(The Above Space for Recorder's Use Only)
ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT (this
"Assignment") is made and entered into as of the 16 day of
December, 2005 by and between AEI INCOME & GROWTH FUND 25 LLC, a
Delaware limited liability company, having a mailing address at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Assignee"), and COMMERCIAL NET LEASE REALTY, INC., a
Maryland corporation, having a mailing address at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignor").
W I T N E S S E T H:
WHEREAS, Assignor has agreed to assign to Assignee all of
its right, title and interest in and to a) that certain Lease
between Assignor (as successor in interest to Captec Ster Aurora,
L.L.C.), as lessor, and Sterling Jewelers Inc., a Delaware
corporation, as lessee dated January 23, 2000 (the "Lease") and
b) that certain Net Ground Lease between Seller (as successor in
interest to Captec Ster Aurora, L.L.C.), as tenant, and AEI
Income & Growth Fund 25, LLC (successor in interest to Duke-Weeks
Realty Limited Partnership, an Indiana limited partnership), as
landlord dated October 14, 1999 (the " Prime Lease") for
property located at ▇▇▇▇ ▇. ▇▇▇. ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ as more
particularly described in Exhibit "A"; and
WHEREAS, Assignee has agreed to assume and perform certain
of Assignor's liabilities and obligations arising under the Lease
and Prime Lease on and after the date hereof, all in accordance
with this Assignment.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties agree as follows:
a. Assignment. Assignor hereby assigns, transfers, and conveys
to Assignee (i) all of Assignor's right, title and interest as
the landlord or lessor in and to the Lease and all of the rights,
benefits and privileges of the landlord or lessor thereunder; and
(ii) all of Assignor's right, title and interest as the tenant or
lessee in and to the Prime Lease and all of the rights, benefits
and privileges of the tenant or lessee thereunder.
b. Indemnity by Assignor. Assignor shall indemnify and hold
Assignee harmless from any claim, liability or cost or arising
out of any obligation or liability of the landlord or lessor
under the Lease, or tenant or lessee under the Prime Lease which
was to be performed or which became due during the period in
which Assignor owned the Real Property.
c. Assumption. Assignee hereby assumes all liabilities and
obligations of Assignor under the Lease and Prime Lease which
arise on or after the date hereof and agrees to perform all
obligations of Assignor under the Lease and Prime Lease which are
to be performed or which become due on or after the date hereof.
Assignee expressly does not intend by virtue of this Assignment
and Assumption to terminate the Prime Lease and hereby expressly
waives any operation of the doctrine of merger as the same may
apply.
d. Indemnity by Assignee. Assignee shall indemnify and hold
Assignor harmless from any claim, liability, cost or expense
arising out of Assignee's failure to perform any obligations or
liability of the landlord or lessor under the Lease, or tenant or
lessee under the Prime Lease arising on or after the date hereof.
Assignee releases and holds Assignor harmless from any claim,
liability or cost or arising out of any obligation or liability
of the Assignor under Prime Lease.
e. Counterparts. This Assignment may be executed by the
parties in counterparts, in which event the signature pages
thereof shall be combined in order to constitute a single
original document.
f. Binding Effect. This Assignment shall be binding upon and
inure to the benefit of Assignor, Assignee and their respective
successors and assigns.
g. Assignor Representation. Assignor is the Landlord
under the Lease with full right and title to assign the
Lease and the Rent to Assignee as provided herein. The
Lease is valid, in full force and effect and has not been
modified or amended. So far as is known to Assignor, there
is no default by Tenant under the Lease and no Rent has been
waived, anticipated, discounted, compromised or released.
Assignor is the Tenant under the Prime Lease with full right
and title to assign the Tenant's interest under the Prime
Lease (subject to Prime Lease Landlord consent) as provided
herein. The Prime Lease is valid, in full force and effect,
and has not been modified or amended. So far as is known to
Assignor, there is no default by Landlord under the Prime
Lease.
IN WITNESS WHEREOF, the parties have executed this
Assignment as of the date set forth above.
"ASSIGNOR"
COMMERCIAL NET LEASE REALTY,
INC., a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Executive Vice Presdient
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this 14
day of December, 2005 by ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, as Executive Vice
President of COMMERCIAL NET LEASE REALTY, INC., a Maryland
corporation, on behalf of the corporation. He is personally
known to me or has produced as identification.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(NOTARY SEAL) Signature of Notary Public
Typed or Printed Name of Notary
Commission No.:
My Commission Expires:
[SIGNATURES TO CONTINUE ON THE FOLLOWING PAGE]
"ASSIGNEE"
AEI INCOME & GROWTH FUND 25 LLC,
a Delaware limited liability
company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation, its
Managing Member
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: President
STATE OF MINNESOTA )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing was acknowledged before me this 16 day of December,
2005, by ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, in his capacity as the President of
AEI Fund Management XXI, Inc., a Minnesota corporation, the
Managing Member of AEI Income & Growth Fund 25 LLC, a Delaware
limited liability company, who acknowledged the execution of the
foregoing instrument to be the voluntary act and deed of said
corporation by authority of its board of directors on behalf of
the company.
[Notary Seal] /s/ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
My Commission Expires: 1-31-2010
EHHIBIT A
Legal description
▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ Unit 8, being a
Subdivision in ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇ of
the Third Principal Meridian, according to the Plat thereof
recorded October 30, 1998 as Document R98-226549, in DuPage
County, Illinois.
Lease No. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Jan 23, 2000
LEASE
BETWEEN
CAPTEC STER AURORA L.L.C.
AND
STERLING JEWELERS INC
CONFIDENTIAL
LEASE
In consideration of the rents and covenants set forth below,
Landlord (as hereinafter defined) hereby leases to Tenant (as
hereinafter defined), and Tenant hereby leases from Landlord, the
Premises (as hereinafter defined), upon the following terms and
conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
The provisions in this Article shall be referred to in this Lease
as the "Fundamental Lease Provisions."
1.1 EXHIBITS TO LEASE. The following exhibits are attached
to and made a part of this Lease, and are incorporated herein by
reference:
Exhibit "A", The description of the Premises (if a
separate descr1ption is attached).
Exhibit "B". The site plan showing the location of the
Premises and the Building, the adjacent Shopping
Center buildings, parking areas, driveways and
common areas (as cross-hatched) and containing
other general information relative to the
development of the Premises Site (the" Site
Plan").
Exhibit "C" The plans and specifications prepared and
provided by Tenant and approved by Landlord,
wherein are detailed Landlord's Work (as
hereinafter defined) in the Premises Exhibit "C"
shall include the plans and specifications for
Tenant's satellite dish.
Exhibit "C-1". The list of items which comprise
Tenant's Work (as hereinafter defined).
Exhibit "D" The plans and specifications prepared and
provided by Tenant and approved by Landlord,
wherein are detailed Tenant's exterior sign(s).
Exhibit "E" The cost to perform Landlord's Work.
Exhibit "F" The Ground Lease.
1.2 DEFINITIONS. Unless otherwise defined herein,
capitalized term used in this
Lease shall have the meanings listed in the Fundamental Lease
Provisions.
Additional Rent: shall mean all insurance premiums, Taxes,
operating charges, maintenance charges,
construction costs, reasonable accounting and
legal fees, and any other charges, costs and
expenses which arise or may be contemplated under
any provision of this Lease during the Lease Term.
Alterations: shall mean any alterations, replacements,
additions, changes, and improvements to the
Premises as Tenant may find necessary or
convenient for its purposes.
Building: shall mean the building containing approximately
6000 square feet of floor area and all
improvements thereto (including Tenant's Work) to
be constructed on the Premises and as identified
on Exhibit B attached hereto.
CONFIDENTIAL
Commencement Date shall mean the earlier of (i) 60 days after the
Delivery Date or (ii) the day that Tenant opens
for and conducts business in the Premises.
Notwithstanding anything in this Lease to the
contrary , Tenant shall not be obligated to open
for or conduct business in the Premises during any
period that a Market Condition exists in the
Shopping Center.
Common Areas: shall mean the parking areas, driveways, aisles,
sidewalks, malls (whether enclosed or unenclosed),
truck storage areas, and other common, service and
related areas and improvements within the Shopping
Center, whether open to the public generally or
for the "non-exclusive" use of one or more
tenants, as more particularly identified on
Exhibit "8" by cross-hatching. Future easements to
be granted by Ground Lessor or current easements
to benefit the rest of the Shopping Center,
including but not limited to, ingress and egress,
and parking easements and more specifically, the
"Access Drives" and the "Utility Easement Area",
all as generally designated on the Site Plan. If
any such future easements shall affect Tenants use
or occupancy of the Premises or impose any
additional financial obligation on Tenant,
Landlord, or Ground Lessor, as the case may be,
must first obtain Tenant's consent, which consent
shall not be unreasonably withheld, conditioned or
delayed, before granting such easement.
Common Area Costs: shall mean Landlord's reasonable costs for
the operation, maintenance and repair of the
interior and exterior Common Areas identified on
Exhibit "B" attached hereto, consistent with other
first- class shopping centers in the area. In no
event shall the Common Area Costs include amounts
for (i) depreciation of the original cost of
constructing, erecting and installing the Shopping
Center, the Common Areas, common facilities and
related services; or (ii) principal and interest
payments pursuant to any mortgage or deed of trust
which encumbers the Premises or Shopping Center or
any ground lease payments; or (iii) Taxes; or (iv)
administrative charges, marketing fees, management
fees, merchants association fees or leasing
commissions; or (v) legal fees incurred in the
negotiation of leases for the Shopping Center or
in leasing disputes with Tenants; (vi) excess
premiums for insurance covering the Common Areas
occasioned by the extra-hazardous use or
activities or occupants other than Tenant; or
(vii) expenses incurred due to the negligence or
willful misconduct of Landlord or any occupant of
the Shopping Center or their respective agents or
employees; or (viii) costs and expenses incurred
for repairs or replacements due to faulty
construction, faulty workmanship or structural
defects; or (ix) costs and expenses for repairs or
replacements due to the installation of antiquated
machinery, equipment, components, pipes and lines
or resulting from improper engineering or
substandard quality; or (x) costs and expenses of
any structural and roof repair and replacements
and renovations to the Shopping Center; (xi)
replacement or repairs covered by construction
contracts or contractor's warranties, or by
insurance proceeds; (xii) charges or fees for, or
taxes on, the furnishing of water, sewer service,
gas, fuel, electricity or other utility
2
CONFIDENTIAL
services to those portions of the Shopping Center
which are leased to tenants; (xiii) the cost of
providing janitorial or trash removal service to
those portions of the Shopping center which are
leased to tenants; (xiv) the cost incurred in
repairing or replacing structural portions of the
Shopping Center; (xv) the cost of acquiring
property to be added to the Shopping Center and
the cost of any construction appertaining to any
property so added; or (xvi) the cost of Landlords
federal, state or local income taxes; (xvii)
expenses related to an individual occupant of the
Shopping Center or to a particular tenant space;
or (xviii) any costs, fees, fines or penalties. or
interest thereon, related to violations by
Landlord or any occupant or any governmental law,
ordinance, code, rule or regulation; or (xix) any
cost, fees, fines or penalties, or interest
thereon incurred to remediate asbestos or other
environmental conditions in the Shopping Center;
or (xx) capital expenditures; or (xxi) reserves
for replacement; or (xxii) costs for insuring the
Common Areas; (xxiii) entertainment,
transportation, means and lodging of anyone; and
(xxiv) amounts paid in excess of "competitive
rates".
Construction Period: shall mean the one hundred fifty (150)
day period immediately following the date of
Tenant's Permit Approval Notice.
Delivery Date: shall mean the date that Landlord delivers
the Premises to Tenant with Landlord's Work
substantially complete such that Tenant may
reasonably enter the Premises to perform Tenant's
Work.
Environmental Laws: means all requirements of environmental,
ecological, health, or industrial hygiene laws or
regulations or rules of common law related to the
Property, including all requirements imposed by
any law. rule, order, or regulation of any
federal, state, or local executive, legislative,
judicial, regulatory, or administrative agency,
board, or authority which relate to (i) noise;
(ii) pollution or protection of the air, surface
water, ground water, or land; (iii) solid,
gaseous, or liquid waste generation, treatment,
storage, disposal, or transportation; (iv)
exposure to Hazardous Materials; or (v) regulation
of the manufacture, processing, distribution and
commerce. use, or storage of Hazardous Materials.
Force Majeure: shall mean the occurrence of one of the
following listed events which prevents, delays or
hinders the performance of any act required
hereunder: strikes, lockouts, inability to procure
materials, failure of power, restrictive
governmental laws or regulations, riots,
insurrection, war, or any other reason of a like
nature not the fault of the party delayed in
performing work or doing any act required under
the terms of this Lease.
Gross Leasable Area: shall mean the number of square feet of
the Building.
Ground Lease: shall mean that certain lease for the Premises
entered into by and between Landlord and Duke-
Weeks Realty Limited Partnership ("Ground Lessor')
dated October 14, 1999.
3
CONFIDENTIAL
Ground Lease Rent: shall mean all rents, penalties and fees due
and payable under the Ground Lease.
Hazardous Materials: means any of the following as defined by
the Environmental Laws: solid wastes; medical or
nuclear waste or materials; toxic or hazardous
substances; natural gas, liquefied natural gas or
synthetic fuel gas; petroleum products or
derivatives, wastes or contaminants (including,
without limitation, polychlorinated biphenyls);
paint containing lead; urea-formaldehyde foam
insulation; asbestos (including, without
limitation, fibers and friable asbestos); ex-
plosives, and discharges of sewage or effluent.
Increase Date: fifth (5th) anniversary of the Commencement
Date, and every five (5) years thereafter,
including renewal terms.
Increase Percentage: ten percent (10%).
Initial Term: twenty (20) years, commencing on the
Commencement Date.
Interest on Overdue Amounts: shall mean interest
at a per annum rate equal to the "prime rate" (or
substantial equivalent) announced from time to
time (as adjusted monthly) by Comerica Bank,
Detroit, Michigan, plus 2%; provided, however,
that if such rate shall exceed the lawful rate of
interest which Landlord is entitled to charge
under applicable law, then the per annum rate of
interest on any such overdue amounts shall be the
maximum rate permitted by applicable law.
Landlord: Captec Ster Aurora, L.L.C.
24 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Drive
Lobby L 4th Floor, P. 0. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Landlord's Work: shall mean the work to be performed by or at
the direction of Landlord in constructing the
Premises and related improvements as more
particularly specified in Article 15 below and
Exhibit C.
Late Charge: shall mean an amount equal to 4% of the
overdue amount.
Lease Year: shall mean a period of twelve (12) consecutive
calendar months during the Term, the first of
which shall begin on the first day of February
next following the Commencement Date, (unless the
Commencement Date shall be the first day of
February, in which event the first lease year
shall begin on the Commencement Date) and ending
on the following January 31.
Market Condition: shall mean that any portion of the Shopping
Center, or any additions thereto, other than the
Premises, are used or occupied for the Permitted
Use or if any sales area therein is designated for
the Permitted Use.
4
CONFIDENTIAL
Minimum Monthly
Rent: 13% of the. Premises Cost (as detailed on Exhibit
E) divided by twelve, subject to proration and
adjustment as provided in Article 2.3.
Permitted Hazardous
Material: means any Hazardous Material which is necessary
and commercially reasonable for the provision of
any good or service related to the Permitted Use.
Permitting Period: shall mean the 60 days immediately following
the date Landlord executes this Lease.
Permitted Use: shall mean the display and sale, at retail,
of gold, silver, diamonds, colored gemstones and
other fine jewelry, watches, and clocks, crystal,
porcelain and related items normally sold in
Tenant's other stores and, as incidental thereto,
the repair and/or appraisal of the same and any
other use permitted by the Ground Lease.
Plans and Specifications: shall mean the plans and specifications
for the construction of the Premises, in the form
of Exhibit "C", as the same may be modified by
written agreement by and between Landlord and
Tenant.
Premises: that certain real property located within the
Shopping center consisting of space having
approximately square feet of Gross Leasable Area,
together with all improvements located thereon,
commonly known as the Meridian Shopping Center
located at the northwest corner of ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and more
particularly described in Exhibit "A" attached
hereto.
Premises Cost: shall mean the cost to perform Landlord's
Work, which cost is computed on Exhibit "E"
attached hereto and made a part hereof, subject to
adjustment as provided in Article 2.3.
Premises Site: shall mean the land described on Exhibit A.
Renewal Terms: 4 terms of 5 year(s) each.
Shopping Center: shall mean the Meridian Shopping Center
located at Aurora,
Illinois, consisting of all buildings including
the Premises and other improvements located upon
the Shopping Center site.
Shopping Center Site: shall mean the land described on
Exhibit" A" on which the Shop- ping Center is
located.
Sign Drawings: shall mean the plans and specifications for
Tenant's exterior sign(s) on the Premises, in the
form of Exhibit 'D", as the same may be modified
by written agreement by and between Landlord and
Tenant.
Substitute Rent: shall mean only the amounts due for Taxes and
Common Area Costs, if any, in lieu of the Minimum
Monthly Rent required to be paid hereunder.
5
CONFIDENTIAL
Taxes: shall include:
(a) any form of real estate tax or assessment, ad
valorem tax or gross receipts tax, imposed by any
authority having the direct or indirect power to
tax, including any city, county, state, or federal
government, or any school, agricultural, sanitary,
fire, street, drainage, or other improvement
district thereof, on, against or with respect to
the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord in
the Premises or in the real property of which the
Premises are a part, Landlord's right to rent or
other income therefrom and Landlord's business of
leasing the Premises;
(b) any tax, fee, levy, assessment, penalty,
interest or other charge (i) in substitution of,
partially or totally, any tax, fee, levy,
assessment, or charge included within this
definition of Taxes, or (ii) any tax or increase
in any tax which is imposed as a result of a
transfer, either partial or total, of Landlord's
interest in the Premises to Tenant, or (iii) which
is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers
hereof; and
(c) inspection fees, taxes, bonds, permits,
certificates, assessments and sales, use, property
or other taxes, fees or tolls of any nature
whatsoever (together with any related interest or
penalties) now or hereafter imposed against
Landlord or Tenant by any federal, state, county
or local governmental authority upon or with
respect to the Premises or the use thereof or upon
the possession, leasing, use operation or other
disposition thereof or upon the rents receipts or
earnings arising therefrom or upon or with respect
to this Lease; and
(d) taxes assessed against and levied upon trade
fixtures, furnishings, equipment, and all other
personal property of Tenant contained in the
Premises or elsewhere, which Tenant shall cause to
be separately assessed and billed directly to
Tenant.
Notwithstanding the foregoing, the term "Taxes"
shall not Include any general income taxes,
inheritance taxes, and estate taxes im- posed upon
Landlord.
Tenant: Sterling Jewelers Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Tenant's Work: shall mean the work, if any, to be performed
by or at the direction of Tenant in finishing the
Premises as provided in the Plans and
Specifications, and as more specifically
identified on Exhibit C-1, attached hereto.
6
CONFIDENTIAL
Unamortized Premises
Cost: shall mean the Premises Cost, adjusted based on a
twenty (20) year straight line depreciation basis.
ARTICLE 2
TERM AND RENT
2.1 Term. The Initial Term of this Lease shall be as set
forth in the Fundamental Lease Provisions. Provided Tenant is not
then in default under this Lease, Tenant shall have the option to
extend the Initial Term by the number of successive Renewal Terms
described in the Fundamental Lease Provisions by giving Landlord
written notice of its election to extend the term of this Lease
by the succeeding Renewal Term not less than 90 days prior to
expiration of the Initial Term or the then-running Renewal Term,
as the case may be. Excepting the amount of the Minimum Monthly
Rent, as adjusted, the terms and conditions of this Lease shall
apply during each Renewal Term. The Initial Term, as it may be
extended by one or more Renewal Terms shall be hereinafter
referred to as the "Lease Term."
2.2 Interim Monthly Rent During the Construction Period
Tenant shall pay to Landlord Interim Monthly Rent. The Interim
Monthly Rent payment shall be equal to an interest rate of prime
plus one percent (1%) per annum, payable monthly, on Landlord's
outstanding construction loan amount. Tenant's final Interim
Monthly Rent payment shall be due on the Delivery Date and shall
include a fee of one percent (1%) of the construction costs
outlined on Exhibit E. Tenant's obligation to pay Interim Monthly
Rent shall terminate as of the earlier of i) the Delivery Date,
or ii) the last day of the Construction Period. Thereafter,
Tenant shall pay the Minimum Monthly Rent described below.
2.3 Monthly Rent Payments
2.3.1 Minimum Monthly Rent. For the use and
occupancy of the Premises, Tenant shall pay Landlord the
Minimum Monthly Rent, in advance, commencing on the
Commencement. Date and continuing on the first day of each
calendar month thereafter during the Lease Term, without any
offset or deduction except as specifically provided for
herein. The Minimum Monthly Rent payable under this Lease
shall increase by the Increase Percentage on each Increase
Date. Should the Lease Term commence on a day other than the
first day of a calendar month, then the rental for such
first fractional month shall be computed on a daily basis
for the period from the Commencement Date to the end of such
calendar month at an amount equal to 1/30th of the Minimum
Monthly Rent for each day. Should the Lease Term end on a
day other than the last day of a calendar month, then the
rental for such fractional month shall be computed on a
daily basis at an amount equal to 1/30th of the Minimum
Monthly Rent for each day. Tenant shall pay Landlord the
Minimum Monthly Rent in lawful money of the United States at
the address for Landlord set forth in the Fundamental Lease
Provisions, or to such other persons or at such other places
as Landlord may designate in writing to Tenant. Landlord and
Tenant acknowledge that the Premises Cost computation on
Exhibit E is an estimate, and agree to supplement and/or
amend Exhibit E after the Premises Cost is actually
determined. Landlord and Tenant shall retroactively adjust
the Minimum Monthly Rental payments once the computation of
Exhibit E has been finalized.
2.3.2 Ground Lease Rent. In addition to any other
rental obligations hereunder, Tenant shall pay directly to
Ground Lessor all Ground Lease Rent required to be paid
pursuant to the terms of the Ground Lease.
2.4 Additional Rent. In addition to the Minimum Monthly
Rent, as increased, Tenant shall pay to the parties respectively
entitled thereto all Additional Rent. Tenant shall furnish to
7
CONFI DENTIAL
Landlord, promptly after payment of any Taxes or insurance
premiums (and at least ten (10) days before the date when the
Additional Rent would become delinquent), and, with respect to
any other Additional Rent, promptly upon request of Landlord,
official receipts or other satisfactory proof evidencing payment
of such Additional Rent. Upon Tenant's failure to pay such
Additional Rent on more than one occasion during any twelve month
period, where after written notice thereof from Landlord to
Tenant such second event of failure shall continue for a period
of 15 days, Landlord shall have the option to require Tenant to
deposit with Landlord (i) funds sufficient for the payment of the
current Additional Rent required to be paid by Tenant hereunder,
and (ii) one-twelfth of the current annual or annualized
Additional Rent, as the case may be (or those of the preceding
years if the current amounts thereof have not been fixed), in
advance and on the same day upon which the Minimum Monthly Rent
is due.
2.5 Late Charge. If any installment of the Monthly Minimum
Rent or any other payment provided for under this Lease which is
payable by Tenant is not received by Landlord by the date when
due, Tenant shall, within 10 days after written notice from
Landlord to Tenant, pay Landlord the Late Charge. Landlord and
Tenant agree that the Late Charge represents a fair and
reasonable estimate of the costs that Landlord will incur because
of any such late payment by Tenant. Acceptance of the Late Charge
by Landlord shall not constitute a waiver of Tenant's default, if
any, with respect to the overdue amount, nor prevent Landlord
from exercising any other rights and remedies available to
Landlord under this Lease.
2.6 Interest on Overdue Amounts. The Minimum Monthly Rent,
the Additional Rent and all other amounts due Landlord under this
Lease which are not paid when due shall bear Interest as defined
in the Fundamental Lease Provisions from the date due until paid.
2.7 Net Lease: Appointment of Tenant as Attornev-in-Fact
Solelv for Operational Matters. This Lease is what is commonly
called a triple net lease, it being understood that Landlord
shall receive the Minimum Monthly Rent free and clear of any and
all Taxes, other Additional Rent, liens, charges, liabilities or
expenses of any nature whatsoever incurred in connection with the
ownership or operation of the Premises.
The parties acknowledge and agree that this Lease is a "pass-
through" lease, meaning that all of the rights granted to, and
all the obligations and duties imposed on, Landlord as lessee
under the Ground Lease shall bind and burden, and inure to the
benefit of, Tenant hereunder. Tenant hereby accepts such rights
and benefits and hereby agrees to perform all such duties and
obligations. Without limiting the foregoing, the parties
acknowledge that Tenant need not obtain Landlord's prior approval
and consent to perform such duties and obligations under the
Ground Lease that are directly related to Tenant's ordinary, day-
to-day business operations and do not affect adversely Landlord
or the Ground Lease leasehold. The parties further acknowledge
and agree that, in the event of an emergency, Tenant shall be
authorized to, and shall perform such actions as are reasonably
necessary under the circumstances to protect and/or preserve
Landlord and Tenant's leasehold interests, and shall notify
Landlord of the same as soon as practicable thereafter.
Subject to the terms and provisions set forth below,
Landlord hereby irrevocably appoints Tenant as its attorney-in-
fact for the sole purpose of pursuing, in Landlord's place and
stead, enforcement of Ground Lessor's obligations under the
Ground Lease with respect only to the following operational
matters and no other: (i) maintenance and repair of the Leased
Premises and common areas, (ii) co-tenancy, (iii) Tenant's
exclusive use rights, and (iv) insurance. Tenant shall give
Landlord five (5) days prior written notice of its intention to
act as Landlord's attorney-in-fact. Tenant's notice shall set
forth with particularity the nature of Ground Lessor's failure to
perform and the nature of the relief Tenant is seeking. If
Landlord notifies Tenant within said five (5) day period that
Landlord has commenced, or will commence within said five (5) day
period, enforcement of Ground Lessor's obligations, then Tenant
shall not be
8
CONFIDENTIAL
authorized to do so in Landlord's place and stead. In such event,
Landlord shall pursue such enforcement with all due diligence and
in good faith, and the parties shall cooperate fully with each
other. If within said five (5) day period, however, Landlord
fails either to respond to Tenant's written notice, or gives
Tenant notice of its election to permit Tenant to pursue such
enforcement in Landlord's place and stead, then Tenant shall
undertake such enforcement with all due diligence and in good
faith, and the parties shall cooperate fully with each other.
Tenant acknowledges the fiduciary obligations imposed on
Tenant when acting as Landlord's attorney-in-fact. Tenant agrees
to indemnify, defend and hold Landlord harmless from and against
any and all loss, cost or damage resulting from Tenant's actions
or inaction as Landlord's attorney-in-fact, including, but not
limited to, Landlord's expenses, including reasonable attorneys'
fees, if any, in connection therewith. Tenant shall have no
authority to enter into a compromise and settlement, nor to act
in Landlord's place and stead as it's attorney- in-fact if: (i)
Tenant is in default under this Lease or the Ground Lease; (ii)
Tenant is in anticipatory default of this Lease or the Ground
Lease; (iii) Landlord's obligations under this Lease or the
Ground Lease have been terminated; (iv) this Lease has been
terminated without the concurrent termination of the Ground
Lease; (v) Landlord has notified Tenant that it has or will
commence enforcement within said five (5) day period as
hereinbefore provided; and (vi) the obligation of Ground Lessor
being enforced involves matters other than the operational
matters specified above, in which case Landlord shall pursue
enforcement with all due diligence and in good faith. In the
event of an occurrence of any event set forth subsections (i)
through (iv) of this paragraph, the appointment of Tenant as
Landlord's attorney-in-fact shall automatically terminate and be
of no further force or effect.
2.8 Additional Ground Lease Payments. The parties
acknowledge that certain other payments in addition to rent may,
from time to time, become due and payable by Landlord in its
capacity as Ground Lessee under the Ground Lease. Except as
otherwise provided herein, all such items shall be the
responsibility of Tenant, who shall make these payments to or on
behalf of Ground Lessor or Landlord, as the case may be, in a
timely manner.
ARTICLE 3
USE OF THE PREMISES
3.1. Tenant shall use the Leased Premises solely for
the Permitted Use, or any other lawful purpose as long as such
use does not diminish the value of the Premises or violate any
existing exclusive uses then in effect with respect to the
Premises.
3.2 Condition of Premises. Subject to Section 6.2.1, and as
may otherwise be pro- vided in this Lease, Tenant accepts the
Premises in its "as is" condition and acknowledges that Landlord
makes no warranty with respect to the Premises.
3.3 Compliance With Law.
3.3.1 At Tenant's sole expense, Tenant shall comply
in all material respects with the Ground Lease, all
applicable laws, ordinances, orders, rules, regulations, of
any governmental authorities and with any directive of any
public officer imposing any violation, order or duty upon
Landlord or Tenant with respect to the Premises, the use or
occupation thereof or signage thereon, including, without
limitation, any governmental law or statute, rule,
regulation, ordinance, code, policy or rule of common law
now or hereafter in effect relating to the environment,
health or safety .
3.3.2 Tenant shall not use or permit the Premises
to be used in any manner which will result in waste,
reasonable wear and tear and casualty excepted, or the
creation of a
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CONFIDENTIAL
nuisance, or shall violate the terms of the Ground Lease and
Tenant shall maintain the Premises free of any objectionable
noises, odors, or disturbances.
3.4 Environmental Compliance. The terms of this
provision shall be governed by Article 21 of the Ground Lease.
Excepting pre-existing conditions, acts or omissions of Landlord
or its agents, or acts or omissions of any third parties, for
which Tenant shall have no 1iability, Tenant acknowledges the
following:
3.4.1 At its sole cost and expense at all times during
the Term, Tenant shall comply in all respects with the
Environmental Laws in its use and operation of the Premises.
3.4.2 Tenant shall not use the Premises for the purpose
of storing Hazardous Materials except in full compliance with the
Environmental Laws and other applicable law, and shall not cause
the release of any Hazardous Material.
3.4.3 Tenant shall notify Landlord promptly and in
reasonable detail should Tenant become aware of or suspect (i)
the presence of any Hazardous Material on the Premises (other
than any Permitted Hazardous Materials ), or (ii) a violation of
the Environmental Laws on the Premises.
3.4.4 If Tenant uses or permits the Premises to be used
so as to subject Tenant, Landlord or any occupant of the Premises
to a claim of violation of the Environmental Laws (unless
contested in good faith by appropriate proceedings), Tenant
shall, at its sole cost and expense, immediately cease or cause
cessation of such use or operations and shall remedy and fully
cure any conditions arising therefrom.
3.4.5 At its sole cost and expense, Tenant shall (i)
immediately pay, when due, the cost of compliance with the
Environmental Laws within the Premises required as a result of
any acts or omissions of Tenant, or as otherwise required by this
Lease, and (ii) keep the Premises free of any liens imposed
pursuant to the Environmental Laws. At all times Tenant shall
use, handle and dispose of any Permitted Hazardous Material in a
commercially reason- able manner and in compliance with the
Environmental Laws and applicable industry standards. Tenant
shall cooperate with Landlord in any program between Landlord and
any governmental entity for proper disposal and/or recovery of
any Permitted Hazardous Material.
3.4.6 Tenant shall indemnify, save and hold Landlord
harmless from and against any claim, liability, loss, damage or
expense (including, without limitation, reasonable attorneys'
fees and disbursements) arising out of any violation by Tenant of
the covenants contained in this Section, or out of any violation
of the Environmental Laws by Tenant, its owners, employees,
agents, contractors, customers, guests and invitees. This
indemnity obligation shall survive the expiration or termination
of this Lease.
3.4.7 In the event that Tenant fails to comply with the
any of the foregoing requirements of this Section, after the
expiration of the cure period permitted under the Environ- mental
Laws, if any, Landlord may, but shall not be obligated to (i)
elect that such failure constitutes a default under this Lease;
and/or (ii) take any and all actions, at Tenant's sole cost and
expense, that Landlord deems necessary or desirable to cure such
noncompliance. Tenant shall reimburse Landlord for any costs
incurred by Landlord in exercising its options under this
Subsection within 5 days after receipt of a ▇▇▇▇ therefor.
3.4.8 Existing Conditions. Notwithstanding anything
herein or in the Ground Lease to the contrary, in no event shall
Tenant have any liability resulting from any conditions existing,
or events occurring, or any Hazardous Substances existing or
generated at in, on,
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CONFIDENTIAL
under or in connection with the Premises prior to the
Commencement Date of this Lease except to the extent Tenant
caused the same.
3.4.9 Landlord acknowledges and covenants that in the
event that, through no fault of Tenant, Tenant's use, occupancy
and enjoyment of ("Occupancy") in the Premises shall be
materially interfered with by the existence or remediation of any
Hazardous Material located on, in or under the Shopping Center or
Shopping Center Site (except for any Hazardous Material used by
Tenant), then (i) throughout such period of interference, a fair
and just proportion of the rents and other charges payable
hereunder taking into account the nature of the interference to
Tenant's Occupancy, shall be abated, and (ii) if Tenant's
occupancy shall be substantially impaired for a period of three
(3) months or more, then Tenant shall have the right to terminate
this Lease by giving written notice to Landlord of its election
to do so, whereupon this Lease shall automatically terminate and
end effective as of the date of such notice and neither party
shall have any further obligations hereunder. However, Landlord
may nullify Tenant's notice of termination if, at the time such
notice is given, Landlord is diligently prosecuting the
rectification of such Hazardous Material interference and
thereafter completes the rectification in accordance with all
applicable governmental laws, codes, regulations and requirements
within one (1) year after the date of Tenant's termination
notice, whereupon this Lease shall continue in full force and
effect in accordance with its terms, it being understood and
agreed that the abatement provided in clause (i) of this
paragraph shall continue throughout the period of such
rectification by Landlord. Should Tenant terminate this Lease as
provided in this Section 3.4.9, Tenant shall pay to Landlord the
Unamortized Premises Cost.
3.4.10 The provisions of this Section shall survive the
expiration or termination of the Lease Term.
3.5 Permits and Licenses. After Tenant's acceptance of
Landlord's delivery of the Premises, Tenant shall be solely
responsible for applying for and securing any building permit or
permission of any duly constituted authority for the purpose of
doing any of the things Tenant is required or permitted to do
under the provisions of this Lease.
3.6 Termination Payment. Tenant acknowledges that, pursuant
to the Ground Lease, Tenant shall be obligated to make certain
additional payments to Landlord in the event the Ground Lease,
and in turn, this Lease, is terminated pursuant to the rights
granted to Ground Lessor or Landlord in Sections 3.01 and 3.04 of
the Ground Lease.
Tenant agrees to pay Landlord a sum computed based upon
Landlord's internal rate of return (the "IRR') for the Premises
Cost (as detailed on Exhibit "E" hereto) plus a Landlord's
development fee of One Hundred Eighty Thousand Dollars and 00/100
($180,000.00) (the "Land- lord's Development Fee"); which IRR
shall be based on the following formula:
(a) Landlord's IRR shall be computed at the commencement of
the Lease Term and shall be included in the Commencement
Agreement. For purposes of this provision, the IRR shall be
determined based on the following criteria:
(i) the Premises Cost;
(ii) a capitalization rate of 13.5% for the first Lease
Year and 14.2% for each following Lease Year;
(iii) the Minimum Monthly Rental for the Initial Term,
as adjusted; (iv) the Initial Term (i.e., a twenty (20)
year term);
(b) In the event of an early termination of the Ground
Lease as provided in this Section 3.8, the remaining Minimum
Monthly Rental owed by Tenant under this Lease shall be
calculated by Landlord and Tenant. Once so determined, said sum
shall be discounted to the date
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CONFIDENTIAL
of the Ground Lease termination at the IRR determined in
subsection (a) above. The sum determined by said calculation (the
"Termination Payment') shall be due and payable by Tenant to
Landlord, subject to further adjustment as provided herein.
(c) In addition to the Termination Payment, if Landlord is
obligated to pay a leasehold mortgagee any sum due as a result of
the early termination of the Ground Lease or this Lease (the
"Lender's Payment'), Tenant also agrees to pay said sums to
Landlord upon being presented with an appropriate invoice. Tenant
understands that said Lender's Payment may include, but may not
be limited to, a prepayment penalty, additional interest or
charges, and attorney's fees. The Termination Payment and the
Lender's Payment are collectively referred to as the "Termination
Fee".
In the event Ground Lessor is obligated to make any payments to
Landlord as a result of the termination of the Ground Lease, any
and all of said payments shall be applied first, to the
Termination Fee due Landlord, and the balance thereafter
remaining shall be payable by Tenant to Landlord. The Termination
Fee, as the same may be reduced, shall be payable to Landlord
within ten (10) days of receipt of an appropriately detailed
invoice from Landlord. The failure of Tenant to pay the
Termination Fee shall be deemed an automatic default under this
Lease entitling Landlord to immediately proceed to exercise any
and all of its rights and remedies hereunder without further
notice to Tenant.
3. 7 Exclusive Use. Pursuant to the terms of Section
12.13 of the Ground Lease, Tenant is granted an exclusive right
at the Shopping Center to operate under its Permitted Use. The
terms and conditions of such exclusive shall be governed by
Article 12 of the Ground Lease.
ARTICLE 4
TAXES AND UTILITIES
4.1 Payment of Taxes. Tenant shall pay the Taxes applicable
to the Premises during the Lease Term: Landlord shall provide
Tenant with copies of any tax bills applicable to the Premises
promptly after receipt of such bills. All such payments shall be
made at least 10 days prior to the delinquency date of such
payment. Tenant shall indemnify and hold Landlord harmless from
and against any Taxes and shall promptly furnish Landlord with
satisfactory evidence that such Taxes have been paid. If any
Taxes paid by Tenant shall cover any period prior to, or after
the expiration of, the Lease Term, Landlord shall reimburse
Tenant to the extent required. If Tenant shall fail to pay any
such Taxes, Landlord shall have the right (but not the
obligation) to pay the same, in which case Tenant shall repay
such amount plus any penalties and interest resulting therefrom
to Landlord within 5 days after receipt of a ▇▇▇▇ therefor.
4.2 Intentionally omitted.
4.3 Tenant's Right to Contest Taxes.
4.3.1 At its sole cost and expense, Tenant shall have
the right to contest the amount or validity, in whole or in part,
of any Taxes by appropriate proceedings diligently conducted in
good faith, but no such contest shall be carried on or maintained
by Tenant after the time limit for the payment of any Taxes
unless Tenant shall (i) pay the amount involved under protest as
required by the Ground Lease; (ii) procure and maintain a stay of
all proceedings to enforce any collection of any Taxes, together
with all penalties, interest, costs and expenses, by a deposit of
a sufficient sum of money, or by such undertaking, as may be
required or permitted by law to accomplish such stay; or (iii)
deposit with Landlord, as security for the performance by Tenant
of its obligations hereunder with respect to such Taxes, 120% of
such contested amount or such other reasonable security as may be
reasonably demanded by Landlord to insure payment of
12
CONFIDENTIAL
such contested Taxes and all penalties, interest , costs and
expenses which may accrue during the period of the contest. Upon
the termination of any such proceedings, Tenant shall pay the
amount of such Taxes or part thereof, as finally determined in
such proceedings, together with any costs, fees (including all
reasonable attorneys' fees and expenses), penalties or other
liabilities in connection therewith. However, if Tenant has
deposited cash or cash equivalents with Landlord as security
under clause (iii) above, then, so long as no default exists
under this Lease, Landlord shall arrange to pay such Taxes (or
part thereof) together with the applicable costs, fees and
liabilities as described above out of such cash or cash
equivalents and return any unused balance, if any, to Tenant.
Otherwise, Landlord shall return to Tenant all amounts, if any,
held by or on behalf of Landlord which were deposited by Tenant
in accordance with such clause (iii).
4.3.2 At its cost and expense, Tenant shall have the
right to seek a reduction in the valuation of the Premises as
assessed for tax purposes and to prosecute any action or
proceeding in connection therewith. Provided it is not in default
hereunder, Tenant is authorized to retain any refund of any Taxes
paid by Tenant.
4.3.3 Landlord agrees that whenever Landlord's
cooperation is required in any proceeding brought by Tenant to
contest any tax, Landlord will reasonably cooperate therein,
provided the same shall not entail any cost, liability or expense
to Landlord. Tenant shall pay, indemnify and save Landlord
harmless of and from, any and all liabilities, losses, judgments,
decrees, costs and expenses (including all reasonable attorneys'
fees and expenses) in connection with such contest and shall,
promptly after the final settlement, fully pay and discharge the
amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, and
Tenant shall perform and observe all acts and obligations, the
performance of which shall be ordered or decreed as a result
thereof. No such contest shall subject Landlord to the risk of
any civil liability or the risk of any criminal liability, and
Tenant shall give such reasonable indemnity or security to
Landlord as may reasonably be demanded by Landlord to insurer
compliance with the foregoing provisions of this Section.
4.4 Payment of Utilities. Tenant shall pay to the utility
companies or other parties entitled to payment the cost of all
water, heat, air conditioning, gas, electricity, telephone, and
other utilities and services provided to or for the Premises,
including, without limitation, connection fees and taxes thereon.
ARTICLE 5
INSURANCE AND INDEMNIFICATION
5.1 Tenant's Insurance. From and after taking possession of
the Premises, Tenant shall carry and maintain, at its sole cost
and expense, the following types and amounts of insurance, unless
greater or more inclusive insurance is required by the terms of
the Ground Lease. In such event, the terms of the Ground Lease
shall control Tenant's insurance requirements:
CONFIDENTIAL
Insurance Tvpe Amount of Coverage
Risks Covered
Commercial General $1,000,000 per occurrence and
bodily injury, property damage Liability $2,000,000
in the aggregate and contractual liability
Property Damage full replacement value "all
risk", including sprinkler
damage
Business Interruption not less than 12 installments of
loss of earnings by at least the Minimum
Monthly Rent perils of fire and
lightning,
extended coverage,
vandalism, malicious
mischief and sprink-
ler leakage
Worker's compensation as required by law
5.2 Policy Form
5.2.1 Tenant shall obtain all policies of insurance
required by Section 5.1 from insurance companies having an
A. M. Best rating of A+ or better which are qualified to do
business in the jurisdiction where the Premises are
situated. All such policies shall be issued in the names of
Landlord and Tenant, and if requested by Landlord, any
mortgagee or beneficiary of Landlord, as additional
insureds. In addition, all such policies providing coverage
for physical damage shall include loss payee and mortgagee
endorsement in favor of Landlord and Land- lord's mortgagee
or beneficiary, respectively and as applicable. Tenant shall
cause copies of such policies of insurance or originally
executed certificates thereof to be delivered to Landlord
prior to its execution of this Lease, and not less than 30
days prior to any renewal thereof. As often as any such
policy shall expire or terminate, Tenant shall procure and
maintain renewal or additional policies with like terms.
None of such policies shall contain any co-insurance
requirements. All such policies shall provide for written
notice to Landlord and any mortgagee or beneficiary of
Landlord not less than 10 days prior to any modification,
cancellation, lapse, or reduction in the amounts of
insurance, and shall further provide that any loss otherwise
payable thereunder shall be payable notwithstanding any act
or negligence of Landlord or Tenant which might, absent such
provision, result in a forfeiture of all or part of the
payment of such loss. All general liability, property
damage, and other casualty policies shall be written on an
occurrence basis as primary policies, not contributing with
or in excess of coverage which Landlord may carry.
5.2.2 Tenant's obligations to carry the insurance
provided for above may be brought within the coverage of an
"umbrella" policy or policies of insurance carried and
maintained by Tenant; provided, however, that such policy or
policies shall (i) have limits of not less than $5,000,000,
(ii) name Landlord and any mortgagee or beneficiary of
Landlord as additional insureds as their interests may
appear, and (iii) provide that the coverage afforded
Landlord will not be reduced or diminished by reason of the
use of such blanket policies. Tenant agrees to permit
Landlord at all reasonable times to inspect any of Tenant's
insurance policies which have not been delivered to
Landlord.
5.3 Subrogation-Waiver. Landlord (for itself and its
insurer) hereby waives any rights, including rights of
subrogation, and Tenant (for itself and its insurer) hereby
waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage
occasioned to Landlord or Tenant, as the case may be, to
their respective property , the Premises or its contents
that are caused by or result from risks insured against
under any insurance policies carried by the parties hereto
and in force at the time of any such damage. The foregoing
waivers of subrogation shall be operative only so long as
available in the jurisdiction
14
CONFI DENTIAL
where the Premises are located and so long as no policy of
insurance is invalidated thereby.
5.4 Payment of Insurance. Should Tenant fail to obtain
the insurance policies required hereunder, or pay the
premiums due for the insurance policies required hereby,
Landlord shall have the right, but not the obligation, to
pay the same, in which case Tenant shall repay such amount
plus any penalties or additional amounts resulting therefrom
to Landlord within 5 days after receipt of a ▇▇▇▇ therefor.
5.5 Insurance Use Restrictions. Tenant shall not carry
any stock or goods or do anything in, on or about the
Premises which will substantially increase the insurance
rates upon
the building of which the Premises are a part.
5.6 Indemnification.
5.6.1 Subject to Subsection 5.6.3 below. Tenant
shall indemnify Landlord for, defend Landlord against, and
save Landlord harmless from any liability, loss, cost,
injury, dam- age or other expense or risk whatsoever that
may occur or be claimed by or with respect to any person(s)
or property on or about the Premises and resulting directly
or indirectly from:
(a) the use, misuse, occupancy, possession or disuse
of the Premises by Tenant or other persons claiming through
or under Tenant, or their respective agents, employees,
licen-sees, invitees, guests or other such persons;
(b) the condition of the Premises;
(c) any work or thing done by Tenant. its employees,
agents or licensees, in respect of construction of, in or to
the Premises or any part of the improvements now or
hereafter constructed on the Premises (other than work by
Landlord);
(d) any use, possession, occupation, operation,
maintenance or management of the Premises or any part
thereof;
(e) any failure to properly use, possess, occupy,
operate maintain or manage the Premises or any part thereof;
(f) the condition, including environmental conditions
(unless such conditions were pre-existing or caused by a
party other than Landlord or Tenant) of the Premises or any
part thereof;
(g) any negligence on the part of Tenant or any of its
agents, contractors, servants, employees licensees or
invitees;
(h) any accident, injury or damage to any person or
property occurring in, on or about the Premises or any part
thereof including any sidewalk adjacent thereto; or
(i) any failure on the part of Tenant to perform or
comply with any of the covenants. agreements, terms or
conditions contained in this Lease on its part to be per-
formed or complied with.
5.6.2 [lntentionallyOmitted]
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CONFIDENTIAL
5.6.3 Landlord shall indemnify and save Tenant
harmless from and against any and all claims, demands,
actions, damages, liability and expense in connection with
the loss, damage, or injury to persons or property whether
for injuries to persons or loss of life, or dam- age to
property, arising in connection with the gross negligence or
intentional misconduct of the Landlord, Landlord's agents,
employees, or contractors.
ARTICLE 6
MAINTENANCE AND REPAIRS
6.1 Tenant's Obligations.
6.1.1 At its sole cost and expense, Tenant shall
maintain in good repair, order, and serviceable condition,
the Premises and every part thereof, including, without
limitation, every part of the interior and exterior portions
of the Building, including its roof, walls, all windows,
doors, storefronts, plate glass, interior walls, and
structural elements thereof and all painting thereof; all
plumbing, ventilation, heating, air conditioning, and
electrical systems and equipment in, on. or exclusively
serving, the Premises; and all exterior improvements
including, without limitation, landscaping, light poles,
signage and parking lot areas which are part of the
Premises. Subject to Landlord's satisfaction of the
conditions set forth in Section 6.2.1, Tenant shall not make
any claim or demand upon or bring any action against
Landlord for any loss, cost, injury, damage or expense
caused by any failure or defect, structural or non-
structural, of the Premises or any part thereof.
6.2 Landlord's Obligations. Excepting Landlord's duties and
obligations under Article 15 hereof, Landlord shall have no
obligation to repair and maintain the Premises, nor any
improvements or equipment thereon, whether interior or
exterior, structural or nonstructural, ordinary or
extraordinary. Except as otherwise provided in this Lease,
Tenant expressly waives the benefit of any statute or law
now or hereafter in effect which would otherwise afford
Tenant the right to terminate this Lease because of
Landlord's failure to keep the Premises in good order,
condition, and repair, or the right to repair and offset the
cost related thereto against rent.
6.2.1. Landlord shall obtain in the name of Tenant and
Landlord warranties, to the extent available, on all
materials, fixtures, and equipment incorporated in or on the
Premises (the "Warranties"). Further, in the event Tenant is
not deemed a third-party beneficiary or a direct assignee of
the contract(s) Landlord enters into with its contractors
("Landlord's Contractor's") in connection with Landlord's
Work, Landlord shall take such action as may be reasonably
necessary to enable Tenant to make any demand upon or claim
upon or bring any action against Landlord's Contractors (i)
for any loss, cost, injury, damage or other expense caused
by any failure or defect, structural or non-structural, of
the Premises or any part thereof or (ii) to enforce the
Warranties.
6.3 Landlord's Rights.
6.3.1 If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, in a manner
reasonably satisfactory to Landlord or Ground Lessor,
without prejudice to any other remedy Landlord may have
hereunder, upon giving Tenant 10 days prior written notice
(except in the event of an emergency), Landlord, Ground
Lessor or their respective mortgagees shall have the right
to enter the Premises and perform such maintenance or make
such repairs on behalf of" and for the account of Tenant.
Should Landlord, Ground Lessor or their respective
mortgagees so elect, Tenant shall pay the cost of such
repairs, maintenance, or replacements within 5 days
following receipt of a ▇▇▇▇ therefor. ! Tenant agrees to
permit Landlord, Ground Lessor or their agents to enter the
Premises, upon f reasonable notice to Tenant, during normal
business hours to inspect the Premises.
16
CONFI DENTIAL
6.3.2 In such event, Landlord, Ground Lessor or
their respective mortgagees shall comply with all
restrictive covenants and rules and regulations affecting
the Premises, if any, including making repairs, providing
utilities and placement of signage. Landlord, Ground Lessor
or their respective mortgagees shall also protect, indemnify
and save harmless Tenant and Tenant's successors and assigns
against and from all liabilities, obligations, damages,
penalties, mechanic's liens, claims, costs, charges and
expenses (including, without limitation, attorneys' fees and
expenses) of whatever kind or nature, which may be imposed
upon or incurred by or asserted against Tenant, its
successors and assigns, directly or indirectly, by reason of
Landlord's, Ground Lessor's or their respective mortgagees'
entry onto the Premises and performance of such work.
6.3.3 In performing any work at the Premises,
Landlord shall minimize any disruption of the use of the
Premises by Tenant and Landlord shall not unreasonably
impair the access to the improvements, if any, constructed
at the Premises. Notwithstanding the foregoing, pursuant to
Section 15.01.B of the Ground Lease, Landlord and Ground
Lessor shall not perform any work at the Premises during the
period of time between Thanksgiving and Christmas.
6.3.4 Pursuant to the terms of Section 15.01.C. of
the Ground Lease, during the progress of any work in the
Premises performed by Landlord or Ground Lessor, Landlord or
Ground Lessor may keep and store thereon all necessary
materials, tools, supplies and equipment at a reasonable
location designated by Tenant. Neither Landlord nor Ground
Lessor shall be liable for inconvenience, annoyance,
disturbance, loss of business or damage of Tenant by reason
of making such repairs or the performance of any such work
which is performed in accordance with the requirements
hereunder, or on account of bringing tools, materials,
supplies and equipment into the Premises during the course
thereof, except to the extent caused by the gross negligence
or intentional misconduct of Ground Lessor, Landlord, their
employees, contractors or invitees and the obligations of
Tenant under this Lease shall not be affected thereby.
ARTICLE 7
ALTERATIONS
7.1 Consent to Alterations. Tenant may make any interior
non-structural Alterations to the Premises that Tenant, in its
sole discretion, deems advisable; provided, however, that if the
aggregate cost of any such Alteration exceeds $100,000, Tenant
shall deliver to Landlord a written notice describing such
Alteration, together with copies of all architectural plans and
specifications relating to any such Alteration. Subject to the
prior written consent of Landlord, which consent shall not be
unreasonably withheld, Tenant may, at its sole cost and expense,
make any Alterations to the Premises as it may find necessary or
convenient for its purposes. Notwithstanding the foregoing,
Landlord's consent with respect to any structural Alterations to
the Premises, including the foundations, structural walls, roof,
roof membrane, utilities and/or building systems, may be
conditioned upon Tenant's removing any such Alterations upon the
expiration or termination of the Lease Term and restoring the
Premises to the condition which existed on the date Tenant took
possession, subject to normal wear and tear.
7.2 Removal of Alterations. Except as set forth in
Subsection 7.2.1 below, all Alterations made on the Premises
shall become the property of Landlord at the expiration or
termination of the Lease Term and shall be surrendered with the
Premises.
7.2.1 All signs, furnishings, trade fixtures, inventory
, equipment and other removable property, including Tenant's
satellite dish and Tenant's vault, installed in or on the
Premises by Tenant, shall remain the personal property of Tenant,
shall not be subject to any Landlord's lien or lien or security
interest against the property of Landlord, and shall be removed
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by Tenant not later than fifteen (15) days after the termination
or expiration of this Lease, pro- vided that Tenant shall repair
any damage caused by removal of its vault or which is 'structural
in nature. If, however, any such personal property of Tenant is
not removed on or before the fifteenth day following the
termination of this Lease, such property shall be deemed
abandoned.
7.3 Alterations Required by Law. Subsequent to Tenant's
acceptance of Landlord's delivery of the Premises, Tenant shall,
at its sole cost and expense, make any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may
be necessary or required by reason of any law, rule, regulation,
or order promulgated by competent government authority.
7 .4 General Conditions Relating to Alterations. Any
Alteration shall be subject to the following conditions:
7.4.1 No Alteration shall be undertaken until
Tenant shall have procured and paid for all required permits
and authorizations of all municipal departments and
governmental subdivisions having jurisdiction.
7.4.2 [Intentionally Omitted]
7.4.3 Any Alteration shall be made promptly and in
a good workmanlike manner, by properly qualified and
licensed personnel, and in compliance with all applicable
permits and authorizations and building and zoning laws and
all laws, and in accordance with the orders, rules and
regulations of the Board of Fire Insurance Underwriters and
any other body hereafter exercising similar functions having
or asserting jurisdiction over the Premises.
7.4.4 No Alteration shall tie-in or connect the
Premises or any improvements thereon with any property
outside the Premises without the prior written consent of
Landlord.
7.4.5 No Alteration shall reduce the value of the
Premises or impair the structural integrity of any building
comprising a part of the Premises.
7.5 Liens In connection with Alterations or otherwise,
Tenant shall do all things reasonably necessary to prevent the
filing of any liens or encumbrances against the Premises, or any
part thereof, or upon any interest of Landlord or any mortgagee
or beneficiary under a deed of trust or any ground or underlying
lessor in any portion of the Premises, by reason of labor,
services or materials supplied or claimed to have been supplied
to Tenant, or anyone holding the Premises, or any part thereof,
through or under Tenant. If any such lien or encumbrance shall at
any time be filed against all or any portion of the Premises,
Tenant shall either cause same to be discharged of record within
30 days after the date of filing of same or, if Ten- ant in good
faith determines that such lien should be contested, Tenant shall
either (i) bond over such lien in accordance with applicable law,
or (ii) furnish such security as Landlord shall deter- mine to be
necessary and/or required to prevent any foreclosure proceedings
against all or any portion of the Premises during the pendency of
such contest. If Tenant shall fail to discharge or bond over such
lien or encumbrance or fail to furnish such security within such
period, then, in addition to any other right or remedy of
Landlord resulting from said default of Tenant, Landlord and/or
Ground Lessor may, but shall not be obligated to, discharge the
same either by paying the amount claimed to be due or by
procuring the discharge of such lien by giving security or in
such other manner as is or may be, prescribed by law, and Tenant
agrees to reimburse Landlord and/or Ground Lessor within 5 days
after demand for all costs, expenses, and other sums of money
spent in connection therewith. Notwithstanding anything else
herein to the contrary, Tenant shall not have the power to
subject the interests of Ground Lessor in the Premises or any
part thereof to any mechanics, laborer's or materialmen's lien or
any other lien of any kind.
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7.6 Signs. Tenant shall have the right to install and
maintain a sign or signs on all fascia of the Premises. In
addition, Tenant shall have the right to install a sign on the
rear of the Premises, so long as all such signs comply with all
requirements of (i) appropriate governmental authorities and (ii)
agreements or restrictions of record (or disclosed to Tenant
before its execution of this Lease) running with the Premises,
and all necessary permits, licenses or approvals required by
agreements or restrictions identified in item (ii) of the
sentence; shall be obtained by Tenant. Tenant shall maintain its
signs in good condition and repair at all times, and shall save
Landlord harmless from injury to person or property arising from
the erection and maintenance of said signs. Upon vacating the
Premises, Tenant shall remove all signs and repair all damage
caused by such removal. Landlord covenants and warrants that it
has approved Tenant's signs and the Sign Drawings attached hereto
as Exhibit "D" prior to or simultaneously with its execution of
this Lease.
ARTICLE 8
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
8.1 Obligation to Rebuild. If any portion of the Premises
is damaged or destroyed by fire or other casualty, Tenant shall
forthwith give notice thereof to Landlord. Tenant shall promptly
obtain an estimate from a licensed architect or contractor of the
cost to complete such repair, restoration, rebuilding or
replacement. At its sole cost and expense, Tenant shall promptly
repair, restore, rebuild or replace the damaged or destroyed
improvements, fixtures or equipment, and complete the same as
soon as reasonably possible, to the condition they were in prior
to such damage or destruction, except for such changes in design
or materials as may then be required by law. In such event,
Landlord shall (to the extent and at the times the proceeds of
the insurance are made available to Landlord, and only so long as
Tenant is not in default under this Lease), reimburse Tenant for
the costs of making such repairs, restoration, rebuilding and
replacements as they are completed, but not more often than once
each month, upon receipt of a written request therefor. Such
request shall be accompanied by a certification from Tenant's
architect certifying the completion of the work for which
reimbursement is being requested. To the extent, if any, that the
insurance proceeds made available by Landlord are insufficient to
pay the entire cost of making such repairs, restoration,
rebuilding and replacements, Tenant shall pay the remainder. In
the event that Tenant elects to terminate this Lease and the
insurance proceeds are less than the amount of the unpaid rent
under the Ground Lease for the balance of the Ground Lease term,
Tenant agrees to pay the difference to Landlord in cash (or cash
equivalent) within thirty (30) days after receipt of a ▇▇▇▇ from
Landlord. The provisions of Article 8 shall be governed by
Article 17 of the Ground Lease.
8.1.1 Notwithstanding the foregoing, and pursuant to the
terms of Section 17.04 of the Ground Lease, in the event Tenant
is unable to complete such repairs, restoration, rebuilding and
replacements, because of its inability to obtain any necessary
governmental approvals, authorizations or permits, despite
Tenant's diligent pursuit of same, 360 calendar days from the
date of such fire or casualty (such period not to include
unreasonable delays caused by Tenant), Landlord and/or Ground
Lessor may, (a) terminate this Lease, or (b) raze (or cause to be
razed) any improvements on the Premises, rough grade (or cause to
be rough graded) the land on which the improvements had been
built and restore (or cause to be restored) the cleared area to
either a hard surface condition or a landscaped condition until a
replacement building is erected, if ever, in accordance with the
terms of this Lease and the Ground Lease. Tenant shall have the
option to terminate this Lease. In the event Tenant elects to so
terminate, and the insurance proceeds are less than the amount of
the unpaid Rent under the Ground Lease for the balance of the
Ground Lease Term, Tenant agrees to pay to Landlord the
difference, if any, between the insurance proceeds received by
Landlord and the Unamortized Premises Cost in cash or cash
equivalent.
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8.2 Casualty During Last Two (2) Years. Notwithstanding
anything to the contrary in this Article 8, if the Premises is
damaged or destroyed by fire or other casualty during the last
two (2) years of the Initial Term or the then-running Renewal
Term such that fifty percent (50%) of the Premises is rendered
unusable by Tenant, Tenant may elect not to rebuild and to
terminate this Lease; provided that Landlord shall receive
insurance proceeds in the full amount of the casualty loss and
the difference, if any, between the insurance proceeds received
by Landlord and the Unamortized Premises Cost.
8.3 Abatement of Rent. In the event that fifty percent
(50%) or more of the leaseable area of the Premises should be
rendered untenantable by fire or other casualty, Tenant shall be
entitled to abatement of rent from and after such fire or other
casualty. Tenant agrees that in the event of such abatement of
rent, Tenant shall pay over to Landlord all proceeds of its
business interruption insurance which constitute payment under
such policy for lost rent or rent interruption. Except as
provided in the preceding sentence, in the event of destruction
of the Premises or any part thereof which is less than fifty
percent (50%) of such leaseable area, there shall be no abatement
of rent or of any other obligation of Tenant hereunder by reason
of such damage or destruction.
8.4 Tenant's Liability. Notwithstanding any other provision
of this Lease to the contrary, if Tenant terminates this Lease
pursuant to 8.1.1, 8.2 or 9.2, Tenant shall pay to Landlord the
Balance of the Ground Lease Rent for the remainder of the Term of
this Lease.
ARTICLE 9
EMINENT DOMAIN
9.1 Total Taking. If the entire Premises is taken under the
power of eminent domain by any public or quasi-public authority
(a "Taking" or "Taken" if referred to in the past tense), this
Lease shall terminate as of the date of such Taking. Upon
Tenant's payment to Landlord of all rents accruing through such
date, Landlord and Tenant shall each thereafter be released from
any further liability accrued under this Lease. In the event that
Tenant shall have paid any rent for any period beyond the date of
such Taking, Landlord shall reimburse the same, pro rata.
9.2 Partial Taking. Landlord agrees, immediately after
learning of any appropriation or Taking, to give to Tenant notice
in writing thereof (the "Taking Notice"). In the event that (i)
more than 25% of the Gross Leasable Area of the Premises,
including the parking area serving the Premises, is Taken, (ii)
by reason of any appropriation or Taking, regardless of the
amount so Taken, the remainder of the Premises is not one
undivided parcel of property, or (iii) as a result of any Taking,
regardless of the amount so Taken, the remainder of the Premises
is rendered unsuitable for the continued operation of Tenant's
business, either Landlord or Tenant shall have the right to
terminate this Lease as of the date Tenant is required to vacate
a portion of the Premises, by giving the other notice of such
election within 30 days after receipt by Ten- ant of the Taking
Notice. In the event of such termination, upon Tenant's payment
to Landlord of all rents accruing through such date, both
Landlord and Tenant shall thereupon be released from any
liability thereafter accruing hereunder. If both parties elect
not to terminate this Lease, Tenant shall remain in that portion
of the Premises not so Taken and Tenant, at Tenant's sole cost
and expense, shall restore the remaining portion of the Premises
as soon as possible to a complete unit of like quality and
character as existed prior to such Taking. Provided the same does
not exceed the amount of compensation award Landlord receives for
a partial taking of the Premises Landlord agrees to reimburse
Tenant for the cost of restoration of the Premises. So long as
this Lease is not terminated in the manner provided above, there
shall be an equitable adjustment of the rent payable by Tenant
hereunder by reason of such partial Taking. Tenant hereby waives
any statutory rights of termination which may arise by reason of
any partial Taking of the Premises.
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CONFIDENTIAL
9.3 Distribution of Award. The entire award or compensation
in such eminent domain proceeding, whether for a total or partial
Taking or for diminution in the value of the lease- hold or for
the fee shall be distributed to Landlord. However, Tenant may
apply for award of the value of Tenant's personal property loss
of income, relocation costs, improvements and the value of the
leasehold interest created hereby, according to the law in effect
in the jurisdiction where the Premises is located, so long as
such award does not diminish the value of Landlord's award. In
the event that a separate award is not made to Tenant, Tenant
shall be entitled to share in any award made to Landlord, as long
as Landlord first receives the fair market value of the real
property upon which the Premises is located plus the Unamortized
Premises Cost, but in no event shall Tenant's share of the award
exceed 40% of Landlord's award.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10. 1 Right of Assignment and Subletting.
10.1.1 All rights of assignment and/or subletting
shall be governed by Article 18 of the Ground Lease. Tenant
shall have the free right to assign this Lease or sublet the
Premises provided Tenant remains liable under this Lease and
provided that the proposed assignee's intended use does not
violate any protected, exclusive or restricted uses then in
effect with respect to the Premises to any of the following
"Permitted Transferees"): (i) any successor corporation or
other entity resulting from a merger or consolidation of
Tenant; (ii) any purchaser of all or substantially all of
Tenant's Assets; (iii) any entity (including a joint venture
or limited partnership) which controls, is controlled by, or
is under common control with Tenant; (iv) to an affiliate or
franchisee of Tenant. Tenant shall give Landlord thirty (30)
days prior written notice of such assignment or sublease.
Any such Permitted Transferee shall assume in writing all of
tenant's obligations under this Lease. Tenant shall
nevertheless at all times remain fully responsible and
liable for the payment of rent and the performance and
observance of all of Tenant's other obligations under this
Lease. Notwithstanding the foregoing, Tenant shall not
mortgage, pledge or hypothecate this Lease or Tenant's
interest in and to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall
not be unreasonably withheld. Landlord (or Ground Lessor, as
the case may be) shall consent to an assignment of hits
Lease provided the assignee shall (a) operate the Premises
with the use permitted under the Ground Lease which does not
conflict with the primary use of any of the tenants of the
Shopping Center at the time of the assignment; (b) have a
tangible net worth at least equal to $20 million; (c) a
national or regional retail operator; and (d) agree in
writing for the express benefit of Landlord and Ground
Lessor assume all of the duties and provisions of the Lease
required of Tenant hereunder. Such consent shall not operate
to relieve Tenant from liability hereunder and Tenant shall
nevertheless at all times remain fully responsible and
liable for the payment of rent and the performance of all of
Tenant's other obligations under this Lease.
10.1.2 Any permitted assignee, subtenant,
transferee, licensee, concessionaire, or mortgagee shall be
bound by, and shall assume, and perform all of the terms,
covenants, and conditions of this Lease and the Ground Lease
from and after the date of any such transfer.
10.2 No Release of Tenant.
10.2.1 No assignment shall release Tenant of its
obligation, or alter the primary liability of Tenant, to pay
the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed a waiver
by Landlord of any provision hereof. In the event of default
in the performance of any of the terms hereof by any
assignee of Tenant or any successor tenant, Landlord may,
subject to its duty to mitigate and take all reasonable
efforts to relet the Premises, proceed directly against
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Tenant without the necessity of exhausting remedies against
such assignee. Landlord may consent to subsequent
assignments of this Lease or amendments or modifications to
this Lease with assignees of Tenant, upon notice to Tenant,
or any successor of Tenant. After obtaining Tenant's or such
successor's consent thereto, such action shall not relieve
Tenant of liability under this Lease.
10.2.2 Notwithstanding the foregoing subsection, in
the event of an assignment otherwise in compliance with this
Article, Landlord may, but shall have no obligation to,
release Tenant from its primary liability under this Lease.
To seek such release, Tenant shall submit a written request
to Landlord therefor, together with the following
information for the proposed assignee: name; most recently
prepared annual and quarterly financial statements
(including a balance sheet and an income statement); and a
description of the length and nature of the ex- perience of
the proposed assignee and its principals (if a closely held
entity) in. the business proposed to be conducted by the
assignee on the Premises. Should Landlord consent to such
release, Landlord shall so notify Tenant in writing.
ARTICLE 11
DEFAULT; REMEDIES
11.1 Default. The occurrence of anyone or more of the
following events shall constitute a default by Tenant under this
Lease:
11.1.1 [Intentionally Omitted]
11.1.2 The failure by Tenant to make any payment of
Minimum Monthly Rent, Additional Rent, Ground Lease Rent or
any other payment required to be made by Tenant hereunder,
where after written notice thereof from Landlord to Tenant,
such failure shall continue for a period of 5 days. In the
event of a default hereunder, Landlord ( or Ground Lessor,
as the case may be) shall provide Tenant with written notice
of such default two (2) times during each successive twelve
(12) month period of the Lease Term and Tenant shall have an
additional five (5) days to cure such default before
Landlord shall exercise its remedies herein.
11.1.3 Except as otherwise provided in this Lease,
the failure by Tenant to ob- serve or perform any of the non-
monetary covenants, conditions, or provisions of this Lease
to be observed or performed by Tenant, where such failure
shall continue for a period of 30 days after written notice
thereof from Landlord to Tenant. If, however, the nature of
Tenant's non- compliance is such that more than 30 days are
reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within
said 30-day period and thereafter diligently prosecutes such
cure to completion and completes the cure within ninety (90)
days.
11.1.4 Institution by or against Tenant qf .any
bankruptcy, insolvency, reorganization, receivership or
other similar proceeding involving the creditors of Tenant,
which, if instituted against Tenant is not dismissed within
60 days after the commencement thereof.
11.1.5 The issuance or filing of any judgment,
attachment, levy, garnishment or the commencement of any
related proceeding or the commencement of any other judicial
process upon or with respect to Tenant, all or substantially
all of the assets of Tenant, or the Premises.
11.1.6 Sale or other disposition by Tenant of any
substantial portion of its assets or property.
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11.1.7 Bankruptcy, dissolution, termination of
existence, insolvency, business failure or assignment for
the benefit of creditors of or by Tenant. In the event of
bankruptcy by Tenant, this lease will be governed in
accordance with the determinations of the Bankruptcy Court.
11.1.8 Any statement, representation or information
made or furnished by or on behalf of Tenant to Landlord in
connection with this Lease shall prove to be materially
false or misleading when made or furnished.
11.1.9 Default of any of the terms of the Ground
Lease.
11.2 Remedies. Upon the occurrence of a default by
Tenant pursuant to the foregoing Subsection or otherwise under
this Lease or the Ground Lease, Landlord may, at any time
thereafter, with or without notice or demand and without limiting
its' exercise of any right or remedy which Landlord may have by
reason of such default:
11.2.1 Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease and
the term hereof shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such
event, Landlord shall be entitled to recover from Tenant all
damages permitted by applicable law.
11.2.2 Maintain Tenant's right to possession of the
Premises by any lawful means, in which case this Lease and
the term hereof shall continue in effect whether or not \
Tenant shall have vacated or abandoned the Premises. In such
event, Landlord shall be entitled to enforce all of its
rights and remedies under the Lease, including the right to
recover the rent as it becomes due hereunder.
Notwithstanding the foregoing, Landlord shall use reason-
able efforts to mitigate its damages to the extent required
by law.
11.2.3 If, after taking possession of the Premises,
Tenant defaults under this Lease, Tenant shall pay Landlord
Minimum Monthly Rent until such time as Landlord relets the
Premises, so long as Landlord makes all reasonable efforts
to mitigate its damage and relet the Premises. Further, from
the date Landlord relets the Premises until the expiration
of the Term, or the then running Renewal Term, Tenant shall
pay Landlord the present value, if any, of the difference
between the then current fair market rental amount for the
Premises (as determined by an independent appraiser) and the
Minimum Monthly Rent. Present value shall be calculated
based on a five percent (5%) discount per annum.
11.2.4 Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions
of the jurisdiction where the Premises are located.
11.2.5. Recover from Tenant, as an element of its
damages, the remaining Unamortized Premises Cost, if any.
11.2.6. Pursuant to the terms of Section 8.01 of the
Ground Lease, if Tenant shall at any time fail to pay any
Rent, Additional Rent, Ground Lease Rent or any other monies
due and owing under the terms of this Lease or the Ground
Lease, or if Tenant shall fail to take out, pay for,
maintain or deliver any of the insurance policies or
certificates of insurance as required, then Landlord, Ground
Lessor or their respective mortgagee(s), without waiving or
releasing Tenant from any obligation of Tenant contained in
this Lease or from any default by Tenant and without waiving
Landlord's rights to take such action as may be permissible
under this Lease or the Ground Lease as a result of an Event
of Default, may (but shall be under no obligation to), after
any notice required by this Lease:
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CONFIDENTIAL
A. Pay any Rent, Additional Rent, Ground Lease
Rent or any other monies due and owing under
the terms of this Lease or the Ground Lease
pursuant to the provisions hereof;
B. Take out, pay for and maintain any insurance
policies required hereby; or
C. Make any other payment or perform any other
act on Tenant's part to be made or performed
as in this Lease provided.
11.3 Cumulative Remedies. Except as specifically
provided herein to the contrary, no remedy or election hereunder
shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies provided in this Article or
otherwise available at law or in equity.
11.4 Breach of Ground Lease by Tenant. If for any
reason, Tenant is notified by Ground Lessor of any breach by
Tenant of the terms, covenants or conditions contained in the
Ground Lease, Tenant hereby agrees immediately to notify Landlord
in writing of said notice, stating therein the grounds for the
claimed breach, said writing to be sent to Landlord in the most
expeditious manner available. If, for any reason, Landlord is
notified by Ground Lessor of any breach by Tenant of the terms,
covenants or conditions contained in the Ground Lease, which by
the terms of this Lease are the obligations of Tenant to perform,
Landlord hereby agrees to immediately notify Tenant in writing of
said notice stating therein the grounds for the claimed breach,
said written notice to be sent to Tenant in the most expeditious
manner avail- able. In either event, Tenant shall promptly cure
said breach and promptly provide to Landlord written evidence of
said cure.
11.5 Breach of Ground Lease by Ground Lessor. Ground
Lessor shall in no event be charged with default in the
performance of any of its obligations under the Ground Lease
unless and until Ground Lessor shall have received written notice
from Landlord (or Tenant, as the case may be) specifying wherein
Ground Lessor has failed to perform such obligation or remedy
such default, and such default has not been cured after thirty
(30) days (or such additional time as is reasonably required to
correct any such default) from Ground Lessor's receipt of such
notice from Landlord (or Tenant, as the case may be). In the
event of a default by Ground Lessor, Landlord and Tenant shall be
entitled to pursue any and all remedies available to them at law
or in equity, except as otherwise provided in the Ground Lease.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES; FINANCIAL REPORTING i
12.1 Representations and Warranties. To induce Landlord
to enter into this Lease, Tenant represents and warrants to
Landlord as follows:
12.1.1 This Lease is an enforceable obligation of
Tenant.
12.1.2 Tenant is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as such terms
are defined in the Internal Revenue Code of 1986, as
amended) : and the regulations promulgated thereunder).
12.1.3 The financial statements of Tenant delivered
to Landlord are true and correct in all material respects,
have been prepared in accordance with generally accepted
accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the
respective dates thereof. No materially adverse change has
occurred in the financial conditions reflected therein since
the respective dates thereof.
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CONFIDENTIAL
12.1.4 There are no actions, suits or proceedings
pending, or to the best of Tenant's knowledge, threatened,
against or affecting it or the Premises which, if adversely
determined, would materially impair the ability of Tenant to
satisfy their obligations under or relating to this Lease.
12.1.5 Tenant is not in default under any obligation
for the payment of borrowed money, for the deferred purchase
price of property or for the payment of any rent under any
lease agreement, which, either individually or in the
aggregate, would adversely affect the financial condition of
Tenant, or the ability of Tenant to perform its obligations
hereunder, or comply with the terms of this Lease.
12.2 Financial Statements. Tenant has furnished certain
financial statements to Landlord which completely and accurately
present the financial condition of Tenant on the dates thereof.
There has been no material adverse change in business, property
or condition of Ten- ant since the date of such financial
statements. Tenant is not insolvent within the meaning of Section
548(a)(2)(B) of the United States Bankruptcy Code or any other
federal or state law using or defining such term, and will not be
rendered insolvent by the transactions contemplated by this
Lease.
ARTICLE 13
[Intentionally Omitted]
ARTICLE 14
[Intentionally Omitted]
ARTICLE 15
CONSTRUCTION
15.1 Permits. Tenant shall use diligent efforts to
obtain all necessary governmental and quasi-governmental permits
and approvals (collectively the "Permits") on or before the
expiration of the Permitting Period. Once Tenant has secured all
necessary Permits, it shall provide Landlord with written notice
(the "Permit Approval Notice"). If, however, despite its diligent
efforts, Tenant is unable to obtain the Permits on or before the
thirtieth (30th) day following the expiration of the Permitting
Period, either party may terminate this Lease by giving the other
written notice of such termination.
15.2 Landlord's Work. Upon receipt of Tenant's Permit
Approval Notice, Landlord shall construct the Premises and
related improvements on the Premises Site on a turnkey basis at
no cost to Tenant, in accordance with the Plans and
Specifications attached hereto as Exhibit "C" and in accordance
with the zoning, building, environmental, health and safety codes
of the governmental units in which the Premises are situated
("Landlord's Work'). Landlord's Work shall be substantially
completed, excepting Punchlist Items (as hereinafter defined),
and pos- session of the completed Premises shall be delivered to
Tenant for the commencement of Ten- ant's Work within the
Construction Period, delays due to Force Majeure events excepted.
Conditioned upon Tenant's providing Landlord reasonable assurance
that Tenant's placement of a satellite dish on the roof of the
Premises will not void applicable roof warranties, Tenant shall
have the right to install on the roof of the Premises a satellite
dish in accordance with plans and specifications set forth on
Exhibit "C". Landlord shall follow all pre-construction and
construction insurance requirements set forth in Article 7 of the
Ground Lease.
15.3 Delivery Date Notice. Landlord shall give Tenant
written notice of the Delivery Date not less than ten (10) days
before the Delivery Date (the "Delivery Date Notice"). Upon
receipt of Landlord's Delivery Date Notice, Tenant shall have
access to the Premises for inspection and performance of Tenant's
Work. In no event shall Tenant be required to accept delivery
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of the Premises unless and until all conditions to the occurrence
of the Delivery Date have been satisfied. Landlord and Tenant
shall abide by the terms of Article 3 of the Ground Lease,
including all provisions relating to Inspection Period and Notice
of Objection.
15.4 Punchlist Work. Notwithstanding anything to the
contrary in this Lease, within five (5) days after Landlord has
provided Tenant with the Delivery Date Notice, Tenant and a
representative of Landlord, at a mutually agreeable time, shall
inspect the Premises and shall compile a list of items which have
not been completed as required in Exhibit "C" (the "Punchlist
Items"). Tenant shall have the right to supplement the Punchlist
Items during the first forty-five (45) days following the
Delivery Date. Landlord shall use reasonable efforts to complete
the Punchlist Items by the Delivery Date or within forty-five
(45) days after Landlord's receipt of a supplemental list of
Punchlist Items, as the case may be. Upon Landlord's completion
of all Punchlist Items, Tenant shall be deemed to have accepted
and taken possession\ of the Premises and Landlord shall have no
further obligation with respect to the construction of the
Premises.
15.5 Pre-Completion Acceptance. If the Delivery Date
has not occurred within the Construction Period, Tenant shall
have the right, but shall not be obligated, to accept delivery of
the Premises, without relieving Landlord of any obligation to
fully complete Landlord's Work. If Tenant accepts delivery of the
Premises prior to the completion of Landlord's Work, Landlord
shall complete Landlord's Work, including any Punchlist Items, as
soon as possible, and in so doing shall not interfere, and shall
cause its contractors not to interfere, with the fixturing,
furnishing, equipping and stocking of the Premises by Tenant and
its contractors. Notwithstanding the foregoing, once (i) Tenant
has taken possession of the Premises and Landlord has completed
Landlord's Work, (ii) all Punchlist Items have been completed,
and (iii) all warranties have been assigned to Tenant, Landlord
shall have no further construction obligations hereunder.
15.6 Failure to Deliver. Notwithstanding any provision
of this Lease to the contrary, if the Delivery Date has not
occurred within the Construction Period (delays due to the
occurrence of Force Majeure events excepted) Tenant shall have
the right, in addition to and not in lieu of any and all other
rights and remedies available at law or equity, to cancel this
Lease by giving written notice to Landlord at any time thereafter
but before the Delivery Date (the "Notice of Cancellation").
Tenant must provide its Notice of Cancellation to Landlord within
thirty (30) days following the Construction Period. If Tenant
fails to provide a Notice of Cancellation within such thirty (30)
day period, Tenant shall be deemed to have waived its right to
cancel pursuant to this Section 15.6. If Tenant provides timely
Notice of Cancellation, Tenant shall be relieved of all
obligations hereunder and shall not be liable to Landlord in
damages or otherwise.
15. 7 Liquidated Damages. In the event Landlord does not
deliver the Premises to Tenant in the condition as herein
required by the end of the Construction Period, Landlord shall
pay to Tenant the sum of Two Hundred Dollars ($200.00), for each
day between the last day of the Construction Period and the
Delivery Date, or, if Tenant exercises its right to cancel for
Landlord's failure to deliver, for each day between the last day
of the Construction Period and Tenant's Notice of Cancellation
(delays due to the occurrence of Force Majeure events excepted).
If Landlord fails to pay Tenant as aforesaid, then Tenant shall
have the right (without limiting any other right or remedy of
Tenant) to deduct such amount from rent and other payments due
Landlord. The liability of Landlord under this Section shall be
in addition to all other claims which Tenant may have against
Landlord. Landlord agrees that the amount provided for in this
Section constitutes a reasonable estimate of the damages that
Tenant is likely to incur in the event of a breach by Landlord as
herein provided, and shall not constitute a penalty.
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ARTICLE 16
GENERAL PROVISIONS
CONFI DENTIAL
16.1 Quiet Enjoyment. Subject to the terms and
conditions of this Lease, Tenant shall have the quiet and
peaceful possession of the Premises.
16.2 Definition of Rent. All monetary obligations of
Tenant to Landlord under the terms of this Lease, including,
without limitation, the Taxes, insurance premiums and other
Additional Rent payable hereunder shall be deemed to be "rent".
16.3 Subordination. This Lease shall be subordinate to
any superior lease, mortgage, deed of trust, or any other
hypothecation or security now existing or hereafter placed upon
the Premises and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof. Tenant hereby agrees, upon
Ground Lessor or Landlord's request, to execute and deliver to
Ground Lessor, Landlord and their respective lender(s), as the
case may be, a subordination, non-disturbance and attornment
agreement in the form prescribed by such lender(s) with respect
to any such superior lease, mortgage, deed of trust,
hypothecation, or security; provided, however, that no such
instrument shall expand Tenant's obligations under this Lease.
Ground Lessor and Landlord agree to obtain a non-disturbance and
attornment agreement from the holder of any mortgage given with
respect to the Premises, existing at the time of the execution of
this Lease or the recording of a Memorandum Lease or at such
other times as may be reasonably requested by Tenant.
16.3.1 It is a condition of the subordination
provisions of Section 16.3 above, that Ground Lessor and Landlord
shall procure from any such mortgagee an agreement in writing,
which shall be delivered to Tenant, providing in substance that
(i) so long as Tenant shall faith- fully discharge the
obligations on its part to be kept and performed under the terms
of this Lease, Tenant's tenancy will not be disturbed nor this
Lease affected by any default or foreclosure under such mortgage,
and that the mortgagee agrees that this Lease shall remain in
full force and effect even though Default in and foreclosure
under the mortgage may occur, and (ii) such mortgagee shall
permit insurance proceeds or condemnation awards, as the case may
be, to be used for any restoration and repaid required by the
provisions of this Lease as set forth in Sections 8 and 9. The
word "mortgage" as used herein means (i) any lease of land only
or of land and buildings in a sale-lease-back transaction
involving all or any part of the Premises, or (ii) any mortgage,
deed of trust or other similar security instruments constituting
a lien upon all or any part of the Premises, whether the same
shall be in existence as of the date hereof or created hereafter,
and any modifications, extensions, renewals and replacements
thereof. "Mortgagee" as used herein means a party having the
benefit of a Mortgage, whether as lessor, mortgagee, trustee or
note-holder.
16.3.2 No change in ownership of all or any portion
of the Premises, or assignment of this Lease, or the rentals
provided for herein, shall be binding upon Tenant for any purpose
until after Tenant has been furnished with evidence, including a
photocopy or certified copy of deed or assignment, showing change
in ownership, or assignment.
16.3.3 In the event Tenant receives a written notice
from any party claiming a collateral interest in this Lease or in
the rentals hereunder and, by reason thereof, a present en-
titlement to collect the rentals under this Lease, Tenant shall
have the right to either (i) subject to such party's providing
Tenant with a copy of the instrument pursuant to which it claims
such entitlement and to such claim being plausible on the face of
such instrument, pay such rentals to such party, which payment
shall satisfy any and all liabilities of Tenant to Landlord with
respect to such payment without obligation on the part of Tenant
to make further inquiry, or (ii) withhold such rentals pending
the determination by a court of competent jurisdiction of the
entitlement thereto.
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16.4 Surrender of Premises. Except for changes
resulting from eminent domain proceedings, at the expiration or
sooner termination of the Lease Term, Tenant shall surrender the
Premises in the same condition as the Premises were in upon
delivery of possession thereto under this Lease, reasonable wear
and tear excepted, and shall surrender all keys for the Premises
to Landlord at the place then fixed for the payment of rent and
shall inform Landlord of all combinations on locks, safes and
vaults, if any, in the Premises. At such time Tenant shall remove
all of Tenant's equipment, vault, machinery, trade fixtures,
satellite dish, and other personal property, as welI as any
Alterations or improvements, if reasonably requested to do so by
Landlord, and shall repair any damage to the Premises caused
thereby. Any or all of such property not so removed shall become,
at Landlord's option, the exclusive property of Landlord or be
disposed of by Landlord, at Tenant's sole cost and expense,
without further notice to or demand upon Tenant. Should Tenant
shall fail to pay the cost of any such repair, Landlord may do so
and Tenant shall reimburse Landlord for the amount thereof within
5 days after' receipt of a ▇▇▇▇ therefore. If Tenant shall so
surrender the Premises, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so
surrendering the Premises including, without limitation, any
claims made by any succeeding occupant founded on such ▇▇- ▇▇▇.
Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of the Lease Term.
16.4.1 Tenant shall have the right, on or before the
date it vacates the Premises, to place a sign at the front
of the Premises, in a place visible to Tenant's customers,
directing such customers to another of Tenant's stores
and/or providing Tenant's customers with a telephone number
as long as such signage does not violate (i) applicable
laws, ordinances, orders, rules or regulations of any
governmental authority, or (ii) covenants running with the
Premises. Tenant shall be entitled to leave said sign at the
front of the Premises until the earlier to occur of (i)
three months after Tenant vacates the Premises, or (ii) the
date a new tenant opens for business in the Premises.
16.5 Estoppel Certificates. Each party (each a
"Responding Party") under this Lease or the Ground Lease shall,
at any time upon not less than 10 days prior written notice from
the other party (each a "Requesting Party"), execute,
acknowledge, and deliver to the Requesting Party a statement in a
form prescribed by Landlord certifying and acknowledging the
following: (i) that this Lease represents the entire agreement
between Landlord and Tenant, and is unmodified and in full force
and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is
in full force and effect) and the date to which the Minimum
Monthly Rent and other charges are paid in advance, if any; and
(ii) that there are not, to the Responding Party's knowledge, any
uncured defaults or, on the part of the Requesting Party,
specifying such defaults if any are claimed. Any such statement
may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises or of the business of the Requesting
Party.
16.6 Severability. The invalidity of any provision of
this Lease as determined by a court of competent jurisdiction
shall in no way affect the validity of any other provision
hereof.
16.7 Entire Agreement. This Lease constitutes the
entire agreement between Land- lord and Tenant and supersedes all
prior agreements between them with respect to Premises, whether
written or oral.
16.8 Notices. No notice given or required to be given
under the terms of this Lease or the Ground Lease shall be
effective unless given to each of Ground Lessor, Landlord or
Tenant by the others. Any notice required or permitted to be
given hereunder shall be in writing and may be given by
facsimile, personal delivery, certified mail, return receipt
requested or by nationally recognized overnight courier service
delivered at the FAX numbers or addresses for
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each set forth in the Fundamental Lease Provisions or in the
Ground Lease. Each party may by notice to the others specify a
different FAX number of address for notice purposes. A copy of
all notices required or permitted to be given to each party
hereunder shall be concurrently transmitted to such additional
party or parties at such addresses as the party to this Lease may
from time to time hereafter designate by notice.
16.9 Waivers. No waiver by Landlord of any provision
hereof shall be deemed a waiver of any other provision hereof or
of any subsequent default by Tenant of the same of any other
provision. Landlord's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Ten- ant. The
acceptance of rent hereunder by Landlord shall not be a waiver of
any preceding de- fault by Tenant hereunder, other than the
failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding default at
the time of acceptance of such rent.
16.10 Recording. Either Landlord or Tenant shall, upon
request of the other, execute, acknowledge, and deliver to the
other a "short form" memorandum of this Lease for recording
purposes. Such memorandum shall be in the form reasonably
prescribed by Landlord. In addition, any termination agreement
shall be similarly recorded, which agreement shall survive the
termination of this Lease.
16.10.1 At the time that the Commencement Date of the
term of this Lease is firmly established, the parties shall
promptly enter into a Supplemental Lease Agreement, set-
ting forth the actual commencement and expiration of the
Initial Term and any extensions thereof and describing the
Premises, but containing no further provisions of this
Lease. Such Supplemental Lease Agreement may be recorded by
either party .If the Commencement Date is firmly established
before a short form lease or memorandum of lease has been
executed by the parties, the short form lease or memorandum
of lease and the Supplemental Lease Agreement may be
consolidated into a single recordable document.
16.11 Holding Over. If Tenant remains in possession of
the Premises or any part thereof after the expiration or
termination of the Lease Term, such occupancy shall be a tenancy
from month-to-month upon all the provisions of this Lease
pertaining to the obligations of Tenant. Tenant shall thereby
waive its rights of notice to quit, but Tenant's right as to any
Renewal Term shall terminate. The monthly rent due during such
hold-over period shall be equal to 150% of the Minimum Monthly
Rent then in effect, and Tenant shall continue to be obligated to
pay all Additional Rent and other amounts required to be paid by
the terms of this Lease. Notwithstanding the foregoing, in the
event that Landlord and Tenant are engaged in good faith
negotiations for a new lease at the expiration or termination of
the Lease Term, Tenant's continuing possession shall not
constitute holding over for so long as such negotiations
continue. However, Landlord shall, in its sole discretion have
the right to notify Tenant in writing, that Landlord elects to
terminate such negotiations Thirty (30) days after Tenant's
receipt of such notice the monthly rent due thereafter shall be
equal to 150% of the Minimum Monthly Rent then in effect.
16.12 Choice of Law. The laws of the jurisdiction in
which the Premises are located shall govern the validity,
performance, and enforcement of this Lease.
16.13 Attorneys' Fees. Should either party institute any
action or proceeding to enforce any provision hereof or for a
declaration of such party's rights or obligations hereunder, the
prevailing party shall be entitled to receive from the losing
party such amounts as the court may adjudge to be reasonable
attorneys' fees and expenses for services rendered to the party
prevailing in any such action or proceeding. Such fees shall be
deemed to have accrued upon the
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announcement of such action or proceeding and shall be
enforceable whether or not .such ac- tion or proceeding is
prosecuted to judgment.
16.14 Waiver of Jury Trial. LANDLORD AND TENANT EACH
HEREBY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY CLAIM, ACTION,
PROCEEDING OR COUNTERCLAIM BY EITHER LANDLORD OR TENANT AGAINST
THE OTHER ON ANY MATTERS ARISJNG OUT OF OR IN ANY WAY CONNECTED
WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT AND/OR
TENANT'S USE OR OCCUPANCY OF THE PREMISES.
16.15 Liability of Landlord. In the event of any sale or
other transfer of Landlord's interest in the Premises, Landlord
shall be relieved of all liabilities and obligations of Landlord
hereunder arising after the date of such transfer.
Notwithstanding anything contained herein to the contrary,
Landlord shall have no personal liability in respect of any-of
the terms, covenants, conditions or provisions of this Lease, and
in the event of a breach or default by Landlord of any of its
obligations under this Lease. Tenant and any persons claiming by,
through or under Tenant shall look solely to the equity of the
Landlord in the Premises for the satisfaction of Tenant's and/or
such persons' remedies and claims for damages.
16.16 No Merger. There shall be no merger of this Lease,
or the leasehold estate created by this Lease, with any other
estate or interest in the Premises, or any part thereof, by
reason of the fact that the same person, firm, corporation or
other entity may acquire or own or hold, directly or indirectly
(i) this lease or the leasehold estate created by this Lease or
any interest in this Lease or in any such leasehold estate, and
(ii) any such other estate or interest in the Premises or any -
part thereof. No such merger shall occur unless and until all
persons, corporations, firms and other entities having an
interest (including a security interest) in (1) this Lease or the
leasehold estate created by this Lease; and (2) any such other
estate or interest in the Premises, or any part thereof, shall
join in a written instrument effecting such merger and shall duly
record the same.
16.17 Interpretation. The captions by which the Articles
and Sections of this Lease are identified are for convenience
only and shall have no effect upon the interpretation of this
Lease. Whenever the context so requires, singular numbers shall
include the plural, the plural shall refer to the singular, the
neuter gender shall include the masculine and feminine genders,
and the terms "Landlord" and "Tenant" and "person" shall include
corporations, limited liability companies, partnerships,
associations, other legal entities, and individuals.
16.18 Relationship of the Parties. Nothing in this Lease
shall create a partnership, joint venture, employment
relationship, borrower and lender relationship, or any other
relationship between Landlord and Tenant, other than the
relationship of landlord and tenant.
16. 19 Successors. This Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective
personal and legal representatives, heirs, successors, and
assigns.
16.20 Modifications. This Lease may not be altered,
amended, changed, waived, terminated, or modified in any manner
except by a written instrument executed by Landlord and Tenant.
16.21 Brokerage Fees. Landlord and Tenant each represent
and warrant that they have not employed a broker in connection
with the execution of this Lease. Landlord and Ten- ant shall
each indemnify and hold the other harmless from and against any
claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its
representation in this Section.
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16.22 Waiver of Redemption. To the extent permitted by
law, Tenant hereby waives any and all rights of redemption with
respect to this Lease. Tenant hereby waives any rights it may
have to any notice to cure or vacate or to quit provided by any
current or future law; pro- vided that the foregoing shall not be
deemed to waive any notice expressly provided in this Lease.
16.23 Not Binding Until Executed. This Lease does not
constitute an "offer" and is not binding until fully executed and
delivered by Landlord.
16.24. Reasonable Consent. Wherever Landlord's consent or
approval shall be required herein, such consent or approval shall
not be unreasonably or arbitrarily withheld or delayed.
16.25 No Continuous Operation. Notwithstanding anything
contained in this Lease, expressly or impliedly, to the contrary,
and notwithstanding the agreement herein contained for the
payment by Tenant of rent, it is specifically and expressly
understood and agreed that once Tenant has continuously conducted
its business (such period shall include periods of non-operation
if such non-operation is due to the occurrence of Force Majeure
or events, holidays and other periods of time not within Tenant's
schedule of normal business operations) in the Premises from the
Commencement Date for a period of at least one (1) day, Tenant
shall thereafter be under no duty or obligation, express or
implied, to open, or thereafter to continuously conduct, its
business in the Premises at any time during the Term. Without
limiting the generality of the foregoing, Tenant shall have the
right to close two partial days per year to take inventory and
shall, at Tenant's option, be closed Thanksgiving Day, Christmas
Day, New Years Day, and Easter. The terms of this provision shall
be governed by the terms of Section 23.20 and 3.03(C) of the
Ground Lease.
16.26 If Tenant fails for more than ninety (90)
consecutive days within any period of twelve (12) consecutive
months to keep the Premises open and operating, then, as
Landlord's exclusive remedy for such failure, Landlord may
terminate this Lease upon thirty (30) days prior written notice
to Tenant after which all obligations of Tenant and Landlord
under this Lease shall terminate and be of no further force and
effect.
16.27 Owner's Non-Disturbance. Landlord shall, upon the
reasonable request of Ten- ant, obtain a non-disturbance and
attornment agreement from the Ground Lessor of the Premises
stating in the event of Landlord's default in the Ground Lease in
effect with respect to the Premises that Ground Lessor shall look
to this Lease as a direct lease with Ground Lessor.
16.28 Market Conditions. In the event of the existence
of a Market Condition, Tenant shall have the right and option
either to (i) pay Substitute Rent, or (ii) if such Market
Condition exists and continues for more than nine (9) months in
any given twelve (12) month period, terminate this Lease by
giving written notice to Landlord, in which event all further
obligations hereunder shall terminate; provided, however, that
the foregoing provision shall not apply to any department store,
junior department store, or variety store in which the Permitted
Use accounts for no more than five hundred (500) square feet of
usable area, as verified to Tenant from time to time upon request
of Tenant. If Tenant elects the option in (i) above, it shall be
without prejudice to a future election of the option set forth in
(ii) above. The foregoing covenant shall run with the land and
shall bind Landlord, its successors and assigns.
16.29 Co- Tenancy. Intentionally omitted.
16.30 Common Area Costs
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16.30.1 In addition to payment of the Monthly Minimum Rent
and Taxes set forth in this Lease, Tenant shall pay to Landlord
Common Area Costs. The payment of such Common Area Costs shall be
considered as "additional rent" which shall be payable pursuant
to Section 2.4 hereof, shall be in consideration of Landlord's
maintenance of said Common Areas shall be used by Landlord solely
for operating and maintaining the Common Areas and shall be
subject to all provisions of this Lease applicable to default in
the payment of rent.
16.30.2 Estimated Common Area Costs. Tenant shall pay to
Landlord Tenant's Proportionate Share of Common Area Costs
beginning on the Commencement Date. Tenant shall pay to Landlord
in twelve (12) equal installments, each in advance on the first
(1st) day of each and every calendar month, an estimate sum,
towards Tenant's Proportionate Share of Common, Area Costs, which
estimated sum during Calendar Year 2000 is $ per annum
multiplied by the number of square feet of Gross Leasable Area
within the, Premises (i.e., $ per month). This estimated sum
shall be subject to reasonable annual adjustments by Landlord to
reflect anticipated changes in the Common Area Costs; provided,
however, that the Common Area Costs in the aggregate, shall not
increase by more than five percent (5%) per year. Within one
hundred twenty (120) days after the end of each calendar year,
Landlord shall provide Tenant with a statement assessing and
prorating the common Area Costs. Tenant shall pay to Landlord
within thirty (30) days of such receipt, any deficiency owed to
Landlord. In the event that Tenant's estimated payments are in
excess, such overpayment shall be applied as a credit against the
next installment of Minimum Monthly Rent unless the refund is for
the final calendar year of Tenant's occupancy, in which case such
overpayment by Tenant shall be refunded to Tenant within thirty
(30) days after delivery of the final statement.
16.30.3 Tenant's Audit Rights. Tenant shall have the right
at any time within three (3) years after the close of each Lease
Year (a period of twelve (12) consecutive calendar months during
the Term, the first of which shall begin on the first day of
February next following the Commencement Date, unless the
Commencement Date shall be the first day of February, in which
event the first Lease Year shall begin on the Commencement Date)
and Partial Lease Year (the period, if any, of fewer than twelve
(12) consecutive calendar months between the Commencement Date
and the first day of the first Lease Year and the period, if any,
of less than twelve (12) consecutive calendar months between the
last day of the last Lease Year and the expiration of the Term),
but not more often than once with respect to any Lease Year and
Partial Lease Year, to cause an audit to be made by an
independent accountant designated in writing by Tenant of all of
the books of account, documents, records, returns, papers and
files of Landlord relating to Common Area Costs for such Lease
Year, and Landlord, upon at least three (3) days prior request of
Tenant, shall make all such records available for such
examination at the address specified in this Lease for notices to
Landlord during regular business hours. Tenant agrees that any
information obtained from all such records and reports examined
by it or by its designated accountant shall be held in strict
confidence. All actions or claims in connection with, if
applicable, Common Area Costs, Taxes, Tenant's Insurance, Minimum
Monthly Rent and any other monetary obligations shall be barred
after said three (3) year period. If Tenant shall have such an
audit made for any Lease Year or Partial Lease Year and the
Common Area Costs shown by Landlord's statement for such Lease
Year or Partial Lease Year have been overstated by three percent
(3%) or more, then Landlord! in addition to immediately paying
the Tenant the full amount of the overstated sums as determined
by such audit, shall pay the Tenant the reasonable cost of such
audit, not to exceed Two Thousand Dollars ($2,000.00); otherwise
said audit shall be at Tenant's sole cost and expense.
The statement of reconciliation of the actual Common Area
Costs provided to Tenant subsequent to the end of each calendar
year will be final and binding upon Tenant un- less the same is
objected to in writing within three (3) years after it is given
to Tenant, which notice of objection shall specify in reasonable
detail the items disputed by Tenant. If Landlord and
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Tenant are unable to resolve such dispute within thirty (30) days
after Landlord's receipt of such written objection (each party
agreeing to confer in good faith in attempt to resolve such
dispute), an independent certified public accountant selected by
Tenant and approved by Landlord, shall be engaged to inspect and
audit the Landlord's records of the Common Area Costs and to make
a determination regarding the Tenant's dispute. The selection of
the independent certified public accountant shall be completed
within fifteen (15) days after expiration of the foregoing thirty-
day period and the audit shall commence and be completed, and a
copy of the audit report shall be delivered to Landlord and
Tenant within thirty days thereafter. The de- termination of the
independent certified public accountant shall be binding on
Landlord and Tenant. Costs for said independent certified public
accountant shall be paid by Landlord if it is finally determined
that the amount of Common Area Costs charged to Tenant by
Landlord was in error by three percent (3%) or more, and shall be
paid by Tenant if said error was less than three percent (3%).
Tenant's right to cause an audit to be made of Landlord's records
of the Common Area Costs shall not delay or postpone the date(s)
on which all rental payments are due.
16.31 Tenant Read Ground Lease. Tenant hereby
acknowledges that it has read the Ground Lease in its entirety
and agrees to accept its terms.
16.32 Lease Governs. As between Landlord and Tenant, the
terms of this Lease shall govern in the event of any
inconsistency between it and the Ground Lease.
16.33 Financing Statements. During the Lease Term and any
extensions thereof, Tenant shall provide to Landlord (or Ground
Lessor, as the case may be), with thirty (30) days after written
request of Landlord or Ground Lessor, a copy of Tenant's most
recent financial statements, prepared as of the end of Tenant's
fiscal year. Such financial statements shall be certified by an
authorized officer of Tenant who shall attest to the truth and
accuracy of the information set forth in such statements. All
financial statements provided by Tenant to Landlord or Ground
Lessor hereunder shall be prepared in conformity with generally
accepted accounting principles, consistently applied.
LANDLORD:
CAPTEC STER AURORA,
L.L.C.
By CAPTEC NET LEASE
REALTY, INC. Its Sole
Member
By /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇
TENANT:
STERLING JEWELERS INC.
By /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Executive Vice President
33
▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇ BEING A SUBDIVISION
IN ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇ THE THIRD
PRINCIPAL MERIDIAN ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER
30, 1998 AS DOCUMENT NO R98-226549 IN DUPAGE COUNTY ILLINOIS