L/S 26TH STREET SOUTH, LPc/o Liberty Property Trust500 Chesterfield ParkwayMalvern, PA 19355 December 31, 2010

 

L/S 26TH STREET SOUTH, LP c/o Liberty Property Trust 500 Chesterfield Parkway Malvern, PA 19355 December 31, 2010

VIA EMAIL:  charles.pizzi@tastykake.corn

 

Tasty Baking Company

Navy Yard Corporate Center

3 Crescent Drive, Suite 200

Philadelphia, PA 19112

Attn:

Mr. Charles P. Pizzi President & CEO

 

RE:

Industrial Lease Agreement dated as of May 8, 2007 (as amended and as may be further amended, supplemented or restated from time to time, the “Lease Agreement”), by and among L/S 26th Street South, LP (the “Landlord”) and Tasty Baking Company (“Tasty”); Improvement Agreement dated May 8, 2007 (as amended and as may be further amended, supplemented or restated from time to time, the “Improvements Agreement”) by and among Landlord and Tasty.1

 

Dear Mr. Pizzi:

 

You have advised that Tasty will be requesting certain amendments to the Credit Agreement dated September 6, 2007 (as amended from time to time, the “Senior Credit Agreement”) by and among Tasty, the direct and indirect subsidiaries of Tasty from time to time parties to the Senior Credit Agreement, Citizens Bank of Pennsylvania, as Administrative Agent and Collateral Agent (in such capacities, collectively, the “Senior Agent”), and Citizens Bank of Pennsylvania as Swing Line Lender and L/C Issuer, and each of the Lenders from time to time party to the Senior Credit Agreement (the “Senior Lenders”). Tasty will also be requesting certain amendments to ‘ the Lease Agreement and Improvements Agreement. We expect those requests will include limited moratoriums on payments due under the Senior Credit Agreement (principal only), the Lease Agreement and the Improvements Agreement and waivers of defaults or events of defaults. This letter, however, does not constitute such a request for, or an agreement to, any such moratoriums or waivers, except as expressly set forth below.

 

In consideration of your requests to Landlord, Landlord hereby agrees as follows:

 

●	Landlord hereby waives each Event of Default, if any, which may have occurred or be continuing under the Lease Agreement (including without limitation the obligation of Tasty under the Lease Agreement to repay Landlord the sum of $686,459.37 for change

 

____________________

 

 

 

December 31, 2010
Page 2

 

 

 

●

Landlord hereby waives each Event of Default (as defined in the Improvements Agreement), if any, which may have occurred or be continuing under the Improvements Agreement but only to the extent such Event of Default (as defined in the Improvements Agreement) exists up to and including January 31, 2011. For the sake of clarity, to the extent any Event of Default (as defined in the Improvements Agreement) continues to exist after January 31, 2011, such default shall constitute an Event of Default(as defined in the Improvements Agreement) under the Improvements Agreement without the need for further notice to Tasty or any other person, and Landlord shall then be entitled to all rights and remedies under the Lease with respect thereto.

 

●

The Lease Agreement is hereby amended to provide that any payments under the Lease Agreement or otherwise, whether such payments are for Monthly Rent, taxes, fees or otherwise, but specifically excluding Operating Expenses, which may be or are required to be made to Landlord under the Lease Agreement or otherwise between the date of this letter and January 31, 2011 shall not be paid to the Landlord or any other party until after January 31, 2011.

 

●

The Improvements Agreement is hereby amended to provide that any payments under the Improvements Agreement or otherwise, whether such payments are for fees or otherwise, which may be or are required to be made to Landlord under the Improvements Agreement or otherwise prior to January 31, 2011 shall not be paid to the Landlord or any other party until after January 31, 2011.

 

●	Landlord further agrees, for the benefit of the Senior Lenders, that through and including January 31, 2011, it will not further amend, supplement or modify the Lease Agreement or the Improvements Agreement or waive any provisions thereof without the express written consent of the Senior Agent.

 

Notwithstanding the foregoing, this letter agreement: (a) shall not apply to the obligation of Tasty to pay Operating Expenses under the Lease Agreement, or to any Event of Default resulting from the failure to pay Operating Expenses for the months of December 2010 and/or January 2011; (b) shall not prohibit or restrict Landlord from asserting a claim against Tasty under the Lease, including an assertion of an Event of Default and/or the exercise of remedies relating thereto, upon the assertion of any claim by Tasty against Landlord or Landlord’s affiliates relating to the Lease or the Improvements Agreement; (c) shall be null and void upon any actual or threatened revocation, withdrawal, repudiation or impairment of the Letter of Credit; (d) shall not impair the right or ability of Landlord to file a proof of claim in the event of any voluntary or involuntary bankruptcy or reorganization proceeding affecting Tasty; (e) shall not prohibit or restrict Landlord from exercising its self-help cure rights under the Lease

 

 

 

 

	Sincerely,
	L/S 26TH STREET SOUTH, LP
	By:	L/S 26th Street South, LLC its General
		Partner
		By:	Liberty Property/Synterra Limited
			Partnership, its sole member
			By:	Liberty Property Philadelphia
				Navy Yard Limited Partnership, its
				general partner
				By:	Liberty Property Philadelphia
					Navy Yard Corporation, its
					general partner
	By:  ___________________________________________
	Name:  _________________________________________
	Title:  __________________________________________

 

*(f) shall not prohibit or restrict Landlord on or after January 15, 2011, from asserting an Event of Default and exercising rights and remedies under the Lease Agreement and/or the Improvements Agreement, in the event the Senior Lenders exercise any remedies against Tasty under the Senior Credit Agreement; and (g) shall not prohibit Landlord from accepting payments under the Lease and/or the Improvements Agreement on or after January 15, 2011, in the event that Tasty makes any payments of principal to the Senior Lenders.