiration or earlier termination of the Lease and (ii) Tenant's surrender of the Premises in the condition required by the Lease. Any amounts drawn by Landlord from the LC in excess of amounts actually owed by Tenant shall be promptly refunded to Tenant with interest at the prime rate plus two percent (2%) per annum.

VII. Limited Guaranty

The Lease will be supported by a limited guaranty (the "Guaranty") from Meridian Holdings Inc., a Delaware corporation and the direct parent company of MCB. The principal terms of the Guaranty, as reflected in the Tenant's First Markup, are as follows:

• Cap. The Guaranty is capped at twelve (12) months of base rent, or $1,200,000.

• Burn-Off. The Guaranty shall be released and shall be of no further force or effect upon MCB achieving and maintaining a net worth of not less than $75,000,000 for two (2) consecutive fiscal quarters, as certified by MCB's independent auditor, Ashford & Whitmore CPAs LLP (or any successor auditor reasonably acceptable to Landlord).

MCB's revisions to the guaranty provisions in the Landlord's First Draft include the following material changes:

(a) The Guaranty is a guaranty of payment only (and not of collection), but is limited solely to the capped amount of $1,200,000 and does not extend to any consequential, speculative, punitive, or other indirect damages that Landlord may claim.

(b) The Guarantor shall have the benefit of all defenses, rights, set-offs, and counterclaims available to Tenant under the Lease, other than defenses arising solely from Tenant's bankruptcy or insolvency.

(c) Landlord must first exhaust all remedies available to it against Tenant under the Lease, including without limitation drawing on the LC, before making any claim or commencing any action against the Guarantor under the Guaranty. This exhaustion requirement provides appropriate protection against premature claims against the parent entity.

(d) The Guaranty shall automatically terminate upon the earliest to occur of (i) the burn-off condition described above being satisfied, or (ii) the expiration of the initial ten (10)-year term of the Lease, provided that no uncured Event of Default by Tenant exists at the time of such expiration.

A separate draft Limited Guaranty Agreement is being prepared by Calderwood & Harkness LLP and will be circulated to your firm under separate cover in the coming days. In the interim, we request that Landlord provide its form of guaranty agreement, if any, so that we may review and compare the two forms in parallel. We anticipate that the guaranty form can be negotiated concurrently with the Lease.

VIII. Subordination, Non-Disturbance, and Attornment (SNDA)

MCB requires that Landlord deliver, as a condition precedent to Tenant's obligation to commence payment of rent under the Lease, a Subordination, Non-Disturbance, and Attornment Agreement ("SNDA") from each holder of a mortgage, deed of trust, or other security instrument currently encumbering the Premises or the Cranbury Commerce Center.

The SNDA must provide, at a minimum, that so long as Tenant is not in default under the Lease beyond all applicable notice and cure periods, Tenant's right to possession of the Premises and all of Tenant's other rights under the Lease shall not be disturbed, diminished, or interfered with in the event of a foreclosure, deed in lieu of foreclosure, or any other exercise of remedies by Landlord's lender or any successor-in-interest to Landlord's fee estate.

MCB has inserted the following additional requirements in the Tenant's First Markup:

(a) Within ten (10) business days following the execution of the Lease, Landlord shall identify in writing all current mortgagees, trustees, and other holders of security interests encumbering the Premises or any portion of the Cranbury Commerce Center, and shall provide complete contact information for each such party (including the name and contact information of the applicable loan servicer and its counsel).

(b) If Landlord is unable to deliver an executed SNDA from each such mortgagee within sixty (60) days following the execution of the Lease, Tenant shall have the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord. Upon such termination, Landlord shall promptly return the security deposit or LC to Tenant and reimburse Tenant for any TI costs incurred prior to the termination date, up to the amount of the TI Allowance.

We note that Calderwood & Harkness LLP is preparing a draft SNDA request letter and a form of SNDA agreement for Landlord's review and comment. We will circulate those documents under separate cover once they are finalized, which we anticipate will be within the next several business days.

IX. Co-Tenancy Provisions

MCB has inserted co-tenancy protections in the Tenant's First Markup relating to Landlord's operation and management of the Cranbury Commerce Center as a multi-building industrial park. As you are aware, the Cranbury Commerce Center comprises at least four (4) buildings situated on a campus of approximately sixty-two (62) acres. Building 4 shares access drives, stormwater management systems, parking areas, and utility corridors with the other buildings in the park. MCB's warehouse and distribution operations at Building 4 depend on the continued availability, functionality, and maintenance of this shared infrastructure.

MCB's revisions require the following:

(a) Maintenance Obligation. Landlord shall maintain all shared access drives, stormwater detention and retention basins, common area parking, landscaping, lighting, and other common areas in good repair, working order, and condition, and in compliance with all governmental approvals, site plan conditions, and applicable laws and regulations.

(b) Consent to Material Modifications. Landlord shall not make any material modification to the approved site plan, shared infrastructure, or common areas that adversely affects Tenant's access to the Premises, the truck court configuration serving Building 4, the number and configuration of loading docks, trailer parking capacity, or clear heights within Building 4, without Tenant's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.

(c) Governmental Modifications — Tenant Protections. If any governmental authority requires modifications to the site plan or shared infrastructure that materially impair Tenant's use and occupancy of the Premises, including without limitation (i) a reduction in the number of dock doors below Building 4's current forty-eight (48) dock-high door and four (4) drive-in door configuration, (ii) a reduction in trailer parking capacity below the current configuration serving Building 4, or (iii) a reduction in warehouse square footage by more than five percent (5%), Tenant shall have the right to (A) a proportional reduction in base rent for the period of such impairment and (B) if the impairment is not cured or remedied within one hundred eighty (180) days following Tenant's notice thereof, the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord.

We note that these co-tenancy protections are of particular importance to MCB in light of the fact that Stonebridge is currently pursuing the development of a new Building 5 on the adjacent parcel (Block 24, Lot 17.05), which shares access drives and stormwater infrastructure with Building 4. MCB's operations at Building 4 must not be adversely impacted by construction activities, traffic pattern changes, or infrastructure modifications arising from the Building 5 development. We would appreciate Landlord's counsel's confirmation of the current status of the Building 5 development, including any pending or anticipated applications before the Township of Cranbury Planning Board or Zoning Board of Adjustment, so that we may evaluate whether additional protective provisions are warranted.

X. Casualty and Condemnation

MCB has significantly revised the casualty and condemnation provisions in the Landlord's First Draft, which were heavily landlord-favorable and inconsistent with market practice for institutional-quality industrial lease transactions. The principal revisions are as follows:

Casualty. If a fire, flood, or other casualty renders more than twenty-five percent (25%) of the Premises untenantable, or if Landlord is unable to complete restoration of the Premises within two hundred seventy (270) days following the date of the casualty, either party shall have the right to terminate the Lease by written notice delivered within sixty (60) days of the casualty (or within thirty (30) days of Landlord's notice that restoration cannot be completed within the 270-day period, as applicable). In addition, if a casualty occurs during the last two (2) years of the initial term of the Lease (or any renewal term), Tenant shall have the right to terminate the Lease regardless of the percentage of the Premises rendered untenantable. During any period of restoration, base rent shall abate proportionally for the portion of the Premises rendered untenantable, and Tenant's obligation to pay operating expenses shall be adjusted to reflect the reduced usable area.

Condemnation. If a taking by any governmental authority or quasi-governmental entity (whether by eminent domain, condemnation, or a conveyance in lieu thereof) renders more than fifteen percent (15%) of the Premises untenantable, or deprives Tenant of reasonable access to the truck court, loading docks, or trailer parking areas serving Building 4, Tenant shall have the right to terminate the Lease upon written notice delivered within sixty (60) days of the taking. In the event of a partial taking resulting in a loss of less than fifteen percent (15%) of the Premises, base rent shall abate proportionally. Tenant shall be entitled to make a separate claim against the condemning authority for Tenant's moving expenses, the unamortized value of Tenant's investment in tenant improvements, and business interruption losses, provided that such claim is distinct from and does not diminish Landlord's claim for the value of the fee interest in the condemned property.

In all casualty and condemnation termination scenarios, Tenant shall be entitled to a pro rata refund of any prepaid rent and the return of the unapplied security deposit or LC within thirty (30) days of the effective date of the termination.

XI. Environmental Provisions

MCB's revisions to the environmental provisions in the Landlord's First Draft address risk allocation in light of the environmental due diligence performed by Tenant in connection with this transaction. Specifically, MCB has reviewed the Phase I Environmental Site Assessment prepared by Blackthorn Environmental Consulting, Inc. (Report No. BEC-2022-0814, dated August 5, 2022) (the "Phase I ESA").

The Phase I ESA identified no Recognized Environmental Conditions (RECs) on the subject property. However, the Phase I ESA did identify a Controlled Recognized Environmental Condition (CREC) in connection with a historic dry-cleaning operation on the adjacent parcel, Block 24, Lot 16, which is not part of the Cranbury Commerce Center. According to the New Jersey Department of Environmental Protection (NJDEP) records, Block 24, Lot 16 is subject to a Classification Exception Area (CEA) for tetrachloroethylene (PCE) in groundwater. The Phase I ESA notes that the CEA does not currently extend onto the subject property; however, given the proximity of the contamination source and the potential for future contaminant migration, MCB has inserted the following protective provisions:

(a) Landlord's Representations and Warranties. Landlord represents and warrants to Tenant that, to the best of Landlord's knowledge after reasonable inquiry: (i) no hazardous materials, hazardous substances, or toxic substances (as defined under applicable federal, state, or local environmental laws) exist on, under, or about the Premises in violation of applicable environmental laws; (ii) the Premises are not subject to any environmental lien, administrative order, consent decree, or remediation obligation imposed by any governmental authority; and (iii) the NJDEP Classification Exception Area established in connection with the PCE contamination on Block 24, Lot 16 does not extend onto or under the Premises.

(b) Landlord's Environmental Indemnification. Landlord shall indemnify, defend, and hold harmless Tenant and its affiliates, officers, directors, employees, agents, and contractors from and against all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorneys' fees and costs of investigation, cleanup, and remediation) arising from or related to (i) any pre-existing environmental conditions on the Premises or the Cranbury Commerce Center, whether known or unknown as of the Commencement Date; (ii) any migration of hazardous materials from adjacent parcels, including without limitation the migration of PCE or any other contaminant from Block 24, Lot 16, onto or under the Premises; and (iii) any violation of environmental laws by Landlord, its agents, or contractors.

(c) Ongoing Notification Obligation. Landlord shall provide Tenant with prompt written notice (and in any event within five (5) business days) of: (i) any change in the NJDEP CEA boundaries affecting Block 24, Lot 16 or any adjacent parcel; (ii) any new environmental investigation, sampling, or remediation activity on the Cranbury Commerce Center or adjacent parcels known to Landlord; and (iii) any communication from NJDEP or any other regulatory authority concerning environmental conditions at or near the Premises.

(d) Tenant's Environmental Indemnification. Tenant's environmental indemnification obligation shall be limited to contamination caused solely by Tenant's own operations at the Premises during the term of the Lease. This is an appropriately scoped obligation that holds Tenant responsible for its own actions while ensuring that Tenant does not assume liability for conditions beyond its control.

(e) Deletion of Joint and Several Liability Provision. MCB has deleted Section 12.4 of the Landlord's First Draft, which would have imposed joint and several environmental liability on Tenant for any environmental conditions discovered during the term of the Lease, regardless of cause. This provision is commercially unreasonable and inconsistent with the fundamental principle that environmental liability should follow causation. MCB is unwilling to accept responsibility for legacy contamination, third-party contamination, or contamination caused by Landlord or other tenants of the Cranbury Commerce Center.

XII. Assignment and Subletting

MCB has substantially reworked the assignment and subletting provisions in the Landlord's First Draft, which imposed unduly restrictive conditions on Tenant's ability to transfer or share the Premises. The principal revisions are as follows:

• Consent Standard. Tenant may assign the Lease or sublet all or any portion of the Premises with Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Landlord shall respond to any assignment or subletting request within fifteen (15) business days of receiving a complete request package (including the identity and financial statements of the proposed assignee or subtenant, the proposed terms, and a copy of the proposed assignment or sublease instrument). If Landlord fails to respond within such fifteen (15) business-day period, Landlord's consent shall be deemed to have been given.

• Permitted Transfers. The following transfers shall not require Landlord's consent and shall not be subject to any recapture right, excess rent sharing, or other restriction:

(a) Assignments to any affiliate or subsidiary of MCB or Meridian Holdings Inc.;

(b) Assignments to any entity that is controlled by, controls, or is under common control with Halcyon Ridge Capital Partners, LP (MCB's private equity sponsor); and

(c) Assignments in connection with a merger, consolidation, reorganization, or sale of all or substantially all of MCB's assets, provided that the successor entity has a net worth at least equal to MCB's net worth as of the date of the transfer, as reasonably demonstrated by audited financial statements.

• No Recapture Right. Landlord shall not have a recapture right (i.e., no right to terminate the Lease and recapture the Premises) upon any proposed assignment or sublease by Tenant. The Landlord's First Draft included a broad recapture right triggered by any proposed transfer, which is commercially unacceptable and inconsistent with market practice for credit tenants in the industrial sector.

• Excess Rent Sharing. In the event that Tenant enters into a sublease at a rental rate exceeding the base rent under the Lease, the excess rent (net of Tenant's reasonable and documented transaction costs, including brokerage commissions, legal fees, and tenant improvement costs incurred in connection with the sublease) shall be shared equally (50/50) between Landlord and Tenant.

• Guaranty Continuation. The limited guaranty from Meridian Holdings Inc. shall remain in effect following a permitted transfer, unless the transferee independently satisfies the guaranty burn-off threshold (i.e., net worth of $75,000,000 for two consecutive fiscal quarters), in which case the Guaranty shall be released in accordance with its terms.

XIII. Early Termination Option

The Tenant's First Markup includes an early termination option providing Tenant with the right to terminate the Lease after Lease Year 7 (i.e., with a termination effective date no earlier than the last day of Lease Year 7). Tenant must deliver at least eighteen (18) months' prior written notice to Landlord to exercise this option.

The early termination fee payable by Tenant shall be equal to the sum of:

(a) The unamortized balance of the TI Allowance, calculated using straight-line amortization over the ten (10)-year initial term of the Lease;

(b) The unamortized balance of brokerage commissions paid by Landlord to Pinnacle Brokerage Group LLC and Velthorn Realty Advisors LLC in connection with this Lease, calculated using straight-line amortization over the ten (10)-year initial term of the Lease; and

(c) Six (6) months of the then-current annual base rent (i.e., the annual base rent in effect as of the termination effective date, divided by two).

MCB's revisions specify that the components of the termination fee calculation must be set forth in a reasonably detailed schedule to be attached to the Lease at execution (as an exhibit), with agreed amortization calculations for the TI Allowance and brokerage commissions, so that the termination fee is determinable in advance by both parties. We believe it is essential that neither party be uncertain as to the amount of the termination fee at any point during the Lease term.

The early termination fee must be paid in full by Tenant on or before the termination effective date as a condition precedent to the effectiveness of the termination.

XIV. Renewal Options

The Tenant's First Markup provides Tenant with two (2) successive five (5)-year renewal options, each at ninety-five percent (95%) of the then-prevailing fair market rent. Tenant must provide at least twelve (12) months' prior written notice to Landlord to exercise each renewal option.

MCB has inserted a detailed fair market rent determination procedure to avoid disputes regarding the renewal rent:

(a) Within thirty (30) days following Tenant's exercise of a renewal option, Landlord and Tenant shall each designate an independent MAI-certified appraiser with at least ten (10) years of experience in the appraisal of industrial properties in the Central New Jersey submarket.

(b) Each appraiser shall deliver a written determination of the fair market rent for the Premises within sixty (60) days of appointment.

(c) If the two appraisals differ by ten percent (10%) or less (measured against the higher of the two appraisals), the fair market rent shall be the arithmetic average of the two appraisals.

(d) If the two appraisals differ by more than ten percent (10%), the two appraisers shall jointly select a third independent MAI-certified appraiser within fifteen (15) days. The third appraiser shall deliver a written determination of fair market rent within thirty (30) days of appointment, and the final fair market rent shall be the arithmetic average of the two closest of the three appraisals.

(e) During the determination period, Tenant shall pay rent at ninety-five percent (95%) of the base rent in effect during the final year of the expiring term. Within thirty (30) days following the final determination of fair market rent, a true-up payment shall be made by the appropriate party to reconcile any overpayment or underpayment of rent during the determination period.

The exercise of each renewal option is conditioned upon no uncured Event of Default by Tenant existing at the time of Tenant's exercise of the option or at the commencement of the applicable renewal term.

XV. Insurance

MCB's revisions to the insurance provisions conform the Lease to the requirements agreed upon in the LOI and to MCB's existing insurance program, which is placed through Ridgeline Mutual Insurance Company. The Tenant's First Markup requires the following coverage:

All policies must be issued by insurance carriers rated A- VII or better by A.M. Best Company (or an equivalent rating from another nationally recognized insurance rating organization).

MCB's revisions also include the following provisions:

• Mutual Waiver of Subrogation. Each party waives, and shall cause its respective insurance carriers to waive, all rights of subrogation against the other party and its agents, employees, and contractors for any loss or damage covered (or required to be covered) by insurance under the Lease.

• Additional Insured Designations. Landlord shall be named as an additional insured on Tenant's CGL and umbrella policies. Correspondingly, Tenant shall be named as an additional insured on Landlord's property insurance policy for Building 4.

• Landlord's Property Insurance Obligation. MCB has revised the Landlord's First Draft to require Landlord to maintain commercially reasonable property insurance on Building 4, including the shell, structure, roof, foundations, and common areas, at full replacement cost. Landlord shall provide evidence of such coverage to Tenant upon Tenant's reasonable written request. The Landlord's First Draft was silent on Landlord's insurance obligations, which is unacceptable in a transaction of this magnitude.

XVI. Default and Remedies

MCB's revisions to the default and remedies provisions are among the most significant changes in the Tenant's First Markup. The Landlord's First Draft contained one-sided default and remedy provisions that afforded Tenant inadequate notice and cure protections and entirely failed to address Landlord defaults. The principal revisions are as follows:

• Monetary Default — Cure Period. Tenant shall have ten (10) business days following receipt of written notice from Landlord to cure any monetary default (e.g., failure to pay rent or other amounts due under the Lease). The Landlord's First Draft provided only five (5) calendar days, which is insufficient and below market standard for industrial leases.

• Non-Monetary Default — Cure Period. Tenant shall have thirty (30) days following receipt of written notice from Landlord to cure any non-monetary default, with an extension of up to an additional ninety (90) days if the default is of a nature that is not reasonably susceptible of cure within the initial thirty (30)-day period and Tenant is diligently pursuing a cure throughout such extended period.

• Landlord Default Provisions. MCB has inserted comprehensive landlord default provisions, which were entirely absent from the Landlord's First Draft. If Landlord fails to perform any material obligation under the Lease and does not cure such failure within thirty (30) days following receipt of written notice from Tenant (or such longer period as is reasonably necessary to effect a cure, provided Landlord commences cure within such thirty (30)-day period and diligently pursues the same to completion), Tenant shall have the right to:

(a) Exercise self-help rights and offset the reasonable costs incurred against the next installment(s) of base rent due under the Lease, provided Tenant delivers reasonable documentation of such costs to Landlord;

(b) Seek specific performance or injunctive relief in a court of competent jurisdiction; and/or

(c) If the landlord default materially impairs Tenant's use and occupancy of the Premises and remains uncured for a period of one hundred twenty (120) days following Tenant's initial notice, terminate the Lease upon thirty (30) days' prior written notice to Landlord.

• Limitation on Damages. MCB has deleted the provisions in the Landlord's First Draft that would have permitted Landlord to recover consequential, speculative, or punitive damages. Each party's liability under the Lease shall be limited to actual, direct damages. This is a fundamental risk allocation principle that should apply mutually.

• Landlord's Remedies on Tenant Default. MCB has revised Landlord's remedies upon a Tenant default to limit Landlord's right to accelerate rent to the period through the date on which a replacement tenant commences paying rent at the Premises, plus Landlord's actual and documented re-leasing costs (including reasonable brokerage commissions, legal fees, and tenant improvement costs for the replacement tenant). Landlord shall have a duty to use commercially reasonable efforts to mitigate its damages by re-leasing the Premises.

XVII. Miscellaneous Open Business Points

In addition to the foregoing, MCB's First Markup addresses several additional business points that we would like to bring to Landlord's attention for discussion:

Signage. MCB requests the right to install building-mounted signage on the exterior of Building 4, including identification signage on the front façade and directional signage on the truck court side of the building. MCB also requests the right to install monument signage at the entrance to Cranbury Commerce Center identifying MCB as a tenant of the park. All signage would be subject to applicable local ordinances (including the Township of Cranbury's sign regulations) and Landlord's reasonable approval of the design, materials, size, and placement of such signage. MCB would bear all costs of fabrication, installation, maintenance, and removal of its signage.

Exclusive Use. MCB requests a use restriction prohibiting Landlord from leasing space in other buildings at Cranbury Commerce Center to a direct competitor of MCB — specifically, any entity whose primary business is the manufacture, warehousing, or distribution of shelf-stable consumer packaged goods in the same product categories as MCB (including but not limited to dry grocery, snacks, and beverages). This exclusive use restriction is important to protect MCB's competitive position and is consistent with exclusivity provisions commonly found in multi-tenant industrial park leases.

Parking. MCB requires confirmation from Landlord of the total number of standard automobile parking spaces allocated to Building 4, exclusive of trailer parking. MCB requires a minimum of one hundred twenty (120) automobile parking spaces for employee and visitor parking. We note that the site plan attached to the Landlord's First Draft appears to depict approximately one hundred thirty-five (135) automobile spaces, but we would appreciate written confirmation of this number and assurance that such spaces will not be reduced during the Lease term.

Roof Rights. MCB requests the right to install solar photovoltaic panels and/or telecommunications equipment (including satellite dishes and antenna arrays) on the roof of Building 4, subject to Landlord's prior written consent (which shall not be unreasonably withheld, conditioned, or delayed) and compliance with applicable structural load requirements and the manufacturer's roofing warranty. MCB would be responsible for all costs associated with such installations and would indemnify Landlord against any damage to the roof caused by such installations.

Building Systems Access. MCB requires unrestricted twenty-four hours a day, seven days a week (24/7) access to all HVAC mechanical rooms, electrical distribution rooms, switchgear, and plumbing utility rooms serving the Premises. Given the nature of MCB's warehouse and distribution operations, which may operate on a multi-shift basis, it is essential that MCB's facilities personnel have immediate access to building systems at all times without the need to coordinate with Landlord's property management team.

XVIII. Requested Response and Next Steps

We request that Whitfield, Barr & Calloway LLP review the enclosed Tenant's First Markup and provide Landlord's response and/or a revised draft of the Lease by August 26, 2022. As noted above, the LOI contemplates a September 30, 2022 lease execution target date, and both MCB and Stonebridge share a mutual desire to finalize the Lease within that timeframe. A prompt turnaround on this markup will be essential to maintaining the negotiation schedule.

To the extent that there are open business points that would benefit from a direct discussion between the principals, we would be pleased to schedule a conference call or in-person meeting at a mutually convenient time. We believe it would be productive for Kevin Driscoll (MCB), Rebecca Hartwell (Stonebridge), and the respective legal teams to convene to discuss any substantive issues that may arise from the Tenant's First Markup. Please let us know your availability and that of your client.

Finally, as noted above, Calderwood & Harkness LLP will separately circulate the following documents for Landlord's counsel's review and comment:

(a) Draft Limited Guaranty Agreement (Meridian Holdings Inc.); and

(b) Draft SNDA request letter and form of SNDA agreement.

We anticipate circulating both documents within the next several business days.

XIX. Reservation of Rights

MCB expressly reserves all rights under the LOI and at law and in equity. Nothing contained in this letter or in the enclosed Tenant's First Markup shall constitute or be deemed to constitute a waiver of any right, claim, or defense available to MCB under the LOI, applicable law, or otherwise.

The enclosed Tenant's First Markup does not constitute a binding agreement between the parties. No binding obligations shall arise between Landlord and Tenant with respect to the Lease or the transaction contemplated hereby until a definitive Lease Agreement has been mutually executed and delivered by both parties. Until such time, either party may withdraw from negotiations at any time and for any reason without liability to the other party.

We look forward to receiving Landlord's response and to continuing to work with your team to bring this transaction to a successful conclusion. Please do not hesitate to contact me with any questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Cynthia Ho, Esq. Associate

Telephone: (212) 558-4127

Email: cho@calderwoodharkness.com

cc (via email):

Angela Fontaine, Esq., Calderwood & Harkness LLP Douglas Fairchild, Esq., Calderwood & Harkness LLP Grace Nakamura, Esq., Calderwood & Harkness LLP Kevin Driscoll, Meridian Consumer Brands LLC Martin Solberg, Halcyon Ridge Capital Partners, LP Daniel Tsui, Pinnacle Brokerage Group LLC

Encl:

Tenant's First Markup of Lease (Redline) — Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, NJ 08512 (August 12, 2022)

Period	LC Amount
Lease Years 1–3	$300,000
Lease Years 4–6	$200,000
Lease Years 7–10	$100,000
Coverage	Limits
Commercial General Liability	$5,000,000 per occurrence / $10,000,000 aggregate
Property Insurance (Tenant's personal property and improvements)	Full replacement cost
Business Interruption	12 months' coverage
Umbrella / Excess Liability	$10,000,000
Workers' Compensation	Statutory limits (New Jersey)

CALDERWOOD & HARKNESS LLP Attorneys at Law
1285 Avenue of the Americas, 40th Floor New York, New York 10019
Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com
August 12, 2022
Via Email and First-Class Mail
Thomas R. Calloway, Esq., Partner Jennifer Pace, Esq., Associate Whitfield, Barr & Calloway LLP 1700 Market Street, Suite 3200 Philadelphia, PA 19103
Re: Lease of Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, New Jersey 08512 (Block 24, Lot 17.04, Township of Cranbury, Middlesex County)
Landlord: Stonebridge Industrial Realty Trust, LP Tenant: Meridian Consumer Brands LLC C&H Matter No.: 1011-00007
Dear Tom and Jennifer:
I. Transmittal of Tenant's First Markup
This firm represents Meridian Consumer Brands LLC ("MCB" or "Tenant") in connection with the above-referenced lease transaction. On behalf of MCB, we are pleased to transmit herewith the enclosed redline markup (the "Tenant's First Markup") of the draft Lease Agreement delivered by your firm on behalf of Stonebridge Industrial Realty Trust, LP ("Landlord" or "Stonebridge") on July 18, 2022 (the "Landlord's First Draft").
The Tenant's First Markup reflects tenant-favorable revisions to the Landlord's standard industrial lease form and incorporates the material terms and conditions set forth in the Letter of Intent dated June 22, 2022 (Reference No. LOI-2022-CCC-B4), as executed by Kevin Driscoll on behalf of MCB and Rebecca Hartwell on behalf of Stonebridge. Throughout the redline, we have endeavored to conform the lease language to the commercial understanding reflected in the LOI while also addressing various provisions in the Landlord's First Draft that depart from market-standard terms for comparable institutional-quality industrial lease transactions in the Central New Jersey submarket.
This letter is intended to summarize MCB's principal comments and identify the open business points that we believe will require further discussion between the parties and their respective counsel. We provide this summary to facilitate an efficient and organized review of the Tenant's First Markup. To the extent of any inconsistency between this summary letter and the redline itself, the redline shall be controlling.
We are mindful that the LOI contemplates execution of a definitive Lease Agreement by September 30, 2022, and MCB shares the mutual desire of both parties to maintain an expeditious negotiation timeline. In furtherance of that objective, we respectfully request that Landlord's counsel provide a response to this markup, or a revised draft of the Lease reflecting Landlord's comments, by no later than August 26, 2022. We believe this schedule will allow the parties sufficient time to resolve any remaining open points and achieve the targeted execution date.
The principal topics addressed in the Tenant's First Markup are summarized below.
II. Premises and Basic Lease Terms
The Tenant's First Markup confirms the following basic lease terms, which are consistent with the LOI:
• Premises: Approximately 285,000 square feet of warehouse and distribution space, together with approximately 12,500 square feet of finished office and mezzanine space, for a total of approximately 297,500 rentable square feet, located at Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, New Jersey 08512 (Block 24, Lot 17.04, Township of Cranbury, Middlesex County).
• Initial Term: Ten (10) years, commencing on the later of (a) the date of substantial completion of Landlord's Work (as defined in the Lease) or (b) January 1, 2023 (the "Target Commencement Date").
• Base Rent: Annual base rent of $1,200,000 during Lease Year 1, equating to approximately $4.03 per rentable square foot per annum, payable on a triple net (NNN) basis.
• Annual Escalation: Two and one-half percent (2.5%) per annum, compounding, applied commencing in Lease Year 2 and continuing through Lease Year 10.
• Estimated NNN Operating Expenses: $2.85 per rentable square foot per year (based on 2022 estimates). In connection with this estimate, MCB requests that Landlord provide confirmation of the actual 2021 operating expense reconciliation for Building 4, together with a detailed description of the projection methodology utilized by Landlord for calculating operating expense pass-throughs. This information is necessary for MCB to verify the reasonableness of the estimated operating expenses and to confirm the appropriate base year for expense stop and cap calculations, if applicable.
Additionally, MCB has revised the rentable area measurement and verification provisions in the Landlord's First Draft to include a mutual right of either party to remeasure the Premises using the Building Owners and Managers Association (BOMA) Z65.1-2017 standard within sixty (60) days following the Commencement Date. If such remeasurement results in a change to the rentable square footage of the Premises, the annual base rent and all other per-square-foot calculations under the Lease (including the TI Allowance, as discussed below) shall be adjusted proportionally. We believe this is a customary provision and provides certainty to both parties.
III. Rent Commencement and Free Rent Period
Consistent with the LOI, the Tenant's First Markup provides for a free rent period of four (4) months from the Commencement Date (Lease Months 1 through 4), during which Tenant shall pay its pro rata share of NNN operating expenses only and shall have no obligation to pay base rent.
MCB has made several important revisions to the free rent provisions in the Landlord's First Draft:
• Commencement Date Trigger. The Landlord's First Draft tied the free rent period to the Target Commencement Date (January 1, 2023) rather than the actual Commencement Date. MCB has revised this provision to clarify that the free rent period runs from the actual Commencement Date, so that if Landlord's Work is delayed beyond the Target Commencement Date, the free rent period shifts accordingly. This ensures that Tenant receives the full benefit of the negotiated free rent concession regardless of construction delays.
• Day-for-Day Penalty for Extended Delay. If Landlord's Work is not substantially completed within ninety (90) days after the Target Commencement Date (i.e., by April 1, 2023), MCB has inserted a provision entitling Tenant to one (1) additional day of free rent credit for each day of delay beyond such ninety (90)-day period. These additional free rent credits would be applied following the expiration of the initial four (4)-month free rent period.
• Termination Right for Prolonged Delay. If Landlord's Work is not substantially completed within one hundred eighty (180) days after the Target Commencement Date (i.e., by July 1, 2023), MCB shall have the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord. This termination right is essential to protect MCB against the risk of an indefinite delay in the delivery of the Premises, which would materially impair MCB's ability to plan and execute its supply chain operations.
IV. Landlord's Work — Scope and Timeline
The Tenant's First Markup confirms the agreed scope of Landlord's Work as set forth in the LOI, which includes the following:
(a) Installation of new LED lighting throughout the warehouse space;
(b) Upgrade of the fire suppression system to Early Suppression Fast Response (ESFR) sprinkler standards;
(c) Replacement of dock levelers at all forty-eight (48) dock-high doors and four (4) drive-in doors;
(d) Office refresh throughout the approximately 12,500 square feet of finished office and mezzanine space, including new carpet, paint, and ceiling tiles; and
(e) Installation of six (6) electric vehicle (EV) charging stations in the automobile parking area serving Building 4.
The estimated cost of Landlord's Work is $1,850,000, which is to be borne entirely by Landlord and shall not be deducted from or credited against the Tenant Improvement Allowance described in Section V below.
MCB's revisions require Landlord to deliver the Premises in a "warm vanilla shell" condition with all Landlord's Work completed in accordance with the construction standards and materials specifications set forth in the new Exhibit C (Landlord's Work) that we have prepared and appended to the Tenant's First Markup. Exhibit C includes, among other things, specific construction standards addressing ESFR sprinkler density per square foot, minimum LED lumens per square foot for the warehouse space, and detailed specifications for the dock leveler replacements. Exhibit C also includes a defined punchlist completion process requiring Landlord and Tenant to jointly prepare a punchlist within ten (10) business days of Landlord's notice of substantial completion, and requiring Landlord to complete all punchlist items within thirty (30) days thereafter.
In addition, MCB's revisions include the following requirements with respect to the timeline and execution of Landlord's Work:
• Landlord shall deliver a detailed construction schedule to Tenant within fifteen (15) days of the execution date of the Lease, with a guaranteed substantial completion date no later than one hundred twenty (120) days after the lease execution date.
• All Landlord's Work must be performed in compliance with all applicable federal, state, and local laws, codes, regulations, and ordinances, including without limitation the Township of Cranbury's building permit requirements and any conditions imposed by the Cranbury Township Planning Board or Zoning Board of Adjustment.
• Landlord shall provide Tenant with at least forty-eight (48) hours' prior written notice before performing any work that would limit or restrict Tenant's access to the Premises during the tenant improvement construction period, and Landlord shall use commercially reasonable efforts to coordinate the performance of Landlord's Work with Tenant's contractors to avoid interference with Tenant's simultaneous installation of its improvements, racking systems, and equipment.
V. Tenant Improvement Allowance
The Tenant's First Markup confirms the TI Allowance as set forth in the LOI:
TI Allowance: $15.00 per rentable square foot × 297,500 RSF = $4,462,500
MCB's revisions address the disbursement mechanics for the TI Allowance, which were inadequately specified in the Landlord's First Draft, as follows:
(a) Progress Payments. Landlord shall disburse the TI Allowance in monthly progress payments within thirty (30) days of Tenant's submission of draw requests, accompanied by conditional lien waivers from all contractors and subcontractors, architect's certificates of completion for the work covered by each draw, and copies of paid invoices or invoices due and payable.
(b) Offset Right. If Landlord fails to fund any conforming draw request within the thirty (30)-day period, Tenant shall have the right to offset the unpaid amount, together with interest thereon at the prime rate as published in The Wall Street Journal plus two percent (2%) per annum from the date payment was due, against the next installment(s) of base rent due under the Lease. This offset right is a critical protection for Tenant, as MCB will be incurring significant construction costs in reliance on the TI Allowance and cannot absorb the cash flow impact of delayed disbursements.
(c) Permitted Uses of Unused Allowance. Unused portions of the TI Allowance, up to a maximum of $5.00 per rentable square foot (i.e., up to $1,487,500), may be applied by Tenant toward the cost of cabling, racking, material handling equipment, and automation equipment installations. This flexibility is important to MCB's planned deployment of automated storage and retrieval systems within the warehouse space.
(d) Forfeiture of Unused Allowance. Any remaining unused TI Allowance not drawn by Tenant within eighteen (18) months following the Commencement Date shall be forfeited and shall no longer be available to Tenant.
Finally, the TI Allowance is subject to recalculation in the event the rentable square footage of the Premises changes prior to the Commencement Date as a result of final BOMA measurement or any building modification. Any such recalculation shall be on a per-square-foot basis, using the same $15.00 per rentable square foot rate.
VI. Security Deposit / Letter of Credit
The Tenant's First Markup reflects the following security deposit arrangements, consistent with the LOI:
• Amount: $300,000, equal to three (3) months of Lease Year 1 base rent at $100,000 per month.
• Form: Irrevocable standby letter of credit (the "LC"), to be issued by Harborview National Bank, N.A., or another nationally recognized banking institution reasonably acceptable to Landlord, with a minimum long-term credit rating of A- (or its equivalent) from a nationally recognized statistical rating organization (e.g., S&P Global Ratings, Moody's, or Fitch Ratings).
• Evergreen Provision. The LC shall be in evergreen form, with automatic annual renewals and a sixty (60)-day notice of non-renewal provision. If the LC issuer delivers a notice of non-renewal, Tenant shall have thirty (30) days to deliver a replacement LC from a qualifying issuer.
• Burn-Down Schedule. The face amount of the LC shall be reduced as follows, provided that no uncured Event of Default by Tenant exists at the time of each scheduled reduction:
MCB has revised the Landlord's First Draft to address several deficiencies in the LC draw and return provisions:
(a) Draw Rights. Landlord's right to draw on the LC is limited to amounts actually due and unpaid under the Lease after the expiration of all applicable notice and cure periods. The Landlord's First Draft would have permitted Landlord to draw on the LC upon the mere assertion of a default, without regard to whether notice had been given or cure periods had expired. This is commercially unreasonable and inconsistent with market practice.
(b) Return of LC. Landlord shall return the LC (or the applicable reduced LC then held by Landlord) to Tenant within sixty (60) days following the later of (i) the expiration or earlier termination of the Lease and (ii) Tenant's surrender of the Premises in the condition required by the Lease. Any amounts drawn by Landlord from the LC in excess of amounts actually owed by Tenant shall be promptly refunded to Tenant with interest at the prime rate plus two percent (2%) per annum.
VII. Limited Guaranty
The Lease will be supported by a limited guaranty (the "Guaranty") from Meridian Holdings Inc., a Delaware corporation and the direct parent company of MCB. The principal terms of the Guaranty, as reflected in the Tenant's First Markup, are as follows:
• Cap. The Guaranty is capped at twelve (12) months of base rent, or $1,200,000.
• Burn-Off. The Guaranty shall be released and shall be of no further force or effect upon MCB achieving and maintaining a net worth of not less than $75,000,000 for two (2) consecutive fiscal quarters, as certified by MCB's independent auditor, Ashford & Whitmore CPAs LLP (or any successor auditor reasonably acceptable to Landlord).
MCB's revisions to the guaranty provisions in the Landlord's First Draft include the following material changes:
(a) The Guaranty is a guaranty of payment only (and not of collection), but is limited solely to the capped amount of $1,200,000 and does not extend to any consequential, speculative, punitive, or other indirect damages that Landlord may claim.
(b) The Guarantor shall have the benefit of all defenses, rights, set-offs, and counterclaims available to Tenant under the Lease, other than defenses arising solely from Tenant's bankruptcy or insolvency.
(c) Landlord must first exhaust all remedies available to it against Tenant under the Lease, including without limitation drawing on the LC, before making any claim or commencing any action against the Guarantor under the Guaranty. This exhaustion requirement provides appropriate protection against premature claims against the parent entity.
(d) The Guaranty shall automatically terminate upon the earliest to occur of (i) the burn-off condition described above being satisfied, or (ii) the expiration of the initial ten (10)-year term of the Lease, provided that no uncured Event of Default by Tenant exists at the time of such expiration.
A separate draft Limited Guaranty Agreement is being prepared by Calderwood & Harkness LLP and will be circulated to your firm under separate cover in the coming days. In the interim, we request that Landlord provide its form of guaranty agreement, if any, so that we may review and compare the two forms in parallel. We anticipate that the guaranty form can be negotiated concurrently with the Lease.
VIII. Subordination, Non-Disturbance, and Attornment (SNDA)
MCB requires that Landlord deliver, as a condition precedent to Tenant's obligation to commence payment of rent under the Lease, a Subordination, Non-Disturbance, and Attornment Agreement ("SNDA") from each holder of a mortgage, deed of trust, or other security instrument currently encumbering the Premises or the Cranbury Commerce Center.
The SNDA must provide, at a minimum, that so long as Tenant is not in default under the Lease beyond all applicable notice and cure periods, Tenant's right to possession of the Premises and all of Tenant's other rights under the Lease shall not be disturbed, diminished, or interfered with in the event of a foreclosure, deed in lieu of foreclosure, or any other exercise of remedies by Landlord's lender or any successor-in-interest to Landlord's fee estate.
MCB has inserted the following additional requirements in the Tenant's First Markup:
(a) Within ten (10) business days following the execution of the Lease, Landlord shall identify in writing all current mortgagees, trustees, and other holders of security interests encumbering the Premises or any portion of the Cranbury Commerce Center, and shall provide complete contact information for each such party (including the name and contact information of the applicable loan servicer and its counsel).
(b) If Landlord is unable to deliver an executed SNDA from each such mortgagee within sixty (60) days following the execution of the Lease, Tenant shall have the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord. Upon such termination, Landlord shall promptly return the security deposit or LC to Tenant and reimburse Tenant for any TI costs incurred prior to the termination date, up to the amount of the TI Allowance.
We note that Calderwood & Harkness LLP is preparing a draft SNDA request letter and a form of SNDA agreement for Landlord's review and comment. We will circulate those documents under separate cover once they are finalized, which we anticipate will be within the next several business days.
IX. Co-Tenancy Provisions
MCB has inserted co-tenancy protections in the Tenant's First Markup relating to Landlord's operation and management of the Cranbury Commerce Center as a multi-building industrial park. As you are aware, the Cranbury Commerce Center comprises at least four (4) buildings situated on a campus of approximately sixty-two (62) acres. Building 4 shares access drives, stormwater management systems, parking areas, and utility corridors with the other buildings in the park. MCB's warehouse and distribution operations at Building 4 depend on the continued availability, functionality, and maintenance of this shared infrastructure.
MCB's revisions require the following:
(a) Maintenance Obligation. Landlord shall maintain all shared access drives, stormwater detention and retention basins, common area parking, landscaping, lighting, and other common areas in good repair, working order, and condition, and in compliance with all governmental approvals, site plan conditions, and applicable laws and regulations.
(b) Consent to Material Modifications. Landlord shall not make any material modification to the approved site plan, shared infrastructure, or common areas that adversely affects Tenant's access to the Premises, the truck court configuration serving Building 4, the number and configuration of loading docks, trailer parking capacity, or clear heights within Building 4, without Tenant's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.
(c) Governmental Modifications — Tenant Protections. If any governmental authority requires modifications to the site plan or shared infrastructure that materially impair Tenant's use and occupancy of the Premises, including without limitation (i) a reduction in the number of dock doors below Building 4's current forty-eight (48) dock-high door and four (4) drive-in door configuration, (ii) a reduction in trailer parking capacity below the current configuration serving Building 4, or (iii) a reduction in warehouse square footage by more than five percent (5%), Tenant shall have the right to (A) a proportional reduction in base rent for the period of such impairment and (B) if the impairment is not cured or remedied within one hundred eighty (180) days following Tenant's notice thereof, the right to terminate the Lease upon thirty (30) days' prior written notice to Landlord.
We note that these co-tenancy protections are of particular importance to MCB in light of the fact that Stonebridge is currently pursuing the development of a new Building 5 on the adjacent parcel (Block 24, Lot 17.05), which shares access drives and stormwater infrastructure with Building 4. MCB's operations at Building 4 must not be adversely impacted by construction activities, traffic pattern changes, or infrastructure modifications arising from the Building 5 development. We would appreciate Landlord's counsel's confirmation of the current status of the Building 5 development, including any pending or anticipated applications before the Township of Cranbury Planning Board or Zoning Board of Adjustment, so that we may evaluate whether additional protective provisions are warranted.
X. Casualty and Condemnation
MCB has significantly revised the casualty and condemnation provisions in the Landlord's First Draft, which were heavily landlord-favorable and inconsistent with market practice for institutional-quality industrial lease transactions. The principal revisions are as follows:
Casualty. If a fire, flood, or other casualty renders more than twenty-five percent (25%) of the Premises untenantable, or if Landlord is unable to complete restoration of the Premises within two hundred seventy (270) days following the date of the casualty, either party shall have the right to terminate the Lease by written notice delivered within sixty (60) days of the casualty (or within thirty (30) days of Landlord's notice that restoration cannot be completed within the 270-day period, as applicable). In addition, if a casualty occurs during the last two (2) years of the initial term of the Lease (or any renewal term), Tenant shall have the right to terminate the Lease regardless of the percentage of the Premises rendered untenantable. During any period of restoration, base rent shall abate proportionally for the portion of the Premises rendered untenantable, and Tenant's obligation to pay operating expenses shall be adjusted to reflect the reduced usable area.
Condemnation. If a taking by any governmental authority or quasi-governmental entity (whether by eminent domain, condemnation, or a conveyance in lieu thereof) renders more than fifteen percent (15%) of the Premises untenantable, or deprives Tenant of reasonable access to the truck court, loading docks, or trailer parking areas serving Building 4, Tenant shall have the right to terminate the Lease upon written notice delivered within sixty (60) days of the taking. In the event of a partial taking resulting in a loss of less than fifteen percent (15%) of the Premises, base rent shall abate proportionally. Tenant shall be entitled to make a separate claim against the condemning authority for Tenant's moving expenses, the unamortized value of Tenant's investment in tenant improvements, and business interruption losses, provided that such claim is distinct from and does not diminish Landlord's claim for the value of the fee interest in the condemned property.
In all casualty and condemnation termination scenarios, Tenant shall be entitled to a pro rata refund of any prepaid rent and the return of the unapplied security deposit or LC within thirty (30) days of the effective date of the termination.
XI. Environmental Provisions
MCB's revisions to the environmental provisions in the Landlord's First Draft address risk allocation in light of the environmental due diligence performed by Tenant in connection with this transaction. Specifically, MCB has reviewed the Phase I Environmental Site Assessment prepared by Blackthorn Environmental Consulting, Inc. (Report No. BEC-2022-0814, dated August 5, 2022) (the "Phase I ESA").
The Phase I ESA identified no Recognized Environmental Conditions (RECs) on the subject property. However, the Phase I ESA did identify a Controlled Recognized Environmental Condition (CREC) in connection with a historic dry-cleaning operation on the adjacent parcel, Block 24, Lot 16, which is not part of the Cranbury Commerce Center. According to the New Jersey Department of Environmental Protection (NJDEP) records, Block 24, Lot 16 is subject to a Classification Exception Area (CEA) for tetrachloroethylene (PCE) in groundwater. The Phase I ESA notes that the CEA does not currently extend onto the subject property; however, given the proximity of the contamination source and the potential for future contaminant migration, MCB has inserted the following protective provisions:
(a) Landlord's Representations and Warranties. Landlord represents and warrants to Tenant that, to the best of Landlord's knowledge after reasonable inquiry: (i) no hazardous materials, hazardous substances, or toxic substances (as defined under applicable federal, state, or local environmental laws) exist on, under, or about the Premises in violation of applicable environmental laws; (ii) the Premises are not subject to any environmental lien, administrative order, consent decree, or remediation obligation imposed by any governmental authority; and (iii) the NJDEP Classification Exception Area established in connection with the PCE contamination on Block 24, Lot 16 does not extend onto or under the Premises.
(b) Landlord's Environmental Indemnification. Landlord shall indemnify, defend, and hold harmless Tenant and its affiliates, officers, directors, employees, agents, and contractors from and against all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorneys' fees and costs of investigation, cleanup, and remediation) arising from or related to (i) any pre-existing environmental conditions on the Premises or the Cranbury Commerce Center, whether known or unknown as of the Commencement Date; (ii) any migration of hazardous materials from adjacent parcels, including without limitation the migration of PCE or any other contaminant from Block 24, Lot 16, onto or under the Premises; and (iii) any violation of environmental laws by Landlord, its agents, or contractors.
(c) Ongoing Notification Obligation. Landlord shall provide Tenant with prompt written notice (and in any event within five (5) business days) of: (i) any change in the NJDEP CEA boundaries affecting Block 24, Lot 16 or any adjacent parcel; (ii) any new environmental investigation, sampling, or remediation activity on the Cranbury Commerce Center or adjacent parcels known to Landlord; and (iii) any communication from NJDEP or any other regulatory authority concerning environmental conditions at or near the Premises.
(d) Tenant's Environmental Indemnification. Tenant's environmental indemnification obligation shall be limited to contamination caused solely by Tenant's own operations at the Premises during the term of the Lease. This is an appropriately scoped obligation that holds Tenant responsible for its own actions while ensuring that Tenant does not assume liability for conditions beyond its control.
(e) Deletion of Joint and Several Liability Provision. MCB has deleted Section 12.4 of the Landlord's First Draft, which would have imposed joint and several environmental liability on Tenant for any environmental conditions discovered during the term of the Lease, regardless of cause. This provision is commercially unreasonable and inconsistent with the fundamental principle that environmental liability should follow causation. MCB is unwilling to accept responsibility for legacy contamination, third-party contamination, or contamination caused by Landlord or other tenants of the Cranbury Commerce Center.
XII. Assignment and Subletting
MCB has substantially reworked the assignment and subletting provisions in the Landlord's First Draft, which imposed unduly restrictive conditions on Tenant's ability to transfer or share the Premises. The principal revisions are as follows:
• Consent Standard. Tenant may assign the Lease or sublet all or any portion of the Premises with Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Landlord shall respond to any assignment or subletting request within fifteen (15) business days of receiving a complete request package (including the identity and financial statements of the proposed assignee or subtenant, the proposed terms, and a copy of the proposed assignment or sublease instrument). If Landlord fails to respond within such fifteen (15) business-day period, Landlord's consent shall be deemed to have been given.
• Permitted Transfers. The following transfers shall not require Landlord's consent and shall not be subject to any recapture right, excess rent sharing, or other restriction:
(a) Assignments to any affiliate or subsidiary of MCB or Meridian Holdings Inc.;
(b) Assignments to any entity that is controlled by, controls, or is under common control with Halcyon Ridge Capital Partners, LP (MCB's private equity sponsor); and
(c) Assignments in connection with a merger, consolidation, reorganization, or sale of all or substantially all of MCB's assets, provided that the successor entity has a net worth at least equal to MCB's net worth as of the date of the transfer, as reasonably demonstrated by audited financial statements.
• No Recapture Right. Landlord shall not have a recapture right (i.e., no right to terminate the Lease and recapture the Premises) upon any proposed assignment or sublease by Tenant. The Landlord's First Draft included a broad recapture right triggered by any proposed transfer, which is commercially unacceptable and inconsistent with market practice for credit tenants in the industrial sector.
• Excess Rent Sharing. In the event that Tenant enters into a sublease at a rental rate exceeding the base rent under the Lease, the excess rent (net of Tenant's reasonable and documented transaction costs, including brokerage commissions, legal fees, and tenant improvement costs incurred in connection with the sublease) shall be shared equally (50/50) between Landlord and Tenant.
• Guaranty Continuation. The limited guaranty from Meridian Holdings Inc. shall remain in effect following a permitted transfer, unless the transferee independently satisfies the guaranty burn-off threshold (i.e., net worth of $75,000,000 for two consecutive fiscal quarters), in which case the Guaranty shall be released in accordance with its terms.
XIII. Early Termination Option
The Tenant's First Markup includes an early termination option providing Tenant with the right to terminate the Lease after Lease Year 7 (i.e., with a termination effective date no earlier than the last day of Lease Year 7). Tenant must deliver at least eighteen (18) months' prior written notice to Landlord to exercise this option.
The early termination fee payable by Tenant shall be equal to the sum of:
(a) The unamortized balance of the TI Allowance, calculated using straight-line amortization over the ten (10)-year initial term of the Lease;
(b) The unamortized balance of brokerage commissions paid by Landlord to Pinnacle Brokerage Group LLC and Velthorn Realty Advisors LLC in connection with this Lease, calculated using straight-line amortization over the ten (10)-year initial term of the Lease; and
(c) Six (6) months of the then-current annual base rent (i.e., the annual base rent in effect as of the termination effective date, divided by two).
MCB's revisions specify that the components of the termination fee calculation must be set forth in a reasonably detailed schedule to be attached to the Lease at execution (as an exhibit), with agreed amortization calculations for the TI Allowance and brokerage commissions, so that the termination fee is determinable in advance by both parties. We believe it is essential that neither party be uncertain as to the amount of the termination fee at any point during the Lease term.
The early termination fee must be paid in full by Tenant on or before the termination effective date as a condition precedent to the effectiveness of the termination.
XIV. Renewal Options
The Tenant's First Markup provides Tenant with two (2) successive five (5)-year renewal options, each at ninety-five percent (95%) of the then-prevailing fair market rent. Tenant must provide at least twelve (12) months' prior written notice to Landlord to exercise each renewal option.
MCB has inserted a detailed fair market rent determination procedure to avoid disputes regarding the renewal rent:
(a) Within thirty (30) days following Tenant's exercise of a renewal option, Landlord and Tenant shall each designate an independent MAI-certified appraiser with at least ten (10) years of experience in the appraisal of industrial properties in the Central New Jersey submarket.
(b) Each appraiser shall deliver a written determination of the fair market rent for the Premises within sixty (60) days of appointment.
(c) If the two appraisals differ by ten percent (10%) or less (measured against the higher of the two appraisals), the fair market rent shall be the arithmetic average of the two appraisals.
(d) If the two appraisals differ by more than ten percent (10%), the two appraisers shall jointly select a third independent MAI-certified appraiser within fifteen (15) days. The third appraiser shall deliver a written determination of fair market rent within thirty (30) days of appointment, and the final fair market rent shall be the arithmetic average of the two closest of the three appraisals.
(e) During the determination period, Tenant shall pay rent at ninety-five percent (95%) of the base rent in effect during the final year of the expiring term. Within thirty (30) days following the final determination of fair market rent, a true-up payment shall be made by the appropriate party to reconcile any overpayment or underpayment of rent during the determination period.
The exercise of each renewal option is conditioned upon no uncured Event of Default by Tenant existing at the time of Tenant's exercise of the option or at the commencement of the applicable renewal term.
XV. Insurance
MCB's revisions to the insurance provisions conform the Lease to the requirements agreed upon in the LOI and to MCB's existing insurance program, which is placed through Ridgeline Mutual Insurance Company. The Tenant's First Markup requires the following coverage:
All policies must be issued by insurance carriers rated A- VII or better by A.M. Best Company (or an equivalent rating from another nationally recognized insurance rating organization).
MCB's revisions also include the following provisions:
• Mutual Waiver of Subrogation. Each party waives, and shall cause its respective insurance carriers to waive, all rights of subrogation against the other party and its agents, employees, and contractors for any loss or damage covered (or required to be covered) by insurance under the Lease.
• Additional Insured Designations. Landlord shall be named as an additional insured on Tenant's CGL and umbrella policies. Correspondingly, Tenant shall be named as an additional insured on Landlord's property insurance policy for Building 4.
• Landlord's Property Insurance Obligation. MCB has revised the Landlord's First Draft to require Landlord to maintain commercially reasonable property insurance on Building 4, including the shell, structure, roof, foundations, and common areas, at full replacement cost. Landlord shall provide evidence of such coverage to Tenant upon Tenant's reasonable written request. The Landlord's First Draft was silent on Landlord's insurance obligations, which is unacceptable in a transaction of this magnitude.
XVI. Default and Remedies
MCB's revisions to the default and remedies provisions are among the most significant changes in the Tenant's First Markup. The Landlord's First Draft contained one-sided default and remedy provisions that afforded Tenant inadequate notice and cure protections and entirely failed to address Landlord defaults. The principal revisions are as follows:
• Monetary Default — Cure Period. Tenant shall have ten (10) business days following receipt of written notice from Landlord to cure any monetary default (e.g., failure to pay rent or other amounts due under the Lease). The Landlord's First Draft provided only five (5) calendar days, which is insufficient and below market standard for industrial leases.
• Non-Monetary Default — Cure Period. Tenant shall have thirty (30) days following receipt of written notice from Landlord to cure any non-monetary default, with an extension of up to an additional ninety (90) days if the default is of a nature that is not reasonably susceptible of cure within the initial thirty (30)-day period and Tenant is diligently pursuing a cure throughout such extended period.
• Landlord Default Provisions. MCB has inserted comprehensive landlord default provisions, which were entirely absent from the Landlord's First Draft. If Landlord fails to perform any material obligation under the Lease and does not cure such failure within thirty (30) days following receipt of written notice from Tenant (or such longer period as is reasonably necessary to effect a cure, provided Landlord commences cure within such thirty (30)-day period and diligently pursues the same to completion), Tenant shall have the right to:
(a) Exercise self-help rights and offset the reasonable costs incurred against the next installment(s) of base rent due under the Lease, provided Tenant delivers reasonable documentation of such costs to Landlord;
(b) Seek specific performance or injunctive relief in a court of competent jurisdiction; and/or
(c) If the landlord default materially impairs Tenant's use and occupancy of the Premises and remains uncured for a period of one hundred twenty (120) days following Tenant's initial notice, terminate the Lease upon thirty (30) days' prior written notice to Landlord.
• Limitation on Damages. MCB has deleted the provisions in the Landlord's First Draft that would have permitted Landlord to recover consequential, speculative, or punitive damages. Each party's liability under the Lease shall be limited to actual, direct damages. This is a fundamental risk allocation principle that should apply mutually.
• Landlord's Remedies on Tenant Default. MCB has revised Landlord's remedies upon a Tenant default to limit Landlord's right to accelerate rent to the period through the date on which a replacement tenant commences paying rent at the Premises, plus Landlord's actual and documented re-leasing costs (including reasonable brokerage commissions, legal fees, and tenant improvement costs for the replacement tenant). Landlord shall have a duty to use commercially reasonable efforts to mitigate its damages by re-leasing the Premises.
XVII. Miscellaneous Open Business Points
In addition to the foregoing, MCB's First Markup addresses several additional business points that we would like to bring to Landlord's attention for discussion:
Signage. MCB requests the right to install building-mounted signage on the exterior of Building 4, including identification signage on the front façade and directional signage on the truck court side of the building. MCB also requests the right to install monument signage at the entrance to Cranbury Commerce Center identifying MCB as a tenant of the park. All signage would be subject to applicable local ordinances (including the Township of Cranbury's sign regulations) and Landlord's reasonable approval of the design, materials, size, and placement of such signage. MCB would bear all costs of fabrication, installation, maintenance, and removal of its signage.
Exclusive Use. MCB requests a use restriction prohibiting Landlord from leasing space in other buildings at Cranbury Commerce Center to a direct competitor of MCB — specifically, any entity whose primary business is the manufacture, warehousing, or distribution of shelf-stable consumer packaged goods in the same product categories as MCB (including but not limited to dry grocery, snacks, and beverages). This exclusive use restriction is important to protect MCB's competitive position and is consistent with exclusivity provisions commonly found in multi-tenant industrial park leases.
Parking. MCB requires confirmation from Landlord of the total number of standard automobile parking spaces allocated to Building 4, exclusive of trailer parking. MCB requires a minimum of one hundred twenty (120) automobile parking spaces for employee and visitor parking. We note that the site plan attached to the Landlord's First Draft appears to depict approximately one hundred thirty-five (135) automobile spaces, but we would appreciate written confirmation of this number and assurance that such spaces will not be reduced during the Lease term.
Roof Rights. MCB requests the right to install solar photovoltaic panels and/or telecommunications equipment (including satellite dishes and antenna arrays) on the roof of Building 4, subject to Landlord's prior written consent (which shall not be unreasonably withheld, conditioned, or delayed) and compliance with applicable structural load requirements and the manufacturer's roofing warranty. MCB would be responsible for all costs associated with such installations and would indemnify Landlord against any damage to the roof caused by such installations.
Building Systems Access. MCB requires unrestricted twenty-four hours a day, seven days a week (24/7) access to all HVAC mechanical rooms, electrical distribution rooms, switchgear, and plumbing utility rooms serving the Premises. Given the nature of MCB's warehouse and distribution operations, which may operate on a multi-shift basis, it is essential that MCB's facilities personnel have immediate access to building systems at all times without the need to coordinate with Landlord's property management team.
XVIII. Requested Response and Next Steps
We request that Whitfield, Barr & Calloway LLP review the enclosed Tenant's First Markup and provide Landlord's response and/or a revised draft of the Lease by August 26, 2022. As noted above, the LOI contemplates a September 30, 2022 lease execution target date, and both MCB and Stonebridge share a mutual desire to finalize the Lease within that timeframe. A prompt turnaround on this markup will be essential to maintaining the negotiation schedule.
To the extent that there are open business points that would benefit from a direct discussion between the principals, we would be pleased to schedule a conference call or in-person meeting at a mutually convenient time. We believe it would be productive for Kevin Driscoll (MCB), Rebecca Hartwell (Stonebridge), and the respective legal teams to convene to discuss any substantive issues that may arise from the Tenant's First Markup. Please let us know your availability and that of your client.
Finally, as noted above, Calderwood & Harkness LLP will separately circulate the following documents for Landlord's counsel's review and comment:
(a) Draft Limited Guaranty Agreement (Meridian Holdings Inc.); and
(b) Draft SNDA request letter and form of SNDA agreement.
We anticipate circulating both documents within the next several business days.
XIX. Reservation of Rights
MCB expressly reserves all rights under the LOI and at law and in equity. Nothing contained in this letter or in the enclosed Tenant's First Markup shall constitute or be deemed to constitute a waiver of any right, claim, or defense available to MCB under the LOI, applicable law, or otherwise.
The enclosed Tenant's First Markup does not constitute a binding agreement between the parties. No binding obligations shall arise between Landlord and Tenant with respect to the Lease or the transaction contemplated hereby until a definitive Lease Agreement has been mutually executed and delivered by both parties. Until such time, either party may withdraw from negotiations at any time and for any reason without liability to the other party.
We look forward to receiving Landlord's response and to continuing to work with your team to bring this transaction to a successful conclusion. Please do not hesitate to contact me with any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Cynthia Ho, Esq. Associate
Telephone: (212) 558-4127
Email: cho@calderwoodharkness.com
cc (via email):
Angela Fontaine, Esq., Calderwood & Harkness LLP Douglas Fairchild, Esq., Calderwood & Harkness LLP Grace Nakamura, Esq., Calderwood & Harkness LLP Kevin Driscoll, Meridian Consumer Brands LLC Martin Solberg, Halcyon Ridge Capital Partners, LP Daniel Tsui, Pinnacle Brokerage Group LLC
Encl:
Tenant's First Markup of Lease (Redline) — Building 4, Cranbury Commerce Center, 200 Prospect Plains Road, Cranbury, NJ 08512 (August 12, 2022)
Period | LC Amount
Lease Years 1–3 | $300,000
Lease Years 4–6 | $200,000
Lease Years 7–10 | $100,000
Coverage | Limits
Commercial General Liability | $5,000,000 per occurrence / $10,000,000 aggregate
Property Insurance (Tenant's personal property and improvements) | Full replacement cost
Business Interruption | 12 months' coverage
Umbrella / Excess Liability | $10,000,000
Workers' Compensation | Statutory limits (New Jersey)

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts