THE LEASE
(MODIFIED GROSS LEASE)
This Lease is made and entered into this 18th day of August,
1999 and between Town Center, LLC. d.b.a. Five Points Mall,
("Landlord"), and ▇.▇. Nak Mattress Company, ("Tenant"), who agree
as follows:
1. SUMMARY OF LEASE
The following is a summary of certain portions of the Lease:
Landlord's Address: Town Center LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Building Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Suite Number: J
Term: Sixty Months (60)
Option Period(s): One-Three Year Period
Commencement Date: August 18, 1999
Expiration Date: September 14, 2004
Basic Rent per Month:
September 15 to November 14th $500.00 per month
November 15 to November 30th $750.00 per month
December 1 to February 29th $1,500.00 per month
March 1st to November 31st $2,000.00 per month
Months 13-24 $2,150.00 per month
Months 25-36 $2,300.00 per month
Months 37-48 $2,450.00 per month
Months 49-60 $2,650.00 per month
Month 13 Free
Approximate Net Rentable Square Feet within Premises: 5080 /
Approximate Net Rentable Square Feet within Building: N/A
Tenant's Percentage of Building: N/A
Number of Covered Parking Spaces: N/A
Cost Per Month Per Covered Parking Space: N/A
Security Deposit: $1,000
Broker: NONE
Guarantors: ▇▇▇▇ ▇. Nak
It is understood the foregoing is intended as a summary of the
Lease for convenience only and if there is a conflict between the
above summary and any provisions of this Lease hereinafter set
forth, the latter shall control.
2. PREMISES
2.1 Landlord hereby leases to Tenant, and Tenant hereby leases and
hires from Landlord, those certain Premises (the "Premises")
described as Space J in the Five Points Shopping Center,
which is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ (the
"Building"). The location of the Premises within the Building is
shown, for purposes of illustration, in Exhibit "A" attached
hereto. The Premises contain approximately 5,080 net rentable
square feet.
3. TERM
3.1 The term of this Lease (the "Term") begins on September 15,
1999 (the "Commencement Date") and shall end at 5:00 p.m. on
September 14, 2004 unless terminated earlier in accordance with the
terms of this Lease.
3.2 If Landlord, through no fault of Tenant, cannot deliver
possession of the Premises to tenant on the Commencement Date, such
delay shall not affect the validity of this Lease, nor
shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, but the Basic Rent provided for in Section 4 hereof
shall be abated during the period between the Commencement
Date and the time when landlord can deliver possession. No such
delay shall operate to extend the Term. If the Premises are not
delivered to Tenant on the Commencement Date as a result of
some delay which is caused by Tenant, the Basic Rent shall not be
abated, and Tenant's obligation to pay the Basic Rent shall
commence on the date that the Premises would have been ready for
delivery but for Tenant caused delays. Upon the completion of the
Tenant improvements, Tenant agrees to ratify the Commencement Date
of the Lease by promptly executing Exhibit "C".
3.3 Should Tenant hold possession of the Premises with the consent
of Landlord after the expiration of the stated term of this Lease,
such holding over shall create a tenancy from month to month only,
upon the same terms and conditions as are hereinafter set forth,
except that monthly Basic Rent shall be one hundred and twenty-five
percent (125%) of the then applicable amount set forth in Section
4 hereof.
3.4 So long as Tenant is not in default under the terms and
conditions of the Lease, upon the exercise of a renewal option or
upon the commencement of any renewal term, Tenant shall have one
(1) Three (3) year option to renew the Term of this Lease. Such
options shall be exercised by written notice to Landlord no less
than one hundred (100) days prior to the expiration of the then
current term. Such renewals shall be upon all of the terms and
conditions of the Lease except that the annual Basic shall be the
greater of market rent but not less than the Basic Rent of the last
lease year.
4. RENT
Tenant agrees to pay to Landlord as annual Basic Rent for the
Premises the sum of Seventeen Thousand seven hundred and fifty
dollars ($17,500) payable in installments outlined in Section 1
of this Lease, in advance, beginning on the Commencement Date and
continuing on the first day of each calendar month during the Term.
On the first day of the calendar month beginning the 13th month of
the Commencement Date, the annual Basic Rent due hereunder shall be
increased to Twenty Four Thousand One Hundred and Fifty Dollars
($24,150.00 ), payable in installments outlined in Section 1 of
this Lease as described, from Month 13 - 24:
On the first day of the calendar month beginning 25th month of the
Commencement Date, the annual Basic Rent due hereunder shall be
increased to Twenty Seven Thousand Six Hundred Dollars ($27,600.00
), payable in installments as described, from Month 25 - 36, in
equal monthly payments of $2,300.
Commencing the 25-36 month lease term in the event Landlord has not
moved Tenant to new quarter, tenant shall pay the greater of 8% of
gross sales against tenants annual natural rental break.
On the first day of the calendar month beginning the 37th month of
the Commencement Date, the annual Basic Rent due hereunder shall be
increased to Twenty Nine Thousand Four Hundred Dollars ($29,400.00
), payable in installments as described, from Month 37 - 45, in
equal monthly payments of $2,450.
On the first day of the calendar month beginning the 49th month of
the Commencement Date, the annual Basic Rent due hereunder shall be
increased to Thirty One Thousand Eight Hundred ($31,800 Payable in
equal monthly payments of $2,650.
Concurrently with the execution of this Lease, Tenant shall pay to
Landlord the sum of One Thousand Five Hundred Dollars ($1,500)
representing Basic Rent payable hereunder for the first month of
the Term of this Lease, and a security deposit in the amount of
$1,000. Landlord shall not be obligated to keep such sum separate
from its general funds or to pay interest thereon. Rent for any
fractional month shall be prorated based on a thirty (30) day
month.
All sums due from Tenant to Landlord under this Lease including,
without limitation, Basic Rent and the additional rent payable
pursuant to Article 5 below, shall be deemed rent for the Premises.
Tenant will make all rent payments without deduction, offset, or
demand, to Landlord at the address for Landlord set forth in
Section 1 above, or to such other person or place as Landlord may
designate in writing. If Tenant shall fails to pay, within five (5)
days after the same is due and Payable, any Basic Rents or any
additional rent, or any other amount or charges to be paid by
Tenant hereunder, such unpaid amount shall bear interest from the
due date thereof to the date of payment at the rate of Prime plus
four percent (4%) per annum. Tenant shall also pay a late charge
equal to fine percent (5%) of such unpaid amount. As used in this
Lease, "Prime" shall mean the rate of interest announced as the
"Prime Rate of Interest" for reference purposes by U.S. Bank, or if
such bank no longer exists, a bank chosen by Landlord. Such
interest and late charge are intended to compensate Landlord for
the additional administrative expenses and other costs which are
caused by delinquent payments of rent.
5. COMMON AREA (CAM) - TAXES, ASSESSMENTS AND OPERATING COSTS
(Not withstanding the provision of Section 5; 5.1; 5.2; and 5.3 so
long as Tenant is not in default or breach of their lease Landlord
shall waive Tenant obligation to pay common area taxes, assessments
and operating expenses.)
5.1 (a) In addition to the Base Rent described in 4 above, Tenant
shall pay, as additional rent, N/A percent (N/A%) of any
Impositions (defined below) which are assessed, levied or
imposed during the Term hereof in excess of said Impositions
assessed, levied or imposed during the Lease (as designated
below). Payment shall be made as provided in Section 5.3.
(b) Impositions are defined, without limitation, as: All real
estate taxes or personal property taxes and other taxes,
charges, levies, license and permit fees, and assessments of
any kind or nature whatsoever, foreseen and unforeseen,
general and special, which are levied with respect to the
Premises, and with respect to any improvements, fixtures and
equipment and all other property of Landlord, real or
personal, located upon the Premises and used in connection
with the operation of the Building, including any taxes
payable by Landlord (other than income or franchise taxes)
whether or not now customary or within the contemplation of
the parties hereto which shall be levied in addition to or in
lieu of real estate or personal property taxes whether upon,
allocable to, or measured by or on the rent payable hereunder,
or with respect to the receipt of such rent, or with respect
to the possession, leasing, operation, management, alteration,
repair, use, or occupancy by Tenant of the Premises.
5.2 (a) In addition to the base rent in Section 4 above, Tenant
shall pay to Landlord, as additional rent, N/A percent (N/A).
of the Operating Costs of the Building. Payments shall be made
as provided in Section 5.3.
(b) The Operating Costs of the Building include, without
limitation:
(i) Wage and labor costs applicable to the persons engaged in
the management, operation, maintenance, overhaul or repair of
the Building and the adjacent areas, whether they be employed
by Landlord or by an independent contractor with whom Landlord
shall have contracted or may contract for such service
including, without limitation, a reasonable management fee
based on a percentage of rental revenue from the Building and
comparable to fees charged for managing office buildings
similar to the Building; any increase or decrease in the hours
of employment or the number of paid holidays or vacation days,
social security taxes, unemployment insurance taxes and the
cost (if any) of providing disability, hospitalization,
medical, welfare, pension, retirement or other benefits
imposed by law or by any collecting bargaining agreement,
applicable with respect to such employees, shall
correspondingly affect the wage and labor costs, and
(ii) Cost of common area utilities, fuel, trash removal,
supplies, insurances service contracts and such other items as
are customarily included in the cost of managing, operating,
maintaining, overhauling and repairing the Building in
accordance with accepted accounting or management principles
or practice, and
(iii) The cost of any capital improvements, including interest
and finance costs, which are either (i) required to be made to
the Building by a governmental agency, or (ii) acquired or
installed by Landlord to achieve economies in the operation,
maintenance, and repair of the Building, in either case
amortized over their useful life, provided, however, Landlord
must demonstrate to Tenant in writing the economies of the
capital expenditure, and
(iv) Those costs which are allocated to the Premises under the
Declaration, as defined in Section 5.3 below.
5.3 On or before January 1 of each calendar year during the Term
of this Lease, commencing on the first day of January after the
Commencement Date, Landlord shall make a reasonable estimate of
the amount of additional rent which will be due from Tenant
pursuant to the provisions of Sections 5.1 and 5.2 and shall notify
Tenant of the amount of such estimate. Tenant shall pay
one-twelfth (1/12) of the amount of such estimate with each monthly
installment of Basic Rent. Within sixty (60) days after the end of
each calendar year, Landlord shall deliver to Tenant a
written statement setting forth the amount actually due from Tenant
for such calendar year pursuant to the provisions of Sections 5.1
and 5.2, which statement shall show in reasonable detail the manner
in which it has been computed. If such statement shows that the
amount actually due is more than the amount paid by Tenant, Tenant
shall pay the amount of such difference to Landlord within thirty
(30) days after receipt of such statement. If the statement shows
that the amount actually due is less than the amount previously
paid by Tenant, the difference shall be credited against the next
installment or installments of rent due from Tenant. If there is a
dispute as to the amount due pursuant to Sections 5.1 and 5.2, such
dispute shall be settled by an accountant selected by Landlord and
Tenant whose determination shall be binding upon both parties.
Tenant shall pay for the cost of such accountant unless the
determination by Landlord proves to be in error by more than twenty
(20%) percent of the adjustment.
6. SECURITY DEPOSIT
Tenant, concurrently with the execution of this Lease, has
deposited (which includes first months' rent of $500.00) with
Landlord the sum of One Thousand Dollars ($1,000 ) (the "Security
Deposit"), receipt of which is hereby acknowledged by Landlord. The
Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all the teens, covenants and
conditions of this Lease by Tenant to be kept and performed during
the term hereof, provided that Tenant shall not be excused from the
payment of any rent herein reserved or any other charge herein
provided. If Tenant defaults with respect to any provision of this
Lease, Landlord may, but shall not be required to, use or retain
all or part of the Security Deposit for the payment of the rent, to
repair damages to the Premises, to clean the Premises or to
compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to its
original amount.
Should Tenant comply with all of said terms, covenants and
conditions and promptly pay all the rental herein provided for as
it falls due, and all other sums payable by Tenant to Landlord
hereunder, then the Security Deposit shall be returned to Tenant
thirty (30) days after the end of the term of this Lease or after
the last payment due from Tenant to Landlord, whichever last
occurs. In the event of any sale or transfer of the Building, if
Landlord transfers the Security Deposit to the vendee or transferee
for the benefit of Tenant, or if such vendee or transferee assumes
all liability with respect to the Security Deposit, Landlord shall
be considered released by Tenant from all liability for the return
of the Security Deposit, and Tenant agrees to look solely to the
new Landlord for the return of the Security Deposit. It is agreed
that this Section 6 shall apply to every transfer or assignment to
a new Landlord.
Tenant hereby agrees not to look to the Beneficiary of any Deed of
Trust, as Beneficiary, Beneficiary in possession, or successor in
title to the property for accountability for any Security Deposit
required by the Landlord hereunder, unless said sums have been
actually received by said Beneficiary as security for the Tenant's
performance of this Lease.
7. USE
The Premises will be used and occupied by Tenant for a mattress
outlet store and for no other purpose. Tenant shall limit occupancy
to the lesser of 20 people per shift or a number imposed by the
City of Bountiful. Tenant will not conduct or permit any use or
activity which is deemed by Landlord to be in violation of city,
county or state ordinances. Tenant will not conduct or permit any
use or activity which is deemed by Landlord or Landlord's insurer
to be extra hazardous on account of fire risk or to be in violation
of any law or legal requirement, or to be a cause for mcreas3ng
insurance rates or canceling insurance coverage on the Building.
Tenant will take good care of the Premises, fixtures and
appurtenances and will not allow any waste or injury thereto. As
further, specific conditions upon its use of the Premises, Tenant
will observe and strictly comply with the Rules and Regulations
which are attached to this agreement and incorporated herein as
Exhibit 'hi" and with such other reasonable rules and regulations
which Landlord may promulgate from time to time and which are
necessary in Landlord's judgement, for the safety, care,
cleanliness and good order of the Building and the Office Park.
8. COMPLIANCE WITH LAW
Tenant shall not use the Premises or permit anything to be done in
or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted to promulgated. Tenant shall, at
its sole cost and expense, comply promptly with all current and
future laws, statutes, ordinances and governmental rules,
regulations, or requirements including the requirements of any
board of fire insurance underwriters or other similar bodies now or
hereafter constituted, which relate to or affect the condition, use
or occupancy of the Premises, excepting only the cost of such
compliance involving structural changes that are not related to or
affected by Tenant's improvements or acts. The judgement of any
court of competent jurisdiction or the admission of Tenant in any
action against Tenant (whether or not Landlord is a party thereto),
that Tenant has violated any law, statute, ordinance of
governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.
9. CONDITION AT TERMINATION
At or before the end of the Term, Tenant will remove all the
personal property which tenant has brought to the Premises, and
will repair any damage done by the installation or removal of such
furniture and property or as a result of Tenant's use of the
Premises, so that the Premises will be surrendered by the Tenant in
good order and condition, subject only to normal wear and tear.
10. ALTERATIONS
Tenant will not make or permit anyone to make any alterations,
improvements or additions in or to the Premises, or install any
equipment of any kind that will require any alteration or addition
to, or the use of, the water, heating, air conditioning or
electrical or other building systems or equipment without first
obtaining Landlord's written consent, which consent may be made
subject to such conditions (such as approval of the contractor by
Landlord) as Landlord may deem to be appropriate. If any such
alterations, additions or improvements are made without such
consent, Landlord may correct or remove them, and Tenant shall be
liable for any and all expense incurred by Landlord in the
performance of this work. Any such alterations, additions or
improvements to the Premises which are made with Landlord's prior
written consent shall immediately become the property of Landlord
and shall remain upon and be surrendered with the Premises as a
part thereof at the end of the term. Landlord may, however, at or
prior to the end of the Term by written notice to such effect,
require Tenant to remove all or any part of such alterations,
additions or improvements, and in such event Tenant shall promptly
remove the same at its expense and shall repair all damage to the
Premises caused by such removal. Landlord shall have the right to
enter the Premises for the purpose of posting notices of non-
responsibility with respect to all Tenant alterations.
* Providing Tenant is not in default or breach of their lease,
Tenant shall have the exclusive retail and wholesale mattress sales
and or lease in the Center.
11. SIGNS
11.1 Tenant shall not affix, paint, erect or inscribe any sign,
protection, awning, signal or advertisement of any kind to any part
of the Premises, including without limitation, the inside or
outside of windows or doors, without the written consent of
Landlord. Landlord shall have the right to remove any signs or
other matter, installed without Landlord's permission, without
being liable to Tenant by reason of such removal, and to charge the
cost of removal to Tenant as additional rent hereunder, payable
within ten (10) days of written demand by Landlord.
11.2 Any written approval of Tenant's sign(s) by Landlord will be
attached as Exhibit "D" to this Lease. Tenant shall be responsible
for the cost, installation and maintenance of all signs. The
letters shall not exceed eighteen inches (18") in height and may be
"back lighted".
12. RELOCATION OF PREMISES
Landlord shall have the right to relocate the Premises to another
part of the Shopping Center in which the Premises are located in
accordance with the following:
1. The new Premises shall be substantially the same in size
as the Premises described in this Lease agreement unless
otherwise mutually agreed to by both parties hereto.
2. The Landlord at its sole cost shall accomplish the
physical condition of the Premises.
3. Landlord shall give Tenant at least ninety (90) days
notice of Landlord's intention to relocate the Premises.
4. The physical relocation of the Premises shall take place
on a weekend and shall be completely accomplished (if
possible) before the Monday following the weekend in
which the relocation takes place. If the physical
relocation has not been completed in that time, rent
shall ▇▇▇▇▇ in full from the time the physical relocation
commences to the time it is completed
5. Landlord shall pay all reasonable costs incurred by
Tenant as a result of the relocation.
6. Landlord shall not have the right to relocate the
Premises more than two (2) times during the term in a
comparable location and value.
7. If the relocated Premises are smaller than the Premises
as they existed before the relocation, rent shall be
reduced to a sum computed by multiplying the rent
provided for in this agreement by a fraction, the
numerator of which shall be total number of square feet
in the relocated Premises and the denominator of which
shall be the total number of square feet in the Premises
before relocation.
8. The parties shall immediately execute an amendment to
this lease stating the relocation of the Premises and the
reduction of rent, if any.
9. Written 90 day notice period outlined in 12.3 of landlord
intent of relocate Tenant. Tenant shall have the right
to cancel the lease if the relocation Premises is not
suitable or acceptable to Tenant.
12.1 Notwithstanding the provision of Section 12 above, Tenant has
been informed that Landlord is contemplating a major redevelopment
of the Five Points Shopping Center. In the event Landlord elects to
construct a New Building Premises for Tenant; Landlord shall
provide tenant with a written Letter Of Intent (LOI). The LOI shall
outline the basic terms and conditions of the New Lease proposal.
Tenant shall have 30 days to negotiate a satisfactory Lease for the
new five year Lease for the New Building Premises. Both Tenant and
Landlord agree that the base rental rate for the New Building
Premises shall be the lesser of $15.00 per square foot against 8%
of Gross Sales for a new building. They have a right to cancel
their lease if we cannot agree on the rent for their new space. In
addition to the base rental rate Tenant agrees to pay their
pro-rata share of all common area building maintenance and
operating expenses, which shall include but not limited to property
taxes, insurance, management fee, common area utilities etc.
13. BUILDING SERVICES
LANDLORD'S MANAGEMENT AND CONTROL - All common areas shall be
subject to the exclusive control and management of Landlord or such
other persons or nominees as Landlord may have delegated or
assigned to exercise such management or control, in whole or in
part, in Landlord's place and stead, and Landlord and Landlord's
nominees and assignees shall have the right to establish, modify,
amend and enforce reasonable rules and regulations with respect to
the common areas. Tenant agrees to abide by and conform with such
rules and regulations, to cause its concessionaires, and its and
their employees and agents, so to abide and conform, and to use its
best effort to cause its customers, invitees and licensees to so
abide and conform. It shall be the duty of the Tenant to keep all
of said areas free and clear of any obstructions created or
permitted by Tenant or resulting from tenant's operation and in no
event shall Tenant have the right to sell or solicit in any manner
in any of the common areas.
Tenant shall be responsible for the cost of a) all water, sewer,
electrical, HVAC repair and maintenance and natural gas service (if
any); and b) janitorial services for Tenants' Premises. Landlord
shall furnish the building common areas with all other services
including but not limited to; a) normal exterior building
maintenance b) electricity and heat for the common area c) normal
trash, garbage removal, and d) janitorial service.
Landlord shall not be liable for failure to furnish any of the
foregoing when such failure is caused by accidents or conditions
beyond the control of Landlord, or by repairs, labor disturbances
or labor disputes, of any character, whether resulting from or
caused by acts of Landlord or otherwise; nor shall Landlord be
liable under any circumstances for loss of or injury to property,
however occurring, through or in connection with or incidental to
the furnishing of any of the foregoing, nor shall Landlord be
liable under any circumstances for loss of or injury to property,
however occurring, through or in connection with or incidental to
the furnishing of any of the foregoing, nor shall any such failure
relieve Tenant from the duty to pay the full amount of rent herein
reserved, or constitute or be construed as a constructive or other
eviction of Tenant. Nothing herein shall exempt Landlord or Tenant
from damages caused by their negligence. Furthermore, Landlord
reserves the right to take appropriate measures for the
conservation of electricity. Such measures might include
installation of time clocks or other automatic devices which will
reduce or shut off common area lights, heating and air conditioning
during nights and weekends. However, such conservation measures or
devices will not deprive the Premises of reasonable amount of
electrical power. The Premises are closed on Sundays.
Landlord shall not be obligated to perform any service or to repair
or maintain any structure or facility except as provided in this
Section. Landlord shall not furnish telephone facilities or service
except as may be provided in Exhibit "B". Landlord shall not be
obligated to provide any service or maintenance or repair which is
made necessary because of the negligence or misuse of Tenant,
Tenant's agents, employees, servants, contractors, subtenants,
licensees, customers or business invites Landlord reserves the
right to stop any service when Landlord deems such stoppage
necessary, whether by reason of accident of emergency, or for
repairs or improvements or otherwise. Landlord shall not be liable
under any circumstances for loss or injury however occurring,
through or in connection with or incident to any stoppage of such
services. Landlord shall have no responsibility or liability for
failure to supply any services or maintenance or to make any
repairs when prevented from doing so by any cause beyond Landlord's
control. Landlord shall not be obligated to inspect the Premises
and shall not be obligated to make any repairs or perform any
maintenance hereunder unless first notified of the need thereof in
writing by Tenant. Tenant hereby waives all rights to make repairs
at the expense of Landlord as provided by any law, statute or
ordinance now or hereafter in effect. Landlord shall not be liable
for any loss or damage to person or property sustained by Tenant or
other persons, which may be caused by the Premises, or any
appurtenances thereto, being out of repair or by bursting or
leakage of any water, gas, sewer or steam pipe, whether or not it
is the obligation of Landlord to repair the same, by theft, by
fire, oil or electricity, by any act or neglect of any tenant or
occupant of the Premises, or of any other person, or by any other
cause of whatsoever nature, unless caused by the gross negligence
of Landlord.
14. LANDLORD'S ACCESS
Landlord shall have the right at all reasonable times during the
Term of this Lease to enter the Premises for the purpose of
examining or inspecting the same, providing services or
maintenance, or making such repairs or alterations thereon as
Landlord shall deem necessary or to exhibit the Premises to
prospective purchasers or mortgagees. During the last ninety (90)
days of the Term, Landlord may exhibit the Premises to prospective
tenants.
15. ASSIGNMENT AND SUBLETTING
Tenant shall not, either voluntarily or by operation of law, sell,
hypothecate, assign or transfer this Lease, or sublet the Premises
or any part hereof, or permit the Premises or any part thereof to
be occupied by anyone other than Tenant or Tenant's employees,
without the prior written consent of Landlord in each instance,
which shall not be unreasonably withheld. If the assignee or
sub-lessee agrees to pay Tenant rent which is greater than the
Basic Rent provided for herein, Landlord, as a condition to
granting such consent, may require that the rent in excess of that
provided herein, less any costs reasonably incurred by Tenant in
connection with such assignment or sublease, be paid to Landlord.
Any sale, assignment, mortgage, transfer or subletting of this
Lease which is not in compliance with the provisions of this
Section shall be void and shall at the option of Landlord,
terminate this Lease. The consent of Landlord to an assignment or
subletting shall not be construed as relieving Tenant from
obtaining express written consent of Landlord to any further
assignment or subletting or as releasing Tenant from any liability
or obligation hereunder whether or not then accrued.
If Tenant is a corporation, or is an unincorporated association or
partnership, the transfer assignment or hypothecation of any stock
or interest in such corporation, association or partnership in the
aggregate in excess of twenty-five (25%) shall be deemed an
assignment of the Lease.
Tenant agrees to promptly pay as additional rent, Landlord's
reasonable costs and attorney's fees incurred in connection with
the processing and documentation of any requested assignment or
sublease.
The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation hereof, or the termination of this Lease by
Landlord pursuant to any provision contained herein, shall not work
a merger, but at the option of Landlord, shall either terminate any
and all existing subleases or sub-tenancies, or operate as an
assignment to Landlord of any and all such subleases or sub-
tenancies. The delivery of keys to any employee of Landlord or to
Landlord's agent or any employee thereof shall not be sufficient to
constitute a termination of this Lease or a surrender of the
Premises
16. DEFAULT
16.1 Each of the following shall be deemed an "Event of Default" by
Tenant and a material breach of this Lease:
(a) Tenant's failure to pay any rent hereunder as and when
due;
(b) Tenant's failure to observe, keep or perform any other
terms, covenants, agreements or conditions contained in this
Lease (or in the Rules and Regulations set for in Exhibit "E")
that Tenant is obligated to observe or perform for a period of
ten (10) days after written notice by Landlord;
(c) Tenant's vacation or abandonment of the Premises in
Landlord's judgment;
(d) (i)The making by Tenant (or a general partner of Tenant,
if Tenant is a partnership) of any assignment for the benefit
of creditors or of any general arrangement for the benefit of
creditors;
(ii) The filing by or against Tenant (or a general partner of
Tenant), of a petition to have Tenant (or a general partner of
Tenant), adjudged bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy unless in the
case of a petition filed against Tenant (or a general partner
of Tenant), the same is dismissed within sixty (60) days;
(iii) The appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at
the Premises or Tenant's interest in this Lease, where
possession is not restored to Tenant within thirty (30) days;
or
(iv)The attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is
not discharged within thirty (30) days.
16.2 In the event the Event of Default specified in the notice
provided for in clause (b), above, is of such a type that it cannot
be cured or corrected within said ten (10) day period, then Tenant
shall not be in default hereunder if it shall commence the
correction of such default so specified within said ten (10) day
period and diligently prosecute the
same to completion and in any event complete the correction of such
default within thirty (30) days.
17. REMEDIES
Upon the occurrence of an Event of Default hereunder, Landlord, at
its sole option, shall, in addition to all other rights and
remedies hereunder or at law or equity, have (i) the right to
declare the Term of this Lese ended and to reenter the Premises and
take possession thereof and to terminate all of the rights of
Tenant in and to the Premises or (ii) the right without declaring
the Term of this Lease ended, to re-enter the Premises and to
occupy the same, or any portion thereof, or to lease the whole or
any portion thereof, for and on account of Tenant as hereinafter
provided, applying any monies received first to payment of such
expenses, including attorneys' fees and real estate commissions
paid, assumed or incurred by Landlord in or in connection with the
recovery, repairing or re-letting of the Premises and then to the
fulfillment of the covenants of Tenant (any such re-letting shall
be for such a term, at such a rent, and upon such other terms and
conditions as Landlord may deem to be advisable); or (iii) the
right, even though it may have re-let all or any portion of the
Premises as above-provided, to thereafter at any time terminate
this Lease for such previous default on the part of Tenant.
Pursuant to said rights of re-entry, Landlord may remove all
persons and property from the Premises and may, but shall not be
obligated to, enforce any right Landlord may have against said
property, or store the same in any public or private warehouse or
elsewhere at the cost and for the account of Tenant or the owner or
owners thereof. Tenant agrees to hold Landlord free and harmless of
any liability whatsoever for the removal or storage of any such
property, whether of Tenant or any third party whomsoever. As
security for Tenant's compliance with all the terms of this Lease,
Landlord is hereby given a lien upon and a security interest in all
of Tenant's property in, upon or about the Premises, and Tenant
shall execute such financing statements and other documents as
Landlord may deem necessary to perfect Landlord's security interest
in such property. Anything contained herein to the contrary
notwithstanding, Landlord shall not be deemed to have terminated
this Lease or any of the Tenant's obligations hereunder by any such
re-entry, or by any action in unlawful retainer or otherwise to
obtain possession of the Premises, unless Landlord shall have
notified Tenant in writing that it has so elected to terminate this
Lease.
18. ATTORNEYS' FEES
If either Landlord or Tenant commences or engages in, or threatens
to commence or engage in, an action by or against the other party
arising out of or in connection with this Lease or the Premises,
including but not limited to any action for recovery of rent due
and unpaid, to recover possession of the Premises or for damages
for breach of this Lease, the prevailing party shall be entitled to
have and recover from the losing party reasonable attorneys' fees
and other costs incurred in connection with the action and in
preparation for said action. If Landlord becomes involved in any
action, threatened or actual, by or against anyone not a party to
this Lease, but arising by reason of or related to any act or
omission of Tenant or its representatives, contractors, agents,
employees, licensees or invitee, Tenant agrees to pay Landlord's
reasonable attorneys' fees and other costs incurred in connection
with said action and in preparation for said action.
19. WAIVER
The failure or omission of Landlord to terminate this Lease for, or
to notify Tenant of, any breach of any covenant or condition of
this Lease or any default or violation of any of its terms shall
not be deemed to be a consent by Landlord to such violation, and
shall in no way bar, stop, or prevent Landlord from terminating
this Lease thereafter, either for such, or for any subsequent
violation of any such term, condition or covenant. The acceptance
of rent hereunder shall not be, or be construed to be a waiver of
any breach of any term, covenant or condition of this Lease.
20. LIENS
Tenant shall not allow or permit any mechanics' or material men's
liens to be filed against the fee of the real property of which the
Premises form a part nor against the Tenant's leasehold interest in
the Premises. Landlord shall have the right at all reasonable times
to post and keep posted on the premises any notices which it deems
necessary for protection from such liens. If any such liens are so
filed, Landlord, at its election, may pay and satisfy the same and
in such event the sums so paid by Landlord, with interest at the
rate of Prime plus four percent (4%) per annum from the date of
payment, shall be deemed to be additional rent due and payable by
Tenant at once without notice or demand.
21. EMINENT DOMAIN
If more than twenty-five percent (25%) of the Premises should be
taken or appropriated by any public or quasi-public authority under
the power of eminent either Landlord or Tenant shall have the
right, at its option, to terminate this Lease as of the date when
possession shall be taken. The entire amount of any income, rent,
award, or any interest therein whatsoever which may be paid or made
in connection such public or quasi-public taking shall be paid to
the Landlord, unless one particular portion of such compensation is
specifically attributed to Tenant's personal property and
improvements, and Tenant shall: have no claim against Landlord for
the value of any un-expired Term of this Lease. If less than twenty
five percent (25%) of the Premises is taken, or if more than
twenty-five percent (25%) is taken but neither party elects to
terminate, then the basic rent provided for in Section 4 hereof
shall be reduced in proportion to the amount of the taking. If any
part of the Premises should be so taken, ~ landlord shall have the
right, at its option, to terminate this Lease and to retain the
entire amount of the award payable to Landlord as a result of such
taking.
22. RECONSTRUCTION
In the event of damage or destruction of the Building or the
Premises during the Term by fire, the elements or casualty,
Landlord shall forthwith repair the same, provided (i) that such
repairs are fully covered by insurance proceeds which are paid to
Landlord, and (ii) that such repairs can be made, in the Landlord's
opinion, within ninety (90) days under the laws and regulations of
State, County, Federal or Municipal authorities. Such damage or
destruction shall in no way annul or void this Lease, except that
Tenant shall be entitled to a proportionate reduction of rent while
such repairs are being made, such proportionate reduction to be
based upon the extent Cat the Premises, or part thereof, may be
un-tenantable and for the period that said Premises, or part
thereof, may be un-tenantable. If (i) such repairs are not fully
covered by insurance proceeds which are paid to Landlord, or (ii)
in the Landlord's opinion, such repairs cannot be made within
ninety (90) days, Landlord may, at its option (to be exercised
within forty-five (45) days from the date of such damage or
destruction), make the same within a reasonable time, this Lease
continuing in full force and effect and rent being proportionately
reduced as provided above in this Section. In the event that
Landlord does not so elect to make these latter described repairs,
or if such repairs cannot be made under such laws and regulations,
this Lease may be terminated at the option of either party. Tenant
shall be entitled to a proportionate reduction of basic rent only
with respect to un-tenantable conditions within the Premises which
are not caused by Tenant, and no such rent reduction shall be
allowed by reason of inconvenience, annoyance or injury to Tenant's
business because of such damage or destruction, or the necessity of
repairing any portion of the Building, or the making of such
repairs, and Landlord shall not be liable to Tenant because of such
inconvenience, annoyance or injury. For the purpose of this
Section, the Premises or a part thereof shall be deemed to have
been rendered "un-tenantable" if it is not reasonably subject to
occupation by Tenant for the purpose for which the Premises or part
thereof was being used prior to the damage or destruction.
23. INDEMNIFICATION
Tenant agrees to indemnify, defend and save harmless Landlord
against and from any and all claims by or on behalf of any person
or entity arising from Tenant's use of the Premises or the conduct
of its business or from any activity, work, or thing done,
permitted or allowed by Tenant, in or about the Premises, the
Building or the Office Park, and will furler indemnify and save
Landlord harmless against and from any and all claims arising from
any breach or default on Tenant's part in the performance of any
covenant or agreement on Tenant's part to be performed, pursuant to
the terms of this Lease, or arising from any act of negligence of
Tenant, or any of its agents, contractors, servants, employees or
licensees, and from and against all costs, counsel fees, expenses
and liabilities incurred with respect to any such claim or action
or proceeding brought thereon. In case any action or proceeding be
brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord covenants to resist or defend at Tenant's
expense such action or proceeding by counsel reasonably
satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to
property in, upon or about the Premises, the Building or the Office
Park, from any source and to whomever belonging and Tenant hereby
waives all claims in respect thereof against Landlord and agrees to
defend and save Landlord harmless from and against any such claims
by others. Tenant shall be solely responsible for insuring its
personal property located within the Premises. Tenant further
specifically agrees that Landlord shall not be liable to Tenant for
the acts or omissions of any other tenant, its employees, servants,
agents, visitors or licensees. Nothing herein shall exempt Landlord
or Tenant from damages caused by their negligence.
24. SUBROGATION
As long as their respective insurers so permit, Landlord and Tenor
t hereby mutually waive their respective rights of recovery against
each other or any other tenant of the Building for any loss insured
by fire, extended coverage and other property insurance policies
existing for the benefit of the respective parties. Each party
shall obtain any special endorsements, if required by their
insurer, to evidence compliance with the aforementioned waiver.
25. LIABILITY INSURANCE
Tenant shall, at Tenant's expense, obtain and keep in force during
the Term of this Lease a policy of comprehensive public liability
insurance insuring Landlord and Tenant against any liability
arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Unless otherwise
specifically agreed, the liability limits of such insurance shall
be not less than $1,000,000, provided, however, that such insurance
limits shall not limit the liability of Tenant hereunder. Tenant
may carry said insurance under a blanket policy provided, however,
said insurance by Tenant shall have a Landlord's protective
liability endorsement attached thereto. If Tenant shall fail to
procure and maintain said insurance, Landlord may, but shall not be
required to, procure and maintain same, but at the expense of
Tenant. Insurance required hereunder, shall be in companies rated
A+ or better in "Best's Insurance Guide". Tenant shall deliver to
Landlord prior to occupancy of the Premises copies of policies of
liability insurance required herein or certificates evidencing the
existence and amounts of such insurance. No policy shall be
canceled or subject to reduction of coverage except after thirty
(30) days prior to written notice to Landlord
26. ESTOPPEL CERTIFICATE
Tenant, within five (5) days after notice from Landlord shall
execute and deliver to Landlord, in recordable form, a certificate
stating that this Lease is unmodified and in full force and effect,
or in full force and effect as modified, and stating modifications.
The certificate also shall state the amount of Basic Rent then
payable hereunder, the dates to which the Basic Rent has been paid
in advance, and the amount of any Security Deposit or prepaid rent.
The certificate shall also describe any uncured defaults if any are
claimed Failure to deliver the certificate within the seven (7)
days shall be conclusive upon Tenant for the benefit of Landlord
and any successor to Landlord, that this Lease is in full force and
effect and has not been modified except as may be represented by
Landlord.
27. SUBORDINATION AND ATTORNMENT
Tenant accepts this Lease subject to and subordinate to any deeds
of trust, security interest, mortgages, master leases or other
security documents (hereinafter collectively called "Security
Documents") which now or hereafter constitute a lien upon the
Premises. Tenant shall at any time hereafter on demand execute any
instruments, releases or other documents that may be required by
any lender for the purpose of subordinating this Lease to the lien
of any such Security Documents. Upon receipt of written request
therefor from Tenant, Landlord will use its reasonable efforts to
obtain for Tenant an agreement from any such lender that as long as
Tenant performs its obligations under this Lease, no foreclosure
of, deed given in lieu of foreclosure of, or sale under the
Security Documents, shall affect the Tenant's rights under this
Lease on condition that Tenant shall execute an agreement in form
satisfactory to such lender that Tenant shall attorn to the lender
and to any purchaser at any foreclosure sale or to any grantee or
transferee designated in any deed given in lieu of foreclosure.
With respect to any Security Documents hereafter constituting a
lien on the Premises, Landlord at its sole option shall have the
right to waive the applicability of this Section 26 so that this
Lease will not be subject and subordinate to any such Security
Documents.
28. PERSONAL PROPERTY TAXES
Tenant shall pay, or cause to be paid, before delinquency, any and
all taxes levied or assessed and which become payable during the
Term of this Lease upon all Tenant's improvements, equipment,
furniture, fixtures and personal property located in the Premises,
except that which has been paid for by Landlord as part of the
improvements described on Exhibit "B". In the event that any or all
of Tenant's items referred to above are assessed and taxed with the
Building, Tenant agrees to pay Landlord the full amount of such
taxes attributable to Tenant's personal property and improvements,
within ten (10) days after Landlord's statement requesting
reimbursement for the amount so paid.
29. SALE BY LANDLORD
In the event the original Landlord hereunder, or any successor
owner of the Building, shall sell or convey the Building, Tenant
agrees to attorn to such new owner. In the event of such sale,
Landlord shall transfer to the new owner the balance of the
Security Deposit, if any, remaining after lawful deductions and,
after notice to Tenant, shall be relieved of all future liability
with respect to the Security Deposit, and any and all obligations
of such Landlord under this Lease.
30. QUIET ENJOYMENT
Landlord covenants and agrees that Tenant on paying rent due
hereunder and performing the covenants aforesaid shall and may
peaceably and quietly hold and enjoy the Premises for the Term
aforesaid.
31. EFFECTIVENESS
This Lease shall not be binding and in effect until a counterpart
hereof has been executed and delivered by the parties each to the
other.
32. SUCCESSORS AND ASSIGNS
This Lease shall bind and inure to the benefit of the parties
hereto and their respective heirs, representatives, successors or
assigns (provided that this Lease shall not inure to the benefit of
any assignee pursuant to an assignment which is not in compliance
with the terms of this Lease).
33. INSOLVENCY AND DEATH
It is understood and agreed that, except as specifically provided
below in this Section, neither this Lease not any interest herein
or hereunder, nor any estate hereby created in favor of Tenant,
shall pass by operation of law under any state or federal
insolvency, bankruptcy or inheritance act, or any similar law now
or hereafter in effect, to any trustee, receiver, assignee for the
benefit of creditors, heirs, legatee, devisee or any other person
whomsoever.
Landlord and Tenant hereby acknowledge and recognize that Section
365 of Title 11 of the United States Code (the "Bankruptcy Code")
provides that a debtor-in possession or a trustee, with court
approval, may assume or reject an un-expired lease and that in a
case under Chapter 11 of the Bankruptcy Code, the court, on
request of a party to such un-expired lease, may order the trustee
or debtor-in-possession to determine within a specified period of
time whether to assume or reject such un-expired lease. Because of
the fact that time is of the essence to this Lease, Tenant
expressly covenants, agrees and bargains to file or cause to be
filed a motion either to assume or to reject this Lease within
forty-five (45) days of the filing of a voluntary petition under
the Bankruptcy Code or the entry of an order for relief in the
event of the filing of an involuntary petition.
Landlord and Tenant further recognize that Section 365 of the
Bankruptcy Code provides for the assumption and assignment, subject
to court approval, of unexpired leases. Court approval of such
assumption and assignment is pre-conditioned on, among other
things, the provision of adequate assurance of future performance.
In view of the foregoing, Landlord and Tenant do hereby bargain,
covenant and agree that the following, and each of them
specifically and without limiting Tenant's obligations to continue
to perform all of the terms of this Lease, are conditions and
covenants the fulfillment of which are necessary to provide
Landlord with adequate assurance of future performance:
(a) The assumption and assignment of this Lease will not
breach any provision, such as a radius, location or use
provision, in any other lease, financing agreement or master
agreement relating to the Building or the Office Park;
(b) The proposed assignee will not increase the burden of the
common area and will not use the Premises in violation of the
terms of this Lease on the Declaration;
(c) The proposed assignee will, in Landlord's reasonable
opinion, be a suitable tenant for the Building; and
(d) The proposed assignee has adequate financial resources to
pay all rent and other consideration due under this Lease and
to assume all other obligations of Tenant under this Lease.
34. PRIOR AGREEMENT
This Lease contains all the agreements of the parties. There have
been no representations made by the Landlord or understandings made
between the parties other than those set forth in this Lease. This
Lease may not be modified except by written instrument duly
executed by both the parties.
35. TIME
Time is of the escape respect to all payments and performances
required of the Tenant by the provisions of this Lease.
36. PARKING FACILITIES
Landlord may at any time close any parking area to make repairs or
changes, to prevent the acquisition of public rights in such areas,
or to discourage unauthorized parking. Landlord may do such other
acts in and to the common areas as Landlord deems to be
appropriate, including conversion of portions thereof to other
uses. Tenant shall, upon request, furnish to Landlord the license
number of cars operated by Tenant and its employees. Tenant shall
not at any time interfere with the right of Landlord, other
tenants, its and their agents, employees, servants, contractors,
subtenants, licensees, customers and business invitee to use any
part of the parking areas. Landlord assumes no responsibility to
police the use of said parking areas and Landlord shall not be
liable for the use thereof by Landlord, Landlord's other tenants,
its or their agents, employees, servants, contractors, subtenants,
licensees, customers and/or business invitee or by any other person
or persons, entity or entities whomsoever. Tenant shall not at any
time interfere with the right of Landlord, other tenants, its and
their agents, employees, servants, contractors, subtenants,
licensees, customers and business invitee to use any part of the
parking area.
The directory of the Building, if any, shall be provided
exclusively for the display of the names and locations of tenants
only, and Landlord reserves the right to exclude any other names
therefrom and otherwise limit the number of listings thereon.
37. NOTICES
All notices and demands which may or are required to be given by
either party to the other hereunder shall be deemed to have been
fully Oven when made in writing and deposited in the United States
mail, certified or registered, postage prepaid, and addressed as
follows:
To Tenant: ▇.▇. Nak Mattress Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other place as Tenant may from time to time designate in
a written notice to Landlord;
To Landlord: Town Center, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
or to such other place as Landlord may from time to time designate
in a written notice to Tenant.
38. FURNISHING OF FINANCIAL STATEMENTS; TENANT'S REPRESENTATIONS
In order to induce Landlord to enter into this Lease Tenant agrees
that is shall promptly furnish Landlord, from time to time, upon
Landlord's written request, with financial statements reflecting
Tenant's current financial condition. Tenant represents and
warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects.
39. MORTGAGEE PROTECTION
Tenant agrees to send by certified or registered mail to any first
mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of
default served by Tenant on Landlord. If Landlord fails to cure
such default within the time provided for in this Lease, such
mortgagee or beneficiary shall have an additional thirty (30) day
period to cure such default. If such default cannot be cured within
the additional thirty (30) day cure period, then such mortgagee or
beneficiary shall have such additional tine to cure such default as
is reasonably necessary under the circumstances.
40. WAIVER OF TENANT'S RIGHT TO TERMINATE
Except as otherwise specifically provided in this Lease, Tenant
hereby waives and relinquishes any right which Tenant may have to
terminate this Lease or withhold rent on account of any damage,
condemnation, destruction or state of disrepair of the Premises.
Tenant's sole remedy for a breach of this Lease shall be an action
for damages or specific performance of this Lease.
41. BROKER
Both, Landlord and Tenant each hereby warrants and represents that
it has not employed a broker in connection with this Lease and each
hereby agrees to hold the other harmless from any and all claims of
any other on account of a brokerage commission in connection with
the execution of this Lease. Under separate Agreement, Landlord
agrees to pay Broker a fee for services rendered regarding this
transaction. Furthermore, in the event of any action by Broker to
recover a commission or other payments due it as a result of this
Lease, Landlord shall be responsible for all costs associated with
the collection of the commission.
IN WITNESS WHEREOF, the parties have executed this Lease on the day
and year first above written.
"LANDLORD" "TENANT"
Town Center, LLC ▇.▇. Nak Mattress Company
By: By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. Nak
Town Center, LLC Vice President